Starbucks continues to employ various strategies to bridge the gap between its products and the consumers’ needs. Its products include coffee, tea, pastries, Frappuccino beverages, smoothies and merchandise such as mugs and instant coffee. Starbucks studied the market and identified the missing satisfaction of luxurious coffee products and therefore the need to bridge the gap. They focused on making a $2 cup of coffee that was luxurious yet affordable. This coffee product complemented the consumers of the $2 McDonald's hamburger. Further, Starbucks continued reinventing the product while advertising to inform consumers about its utilitarian value.
Starbuck’s 4P marketing mix and its product differentiation strategy enable it to carve a niche in the market and establish it as the mainstream global coffee products company. It has involved an ongoing product innovation process aimed at offering new products for attraction and retention of customers. To enhance more access to its products, Starbucks has embraced technological advancements through its App that allows customers to place orders. The App saves time for consumers. One of its promotional components, the Starbucks card, ensures customers get freebies which enhances customer retention. In its pricing, the company continues to offer high-quality products to match the high price relative to its competitors which have maintained the premium brand image.
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Through the innovation process, Starbucks has reaped the benefits of product differentiation. The high-quality products have created a perceived value to its consumers and potential customers that have also enhanced loyalty. The high-quality products enable the firm to compete at a non-price level without the need to reduce the price. Further, the brand differentiation has created the notion of no perceived substitutes because Starbucks covers a wide range of coffee luxury needs through its various products. Starbucks operates in line with the marketing concept philosophy. It has managed to offer the physical, psychological and sociological satisfaction derived from the purchase and consumption of its products. The benefits derived from use of Starbucks products indicate its ability to solve consumers’ problems associated with luxury in consumption of coffee products.
