Ch. 12-Services and Nonprofit Organization Marketing

Cultivating Change– one relationship at a time.

Starbucks is committed to doing business responsibly and helping communities thrive. And while their vision is big, they're doing things to extend their reach at the same time. They are focused on stimulating a passionate network to their diverse partners, customers, nonprofit organizations, businesses and civic leaders for innovative, positive change. Each relationship brings specialized expertise and experience to the table, and they work with them to create innovative solutions that support their commitments to ethical sourcing, environmental stewardship and community involvement. Every one of them plays a part in their success, and they’re crucial to helping them reach our goals.

They are proud to work with The American Red Cross, AAMA (The Association for the Advancement of Mexican Americans),The Association of Post consumer Plastic Recycles, The Food service Packaging Institute, Inc. (FPI) along with many more. 

   

Ch. 11 - Developing and Managing Products

Developing new products and to be up to date plays a vital role in today's fast moving business world. Innovation is the key of developing new products. Starbucks is considered as the most developing company in the specialized coffee industry. Starbucks provides its customers with new exciting beverages,food items and a unique store experience throughout the year. Coffee is nothing new to the world, and basically all the items Starbucks offers do exist already. But nevertheless, Starbucks makes it happen to update their own company to a overall new experience by creating new product lines,adding new products to existing product lines, improving or revisions of existing products, re-positioning products and innovating customer experience.

The coffee house adds new products to its products lines throughout the year. For example, Starbucks extents its line every season by introducing specific seasonal drinks such as the pumpkin spice latte or peppermint mocha.

Another way Starbucks develops new product is by re-positioning. For example, Starbucks frappuccinos which are actually just ice coffee drinks appeal more to younger people after Starbucks added a couple of flavors such as strawberry,vanilla or chocolate mint. The frappunccinos have become to a more icy milkshake drink that attracts mostly younger children.

Ch. 8 - Segmenting and Targeting Markets

Market segmentation is a very resourceful strategy for organizations to fulfill their mission and gain profits. This is the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups. Starbucks uses demographic segmentation(markets by age, gender, income, ethnic background, and family life cycle) as well as geographic segmentation (markets by region of a country or the world, market size, market density, or climate) and psycho-graphic segmentation, which can link with demographics.

After a company decides what is their target market and market segments, it should choose what positions they should occupy within those segments.  Positioning within a market is developing a specific marketing mix to influence potential customer's overall perception of a brand, product line, or organization in general. Starbucks has positioned themselves as a highly respected brand.  The Starbucks company has become positioned in a way that it can distinguish their products from competition, which gives them an advantage once again.  Going back to their mission, they want "to inspire and nurture the human spirit - one person, one cup, and one neighborhood at a time."  Their positioning strategy is customer based, which allows them to give the best customer service.  As they continue to do this, they hold onto their sustainable competitive advantage in terms of their customer satisfaction as well as their employee satisfaction.

Ch. 15- Marketing Communications

It is less likely that a business survives without promotion no matter how good the product is. Communication to customers is an essential key to make them aware, informed and more apt to take action. All the promotional strategies ( advertising,public relation, personal selling and sales promotion) must be combined effectively and efficiently. It is important to promote on each and every stage of the "purchase decision making process" in order to make customer buy the products. The AIDA concept outlines four basic levels of the purchase decision making process (attention, interest,desire,action) and indicates the most effective promotion strategies on each level.

Starbucks mostly attracts attention through high publicity and all kinds of direct and indirect advertisement. For example, the coffee company seems to be everywhere in NYC. The extreme appearance of the Starbucks brand on cups, stores, packages, TV, social media etc. pp. catches the average consumers eye immediately and unintentional. 
Simple awareness is not enough to drive a consumer to buy, interest must be created. Starbucks creates high interest by advertising their unique store experience and by public relations. For instance, Starbucks attracts interest by sponsoring communities such as the store in Harlem, New York City that shares the profit with the community.


Starbucks encourages desire by different sales promotion that persuade customers to by new products and by well trained sales people.

