Marketing Strategy and Implementation of Starbucks

Legitimate usage and execution of a vital Marketing plan are fundamental to the achievement of any organization. An organization may have an ideal product, however without an appropriate situating, distinguishing proof of an objective market, and a legitimate marketing plan an organization would not have the capacity to effectively showcase its products to buyers.

Starbucks has been effectively being able to convert an activity carried out at home to a business accomplishment through appropriate usage and execution of its strategic intent.

The firm has possessed the capacity to persuade buyers that its stores give something beyond espresso, but instead a rich affair that they ought to enjoy on a repeating premise. The organization has possessed the capacity to decipher this buyer “encounter” of its items into a very beneficial business.

This paper will examine the Marketing strategy being actualized by Starbucks and will assess the organization’s present Marketing plan, including position strategies, targeting strategies, competitive environment, and different elements that influence its advertising methodology.

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This paper will additionally endeavor to give proposals to Starbucks on the game-plan it should handbag to stay practical and boost gainfulness-whether it is through enhancements to its current marketing strategy or implementation of a new strategy.

Brief background, description of Starbucks and its major competition.

Starbucks first opened in Seattle in 1971 (Starbucks, 2014) and has developed from one store to 19,767 stores today. With more than 160 thousand representatives around the world (Forbes, 2014) this organization has turned out to be world well known and conveys astounding espresso and drinks to its customers over the world day by day.

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Their notable statement of purpose is: to motivate and sustain the human soul-one individual, one cup and one neighborhood at any given moment.

In the United states of America, 54% of the populace more than 18 years old drinks coffee day by day and the aggregate American drinking populace burns through 40 billion dollars on this refreshment yearly ( Harvard School of Public Health, 2014) As indicated by the accompanying insights, there is substantial market potential on the planet for this specific administration and generation;

Starbucks alongside numerous contenders, For example Costa Coffee or McCafe, have grabbed this opportunity and keep on innovating inside this market. It is almost certainly that this market can be productive; in 2012 Howard Schultz, the CEO of Starbucks, was delegated the eighth best-paid CEO in the United States of America making 103 million dollars of benefit (Rushe, 2013)

One of the key explanations behind the organization’s prosperity has been the effective projection of its stores as settings for socializations amongst office and work. This technique gave Starbucks with an extensive client base that could utilize Starbucks stores. This, alongside the start of being a premier specialty coffee brand that is seen as a reasonable extravagance enabled Starbucks to charge a premium for its products.

Marketing Strategy of Starbucks

Each business needs to complete a fruitful marketing strategy keeping in mind that end goal to be seen by purchasers and to forge brand identity. All through this section, Starbucks ‘marketing strategy will be depicted using core marketing strategy concept, identifying the positioning, Target and segmentation


At Starbucks, the demographic segmentation’s main group is between 25 and 40 years of age with high incomes, the second target bunch is 18 to 24 years of age and belongs to wealthier families. As a rule, the clients have a place with the Generation Y conceived somewhere in the range of 1977 and 2000; this is the place most benefit is made as guaranteed by Fromm (2014) Psychographic division demonstrates that clients have a place with the upper-working class and for the most part have school training (Rafii, 2013). While focusing on, Starbucks is arranged between mass showcasing and section promoting; they are focusing on a more extensive open; notwithstanding, there are a few criteria that the clients ought to have, for example higher earnings or a more youth age. We can outline Starbuck’s situating on account of the chart (Zapolski, 2010) beneath; it is the way the clients see the item and service sold.

Starbucks’ Positioning

At Starbucks, buyers are purchasing an expensive product of high quality, but they also have the personalized in-store experience enhanced by the trained employees, for example, the consumers ‘name is written on the plastic cup their beverage will be served in (intangible); this helps Starbucks obtain the premium brand status and fight competition
The unique selling proposition concept helps Starbucks differentiate their products and services and gain competitive advantage over competition. They are known for their good customer service and in-store experience, for customers can either spend some time in the shop and benefit from the friendly and cozy environment and Wi-Fi, or they can rapidly purchase their beverage and continue on their way.

