Ch. 7 Business Marketing

The book definition for business marketing is "the marketing of goods and services to individuals and organizations for purpose other than personal consumption." Starbucks does not fall into this definition with any ease. When you think about any sort of coffee shop the only image one can gather is that it is all for personal consumption.

After doing some research I was able to find some information that relates to this company and business marketing. It is not relating to Starbucks drink products but rather their music.

Starbucks has agreed to a partnership with Apple to collaborate on selling music as part of the "coffeehouse experience". In October 2006, Apple added a Starbucks Entertainment area to the iTunes Store, selling music similar to that played in Starbucks stores. In September 2007 Apple announced that customers would be able to browse the iTunes Store at Starbucks via Wi-Fi in the US (with no requirement to login to the Wi-Fi network), targeted at iPhone,iPod touch, and MacBook users. The iTunes Store will automatically detect recent songs playing in a Starbucks and offer users the opportunity to download the tracks. Some stores feature LCD screens with the artist name, song, and album information of the current song playing. This feature has been rolled out in Seattle, New York City, and the San Francisco Bay Area, and was offered in limited markets during 2007–2008.^[174] During the fall of 2007, Starbucks also began to sell digital downloads of certain albums through iTunes. Starbucks gave away 37 different songs for free download through iTunes as part of the "Song of the Day" promotion in 2007, and a "Pick of the Week" card is now available at Starbucks for a free song download. Since 2011 Starbucks also gives away a "Pick of the Week" card for app downloads from the App Store. A Starbucks app is available in the iPhone App Store.

Ch. 8 Segmenting and Targeting Markets

Starbucks has never seemed to have any worry about reaching their target market. Over the years the name has proven to speak for itself. Specialty coffee drinks seems to be that one luxury that people keep holding onto even in a time of economic struggle.

The type of segmentation that they use, as slight as it is, would be demographic. Though they will always strive to be the place for everyone they still have a specific group that they will reach more for. This is determined with demographic segmentation. Age plays a huge factor in determining this company's marketing mix. You will see your occasional tween in one of the many different stores throughout the world, but their main conquest are people age 20-40. This includes students as well as business people. It is marketed to the people who actually need caffeine in their daily routine.

In addition to their segmenting strategy they also have a targeting strategy. I briefly went over it in the last paragraph. Starbucks uses undifferentiated targeting. Though they have their ideal target market they still understand that in order to be a better more successful business they must look at the picture as a whole. The definition states: "essentially adopts a mass-market philosophy, viewing the market as one big market with no individual segments." In this type of business you are not going to be able to make every individual happy. That is why you must market yourself for everyone as a whole. Not to say that it is that way for everyone; but the field that Starbucks falls under, food and drink services, you must have a undifferentiated targeting strategy.

Starbucks has their main idea (undifferentiated targeting) and their sub plot (demographic segmentation). Both of these philosophies work for this company and work in harmony under these circumstances.  

Ch. 11 Developing and Managing Products

Something that Starbucks always seems to be doing is introducing new products into their existing product lines. Not always with customer knowledge. The products are normally seasonal which generates a certain buzz for the aware consumers.

Just today I was inside a neighborhood Starbucks and saw that they had a coffee bean blend called Thanksgiving roast. It was the first I had heard of it. I was only aware of the Christmas roast due to last weeks assignment to find out what our company was doing for the holidays.

The use of seasonal releases for new products is a kind of test market. They put the product out there and see how the customer reacts and then it goes away and they can decide how to better the product or leave it as it is for the following year.

These products rate of adoption fall under both "trialability" and compatibility. It is in the "trialability" category because it can be tried on a limited basis. Because these products are perishable the consumer does not have to make a long lasting, life changing decision. It is used on a trial basis only. The newer products being seasonal also helps this fact. They are also compatible because any product from Starbucks will have the logo attached to it. Any new product will be consistent with the pre-existing products to create continuity within the company and for the customer.   