Ch. 10 Product Concepts

Product Concept 

Starbucks products can be defined as "Convenience Products" because there are "relatively inexpensive" and "limited shopping effort" has to be invested. Among the coffee industry though, Starbucks can be viewed as a "Specialty Product" because compared to other coffee brands, Starbucks brand name, image and quality of service are key components in their company outlook. Also, the price range of the coffee makes it come off as high quality or a luxury.
The coffee company has a high product mix, beside a major variety of coffee and espresso beverage, Starbucks offers different kinds of petites, breakfast items, sandwiches, salads etc. Starbucks has been constantly expanding its product lines by developing plenty of new products.

Starbucks has a international brand name and loyalty (brand equity).The coffee house has been able to established a quality and upscale image. It's logo is well known and immediately identified on a worldwide basis. Starbucks gives many consumers a feeling of high prestige. The company stands out above other coffee houses such as Dunkin'Donats because of their high quality product - coffee - and it's product mix width; furthermore, because of the unique store experience. Starbucks as a whole is basically the main product concept that makes the company so successful, the actual coffee is considered secondary. No other coffee brand has been able to build a brand where its seen as more than just a place where people grab a cup of coffee. One of the most compelling facts is that even though Starbucks products are relatively expensive and defined as "luxurious", it is still affordable. Starbucks was actually meant to target the upper working class. But its brand appearance was so pervasive that Starbucks ended up attracting almost everybody throughout the world.

Ch. 17 - Personal Selling and Sales Management

Retaining Loyal Customers

Starbucks Rewards Card

In order for Starbucks to retain its customers they offer a Starbucks Rewards Card that can save the customer money. The rewards program has 3 different levels that each customer can level up to to continue to receive better benefits. Customers can simply continue to reload their cards in store or do it through the "Starbucks" mobile app to keep up with their stars and balance. Recently, Starbucks has changed the Starbucks rewards to the picture below. 

Personal Selling 

Starbucks are using personal selling business. Starbucks main purpose is to sell coffee drinks and good services. It is more like direct communication between a salesperson and individual customers. Baristas of Starbucks can communicate with their customers one to one and answer questions their customers had, and tell the differences between different type of coffee drinks. Selling coffee drinks are mostly short term sales, it is focus on products delivery and sales follow-up is short term.

Ch. 16 Advertising, Public Relations and Sales Promotion

Adverting 

The Starbucks logo on the white cup itself is enough for advertising. Most everyone who walks with a Starbucks cup in hand is basically a walking billboard. They also use the Starbucks website to promote new drinks or other products.

Promotion

Starbucks offers many promotions whether it's there Half Price Happy Hour, Happy Mondays, Morning receipt promo, Holiday Specials or the promotions you receive through their Starbucks Rewards. Of course the promotions are usually durning certain days and times they still find a way to offer their customers a way to save money. The promote these offers by e-mail, or by the Starbucks Mobile App. 

Ch. 14 Marketing Channels and Retailers

Along with your ordinary Starbucks coffee shops, Starbucks also has a B&N Cafe inside Barnes and Noble. A combination of Book and a cup of Coffee is one of the best friends in the world. 

Choosing the Retail Mix


Product
Unlike Regular Starbucks coffee shop, B&N cafe have limited flavors and types. The target of this store is book shoppers who think about drinks with book, not a regular customer. If their goal is just drinks, They will move to another regular Starbucks coffee shop. As a result, B&N cafe has basic and popular menu from regular Starbucks coffee shop.


Promotion
B&N Cafe has a special discount for Barnes and Nobles members. If you have Membership card for Barnes and Nobles, you can get 10% discount on your items.

Place
When you rest at home, you may read books with a type of drink. However, if you could not find a book to read at home you can visit a B&N cafe and you can find what ever book and bring your own coffee without charge. There is no better place than a cafe, but a cafe with books is way better. Not to mention the coffee smell and the comfortable seating to relax in a hectic city.


Presentation
Even if you did not know B&N cafe is a type of Starbucks, you would recognize it by the interior design and the employees and their very similar Starbucks look. B&N Cafe looks almost the same as a regular Starbucks stores, but B&N cafe's atmosphere is more homier than others. The time you stay at a B&N does not matter as it would at a regular coffee shop.

