Marketing and Starbucks Essay Example for Free

merchandising and Starbucks Essay1.0 IntroductionThe Starbucks Corporation was founded by three entrepreneurs at the place called Seattle in 1971. Initially they were selling of whole bean burnt umber in unrivaled Seattle storeho apply and by the year 1982 the dividing line had great(p) tremendously and has airfoiled five stores selling the coffee bean beans, a roasting installation, and a wholesale business for local restaurants. When the Starbucks started its business it was only a small retail coffee shop as bid the other coffee shops. The main vision of the Starbucks owners was to educate customers about the fine coffees and feel the smell of the smuggled roasted coffee, selling just the coffee was not their direct as the coffee was sold in the USA since 1960s (Starbucks case study). Howard Schultz was recruited as the manager of retail and securities industrying and it was Howard who brought new ideas to the owners, but he was turned down. Schultz in turn opened his own coffee bar was named Il Giornale in 1986 establish on Italian coffee cafes, selling brewed Starbucks coffee. By 1987, Schultz had expanded to three coffee bars and bought Starbucks from the headmaster owners for $4 million and changed the name of his coffee bars from Il Giornale to Starbucks.His intention for the company was to grow tardily with a very solid foundation. For the first two years, Starbucks losses doubled as overhead and operating(a) expenses increased with Starbucks expansion. Schultz stood his ground and did not sacrifice long term integrity and values for short-term profit. By 1991, Starbucks sales increased by 84% and the company were out of debt. Starbucks grew to 20 stores by 1988. By 1996 it grew to 870 stores with plans to open 2000 stores by the year 2000.2.0 Marketing stategyof StarbuksMarketing strategy is carrying out sectionalisation, targeting and lieu. Doing the detailed understanding of the nourishmentstuffplace into strategical conclus ivenesss and the targeting of appropriate customer groups. This targeting should emphasise on any differential favours and adopt a suitable positioning within the target segments (Dibb and Simkin, 1996). Starbucks has adopted a Differentiation strategy it is a strategy which seeks to provide product or service that offer benefits and should be different from competitors that are widely valued by customers.The aim this strategy is to accomplish advantage by offering better products or services at same or higher price. When Starbucks was launched there were many coffee bars in the United States at that period but Starbucks wanted to stand unique from the others.Marketing has powerful potential to contribute to the highly crucial aspects of the organisational competitiveness, namely innovation (Kerin, 1992) and competitive analysis (Varadarajan, 1992) and Schulz wanted to innovate and recreate the experience of the Italian coffee bar culture. Starbucks mainly focused on the strat egy of new products, a stronger connection with the customers as the third place and expanding store locations in the United States and abroad. Starbucks has followed the simple STP process ( partitioning, Targeting and Positioning).2.1 SegmentationMarket Segmentation is a process of dividing a merchandise into distinct groups of buyers with different needs, characteristics, or behaviour that might contend separate products or marketing programs is called Market Segmentation (Kotler and Armstrong, 2006). Initially Starbucks was based as a Socio-Economic segmentation base in consumer Markets as it has c at oncentrated on social folk particularly the business class people those who are working at the office and wanted to work a cup of coffee with a high-priced atmosphere and facilities. Starbucks also had segmented his market by geographic and demographically by selecting the store location where they git find the educated and coffee lovers (Dibb and Simkin, 1996).2.2TargetingAf ter a company has defined market segments, it raft enter one or many segments of a given market and should bring out decision about how many and which customer groups to target (Dibb and Simkin, 1996). Target Marketing is a process of evaluating each market segments attractiveness and selecting one or to a greater extent segments to enter (Kotler and Armstrong, 2006). The concept of target marketing is a synthetic implication of the basic philosophy of marketing (Lancaster and Massingham, 1993).A company should target segments in which it can profitably generate the greatest customer value and sustain it overtime. Starbucks wanted to develop a reputable family with the customers, Most of companies enter in a new market y serving a angiotensin-converting enzyme segment, and if this proves successful than they add more segments, initially Starbucks did the same thing targeted the parents with the young children and it was hit concept and it has added more segments by including Te enagers and developed its product range also (Kotler and Armstrong, 2006).2.3 PositioningOnce the company has decided which market segments to enter it should decide what positions it wants to hold in those segments. Market Positioning is arranging for a product to occupy clear, distinctive, and desirable place intercourse to competing products in the minds of target customers. A products position is the place that the product occupies relative to competitors in consumers minds.Here in this case the Starbucks has developed a unique market position for their products because if a product is to be exactly same like the others on the market than consumers would have no dry land to buy it. Starbucks has positioned themselves in the market as a highly reputed brand (Kotler and Armstrong, 2006). In this case Starbucks has intend his positioning in such a way that it distinguish their products from competing brands and give them the greatest strategic advantage in their target markets. Starbucks has a descriptively simple statement to inspire and nurture the human spirit-one person, one cup, and one neighbourhood at a time.Starbucks positioning strategy was customer base so that it can give the best service more than what the customers expect. Starbucks has gained a competitive advantage over customer gaiety and employee satisfaction as Starbucks had developed its positioning strategy based on the customer and provided the utmost facility in basis of layout, furniture to the music, and in terms of employee satisfaction Starbucks make employee as a partners and gave them a personal security with a freedom to participate in the every decision of the business and make it successful (Porter Miller, 1985, Porter, 1998).3.0 Developing Marketing MixOne of the major concepts in the modern marketing is once the company has decided its overall marketing strategy than it should plan the details of the marketing unite. Marketing mix is the set of controllable, tactical m arketing tools (product, price, place, and promotion) that the firm blends to produce the response it wants in the target market (Kotler and Armstrong, 2006). Starbucks has a made good decisions on marketing mix tools3.1 ProductProduct means the goods and services combining the company offers to the target market. Starbucks has used bell ringer name, Quality, conversion and Services as their Product tool which can be concluded by this statement, Starbucks with a good Brand name provides best Quality and with the Variety of Products, it has adopted Quality improvement strategy (Kotler and Keller, 2009). Initially Starbucks started with the coffee than it has included non-fat milk, cold blended beverages. afterwards on stated seasonal offerings such as strawberry and cream Frappuccino, gingerbread latte with some food items like cookies and pastries. Before launching the products Starbucks was getting the approval of the customers.3.2 PricePrice is the essence of money customers h ave to pay to obtain the product. Though the Price of the Starbucks was higher than the other coffee shops, the customers were ready to pay the amount because Starbucks has developed a luxurious image with all the facilities inside the store. Starbucks as a good Brand have offered more benefits and facilities and the best quality of products to justify their higher prices (Kotler et al, 2006).3.3 Distribution and ServiceStarbucks has a good distribution channels initially it was selling coffee beans and doing wholesale business for local restaurants. In terms of service and location Starbucks opened the stores in a such a way that it can gather to targeted customers and it has also gave more stress on giving the best customer service by expense a lot of money by training its employees (Starbucks case study).3.4 PromotionStarbucks initially did not use the advertising tool for promotion but it was the Public relations and the Personal selling tool that helped the Starbucks to achiev e its target