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Table of Contents
The Starbucks Coffee shop 2
A cozy place 2
Attractive Drinks 3
Competitive frames of reference 5
The Starbucks Commitments 7
The Relationship with customer 7
The Starbucks community 8
Different strategy depending on the country 9
Case Study: CHINA 10
Conclusion 12
References 13
The Starbucks Coffee shop
A cozy place
• Recycle the concept of third place
In the 80’s an American sociologist named Ray Olderbeing create the concept of third place. The third-place concept was first, a political meeting place for citizens. In the 90’s this concept has been recycled by the Starbucks marketing team, the political connotation has been removed. And the third-place concept became a word to describe a comfortable place between your home and working place where you can enjoy spending time.
• Comfortable equipment
The Starbucks coffee shops are fully equipped with many facilities such as plugs, large sofa and round tables. The company tends to prefer the round table because it makes the consumer feels less alone. Also, these tables are spaced to give impression of larger room. You also have an unlimited and full access to the Wi-Fi. The arrival of the WIFI in the Starbucks Coffees attracted a lot of employees working around to come to the coffee shops because they can work on their computer in a cozy environment. They are exactly the kind of clientele that Starbucks wants to attract. If you look at the forefront, you can see very big windows and softened lighting which make the atmosphere cozier. The cleanness of the room is also very important.
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• Aggressive store opening strategy
In 1995 Starbucks starts its aggressive store opening strategy. If they want to be the representation of their new third place concept, they have to be near working place. First, they have established a big amount of coffee shops in Manhattan district, they are interested in opening their stores in the most beautiful places. But they also want to be present in the most visited places such as Grand Central Station where they opened 17 Starbucks Coffee in only 400m². For example, in 1998 Starbucks opened one store every week and two years later in 2000, they opened 3 stores a week. They want that every time you are going out from a taxi you can find a Starbucks Coffee nearby.
Attractive Drinks
• Fashionable drinks
The glasses with customer’s name on it are the key point of their strategy. It makes the people feel special and closer to the barista. They are feeling considered not as a simple order number but as a special human being. In addition, the dedicated drink to consumer make them want to share it on social media.
When it comes to the flavor and design, we can see that Starbucks tries to innovate every year to make their drinks fit the season. They also have limited editions which are coming out every year during the same period time: For example, during Halloween you can find the pumpkin flavor and during Christmas the classic and trendy red drawing cup. And of course, every cup has the Starbucks logo on it. Because the majority of the customers are taking their drink away, so the logo of Starbucks has to be printed on the cup in order to makes a maximum of publicity outside the coffee shop.
The recipe of each Starbucks drinks has to be the same in every coffee shop which means your Frappuccino latte caramel coffee has to taste the same whatever the coffee shop you are going to. The drink has to be a high quality made with premium coffee to get their target audience to justify buying it. You’re paying for premium coffee which means it needs to taste better than the same iced macchiato that you could get at a McDonald’s drive-through for less.
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• Constant innovation
In order to reach a wider audience, Starbucks has to innovate. They created Fruity, chocolatey and caramel flavored drinks to attract consumer whom doesn’t like drinking coffee. But also, they had to find a solution about consumer who only like drinking coffee in the morning. In the US, to please people who like to drink very sweet soda, they added a lot of sugar in their beverages. The result is that 35% of Starbucks drinks are even more sweet than a can of Coca Cola.
But the high-quality service of Starbucks, the luxury design of the Coffee Shop and the clientele presents on site doesn’t give a bad impression of their beverage. A consumer will not feel guilty to drink an extremely sweet Starbucks Frappuccino.
In the documentary “Starbucks sans filtre” produced by Hélène Riffaudeau, an interview shows a woman saying: “I considered my extra-large coffee drink from Starbucks as a gratification”. This means a lot. It means that people do not feel as guilty of drinking a Starbucks sweet drink as when they eat a box of fried chicken. Even if the calories are the same, they don’t feel the same guilty. So, why? Because Starbucks create the concept of “affordable luxury”.