Starbucks for the Holidays

As we get ready for the holidays so does Starbucks. Here are a few things that they are planning for this coming season:

• New addition to the holiday classic drinks; skinny peppermint mocha.
• New Christmas blend coffee
• New app for smart phone. Starbucks Christmas App
• And a promotion. Buy one get one holiday drink from Nov. 17 - 20 2-5pm. 

Ch. 16 Integrated Marketing Communication

Starbucks tends to do their marketing on a more personal level. They do use a mass form of communication, however, it is still a smaller group of people who are up-to-date on the day to day happenings within this large company.

You can create a free online account on their website to receive emails on updated news from Starbucks. They also have a basic news feed section on the same website that allows non-members to view up and coming information.

A way this company likes to send out messages to the masses is through video. I have found throughout my time learning about Starbucks that any news that has happened or will happen is accompanied by an informative video. This is an example of marketing through the use of internet. They have their own channel on Youtube that they use to post their latest creations.

For example they recently launched a new promotion that is geared towards helping create new jobs in the USA (see page entitled "Starbucks reaches out" for more info.) and this is the recent video that came out to promote their cause:

They let their creativity do the talking anytime they have a new exciting opportunity or advertisement to share. I believe that its a successful communication tactic because it shows how relaxed this company is. It shows a sort of confidence because they do not need to be in your face to get the point across, and on top of that its tasteful and artistic.

Ch. 18 Sales Promotion and Personal Selling

Starbucks doesn't adhere to the norm when it comes to promotions. They don't use coupons, rebates, premiums, loyal marketing programs, contests, sweepstakes, point-of-purchase promotion, or online sales promotions. Sometimes in select store locations they will have samples of things. It is very rare when you find that though. Its most likely around the time that they are introducing a new products

They do fall under the advertising and sales promotion category. They do not do personal selling though, you could say they take part in relationship selling because they work on a more personal level with their customers.

Most of Starbucks promotions. when they do them, are geared toward environmental aid. They gave away thermos's and traded them for your cup of coffee and they take ten cents off your coffee if you reuse a cup or bring your own to help fight against pollution.

Starbucks sales promotions are different in that they don't fall into the normal categories. This has yet to show any negative effects on them as a company.

Ch. 10 Product Concept

The Starbucks brand is what keeps this product selling. This company has a brand loyalty, "a consistent preference for one brand over all others". Their logo is known by most people and is a symbol that represents their product. People will buy it because it is a brand that is trusted.

The Starbucks logo is so well known these days that, since its new face lift, it doesn't even need the name attached to it. 

I believe that Starbucks falls under 'convenience product'. It is a convenient product, not only because they are very easy stores to come by, but because it fits the definition that says "a relatively inexpensive item that merits little shopping effort - that is, a consumer is unwilling to shop extensively for such an item". This is absolutely true for Starbucks products. Though it is a high quality and popular coffeehouse, its main selling point is how convenient it is for consumers.

Starbucks different product lines continue to grow with the passing of time. Just recently they released a new kind of coffee that is a Blonde roast. This is the latest addition to their product line of whole bean coffees. Their product mix ranges from different beverage lines to different food lines, even; all of the merchandise they sell would be in its own product line within the product mix. 

Like any company, Starbucks would be no where without their products. Their base for success is their product concept. And this concept is working for them as they are the leading producer in that field. 

Ch. 17 Advertising and Public Relations

Starbucks has never been a place to rely on advertising to get their customers to keep coming back time and time again. This company primarily use a free outlet to get the word out about their product; word of mouth. Their commercials range from the comedic to the informative. A lot of the time their advertisements aren't only about their product but about a cause that they are promoting. Starbucks is all about not limiting themselves to just being a coffee house. They are so much more than that. They inform people of this through their advertising techniques. 

Starbucks uses advertising on a personal level to connect with their consumer and to make them feel like a part of something. Whether it be that they are making them laugh with their quirky sing-song commercials or that they are showing them how in touch they are with the world; Starbucks uses advertising, not just to enhance business, but to show how they always think of the customers wants and needs first.