Ch 6: Consumer Decision Making

 

 When an individual buys a product, there is a process which occurs for making their decision.  This is the consumer decision-making process, which includes: recognition, information search, evaluation of alternatives, purchase, and post purchase behavior.  Now not all of the steps are exactly necessary or even taken.  For example, a person may not even purchase the item or some consumers may not need to do the information search.
Starbucks' consumers rely mainly on the recognition step and even the information search if it is a new consumer.  When a person is thirsty and needs their daily fix of coffee, they are responding to their stimuli.  An individual can be walking by one of Starbucks' coffeehouses and their senses become aroused, which could be enough to indulge in a coffee, or morning beverage/treat in general.  If a consumer needs the information search, they can receive this information from word of mouth.  Many of Starbucks' loyal customers speak very highly of the brand and the quality of the coffee.  Even though the price points are about $2.00 or more than say a Dunkin' Donuts coffee, Starbucks' locations are more convenient to have access to then one of their competitors.
Now within the decision-making process, perception of a specific product is considered by marketing managers.  Perception is a process all people take part in as we move through the course of events in our daily lives.  When we meet people, make business decisions, evaluate performances, or pass judgments, our perception surrounding such events helps us persuade our next course of direction.  Starbucks focuses on their employees and the effects they give on the consumer, as mentioned in previous blog posts.  Starbucks has been successful in modeling guidelines to direct employee behavior and shape corporate perception to help in its success.  Consumers perception must start from the perception employees view about the company.  If the employees decide this is the place to be for them, then the energy will be given to the consumer and they will return.
The consumers' post purchase evaluation process is probably the most important out of the five steps taken because it requires the decision of whether or not to buy that particular item again.  This decision to purchase a product at Starbucks, because of all the research and the variation of products they offer, can be done in one store visit.  Starbucks gives a good motive for customers to return because if you are unsatisfied with your drink, then you will be offered another drink and even given a coupon for a free one.  Again, the customer service in Starbucks is what makes the experience.  The employees make sure that the customer receives what they ask for in a personal way which makes a customer feel like they are the only person Starbucks is attending to and caring for.  As Howard Schultz, CEO, stated to Fortune Magazine, “We aren’t in the coffee business, serving people.  We are in the people business, serving coffee."Starbucks' consumers rely mainly on the recognition step and even the information search if it is a new consumer.  When a person is thirsty and needs their daily fix of coffee, they are responding to their stimuli.  An individual can be walking by one of Starbucks' coffeehouses and their senses become aroused, which could be enough to indulge in a coffee, or morning beverage/treat in general.  If a consumer needs the information search, they can receive this information from word of mouth.  Many of Starbucks' loyal customers speak very highly of the brand and the quality of the coffee.  Even though the price points are about $2.00 or more than say a Dunkin' Donuts coffee, Starbucks' locations are more convenient to have access to then one of their competitors.Now within the decision-making process, perception of a specific product is considered by marketing managers.  Perception is a process all people take part in as we move through the course of events in our daily lives.  When we meet people, make business decisions, evaluate performances, or pass judgments, our perception surrounding such events helps us persuade our next course of direction.  Starbucks focuses on their employees and the effects they give on the consumer, as mentioned in previous blog posts.  Starbucks has been successful in modeling guidelines to direct employee behavior and shape corporate perception to help in its success.  Consumers perception must start from the perception employees view about the company.  If the employees decide this is the place to be for them, then the energy will be given to the consumer and they will return.The consumers' post purchase evaluation process is probably the most important out of the five steps taken because it requires the decision of whether or not to buy that particular item again.  This decision to purchase a product at Starbucks, because of all the research and the variation of products they offer, can be done in one store visit.  Starbucks gives a good motive for customers to return because if you are unsatisfied with your drink, then you will be offered another drink and even given a coupon for a free one.  Again, the customer service in Starbucks is what makes the experience.  The employees make sure that the customer receives what they ask for in a personal way which makes a customer feel like they are the only person Starbucks is attending to and caring for.  As Howard Schultz, CEO, stated to Fortune Magazine, “We aren’t in the coffee business, serving people.  We are in the people business, serving coffee."An advantage marketing managers take into consideration when selling a product and making sure the consumer continues to buy the particular product is looking into specific primary or secondary membership groups.  Consumers are influenced by people around them, whether from their similar cultures, values, personalities, attitude, etc.  Starbucks focuses a lot in spreading their brand name by word of mouth.  They have some commercial ads but what mostly works for them is to be recommended by someone consumers know.  They also take opinion leaders, which by textbook definition is an individual(s) who influences the opinions of others.  Starbucks does this by being featured in many shows and movies.  This has helped them grow their credibility and gain return customers.