• Affordable luxury
Because of the localization of Coffee Shop in the most beautiful districts and the high prices of the beverages we can easily conclude that the favorite consumers target of Starbucks are from upper classes and middle classes. Consumers are using this high coffee standard to show their social success, social recognition, and their purchasing power. The consumers want to show that they can pay more than 5$ for a Coffee. By holding their cup outside they’re saying: “I have enough money to spend in a 5$ Coffee from Starbucks. My salary allows to offer myself this kind of things.”
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Competitive frames of reference
• The National Brand competitors
Growing Competition from Both National Chains and Neighborhood Coffee Shops Threatens Starbucks’ Supremacy. As National Chains competitors we can quote Costa Coffee, Dunkin’ Donuts and McCafé etc. About Dunkin’ Donuts, by the early 2000s, the company had introduced its first specialty coffee line and slowly began to make a name for itself as a destination coffee shop. Even if at first the company was a donuts chain it comes to become more and more competitive in front of Starbucks.
When it comes to Mc Donald’s: the company has long been known as a fast-food restaurant. But in 1993, the brand decided to launch a new brand of coffee shop concept called McCafé in Australia that will meet a great success and subsequently was developed internationally.
Costa Coffee is the main rival of Starbucks Company. The concept of the brand is very similar from Starbucks and the design is also kind cozy and luxury. The two companies are in constant competition for several year.
Starbucks has to maintain a high standard level to keep attracting many customers every day. However, the new main competitors of Starbucks are no longer the National Chains but also the Neighborhood Coffee Shops. According to Neil Stern, senior partner at Chicago-based consulting firm McMillan Doolittle, Starbucks remains a very successful concept. “But this is a case of opening too many stores too close together. The chain is fine, but the business model needs fine-tuning, particularly as customer habits change.”
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• The independent and local Coffee shop
The Starbucks corporation is keeping an eye out on trendy independent coffee shops which are opening around different cities all around the world.
"We're still not seeing any one competitor or even a smaller number of group of competitors being an influence on our business at any time, but what we have acknowledged ... is the collective group of independent coffee shops out there, they are doing a lot of what Starbucks has been so good at for so long" according to CFO Scott Maw (Executive Vice President and Chief Financial Officer at Starbucks).
To keep being competitive Starbucks has to maintain a very high service and environment. A comparative study has been established compering local coffee with Starbucks Shops and McCafé:
SurroundingsMenuProductsPriceServiceTake outSTARBUCKScozy, trendyvariedQuality, uniform and customizablehighfastMcCaféAgitated, noisyLess specializeduniformcheapfastIndependent Coffee ShopsIntimate, convivialpoorRandom qualityNormal priceslowNone
As mentioned on the board previously, the strong points of Starbucks Coffee are rapidity of services, varied and innovated menu and finally coffee shops environment which referred to the third-place concept.
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The Starbucks Commitments
The Relationship with customer
• Barista rules
The goal is to create a quick and close relationship with each customer who are crossing the path of a Starbucks Coffee door. The Barista of Starbucks has to follow special rules (some of which are already applied in other commercial places such as restaurants or coffees.):
1- Smiling and greeting customer as soon as he gets back into the coffee. It’s a way to say: “I notice you and give you consideration.”
2- Ask for the name and have a little chat with every costumer.
3- Not to mention their barista promise, that if you don’t like your drink, they’ll fix it.
• Engaged Store
Another part of the Coffee Shop is the engaged facet. Entering inside a Starbucks coffee and you can immediately notice all the fair-trade coffee pack selling inside the coffee shop and signs where are written: “99% ethical”. This kind of installation makes costumer thinks that he will drink pure and authentic coffee and that he will help the fair-trade and producers in developing countries. Starbucks sells their coffee at a premium price, or at least 25% higher than value brands. In 1990, only three percent of the coffee sold in the United States was sold at premium prices. Starbucks is involved throughout the grain harvesting and maintains excellent relationships with its suppliers, to whom it deploys a strategy of securing the material, and even exclusivity, by building lasting relationships. These relationships are extremely important for Starbucks, which devote considerable energy to preserving their privileged contacts. These allow the company to remain constant in terms of high quality and give to Starbucks the exclusivity of a production.
