Starbucks is the largest coffeehouse chain in the world with over 32,000 stores globally. It began in 1971 with three partners in Seattle, Washington selling high-quality coffee beans and equipment. Starbucks aims to create a third place between work and home that provides customers a sense of belonging. It maintains its market position through high-quality coffee products and has expanded its offerings to include food items, packaged coffee, and licensed products. Starbucks uses customer value-based pricing and competes through premium pricing and quality. It relies heavily on word-of-mouth marketing and uses promotions like seasonal drinks and gift cards. Starbucks has over 32,000 stores globally and continues pursuing growth through new products, markets, and formats like drive-th

1. 1.0 INTRODUCTION
Starbucks, the biggest coffeehouse chain in the world. As indicated by Knoema (2021), it has
grown to 24058 stores globally since the first expanding outside the US market in 1996. Over
the previous 47 years, Starbucks has grown from a single coffee bean store in Seattle to a
huge 80 billion dollar enterprise, with Starbucks sales accounting for 57 percent of the overall
cafe industry. Besides, Starbucks had received “100 Best Corporate Citizen”, “Most Ethical
Company, European Coffee Industry” and more. All these achievements come from 3
passionate young people who met while they were students at the University of San Francisco
which is Jerry Balwin, Zev Siegl, and Gordon Bowker. According to Coffee.org (2021), they
were inspired to sell high-quality coffee beans and equipment by coffee roasting entrepreneur
Alfred Peet after he taught them his style of roasting beans. The name “Starbucks” were came
from Herman Melville’s classic novel Moby Dick.
1.1 STARBUCKS’ GOALS
Starbucks is committed to bringing happiness to people and to inspire, develop the human
spirit “one person, one cup, and one neighborhood at a time”. As stated by Starbucks
Malaysia (2021), they want their customers to feel this sense of belonging, to make their
stores just a haven, a place to get away from the worries of the outside world, a place where
you can gather with friends. It's about enjoying life at the speed it's lived - sometimes slowly
and tastefully, sometimes more quickly. It's always about being human.

2. 2.0 PRODUCT
2.1 STARBUCKS’S QUALITY
According to Bhasin (2018), Starbucks maintains its market position by providing high-
quality products to its customers. They make a name for themselves in the industry by
constantly improving their products and providing fine coffee. Because of the perishable
nature of coffee, Schultz was sure to track every stage of the espresso production process.
Therefore, they began selling whole bean and dark roast coffee from Kenya, Sumatra, Costa
Rica, and Ethiopia. For example, they roasted these coffees from their own plant and sold
them through their stores. As indicated by Ukessays (2015) Starbucks buys coffees that have
been cultivated and processed in accordance with strict environmental, cost-effective, social,
and satisfying requirements, as well as being appropriate and fit for the marketplace and
clients. This helps Starbucks generate long-term and more valuable competitive advantages
by widely differentiating its coffee and coffee-related items while relying on its expertise and
innovation.
2.2 STARBUCKS’ PRODUCT LINE AND VARIETY
GREENSPAN (2019) said Starbucks seeks to improve its product mix in order to acquire a
larger share of the food and beverage market. The company offers or changes product lines to
broaden its market reach and increase its market share. The primary categories of Starbucks
goods are as follows: Espresso, Baked goods with tea, Frappuccino, Smoothies, Products for
various foods and beverages (mugs, coffee on the spot, and so on.) As Skool Team (2021)
had mentioned even though coffee is Starbucks' specialty, the company has expanded its
advertising to include a variety of other products in order to appeal to a wider range of
customers. For instance, Starbucks locations offer seasonal or precise to save locality
products like pumpkin spice latte; development fresh juices and snacks with chips and
crackers; seasonal or specific to save locality products like pumpkin spice latte.

