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The Story of Starbucks-From Inception till date

The Story of Starbucks-From Inception till date

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  • Starbucks doesn’t only sell coffee, they sell a third-place environment; not home, not work, but Starbucks
  • Starbucks is involving the Twitter community in an online photography scavenger hunt, offering prizes of Starbucks Gold Cards for Twitterers who can photograph posters from the most recent US outdoor campaign and post them online including the phrase #top3percent rules. The full-page newspaper ads go to some length to describe how Starbucks selects only the best 3 percent of beans and roasts them until they pop twice, and gives its part-time workers health insurancethe spirit of using social media as a marketing tool, launched a big campaign where it hid posters around 6 major US cities and challenged the public to find the posters, take photos, then post them to Twitter using hash tags Starbucks created for the campaign.
  • crowd-sourcing quality information for the purpose of business developmentbrand awareness and customer engagement
  • Starbucks likes holidays and is always ready to dedicate new charity initiatives to the big dates’ celebration. Now the big coffee brand is promoting its Red Love campaign with the help of social and owned media and wants to drive more consumers to the outlets to gain more money for the Red Cross.The aim is to raise as much money as possible for Global Fund-financed AIDS programs.
  • dearth of innovation, market saturation and poor control over restaurants. Prices for food commodities are at all-time highs, prompting the firm to increase prices twice in the past year. This has scared off customers, who have been defecting to fast-food chains such as Dunkin' Donuts or Panera Bread, which sell reasonable coffee for as little as a quarter of the price of a fancy Starbucks brew
  • test was held in ten major US cities, including Los Angeles, where Dunkin’ Donuts does not have a single store, and Seattle - Starbucks' hometown. Dunkin’s triumph in this challenge lead to a massive campaign covered by TV, radio, print, outdoor, online, in-store, special events and sports advertisements in which slogans such as The Truth Is Out, Hate To Say I Told You So and Friends Don’t Let Friends Drink Starbucks were plastered everywhere– even proudly displayed on the T-shirts of the stores’ employees http://www.youtube.com/watch?v=r2y_GwKzxck
  • really wanted to point out that ordering an espresso at McDonald's is quick and simple. Small, medium and large. It's easy."
  • NOM, the National Organization For Marriage, has gone too far this time, rolling out a new campaign claiming — lying — that Starbucks wants to eliminate traditional marriage.
  • - premium items like its espresso drinks & lower price items like drip coffee

