4. PRODUCT
Coffee as a culture...connected with experience (benefits) rather
than just features.
Product customization offered to meet each individual customer
needs.
Superior quality of product because of sourcing of beans.
offered coffee and other related beverages and snacks.
Product innovation by starting new variants.
5. PLACE
This component of the marketing mix determines the venues at which customers can access the
products. Starbucks offers most of its products at cafés or coffeehouses. However, there are various
other places or channels of distribution available for these products.
In this case, the following are the main venues or places that Starbucks Corporation uses to reach its
target customers:
Coffeehouses/Cafés
Retailers
Mobile apps
Starbucks’ omnipresence plays an important role in its success. Besides brick-and-mortar stores,
Starbucks has also been expanding into the online sphere.
The Mobile app combines e-commerce and e-payment functions. Customers can use their mobile
phones to pay, reload their Starbucks card and track rewards. They can even use the app to place
orders and make payment before picking up their orders at the store.
This is perfect for time-strapped customers and people who hate waiting in line.
6. 6
Promotion
Training employees to connect to the consumer. Making
eye contact, smiling, asking them their preferences.
Offering internet services in select Starbucks retail outlets.
They evaluated the functioning effectiveness of the three
Marketing groups and ensured that there is co ordination.
There was a separate department for promotional activities.
Personalizing service to customers..
8. Case
• As on September 2020, Starbuck’s hiked it’s prices by an average of 1% for the first time in 18
months. It didn’t affect the prices of certain Grande and Venti brewed coffees but affected Tall
(ironically their smallest sized serving) by 10 cents.
• The company’s third quarter net income rose 25% to $417.8 million from $333.1 million a year
earlier, and green coffee prices have plummeted. How did they do that??
Reasons for the Price Increase
Rising Labour
Rising Commodity costs
The price hike was applied to less than a third of their beverages and only targets certain
regions.
10. Study your customer personas
Justify the exchange rate for your product.
Use product differentiation to put your company in the
lead.
Don’t increase the prices of the products with the
highest margins.
Price Strategies