3. 2.3 STARBUCKS’ STYLE AND DESIGN
As stated by GREENSPAN (2019) the product blend of Starbucks espresso is the culmination
of years of corporate innovation. For example, after obtaining the coffee link in 1994, the
company launched the Frappuccino brand. The company also has a continuing product
innovation process that aims to create new products in order to attract and retain more clients,
especially because the company must cater to a diverse population of customers in the
worldwide market. As a result, this portion of Starbucks' marketing mix includes beverages,
meals, and items that are carefully chosen or designed to fit the needs and preferences of
target customers around the world.
2.4 STARBUCKS’ PACKAGING
Skool Team (2021) Once mentioned that many Starbucks locations provide hot and cold
sandwiches, pre-made meals, and drinkware such as tumblers and mugs. For instance, a few
"Starbucks nights" locations sell wine, beer, and appetisers. Starbucks-branded ice cream,
coffee, and cold espresso drinks are also available at several grocery shops.

4. 3.0 PLACE
3.1 ADDRESS OF HEADQUARTERS
Starbucks is a world-famous coffee house company with headquarters in Seattle,
Washington, United States. (Shakil, 2021)
3.2 NUMBER OF BRANCHES AND OUTLETS
On 29 March 2021, Starbucks operated 32,938 retail outlets worldwide. There are two types of
outlets that Starbucks operates, such as company-operated and licensed. 51 percent of outlets
are operated by the corporation, while the remaining 49 percent are licensed. However,
Starbucks released 278 new outlets during the first quarter of 2021. (Knoema, 2021)
3.3 LOCATION AND RETAIL STRATEGY
Starbucks devised a set of criteria for examining and deciding on the location of the site. One of
the criteria of Starbucks is the location. Starbucks prefers to set their shop at signalled
intersections with multiple entry points. Since they want to be more visible, they choose the
main path with easy entry and exit points that are convenient for customers. (Appendix 1) Other
than that, proximity to other businesses. The proximity of Starbucks to other companies is
important since it has a significant impact on consumer growth. Starbucks aims to get a mix of
regional and national retail tenants next to them in order to increase customers to its outlets.
(Dhrumil, 2019)
According to Studylib (n.d.) Starbucks' retail strategy, which is primarily focused on retaining
customer loyalty and repeat business, includes hiring and training knowledgeable counter
servers, known as baristas, to educate customers about Starbucks' specialty coffee drinks and
related products, as well as providing customers with a peaceful environment in which to take
a break from their busy lives. In addition, the firm has formed relationships with Barnes &
Noble and Nordstrom to open cafés in their shops and also provide its coffee on United Airlines.
Licensing the brand name for other foods, such as ice cream and soft drinks, helps to raise
brand recognition.

5. 3.4 MARKETING SYSTEM & DISTRIBUTION CHANNEL
The horizontal marketing system of Starbucks is Starbucks customers are able to get exclusive
use to Apple’s music broadcasting services (iTunes). Customers go to a Starbucks store will be
immediately connected to a hotspot that will allow them to download and stream the free music
from iTunes. Therefore, Starbucks' music-loving customers helped in increasing sales, market
share, and brand recognition. Starbucks loyal consumers who visited and spent their time
enjoying a cup of coffee or two that helped Apple improve iTunes sales. Many consumers,
whether they were music or coffee fans, were able to discover both in one spot due to Apple
and Starbucks' collaboration. (Enisshkurti, 2018)
The vertical marketing system of Starbucks is one company's marketing channel is used to
promote another company's products - for example, Kraft Foods sells Starbucks coffee in
American supermarkets and worldwide through vertical marketing system. Starbucks has a
vertically integrated supply chain, which means it is engaged in every stage of the process,
from the coffee bean to the cup of coffee served to customers. Starbucks works directly with
almost 300,000 coffee farmers across the globe to its vertically integrated operation. (Food,
n.d.)
Multichannel marketing system of Starbucks is driving customer loyalty. Starbucks Rewards
is frequently rated as one of the top customer loyalty incentive programmes available.
Customers get points or "Stars" for every purchase they make via the programme. The Stars
must be accumulated in order to receive free beverages and meals. Starbucks members are
likely to select Starbucks over a competitor coffee shop due to the power of the rewards.
Starbucks has been able to build passionate loyalty among its reward consumers as a result of
this inducement. (Nexcess, n.d.)