Ch. 5 Developing a Global Vision

" To create distinctive Starbucks experience in the face of rapid growth "

Starbucks is the worlds largest coffee retailer with 22,000 stores in 66 countries in the world. 11,o68 stores are placed in the US - it leads to a total store number of almost 16 600 stores.
Throughout the whole world, Starbucks sticks with it common goals and company culture ( Global marketing standardization/"One product,One Message Marketing Mix"), while product offerings are modified to local taste. For instance, Starbucks in Germany does not offer the exact same breakfast items that are offered in the US simply because bagels or some other items are not typical for breakfast in Germany.
Starbucks enters the foreign market mostly through licensing arrangement's or joint ventures with local retailer. Some of the international coffee houses are also company owned or operated. The first international coffee house were launched in Japan with the help of a Japanese retailer SAZABY.INC in 1996.
The company is concerned about their international neighborhoods just the way they are in their own country. It is highly important for Starbucks to carry their "mission"- to be more than just a coffee house - out of the US.

“We remain highly respectful of the culture and traditions of the countries in which we do business. We recognize that our success is not an entitlement, and we must continue to earn the trust and respect of customers every day.” Howard Schultz

Additionally, the company committed themselves to support their international communities with "Starbucks- Shared Planet" .

"Starbucks is dedicated to supporting communities around the world – where we live, where we work and in the countries where our coffees are produced."

Overall, Starbucks as the world largest coffee house brand still earns the most of their revenues and positive feedback from their native costumers. One major point that hinders many consumers to buy at Starbucks  overseas is the high price that the company charges. For example in Germany people have to pay for a small Frappuccino  4 Euros which is almost 6 US Dollar. The same Frappuccino cost in the US 4 Dollar.

Ch. 4 The Marketing Environment

Starbucks' Target Market

Starbucks' target market is mainly adults, men and women, from the ages 25-40.  This consists of almost half of Starbucks'consumers and grows at a rate of 3% annually.  Even though this is the majority of Starbucks' business, the consumer also ranges from young adults 18-24 (40%), which grows at 4.6% annually, and even kids and teens 13-17 (2%), which most products are bought from the parents.

A main reason why Starbucks is so successful today and continues to grow is because the people of the company takes many factors into account.  These include: social, demographic, economic, technological, political and legal, and competitive factors.

The people within the Starbucks company, management and staff, feel they have a responsibility to give back to the community.  Ever since they opened their first store in 1971, they dedicate themselves to show a balance between profitability and social conscience (social factors).  There is a whole area behind just the coffeehouse where they offer community service, create jobs for those in need, and youth action programs to prevent violence among young adults.  They are also very involved in keeping the Earth green and certain environmental factors, such as recycling and reducing waste, energy, water, and climate change. 

Starbucks - Environmental Responsibility

Because Starbucks is a global company and is expanding the retail stores throughout the world, they focus on all demographics.  Although the prices of their products are more than say a street cart, they do provide some low-cost items for those who still want the quality of their coffee.  That said, if we take a look at the average income of an American household in 2011 (Per Capita Personal Income U.S.), it was calculated to be $41,663.  That suggests that Americans can buy specialty coffee drinks from an expensive, quality-oriented organization such as Starbucks.  This also covers certain economic factors Starbucks faces.

Starbucks has kept up to date with the technological factors.  For instance, they developed the Starbucks card, which is basically a pre-paid reward card.  This keeps repeat customers and as a person bumps up rank in the program, they receive greater benefits.  Everything is stored within the system and when a Starbucks employee sees a customer with the Starbucks card, special treatment is delivered.