Ch. 15 - Retailing

Starbucks is by far the largest coffeehouse chain. They have over seventeen thousand locations world wide, three-fourths of which are located in the United States. These chain stores provide a very specific service to their customer. They are considered specialty stores, falling into the definition saying, "specializing in a given type of merchandise", paying close "attention to the customer and limited product line."

You can tell by the atmosphere of any one of these coffee locations that, as a successful company, they pay close attention to the retailing mix. They continue to produce top-notch merchandise for their guests, their are many locations in a given area giving the consumer options, they continue to come up with more promotional tools such as different mobile applications, Starbucks stays in an affordable price range for all different financial groups to enjoy, all the store locations are kept clean and the atmosphere is comforting and homey, and on top of it all you are always treated with kindness on a personal leave from the employees. Starbucks makes a special effort to reach out to its target market and then some.

In an effort to integrate new developments in their retailing strategy Starbucks is using both interactivity and m-commerce as techniques. Over the summer they launched the build your own frappuccino special, getting their consumer involved in their coffee addiction. As far as m-commerce goes Starbucks has an application for all of the major smart phones on the market. With this "app" you are able to find Starbucks locations, see your favorite drink and its nutrition facts and cost, manage your Starbucks card, and also send virtual gifts to your friends via email. 

Starbucks continues to stay on top of their retail strategy, making them extremely successful in everything they do. 

Ch. 6 - Consumer Decision Making

When it comes to making a decision as far as Starbucks is concerned it is pretty obvious that their product is more of a want than a need. Some people may believe they "need" coffee to get through the day, but it is definitely a luxury item.

This thought is what has made and continues to make Starbucks a success. They rely on both non-marketing and marketing-controlled information sources to prompt the sale of their products. Word of mouth is the main way they do their marketing and is what employs costumers to make their decision whether or not to purchase from them.

The information they've gathered also helps them to make a decision on whether to go to another brand or not. That is why it is important to get across a happy and healthy image that will entice the customer to continue to be devoted to the brand. Starbucks does a great job of prompting a comfortable environment for their guests to enjoy everything they have to offer.

Although Starbucks is not a necessity in every culture they have done a brilliant job at expanding and remaining most consumers first and only choice for coffee beverages and other goodies.

Ch. 5 Developing a Global Vision

As Starbucks grows as an industry they continue to move forward and expand globally. Their main focus on being an international success is to be sensitive to the culture that they are trying to pitch themselves into.

Approximately around 2004-2008 Starbucks was not seeing much of a profit with international sales. CEO Howard Schultz, who was what originally made Starbucks a name, left when they were reaching their peak and came back to bring this company out of their global slump.

Recently the demand for coffee has gone up in such mass markets like China and India. Starbucks announced their plan to open one thousand new stores in China. This is the number one market growth for Starbucks global marketing plan. Annually China's demand for coffee, in the last two years,  has gone up twenty percent. This is an outstanding change from a few years ago.

So long as Starbucks stays steadfast with their global vision they will be successful in the future.    

Ch. 4 The Marketing Environment

Something that has been one of the driving forces in Starbucks success has been their ability to break through to many different target markets.

Originally their aim was primarily at Generation Y. Specifically college students who needed a comfortable and affordable place to hang out or do homework. Over the years Starbucks realized that they could attract a much broader range of consumer.

Starbucks became the in between place for both working man/ woman and college student alike to have their morning coffee. But it doesn't stop there. The stay at home mom can bring her young child here and find something that they will enjoy, like a cake pop and a hot chocolate. An elderly couple can go to Starbucks for a cute, spontaneous coffee date.  There is literally something for everyone.

This all encompassing company saw how it could reach all the different generations and is working hard to make sure that every customer that walks through the door leaves with a smile on their face. They see that this  type of marketing environment is one of the factors that keeps them afloat and they continue to do a great job at maintaining their success this way.

