One of the most popular drinks in the world is coffee and the leading retail company that offers coffee is Starbucks. Starbucks was founded in the year 1971 and the company has grown throughout the world to become an internationally recognized brand. Starbucks owns more than 7000 outlets that are distributed in different parts of the world but most of them are located in the United States. As the leading coffee brand in the world, Starbucks has developed its business idea around the restaurant and fast food business model. In order to gain an adequate analysis of Starbucks, this market analysis will examine the growth and diversification strategy, segmenting and targeting strategy, positioning, and the 4Ps of marketing strategy that include product, place, promotion, and price.
Growth and diversification strategy
The growth and diversification strategy that Starbucks has used involves having a diversified product mix. While Starbucks is renowned for offering beverages especially coffee, the company has diversified to other food products. The use of food products has enabled Starbucks to gain a new market for its meals. Starbucks has grown to serve other foods such as the La Boulange pastries. The introduction of these food ranges has been used to fuel a further growth of the company. The diversification strategy has become a new source of revenue for the company. The sale of foods has also increased the spending per customer at the store and this has been used to realize an improvement in sales.
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Segmenting and targeting
Market segmentation involves a division of the market and buyers into distinct groups based on their specific characteristics while market targeting is a process of evaluating the interests of a specific market segment to enter. Starbucks has segmented its market based on income, age, gender, ethnic backgrounds, and geographical location. Such a segmentation has enabled Starbucks to identify its target market where it involves individuals that are between the age of 25 and 40 that are from the middle and high class. The other segmentation involves 18 to 24 year olds that are in the middle and high class. Starbucks target market is thus individuals that are from the middle and high income office workers who are willing to spend their money to purchase premium products.
Positioning
Starbucks has positioned itself in the market as an expensive coffee location that offers a rich and delicious coffee. Starbucks has thus established itself as a brand that focuses on quality. The quality of Starbuck’s coffee has been used to differentiate it from other competitors in the market. Additionally, Starbucks has created its coffee stores to become a location where people can sit, relax, have a cup of coffee, and also use the internet. This strategy has been used to enhance the customer experience. The positioning of Starbucks is thus based on offering the best customer experience at a premium price.
Product
The product strategy of Starbucks is based on offering coffee beverages and other food products. While Starbucks is mainly a coffee company, it has also diversified to other food products. This marketing mix has enabled the company to attract several other customers. Starbucks stores thus sell other products such as ice cream, hot and cold sandwiches. Some stores also have a “Starbucks Evening” which can offer appetizers, wine, and beer. Before the launch of any product, Starbucks gains customer approval and then introduces the products on a few stores to analyze the perception of customers.
Place
The marketing mix of place focuses on the distribution strategy of Starbucks. Starbucks has opened its stores in more than 70 countries in the world and it has more than 30,000 locations. The huge number of stores that operate in different parts of the world has increased the market share of Starbucks in the fast food industry. Most of the outlets of Starbucks are usually located in the United States. The company has also established a website which provides information to customers regarding the different stores and the products served at each of those stores.
Promotion
Starbucks focuses on promotion of its products and services through the use of social media platforms, TV, and print ads. The company has strived to promote its products in social media by running promotional campaigns such as “tweet a coffee”. The company also runs a feedback system from customers that is called “My Starbucks Idea”. There are loyalty programs for its customers that comes with perks such as gift cards and having zero charges for a selected milk and coffee options. The company has also strived to engage with the community through participation in the local community and healthy programs. The company has engaged in social responsibility and environmentally friendly techniques such as the use of green buildings and having recyclable cups.
Price
The price strategy that Starbucks uses involves having coffee that is at a premium price. The company justifies having expensive coffee as it uses high end technology and prioritizes on customer experiences. Starbucks has also opened outlets and provided food products that are of a low cost to customers that may be deterred from the company’s costly options. There are packaged products that can be found at grocery stores which come at affordable prices. The drinks at Starbucks also come with different sizes and at different prices. While it charges premium prices, the quality of Starbucks products is always the highest and this enables the company to have loyal customers.
In conclusion, Starbucks has made use of an effective marketing strategy to become the leading global brand of coffee beverages. Starbucks has diversified its products and enabled it to have a bigger market and grow it sales. Starbucks also focuses on premium prices and this has been used to identify the company’s target market and establish a strong brand positioning. The promotional strategies that Starbucks uses have been effective in appealing to its market spread all over the globe.