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The Starbucks community
Goodies & collection
The goal of Starbucks is to make of their logo a real brand. Since the creation of the original brown logo on 1987, the Starbucks logo has been modified several times. On 2011, Starbucks created a new logo where the traditional “Starbucks Coffee” inscription has totally disappeared from the design. They want that everyone seeing the green logo can recognize the Starbucks brand. And they succeed since we can perfectly recognize the brand seeing the green logo without any inscription. About goodies, the first and big idea of Starbucks was the mug collection. Every country and every city have its own mug named collection. If you go to London you can find a big Starbucks mug with the name of the city written on it. They also extended the collection to much more goodies: different sized cups, different design, thermos, tumblers, etc.
Another idea was the fidelity card concept. It’s not an originally idea from Starbucks but they improved this idea creating different model and designed card. But some limited edition too. Hanis Anilios, a forty-year-old Greek living in Athens was interviewed online. He devotes a cult to Starbucks loyalty cards. He owns more than 1,000 cards from all over the world. He is administrator of a Facebook group page of nearly 1,500 members who meet to exchange cards or advice. "With this passion, I met friends from around the world. I travel often to find new maps. I have done several hours of driving just to find a limited edition". This man also confessed that he dislikes drinking coffee. Knowing that we can surely affirm that Starbucks marketing is doing so well.
Specific vocabulary
Starbucks is using its own vocabulary. An Italian language which make the coffee chicer, classier. The Italian language refer to the country where cappuccino was born. They also use a system of sizing which is the same in every coffee shop. By this process the Starbucks Company is creating a big community group all around the world. A customer from a specific country will immediately feeling at ease going to a Starbucks coffee aboard because he can find a familiar environment and language code. They also developed a big reactivity on social media responding to the comments from different countries and different language to get closer to they community online.
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Social media
Starbucks Social media communication marketing. They are present on all social media. Using the social media code such as hashtags and emojis. Using a different message depending the social media to attract different kind of person. A twitter post was particularly interesting: “When your dad knows every single employee in Starbucks and they don’t even bother asking what he wants cause’ they know.” What Starbucks responded using the term: “Goals”. We can conclude that the: making close relationship with costumer rule is working perfectly such as this client is known by the Starbucks staff where he is willing to go quite often. The girl who posted this tweet feels such honored that she mentioned it on social media. That a new way to have free publicity for Starbucks but also by making the most of the content they create on their social media a place of conversation between their consumer and the brand, Starbucks solidify that relationship.
Different strategy depending on the country
Different design
To adapt themselves to the local architecture they are changing their storefront. For example, you can find typical Chinese style storefront coffee in Shanghai but also a Zen style garden outside the coffee shop of Uji in Japan. Sometimes, they changed the inside style. The Opera Starbucks coffee in Paris is a perfect example of inside style modified Coffee shop from Starbucks. Depending on the country language, they adapted the brand name to local alphabet. For example: in Russia they used the Cyrillic alphabet, in Korea they also used the local writing system. But when it comes to Saudi Arabia, they had to totally changed the logo design. The naked mermaid could be considered as inappropriate for these conservative local population. About this case, Starbucks created a logo where you can only see the crown above the water to avoid any dissatisfaction with customers.
Different taste
They also had to satisfied the local food taste which are different depending on the region of the world. They kept the same coffee shop design, the same vocabulary and language, the same goodies collection but they changed some drinks recipes. For example, they created the purple sweet potato milk cream Frappuccino in Asia. And the algarroba Frappuccino in Peru made with a local syrup very appreciate by Latino people.