Starbucks Targeting

Starbucks needed to build up a respectable association with the clients, most organizations enter another marketing serving a solitary portion, and if this demonstrates fruitful than then they include more sections, at first Starbucks did likewise focused on the guardians with the youthful youngsters and it has included more fragments by including teenagers and developed its product range (Kotler and Armstrong, 2006)

Marketing Mix

In order to maximize their brand awareness and establish themselves as the most recognized and respected brand in the world and within their target market, Starbucks implemented a well-integrated marketing program that would utilize a marketing mix (product, price, place and promotion) that would satisfy the needs and wants of its market. The four elements of the marketing mix are as follows;


Starbucks product-mix expanded from 30 varieties of whole been coffees to eco-friendly cappuccino, coffee makers, and other Starbucks paraphernalia. Its product offerings have also expanded beyond pastries and coffee to oatmeal, smoothies, and wraps to keep up with the competition and satisfy more customer needs. The company has been introducing new products, such as “Instant via Ready” and “Full Leaf Tazo Tea Lattes” and Tazo Tea Infusions.”


Starbucks products are priced higher due to perceived upscale image attached to its brand. The company also began to offer $1 bottomless 8 oz. Cup of coffee, with unlimited refills that cost approximately 50 cents less than any other Starbucks products. The company is also implementing “value strategies” that would emphasize more on inexpensive coffee products rather being perceived as unaffordable to price-skittish consumers. For example, the company introduced $3.95 “breakfast pairings,” including popular breakfast items paired with a coffee, and highlights $2 brewed coffees instead of the more expensive specially drinks (Jennings)


Starbucks can be found in any neighborhood where there is a perceived high traffic for its stores. Starbucks outlets can also be found in-store of various large chains including Barnes & Noble and Target. Their Locations are extremely conducive for individuals that are on the go and for those that enjoy reading or listening to music


Starbucks has implemented numerous promotions to reach its target markets;

  • Starbucks card that is an initiative that offers customers the opportunity to promote company’s products through a referral system. It also provides a card for corporate sales, which are used for extrinsic rewards to show employee appreciation for a job well done, or gift to client or a vendor
  • Coffee services delivered to offices without coffee size restrictions
  • Appealing to a diverse customer base by offering international teas and coffees to accommodate those customers that want a taste from home or for locals that enjoy tea,

The description of the company’s history, accompanied by present marketing practices allows one to describe Starbucks’ marketing strategy as being that of a differentiator. Coffee is sold just about everywhere, as such, Starbucks has to make itself standout as a company that is not any selling a cup of coffee, but an experience.

In order to achieve this, the company has been trying to differentiate each store within the company by having it represent the specific needs of each community in which it is located. Individual stores serve as a medium for each community, and as an extension of the community’s values and ambitions.

The marketing principles, or the four P’s, also follow the differentiator marketing strategy. Starbucks is competing in an industry where marketing principles has to follow the differentiator strategy, or it risks losing market share. The company must create value to its customers, or the customers will find another place to spend their money.

The marketing principles of Starbucks, can be argued, are the basis of the company’s competitive advantage within the industry. Starbucks products are associated with quality, and the company has differentiated itself during the years as being committed to producing high quality products. Because of this association with quality, Starbucks has been able to charge a premium for its product.

Until recently, Starbucks did not face the type of competition it is experiencing today. Not too many companies that were as large as Starbucks were in the gourmet coffee business. Starbucks, through its promotions was able to create a perception of a premium gourmet coffee. Originally, this was what gave Starbucks a huge advantage over any potential competitors.

The place or location of each outlet is also in line with the company’s differentiator strategy. With 17,000 outlets worldwide, Starbucks individualized each outlet based on the surrounding communities. In addition, Starbucks also prides itself on innovation of new products, which further differentiates it from other competitors. Each of these aspects of the marketing principles that Starbucks utilizes helps to contribute to its differentiator strategy.

A SWOT analysis will help emphasize exactly what Starbucks is doing right or wrong. It will provide an insight on what the company is good at, and in what areas Starbucks could use assistance. Strengths, Weaknesses, Opportunities, and Threats (SWOT) are described below:

  • Strengths
  • It is a global coffee brand built upon a reputation for fine products and services
  • It has almost 17,000 stores in 49 countries.
  • The organization has strong ethical values, commitment to the environment, and community activists.
  • Weaknesses
  • The organization has a strong presence in the United States of America with more than three quarters of its cafes located in the domestic market. In order to reduce business risk, expansion is needed.
  • Starbucks has a reputation for new product development and creativity.

However, they remain vulnerable to the possibility that their innovation may falter over time, and product acceptance will come to a halt eventually slowing growth.

