Ch. 10 Product Concepts

A product represents "the heart of an organization's marketing program". Without a product, there were no price, design, target market, marketing mix, promotion strategy etc. - simply, there were no business.

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. 18 Sales Promotion and Personal Selling

Previously, we found out that Starbucks does not stress about aggressive advertising in order to win customer or boost up sales. Besides using advertising and PR, companies such as Starbucks use Sales Promotion, which is less expensive and more controllable, to push immediate turnovers.

Starbucks has placed different types of Sales Promotion across the country and other nations with hopes of motivating more customer to purchase, especially in times of economical hardships where people are less likely to purchase. The coffee company uses all kinds of different sales promotion. For example, Starbucks offered any of their breakfast sandwiches for $ 2 when purchasing a regular cup of coffee last week. Customers in Seattle, Miami or Chicago who have bought something in the morning at Starbucks were able to buy any cold drink for $2 after 2 pm (Premium). Sampling is another form of promotion that Starbucks uses. For instances, the coffee company gave away free coffee or samples of their new petites. Also, "Happy Hour" is where a specific drink is offered for half of its original price. Coupons or " Buy one and get one FREE" are frequently used tactics at Starbucks as well.

The coffee house usually uses different deals in each region to reflect the regional variations in the manner customers take their coffee . For instance, when Starbucks offers free coffee in NYC at 4 pm, they might offer the same coffee at 8 am in the morning in London. With the awareness of each customers "coffee habits" and each specifically chosen sales promotion, Starbucks shows its major customer related concern which is typical for the company. Starbucks simply knows its customers. This relationship is also reflected in personal selling. The staff at Starbucks is not only well trained in providing advice and information about the products, but they also know how to build a intimate relationship to each customer in a individual way. CEO Howard Schultz stated that the company does not believe that brand sustainability can be achieved only through advertising and sales promotion. How Starbucks builds its personal relationship to each customer is the companies key which makes thousands of them so loyal.

Starbucks designed "Duetto Cards" especially for their loyal customers in order to make them even more loyal by benefiting them (Loyalty Marketing Program). The card is a combination of a credit card and a re-loadable Starbucks card with which customer can collect points. When enough points are collected, they can be convert for any product in the store.

Ch.17 Advertising and Public Relations

Advertising is an essential element of Marketing/Business. A new business needs to promote itself in order to be notice. Otherwise, it would die sooner or later because of the lack of brand awareness. Advertisement attracts attention and brand recognition;more importantly it affects customers everyday by informing them about certain products which affects their beliefs and attitudes towards the company, product and/or service. However, advertisement is quite important in the perception of the business. After a business established its clientele, not every business stresses importance of having a large advertisement budget.


Starbucks is one of those companies that does not follow aggressive advertisement strategies. Today, the coffee company mostly promotes itself through their logo and cups that have a high recognition value and are seen everywhere in NYC and all around the world. Additionally, the brand appearances not only in ever day life but also in the Media and in association with celebrities, promotes the company automatically and free of charge.

Starbucks uses in-store advertisement mainly for their products. They also have a seasonal media schedule where the company advertises a specific beverage that is more likely to be purchased during that specific season of the year, for example the "Pumpkin Spice Latte" which is highly marketed at the moment. Nonetheless, Starbucks is more concerned about institutional advertisement,to point out what Starbucks is about - the experience -.

  "Consumers and companies alike are going through profound changes based on complex and challenging economic realities. Everybody is looking for value, but value doesnt just mean whats cheapest, its about whats best for consumers, their families, their communities and the world around them.

Providing this value and living by our ethics is precisely what Starbucks has been doing for nearly 40 years and today we are poised to launch an extensive, long-term campaign to tell that story. As a loyal customer, we want to thank you for being an important part of our story and invite you to be among the first to discover the new campaign. "

Ch.15 Retailing

Starbucks is considered as a chain store because all coffeehouses are owned and managed by the company. Starbucks Coffee is the largest coffee retailer in the world. They have over 160 stores already in NYC- it seems like Starbucks is in every corner! Other than in the City, Starbucks locates it stores at highly observable places or central points such as train stations. The company also cooperates with other retail stores such as Macy's and Nordstorm to make aware of the brand and sell their coffee. Additionally, Starbucks licenses their brand for other drink and food companies to help build their following.

Starbucks is a specialty retailer, it is specialized in a given type of product - coffee. Therefore, consumers focus on the "rich experience" rather than the price that is define as high-end.Starbucks "experience" or "retailing mission" is to provide a relaxing and familiar atmosphere in which people can enjoy a good cup of coffee and the company of their friends. The "experience" also includes distinctive products, the store's overall atmosphere and costumer service.

I visited a Starbucks store in Hoboken, NJ in order to report about the retail experience from first hand.

My immediate first impression was the coffee smell and its open store design. The store is quite spacious which allows customers to wander around. The counter space is small, whereas the seating area offers cozy couches as well as small to large community tables. Many coffeehouse are small and feel narrow and cramped. Starbucks though, encouraged me to stay and to enjoy my coffee in the store instead of taking it to go. The colors of green, brown and worn wood give the store the sense of life (green) and high standard (wood). The furniture design is carefully planned around organic and manufactured components.The modern and tuneful but also neutral music, which is kept on an appropriate volume level,  is the frosting on the cake. However, after the ambient and overall atmosphere of the store convinced me, I was ready to test the costumer service.

On purpose, I acted like an "annoying" customer who could not decide what kind of beverage to choose. I started asking questions about a few different drinks. The staff was pretty informative and able to describe the single drinks in detail. Also, the lady who served me was patient and friendly. She did not make me feel uncomfortable at all. After I finally decided what to choose, the lady asked me for my name which she wrote on my cup. I never recognized and thought about the fact that they actually invest time to write your name down and even ask you how you spell and pronounce it.I concluded that this gives you a  feeling of intimacy and more importantly the feeling of human interaction. It is commonly seen that retailers just give out a receipt with a order number on it. Than you have to wait until your order is prepared and they call your number; in most stores you are treated exactly like that principle: You are just another number that comes and goes.