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Case Study: CHINA
To keep on talking about Starbucks international strategy, we will do a short analysis of Starbucks Marketing Strategy in China. China is the country where Starbucks has the most coffee shop. To have an idea of the implementation of Starbucks in the country we can say that Starbucks established around 3000 coffee shop in the country. And 600 of them are in Shanghai. To compare, there is 360 coffee shop in New-York city and only 56 in Paris. China is a country where the culture of coffee appeared very recently. At first drinking coffee was very expensive because all the coffee grain came from importation. Now, China began to cultivate its own coffee plantation and the price of coffee get lower. coffee consumption increased with lower prices for coffee beans. On Alibaba’s e-commerce platforms, including Taobao and Tmall, more than 18 million Chinese consumers bought RMB 2.5 billion worth of coffee products in the past 12 months, up 18% year-over-year. Chinese consumers want the good stuff: They are increasingly trading instant coffee for freshly brewed products, as quality and taste become more important.
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In view of the results, we can say that Starbucks has been right about its involvement in the Chinese market. In addition, Starbucks decided to established its biggest Coffee shop in Shanghai. The Coffee shop respect the same cozy, chic and designed environment in not less than 2700m². The luxury image of the brand spread abroad helped Starbucks to makes its place to the local business such as Chinese middle-class purchasing power growth recently. The new rich want to show their money and buying very expensive coffee drink are a way to. They are willing to spend higher price for a coffee if it’s a way to show their social success.
Starbucks also has to adapt itself to the local purchase habits. In China, more than half of the payment are using mobile phone application and Chinese consumers are using the delivery option for almost everything. To manage with this new business opportunity, Starbucks CEO, Howard Schultz, cooperated with the famous Alibaba creator Jack Ma. By this way Starbucks works in cooperation with the largest online distribution company in the country. The Chinese customers can now use Alipay or WeChat which are respectively an online platform payment and the most used social media to order their drinks.
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However, the Starbucks corporation still has to face the competition. Its principal National Competitor Chains were taking their chance on the Chinese new business. The independent Coffee Shops are not a big deal there because the Chinese consumers are still looking for luxury and well-known brands to get the attention from others, going to western coffee brand still remains fashionable. Even is Starbucks innovated its recipes to fit the local taste creating for example the stuffed red bean macha muffin or green tea Frappuccino with red bean topped; we can still find some Taiwanese brand Coffee Shops which are more adapted to the local taste and proposes more varied and appreciated recipes.
Below some examples of the competitor of Starbucks in China:
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Conclusion
The Starbucks Corporation Marketing was an innovation when it comes to give to third-place concept a real idea of cozy, comfortable, fully equipped and convenient space where we like spending time. The costumers target still remains the upper and middle classes which justify the high cost of the beverages. Starbucks succeed to give to its brand an authentic image of luxury and social recognition. The Corporation extended its business abroad respecting the local taste and environment by offering to its International community a place where they feel at ease and familiar whatever the country they are going to. The goodies collection is also a good way to make them enter inside a Coffee shop abroad to discover the unique collection presents in each Coffee shop. The constant innovation of Starbucks recipes gives to the Brand a trendy and modern orientation. Starbucks also succeed creating a real brand around its green mermaid Logo.
References
Documentary “Starbucks sans filtre” produced by Hélène Riffaucheau.
« Les concurrents »
“Starbucks Marketing Strategy: How to Create a Remarkable Brand”
“The Starbucks experience in China is way different than in the US”
« La stratégie marketing de Starbucks : la fidélisation à l'extrême »
“China is becoming a coffee drinking Nation”
“Starbucks' biggest competition isn't Dunkin' Donuts — it's your neighborhood hipster coffee shop”
“Starbucks downgraded on concerns about craft coffee competition, customer loyalty”
« Stratégie de l’entreprise : Starbucks »
“Why Starbucks succeeded in China: A lesson for all retailers”
“Who Are Starbucks’ Main Competitors?”
“Growing Competition from Both National Chains and Neighborhood Coffee Shops Threatens Starbucks’ Supremacy”
“Starbucks China 2012: Overview, Analysis & Recommendations”
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|STARBUCKS COMPANY |A NEW KIND OF MARKETING |
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POULAIN OPHELIE : STARBUCKS COMPANY : A NEW KIND OF MARKETING
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