6. 4.0 Price
4.1 CUSTOMER VALUE-BASED PRICING
Customer value-based pricing strategy used for the perceptions of the value for buyers but not
consists as the cost of products (Claessens, 2015). Starbucks implements customer value-
based pricing strategy to provide customer’s perceived value. For example, Starbucks focuses
on their customer choices by providing various of seasonal drinks to the customer
(MARKETING10, 2021). Besides, Starbucks uses this pricing strategy to maximize its profit
and to utilize the market research and develop the targeted price increase to find out the
maximum prices the customers are willing to buy (Dawson, 2021).
4.2 COMPETITION-BASED PRICING
Furthermore, Starbucks is using competition-based pricing strategy to their customers.
Competition-based pricing strategy is the company products prices will be based on the
competitors’ prices. However, Starbucks does not compete with them. It is adopted a
premium pricing strategy by providing more expensive products and services compared to its
competitor (Greenspan, 2019). For instance, the coffee that Starbucks sells to the customers is
more expensive than others, such as Coffee Bean. Within a premium price, the company
focuses on the quality and experience of the products and services for the customers (TLBB.,
2021). As seen in the Starbucks in Malaysia, it has provided a relaxing and comfortable
environment for the customers to work or study in the shops.

7. 4.3 PRODUCT MIX PRICING
Starbucks also adopted product line pricing in their marketing mix which is a type of product
mix pricing strategy. Product line pricing is the various of goods and services separate into
the cost categories to create perceived values for the customers (Campbell, 2021). As an
example, Starbucks sells its beverages in several price ranges and categories, such as a
Grande size Frappuccino blended beverages have a price range between RM14.85 and RM
16.95 and a price range of RM 15.95 and RM18.00 in Venti size (Starbucks Menu, 2021).
4.4 PRICE SKIMMING
Price Skimming is also involved in the price strategy of Starbucks. It uses price skimming to
increase its profit by setting the products in a high price (Wang, 2021). For instance, it
provides the new seasonal beverages with a high price. Although it is expensive, but the
customers are willing to pay for the price, hence, the loss of sales will be smaller than the
increase in profit margin due to the increase of prices (Wang, 2021).

8. 5.0 PROMOTION
5.1 WORD-OF-MOUTH MARKETING
Starbucks have relied heavily on word-of-mouth marketing. Word-of-mouth marketing is a
type of marketing that usually focuses on providing the best customer experience in order to
inspire people to spread nice comment about a company. (Greenspan, 2019) Firstly, Starbucks
has always placed a strong focus on providing high-quality coffee to its customers. They are
also focusing on providing a third location for people to go between work and home, and they
have gotten to where they are now by creating this distinct and soothing ambience. (Lee, 2017)
The focus on offering high-quality beverages and good customer service leads to organic word-
of-mouth marketing. Those that had a great experience told their friends, family, and coworkers,
and the brand developed rapidly. (Word of Mouth Case Studies from Superdry and Starbucks,
2014)
5.2 SALES PROMOTION
The Starbucks Card (Appendices 1) is one of the promotions that Starbucks has used. Starbucks
Card is a marketing strategy that allows customers to promote Starbucks products through a
referral system. When a customer buys a gift card, they are not only demonstrating brand
loyalty, but they are also providing free publicity for the firm and bringing in new customers.
(Zigu, 2013)