Starbucks Starbucks Presentation Transcript

  • STARBUCKS GROUP C1 GROUP - C1
  • HISTORY OF STARBUCKS
  • The Starbucks Story 1971 - Three friends opened a small shop in Seattle Initially sold fresh-roasted, gourmet coffee beans and brewing and roasting accessories 1982 – Howard Schultz joined Starbucks 1983 - Schultz travels to Italy, where he‟s impressed with Milan‟s espresso bars
  • A Brilliant Epiphany that Transformed the Coffee Industry• Schultz attended an international housewares show in Milan• Fascinated with the exciting coffee culture in Italy• Sampled his first cafe latte in Verona• Impressed with the cafe culture, fashionable coffee house surroundings• It was an “Aha‟‟ moment as inspiration struck
  • Cafe Culture• A brilliant Idea - "Why not create gathering places like the great coffee house of Italy in the United States?"• Baldwin – „Slow down! We just sell beans‟• Baldwin let Schultz test a modest espresso bar in a corner of one of the stores.
  • • Schultz left Starbucks in 1985 to start his own coffee house• Called his new venture IL Giornale• 1987 – IL Giornale acquired Starbucks and changed the name into Starbucks Corporation• 1992 – Starbucks went public
  • The Evolution Of Starbucks Logo
  • 1971-1987 Image of a mythical two-tailed mermaid siren coffee brown color scheme symbolism represent the irresistible and seductive quality of the coffee 1987-1992 Symbolize the melding of the two companies Color scheme → Coffee brown to the familiar green
  • 1992-2011 Crops the image of the mermaid with a close-up view2011 - No longer includes the “Starbucks coffee” Freedom and flexibility to think beyond just coffee The logo was designed to celebrate the companys 40th anniversary
  • Bean There, Done That! 1971 – Starbucks Coffee, Tea and Spice Store opened in Seattle‟s Pike Place Market 1982 – Howard Schultz joined Starbucks 1986 – Howard Schultz established Il Giornale 1987 – Il Giornale acquires Starbucks 1992 – Starbucks decertified the union and made IPO. 1995 – Starbucks Coffee International opens in Japan 1996 - Joins with Pepsi Cola to sell bottled Frappuccino
  • Bean There, Done That! 1997 - Establishes The Starbucks Foundation, benefiting local communities 1998 - Acquires Tazo, a tea company based in Portland, Oregon 1999 - Partners with Conservation International to promote responsible coffee-growing 2000 – Acquired Hear Music, a San Francisco-based company 2002 - Enters into licensing agreements to sell Fairtrade Certified coffee 2003 – Starbucks acquired Seattle’s Best Coffee 2009 - Becomes the largest buyer of Fairtrade Certified coffee
  • HUMAN RESOURCES
  • “Were not in the coffee business, serving people, were in the people business serving coffee” - Howard Schultz CEO
  • “Employee First”20 Hours+• Generous Benefits• Health Coverage• Adoption Program• Bean Stock• Invests Heavily in Training ProgramsIN- STORE• Shifts – Free Drinks
  • Training• 25 Hour Program → coffee history → drink preparation → coffee knowledge → customer service• A four-hour workshop called “Brewing the Perfect Cup”
  • ORGANIZATIONAL CULTURE
  • LEGENDARY SERVICE• “Just say yes”• “Pour your heart into it”• Star skills• The five ways of being
  • STAR SKILLS• Maintain and enhance self-esteem• Listen & acknowledge• Ask for help
  • FIVE WAYS OF BEING• be WELCOMING• be GENUINE• be CONSIDERATE• be KNOWLEDGABLE• be INVOLVED
  • PROBLEMS STEPS TAKEN• Health Insurance & Stock • Mission Review - options – Cost to the Feedback Mechanism company• 2007 – 1,72,000 employees • Increased wages for hourly store partners• Maintaining relationships – Difficult • Developed tools to aid internal hiring• 2004 – Employee turnover → 80%
  • MARKETING
  • Marketing strategy• “Unique Cup of Coffee”• “Third Place”• In-Store Experience• Customer Satisfaction• Creating a Starbucks community• Innovation• Brand Marketing - WOM
  • Online photography scavenger hunt
  • My Starbucks Idea
  • Starbucks Red Campaign
  • Starbucks Got Milk Ad
  • OPERATIONS
  • From Bean To Cup• Centralized control over the entire value chain• Tightly-knit Structure• Involved in each step of the value creation process• Personally chosen high quality beans• Support center for farmers• No franchising• Starbucks stores – Consistent look & feel
  • From Bean To Cup• Baristas played a vital role• Effective measures to reduce customer‟s wait in line - No signatures for purchases under $25 - Semiautomatic espresso machines - “Floaters”• Altering store design process
  • HEADWINDS AND CHALLENGES
  • Challenges 2008 – Recession hits USA Financial crisis Starbucks main problem is overexpansion Amount of store closures No longer a monopoly ‘Coffee Wars’
  • The Brewing Battle
  • Starbucks VS Dunkin Donuts• Dunkin‟ donuts started its feud with starbucks in 2007• Launched an ad - “the delicious latte from Dunkin Donuts, you order it in English, not Fritalian”• In 2008 Dunkin‟ Donuts began naming Starbucks in its ads• DD proclaimed itself the winner in a national taste test against Starbucks• “It‟s just more proof that it‟s all about the coffee (not the couches or the music)”
  • Starbucks VS McDonalds• „unsnobbycoffee.com‟• “four bucks is dumb”• To offer delicious gourmet retail coffee at a lower price than the competition
  • The Hater’s Club Subject of media jokes Anti-Starbucks websites „www.ihatestarbucks.com‟ Criticized by nutritionists Frankenbucks Campaign
  • CONTROVERSY
  • “The Way I See It”„Starbucks has a historyof placing liberal, pro-homosexual and anti-God statementssubmitted bycustomers, celebritiesand other public figureson the side of its coffeecups for customers tocontemplate‟
  • Same-Sex Marriage AdvocacyOn January12th, 2012, Starbucksissued a memorandumdeclaring that same-sexmarriage is core to whowe are and what wevalue as a company.
  • Dump Starbucks
  • Starbucks Appreciation Day
  • CORPORATE SOCIAL RESPONSIBILITY
  • Environmental Impact “Grounds for your garden” Reducing the size of their paper napkins and store garbage bags Implemented a water saving solution Recycled content in food packaging
  • Fair Trade “Fair” price for goods Largest buyer of Certified Fair Trade coffee in North America Introduced C.A.F.E
  • STARBUCKS & ENTERTAINMENT
  • Music & Movies• Hear Music - Starbucks retail music concept• 2005 – selling over 3.5 million CDs a year• Produced a CD "Memory Almost Full“ by Paul McCartney• Producers of the 2006 film Akeelah and the Bee• Bookselling debut with „For One More Day‟
  • Partnership With Apple Selling music as part of the "coffeehouse experience“ Apple added a Starbucks entertainment area to the iTunes store
  • THE BRAND REPORT CARD
  • The Brand Excels At Delivering Benefits Customers Truly Desire• Not just a “Perfect cup of coffee”• 87,000 drink combinations• Appeals to all the five senses - Enticing aroma of beans - Rich taste of coffee - Product display & artwork - Music in the background - Cozy atmosphere 9/10 9/10 “A great brand is a story that’s never completely told.”
  • Brand Stays Relevant • Commitment to their core values • Understands the tastes and expectations • Highest level of customer service • High quality product • “Third Place” • Packaging innovation • “Flavor innovation” • Latest processing technology 9/10A brand name is more than a word. It is the beginning of aconversation.
  • The Pricing Strategy Is Based On Consumer’s Perception Of Value • Starbucks sets its prices on a simple idea - high value at moderate cost • Strict quality controls in its coffee sourcing & customer service • Positions itself as an authority on coffee • A lot of time and energy differentiating itself 8/10 • Starbucks also uses relative pricing“The price of anything is the amount of life you exchange for it”
  • Brand is properly positioned• “Romance and Theatre”• Creates an air of comfort, relaxation, familiarity, exclusivit y• POP - Great-tasting Coffee, Reliability, Speed, Convenience• POD – Rich Sensory Experience, Exotic 9/10 Coffee, High Quality, Exceptional Service“Give them quality – that’s the best kind of advertising”
  • Brand is consistent • Starbucks stores have used the same design, furniture and “look and feel” • Guarantees the same experience in every store • Starbucks london to Starbucks Malaysia, the same model is used, the same coffee, and the same machines • Consistently good customer service 9/10“Consistency builds trust and trust is what will lead you to a loyalcustomer”