  • Opportunity
  • The company has the opportunity to expand its global operations. New markets for coffee such as India and the Pacific Rim nations are beginning to emerge.
  • Co-branding with other manufacturers of food and drink, and brand franchising to manufacturers of other goods and services both have potential.
  • Threats
  • Starbucks’ success has led to the market entry of many competitors and copycat brands that could pose potential threats. How they combat these threats will determine their future.
  • Starbucks is exposed to rises in the cost of coffee and dairy products.

Starbucks is a large company with a competitive advantage that is shrinking because of its huge success. This is because Starbucks model has been copied successfully by its competitors and this poses a serious threat to the company. If Starbucks cannot retain its differentiator strategy, it is doomed to fall out of popularity, as it would end up being a store that is selling nothing more than a cup of coffee.

With majority of its stores concentrated in United States, Starbucks is also limiting its growth and exposing itself to risk. Any negative changes in the domestic market could severely hurt Starbucks viability as a firm. If Starbucks can retain its strengths and build on opportunities, while suppressing weaknesses and extinguishing threats, it will be able to grow throughout the world market.

The company has managed to maintain the competitive advantage because it has offered conveniences and an atmosphere customer can enjoy. As long as Starbucks fulfills its customer’s wants and needs, Starbucks will continue to be a leading force in the market. Starbucks should continue to create more value at its stores. Starbucks has created a perception that it is focused not just on profits, but also on societal agendas.

The company’s stores have become a medium for people and communities to come together and promote a better place to live in an environmentally conscious society. Starbucks found a niche market where it identified what makes its customers happy, and has delivered it to them. Continuing to accomplish this will allow Starbucks to maintain its competitive advantage for years to come.

Recommendations for “fixing” the problems

  • In my attempt to orchestrate a turnaround, I first examine the Corporate Strategy. I identify Starbucks as existing in the service industry, particularly the “Fast Casual. Restaurant “sector. This is a highly competitive and fragmented industry. While there are major players in this sector such as McDonalds and Dunkin Donuts, no one is in the competitive position to set industry prices for products. The customers are price sensitive and brand loyalty is normally low. Because Starbucks has established a strong brand and a moderate amount of brand loyalty, I recommend focusing on increasing profitability and return on investment.
  • For the turnaround of Starbucks, I recommend strategy of acquisition.

The strategy of acquisition would allow to purchase other competitors in the fast casual industry that will allow us to increase profits and gain market share (Mullins, 2009). Organizations such as Caribou Coffee currently have market capital of $170 million dollars and are currently trading on the stock market at less than $8 per share (“Caribou Coffee Company, Inc.”).

By acquiring Caribou Coffee, Starbucks can take advantage of several factors. First, Starbucks can merge administrative costs of both organizations into one. Second, since there is low R ; D in the beverage industry, Starbucks can merge that operation in addition to their distribution system.

Marketing functions will originate from one central location. Caribou Coffee can be repositioned in the market below Starbucks. The lower price point of their products would serve a larger market than the market segment that Starbucks would target, therefore, the higher volume revenues can be generated and directed towards the parent company.

Recommendation regarding business strategy.

  • I recommend the “differentiator “and “defender “strategy to be pursued at Starbucks. The fast casual sector of the industry has products and services that are provided in high volume and low profit margin, which contributes to the low brand loyalty. As a defender, Starbucks will try to protect its domain by providing higher quality and superior service therefore maintaining a secure position (Mullins, 2009).
  •  I recommend that Starbucks differentiate themselves from others in the market. The differentiation strategy would allow Starbucks to establish a clear difference between themselves and their competitors.

They must create a perception that the customer is actually receiving superior value from a Starbuck’s product that cannot be provided by Tim Horton’s, Panera Bread or Dunkin Donuts. This can be accomplished by focusing on providing superior customer service and reinforcing the idea that they are providing the highest quality products in the industry. Differentiating themselves successfully from the competition will provide Starbucks with a competitive advantage and allow them to charge a premium for the products and services.


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    HSPH (2014) ‘Coffee by the Numbers’, Harvard School of Public Health [Online]. Retrieved from:
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  • “Caribou Coffee Company, Inc.” Yahoo! Finance. Retrieved from
  • Boyd, Harper A., John W. Mullins and Orville C. Walker Jr. (2006). Marketing Management: A Strategic Decision-Making Approach.
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  • Zapolski, J. (2010) Strategic Innovations in Product & Service Design [Online]. Retrieved from: starbucks-primo.

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Marketing Strategy and Implementation of Starbucks. (2020, Jun 02). Retrieved from

Marketing Strategy and Implementation of Starbucks

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