Ch. 3 - Ethics and Social Responsibility

"We've always believed that businesses can - and should - have a positive impact on the communities they serve."

The Community:
Over the years Starbucks has gone above and beyond to give back to their community and environment. They do a number of things for the community such as reaching out to the youth. Through programs such as America Scores, City Year, HandsOn, JumpStart, International Youth Foundation and Youth Venture Starbucks is able to give support to young people as they grow and start to discover life and who they are. The goal is to nurture and inspire the rising generation to later take part in the effort to better their own community and later on possibly the world.

In 2011 Starbucks awarded over 100 grants to the organizations listed above and more. The grants ended up totaling $2.6 million. In 2009 they set a goal to connect with 50,000 young people in order to enrich their lives by 2015. Thanks to the grants the Starbucks corporation was able to meet that goal in just two short years. They are now setting a new much higher goal.

Some other ways Starbucks helps different communities

Starbucks is doing so much to help the community. This is not just limited to The United States either. Starbucks is connected with different coffee growing communities in Africa. Starbucks joined forces with Product (RED) and is now helping in the fight to live with HIV/AIDS in Africa. (STARBUCKS) RED

The Environment:
In order to aid in the on going recycling and waste reduction battle Starbucks offers a 10-cent discount to all U.S. and Canada customer who brings in their reusable mug or thermos. There is also an option for the guests who stay in the shop to have their order in a ceramic Starbucks mug.

This is a time line provided by the Starbucks website of their steps with the disposable cup
"

• In 1997, we developed our recycled-content cup sleeve as a way to protect customers from hot beverages and avoid the waste of “double cupping.”
• In 2006, we launched the industry’s first hot beverage paper cup with 10% post-consumer recycled fiber.
• In 2008, we rolled out a new plastic cup that has less of an environmental impact than our original plastic cups.
• In 2009, we hosted a Cup Summit in Seattle, bringing together all facets of our paper and plastic cup value chain to find agreement on criteria for a comprehensive recyclable cup solution.   "

Starbucks is continuing to better their recycling efforts. But it doesn't just stop there. Starbucks has and is still continuing to show concern for all natural and man made resources. They realize how important it is to be aware of the positive and negative impacts a company can have on the world when it comes to those operations. These are some of the ways Starbucks strives for the positive:
Energy Efforts

Water Conservation

Greener Stores

Climate Change

Ethical Sourcing:

Starbucks follows a set of codes and practices when it comes to growing their coffee that is beneficial to both the planet and the people. The guidelines are called Coffee and Farmer Equity (C.A.F.E) Practices. 

Starbucks is extremely thoughtful in everything they do and go the extra mile with everything they produce. From their Tea to their Cocoa they really care about their products and what goes into them. Even what goes on their shevles is crafted in a way thats good for everybody. 

Although Starbucks is probably one of the fastest growing companies in the last thirty years and is now a lot larger than they could have ever dreamed to be; they still give back so much to the environment and the community. They are an amazing example of what an ethical company should be. 

Here are a few more examples of their great display of ethical and social responsibility:

Wellness

Diversity

Starbucks Shared Planet

Goals and Progress

Community Investment FAQ

Ch. 2 - Strategic Planning for Competitive Advantage

Over the years and through its growth as a large company Starbucks Coffee has been displaying its ability to stay afloat in the ever changing market world and economy. They have become the number one spot for your morning coffee and even for a students mock study hall. They didn't achieve this goal over night. Starbucks has been slowly nurturing their marketing tools for the last thirty years or so. By using a competitive objective as their main marketing plan, this ever growing empire has been able to emerge and remain on top of the coffee craze in the United States along with other countries.