9. 5.3 ADVERTISMENT
Starbucks is very active on social media sites such as Instagram, Facebook, Twitter, and
Snapchat. The company sells its products with carefully crafted graphics and videos that easily
connect with its target audiences on each channel. They also offer discount coupons in
combination with payment apps. (Shastri, n.d) Starbucks also have brings its seasonal specials
and menus to every occasion. (Papia, 2020) For example, Starbucks launched the seasonal
range on Christmas 2017 such as Gingerbread Latte, Toffee Nut Latte, Eggnog Latte and the
beloved Fudge Hot Chocolate (Frost, 2017) (Appendices 2) .
5.4 PUBLIC RELATIONS
For the public relations, Starbucks does not use its very often because it has not always worked
out well for them. For example, Race Together public relations campaign was highly panned.
Despite this, the Starbucks Foundation continues to work to address societal issues. While
promoting the company's brands, the Foundation assists communities. (Greenspan, 2019)

10. 6.0 RECOMMENDATIONS
6.1 GROWTH
One of the recommendations to improve Starbucks is growth. According to Team (2016),
growing the number of branches of Starbucks will extend its footprint, but also alter the shop
mix. Rather than establishing additional dine-in locations, they can focus on drive-thru in the
cities and suburbs. It can help to increase the company’s retail penetration. Andrew (2020)
mentioned product development helps Starbucks Corporation expand by introducing new
goods or versions that increase revenue. For example, Starbucks sells brewing equipment as
well as ready-to-drink goods in grocery shops as a result of product innovation. Market
development helps the company grow by generating profit in new markets or market segments
by selling the company's current beverage and food product mix. For example, Starbucks has
expanded its market by expanding into new nations like the Middle East and Africa. Intensive
growth prospects are explored in market development which results in a greater volume of food,
beverage, and other item sales.

11. 6.2 ENHANCEMENT
StudyMoose (2021) once mentioned that it is obvious that Starbucks has a competitive
advantage when it comes to satisfaction, especially when compared to other common coffee
products. Outsiders may incorrectly perceive Asia as a single tradition. It may be true in some
ways, but it will not be a regional success. In terms of lifestyle, cost, faith, tastes, and so on,
Asian countries are radically unique. Many Asians prefer tea, particularly in China, where
ardent tea consumers no longer readily accept the flavour of espresso. Starbucks should
develop unique strategies and tactics for each area in order to make the Starbucks experience a
lifestyle. For example, Starbucks can act locally to satisfy local tastes or preferences by adding
alcoholic beverages for a special happy hour set in certain nations or locations. Korea and
China have long been known for their large use of alcohol and coffee. Strarbucks' high beer,
wine, or cocktail margins may also help it meet local tastes and preferences.
Starbucks can enhance the customers loyalty to gain more profit by using the loyalty
program. Starbucks in Malaysia has started to launch its Starbucks Reward loyalty program
by giving the customer’s choice to choose and redeems the foods and drinks after they got
two hundred stars (Starbucks Malaysia, 2021). This program helps the Starbucks to earn the
customer loyalty and convey a psychological thought to the consumer’s mind that they will
continue to buy the products from Starbucks so they can get a free menu after they have
accumulated two hundred stars for it. Hence, Starbucks should pay more attention to the
program so that it will gain more loyal customers and the profit increase.

12. 6.3 INCREASE SALES
To become a global corporation Starbucks can take part in or sponsor local events, such as
education in underdeveloped nations or community service, in order to strengthen its public
image in those worldwide markets. Once it is viewed as a true partner or caretaker in most
Asian markets, its growth plan may work similarly to that of the US market. (Recommendation
for Starbucks Coffee Company, 2016). As well as with trying to attract new consumers, don't
forget to upsell your present clients to encourage them to spend more throughout their trips.
When they order a drink and a food item, give them a discount. Ordering the biggest size
beverages is clearly a better deal. Anyway, be careful that don't go overboard with pushing on
aggressive upselling from your employees. It becomes irritating and may cause customers to
become irritated.
Some of Starbucks facedes that have enough space for live music, poetry readings or other
events, make good use of it. Make your calendar of events available online. Then check to see
if public lecturers, or organizers of various groups and clubs are interested in using your cafe
as a venue to contact them. Allow local artists to use your wall space and let them to sell their
art and charge for a small commission if needed.