Ch.7 Business Marketing

Business to business commerce (B2B commerce) has become a significant revenue source for Starbucks. Besides the company profitability that the company gains, Starbucks also expands their market reach, brand awareness and improves product image through B2B commerce.

The firm mainly interacts with other businesses in form of business strategic alliances and by selling their products directly to other business re-sellers such as Shop Rite or Kings.

Starbucks forms alliances with other companies and social groups across the world, at the same time they are improving the company's brand awareness and reputation; furthermore, they are exposing the brand name and products to potential new customers on a regular basis. 

For example, Starbucks partners with Barnes and Noble bookstores since 1993. They established an in house coffee shop in plenty of Barnes and Noble stores. Starbucks also has formed an alliance with United Airline, offering the company's coffee in brand labelled cups on board. The coffee company has formed an alliance with ice cream manufactures to use the Starbucks flavored ice cream and brand. Furthermore, the firm partners with the National Association for the Advancement of Colored People (NAACP). The collective purpose of this alliance is to support the advancement of both parties' goals which is to fight for social and economic equality. These are only a few example of the many alliances that Starbucks has been taking care of. However, the company attaches great importance to relationship marketing. Starbucks is a loyal and dedicated partner who guarantees top quality and satisfaction.

"Starbucks Business Alliances provides our customers with a custom Starbucks coffee programme which is tailored to the business  partner. A consultative relationship based on proven success, industry expertise and an overall commitment to quality. It’s a commitment that begins with our selection of the finest coffee beans and doesn’t end until the customer savours the world’s finest cup of coffee." Starbucks for Business

Ch. 8 Segmenting and Targeting Markets

Marketing segmentation helps marketers to group their customers and identify the specific needs for each group more precisely. After doing this, resources can be allocated accurately and the marketing mix can be adjusted perfectly.

Starbucks uses a combined strategy to break down their  own market from others in order to sell their products more effectively. The coffee company mainly uses demographic - and psycho-graphic segmentation. Starbucks focuses mainly on married,well educated men and women with children in the age of 40. Therefore, the coffee house created a mature and high prestige image and also provides beverages and food that appeal to children in order to appeal to their ideal segment. The actual segment turned out to be younger and less educated than expected.The main segment represents women in the age of 18 - 43, 42% of them have children, 33% of them are college graduates and 54 % of them are married. However, Starbucks target market also have common psycho-graphical characteristic. Main Starbucks consumer are college graduates with high income who like to socialize and  share a neighbor hood. The coffee house locates its retail stores in central spots of a neighbor hood such as train stations because these spots are easy to reach for everybody in a community.

Also, Starbucks practices a concentrated targeting strategy by focusing only one segment which is the gourmet coffee drinker. This is how Starbucks defines its niche and label themselves as a high quality product. After establishing their niche, Starbucks continually expanses its product line to keep its only segment excited.

"A coffee so good we can all be thankful"

"Thanksgiving is one of those days where everyone comes together. Where everyone celebrates and everyone watches the parades and eats pumpkin or pecan pie. And with the coffee brewing at the end of the evening, we can now all share a cup of Thanksgiving Blend.

Created to go perfectly with your stuffing and pumpkin pie, this full-bodied blend of coffees from Guatemala and Sumatra will complete your holiday meal. The subtle spice flavor, cocoa notes and hints of fine herbs complement all the flavors of your dinner (including those many leftovers). And that’s something to be thankful for.

Enjoy with:

Your family and friends as dessert is being served." (www.Starbucks.com)

Ch.11 Developing and Managing Products

"New products are important to sustain growth, increase revenues and profits, and replace obsolete items."

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.

Starbucks just created its new blond coffee roast to enter the established market of "light blend" coffee drinkers. New or existing customers are now able to enjoy all the Starbucks coffee beverages brewed with the lighter coffee blend. Previously, the coffee company introduced breakfast items and petites that did not exist before as well.

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.

The Starbucks ready brew instant coffee is one of Starbucks improvements of already existing products. "Other instant coffees taste flat and lifeless. Starbucks VIA® Ready Brew is different – it’s full-bodied and flavorful, just like the Starbucks® coffee you know and love."  Starbucks guarantees the innovative quality of its instant coffee by promising a packet of the traditional house blend in case of dissatisfaction.

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.


Overall, Starbucks has been constantly introducing new products. However, in Starbucks CEO Howard Schultz opinion Starbucks was not always innovating new products ... 

Ch. 16 Integrated Marketing Communication

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 efficiency. 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, NYC 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.

.

Additionally, Starbucks is the most distinctive coffee brand ("rich experience", "more than just coffee")  these days which automatically stimulates desire. 

The coffee company seems to be on a pretty good course regarding action.

"In 1971, our original store in Seattle’s Pike Place Market served its first cup of coffee. Today, Starbucks Coffee Company is the leading retailer, roaster and brand of specialty coffee in the world. More than 40 million customers visit Starbucks retail stores every week where they enjoy cup after cup of freshly brewed coffee."