Political/Legal factors, which affects Starbucks as a company, include the stability of the countries where Starbucks purchases its coffee and natural resources.  They receive their coffee beans from countries all around the world, even places that have many natural disasters: tsunamis, earthquakes, and wars.  If any of these events occur in a country where they are expecting their coffee from, Starbucks may not be able to produce coffee and profits will drop.  Also, Starbucks is environmentally friendly, as stated earlier.  They have to consider how to protect the brand aspect in everything they do, from providing a living wage that makes it to farmers and have production with low pollution rates.

Ch.18 Social Media and Marketing

Starbucks is known for lots of things: great coffee, friendly baristas, and a near-complete takeover of practically every street corner in America. Did you know it’s also known for it’s killer social media strategy? It’s true! Take a look at some of these stats:

37.32 million Facebook likes  
6.56 million Twitter follower  
7.7 million Instagram fans 
2.86 million Google+ followers  
239K Pinterest followers 
32K YouTube subscribers

Facebook
Those numbers are staggering but well-earned. There’s no doubt Starbucks is crushing social media, but how do they do it? Let’s take a look.
Interestingly, the Starbucks social media management team doesn’t post Facebook updates all that often. When they do, however, they’re usually eye-catching and ultra-clever. The posts strike a good balance between fun contests, helpful tips for the java-loving crowd, and subtle sales messages to its customers.

Twitter

Starbucks has a fascinating and unique approach to Twitter updates -- they don’t do them all the time rather strategically! Fans who connect to the company on Twitter to catch the latest news and updates are in for a surprise. The team does post unique content but also uses the Twitter as a service to reach out to customers talking about their in-store or product experiences.                                 

All Tweets are directed at specific Twitter users who’ve “spoken” to Starbucks in their own timeline, sometimes with a complaint or negative feedback. The Starbucks team checks in several times a day and encourages dissatisfied customers to get in touch with the company for follow-up using a Twitter-specific email address. It’s an unorthodox but smart approach to deal with customer complaints before they have a chance to get out of hand.

Pinterest and Instagram

A big part of the coffee culture is about beautifully decorated espressos and fancy cups to drink your favorite cup. Starbucks really shines on visually-oriented social sites like Pinterest and Instagram where they can post appealing beverage-related eye candy. The company maintains several Pinboards featuring tea rituals, coffee gadgets, and soothing spaces to get cozy in while you sip. Instagram, on the other hand, is an assortment of cool images related to the coffee community and culture.



WHAT STARBUCKS KNOWS ABOUT SOCIAL MEDIA


Getting customers is good. Keeping customers is great. With over 21,000 stores in more than 65 countries, its a safe bet that anyone with even a passing interest in coffee already knows Starbucks exists. The company has reached critical mass in terms of advertising so its challenge at this point is keeping customers loyal so they’re not swayed by competitors with similar offerings.

The Starbucks social media team is great at offering the customer service of local coffee shop on a grand scale over its social media channels. Even though they’re a huge company, they still give customers individual attention, which no doubt goes a long way toward keeping them coming back for more.


Coffee is made for socializing. One of the reasons behind Starbucks’ social media success is that drinking coffee is a social activity. People love to meet over coffee, bring each other coffee, swap stories about coffee, and build coffee acquisition into their morning routines. 

By extension, sharing the coffee-drinking experience is a natural fit for platforms like Twitter and Facebook. In a classic case of “build it and they will come,” all Starbucks has to do is create places for coffee drinkers to congregate online and they will happily oblige.


Consistent branding is key. No matter what Starbucks social platform you visit, the Starbucks touch is evident. The company’s social channels all have the same look, feel, and tone as their stores. Although the marketing team takes a slightly approach from Twitter to Instagram to Facebook, the content is consistently unified around the company’s mission, message, and goals.
Whether you’re a fan of the Starbucks product line or not, their social media success is undeniable. As with every other aspect of the company, their attention to detail and customer-centric messaging is what makes their social outreach some of the best in the business.