A look at Starbucks’ marketing strategy

We have no patent on anything we do and anything we do can be copied by anyone else. But you can't copy the heart and the soul and the conscience of the company” – Howard Schultz, CEO of Starbucks Coffee.

This quote from Schultz could be the “magic” that has separated Starbucks from the every other coffee shop; an attitude of marketing which is inspired by the company’s commitment. The successful marketing strategies which Starbucks employs are definitely of interest to anyone interested in business marketing can learn about.

Serving coffee is a common part of any restaurant business, but a successful marketing mix will cause a common product to become uncommon and unique to the consumer.

A marketing strategy for a company requires commitment from the company with all departments and employees working together towards the same goal. This should be a philosophy which is applied to the entire organization, not simply an idea that is applied to the marketing department.

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The two main functions of the marketing strategy are to identify the target market, and develop a successful marketing mix for that target market. Within the marketing mix are four essential components: product, place, promotion, and price. Starbucks Coffee Company has developed a marketing mix which has proven to be exceptionally successful for over 40 years.

Starbucks opened in 1971 by owners who developed a passion for dark roast coffee, and that was basically the main product that was sold in the stores. After about a decade of selling coffee beans, the owners allowed Howard Schultz to join the company as the firm’s Director of Retail Operations and Marketing.

While on a trip to Italy, Schultz came across the Italian “coffee culture” which intrigued his interest; a café where people would gather, socialize and spend time in leisure. Schultz believed this “coffee culture” could be replicated in the United States serving the Starbucks brand of dark roasted coffee and adding espresso drinks to the menu.

This concept was rejected by the founders of Starbucks, and eventually Schultz bought the company, and proceeded to build it into the largest retail coffee shop chain in the world. The product line of coffee was expanded to include espresso drinks such as lattes and cappuccinos; and as the company grew, the drink choices also grew to meet the consumer’s needs.

Starbucks is known for having store locations everywhere in the world; even to the point of shops across the street from one another. Beginning in neighborhoods or in rural areas, and expanding to high traffic areas such as New York City; a Starbucks Coffee Shop may be found in or very near any city in the United States.

Within the “place” of the marketing mix, one considers the type of stores as important as the location. The majority of Americans have two main “places” where time is spent, either at work or at home. With Schultz’s vision of the coffee shops that inspire the customers to consider Starbucks his or her “third place”, all of the shops have the brand of ease and comfort. Designed to be cozy and comfortable, the store decor of every shop is similar, if not identical: big easy chairs and sofas, tables for customers to gather at, high top counters with plenty of electrical outlets for those who take advantage of the free internet, and music playing which adds to the ambiance. Some locations actually have a burning fireplace to warm the atmosphere during the winter months.

It is very rare for one to see a promotional advertisement for Starbucks Coffee in a magazine, newspaper, billboard, television commercial, or any other typical advertising campaign. Starbucks used the marketing strategy of “word-of-mouth” advertising; allowing the high quality of products and the legendary service promote the brand. This tactic has played a huge part in making Starbucks Coffee Company a success.

The front line Barista (coffee artist) has been trained not only to prepare specialty coffee drinks, but to include the art of providing “legendary service” to the customer. This strategy includes promotion of personalized service by learning customer’s names, specific drink preferences, customer’s occupations, and often personal information concerning the customer’s family and life events.

In the beginning, the company’s mission statement was: "To establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles as we grow." Now, Starbucks has added to the mission statement: "To inspire and nurture the human spirit - One person, One cup, and One Neighborhood at a time." With all employees working with the company’s mission in mind, the brand is promoted on a daily basis.

In no way, shape, or form has Starbucks offered a competitive pricing for the products sold in the stores. One may consider the “experience” of the Starbucks brand to be included in the price of the products. As stated above, with all front line Baristas working with the company’s mission statement as a guideline, the consumer is purchasing a cup of coffee with the experience of personalized legendary service.

While the descriptions of Starbucks Coffee Company’s marketing mix did not include the target marketing objective, Starbucks’ target market includes anyone who is willing to pay a premium price for the “Starbucks Experience." This decision was made with extensive strategic planning, and with the knowledge that using a unique marketing program such as this was a huge risk in being successful.

A good summary about the marketing success of Starbucks is this quote by Howard Schultz, CEO of Starbucks:

We establish the value of buying a product at Starbucks by our uncompromising quality and by building a personal relationship with each customer.

The marketing mix that Starbucks Coffee Company developed is unique, unconventional, somewhat risky, but most importantly, extremely successful for over 40 years.