Starbucks is known in the business world for its unique marketing strategy. All of their approaches to the stability of the company are done in a ethical and refreshing way. The main focus that they have is always on customer satisfactory. An environment is created in every Starbucks to put the every day coffee drinker at ease. It is, what Starbucks partners call, the "third place". The place in between work and home where you as a customer feel comfortable. There is a community for the consumers that is based online where you can go and feel more connected with this thriving company. You get a chance to express about your own personal experiences with Starbucks. The company even joins in the discussion creating a more personal feel. Those elements, along with their consistent savory cups of joy have been the main pillar in what has made Starbucks so renowned, its what keeps them coming back for more.

A few of the other components that have this machine running at full speed are their smart choices in partnerships. This could be a very difficult card to play if used incorrectly. Starbucks has been very resourceful with this strategy. It has proven to be beneficial to the growth of the company. Another asset to Starbucks growth is their ability to innovate and create new products to satisfy the consumers need for change. They are continually updating their food and drink menu while still keeping the old favorites everyone knows and loves. For example; due to Fall, Starbucks is promoting the Pumpkin Spice Latte. This hot beverage is always on the menu but is getting publicity now for the upcoming season. While they are re-introducing that they are also releasing a new flavor to the menu called Dulce de Leche, which you can enjoy as either a hot latte or cold frappucino.

What sets Starbucks apart from those other coffee shops is their marketing technique. Starbucks has always mainly used word of mouth to get the buyers in. They rely on the quality of the product to get their foot in the door. Word of mouth is what got them from being the small business that they were to the vast enterprise they are becoming.

The Starbucks Mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time

A few of the principles that starbucks employees live by every day are as follows:

Coffee

It has always been, and will always be, about quality. They're passionate about ethically sourcing the finest coffee beans, roasting them with great care, and improving the lives of people who grow them. They care deeply about all of this; our work is never done.

Partners

The employees are called partners, because it’s not just a job to them, it’s their passion. Together, they embrace diversity to create a place where each of us can be ourselves. They always treat each other with respect and dignity. And hold each other to that standard.

Customers

When the starbucks partners are fully engaged, they connect with, laugh with, and uplift the lives of the customers – even if just for a few moments. Sure, it starts with the promise of a perfectly made beverage, but the work of a starbucks partner goes far beyond that. It’s really about human connection.

Stores

When customers feel this sense of belonging, the stores become a haven, a break from the worries outside, a place where you can meet with friends. It’s about enjoyment at the speed of life – sometimes slow and savored, sometimes faster. Always full of humanity.

Neighborhood

Every store is part of a community, and starbucks takes the responsibility to be good neighbors very seriously. They want to be invited in wherever they do business. Starbucks can be a force for positive action – bringing together partners, customers, and the community to contribute every day. Now they see that their responsibility – and the potential for good – is even larger. The world is looking to Starbucks to set the new standard, yet again. They will lead.

Brief History of Starbucks Coffee

Starbucks is one of the fastest growing service industries of this generation. Who would have guessed that this small coffee shop from Seattle Washington would grow from just one minor store to what now must be more than fifteen thousand stores in fifty different countries in less than fifty years.

From the start Starbucks offered some of the world’s finest fresh-roasted whole bean coffees. The name of the compant was inspired by the book Moby Dick and evoked the romance of the high seas and the seafaring tradition of the early coffee traders.
In 1981, Howard Schultz (Starbucks chairman, president and chief executive officer) took his first steps into a Starbucks store. From his first cup of Sumatra, Howard was drawn into Starbucks and wouldn't soon forget his experience. 

A year later, in 1983, Howard traveled to Italy and became captivated with Italian coffee bars and the romance of the coffee experience. He had a vision to bring the Italian coffeehouse tradition back to the United States. A place for conversation and a sense of community. A third place between work and home. He left Starbucks for a short period of time to start his own Il Giornale coffeehouses and returned in August 1987 to purchase Starbucks with the help of local investors.

From the beginning, Starbucks set out to be a different kind of company. One that not only celebrated coffee and the rich tradition, but that also brought a feeling of connection.

Their mission: to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time.