Chapter 7 - Business Marketing

Strategic Alliances

           Starbucks cooperates with many brands, such as Tazo Tea, Seattle's Best Coffee, Evolution Fresh,La Boulange, Teavana. The most recently cooperate brands are La Boulange and Teavana. La Boulange brings delicious, high quality pastries, together with Starbucks to creat a warm, inviting space where customers can gather with friends and family to share time, stories, great coffee and fantastic food.  Starbucks opened the first Teavana Fine Teas + Teavana Tea Bar at 1142 Madison Avenue (cross street: 85th Street), it is a modern tea bar with a wide range of unique hot brewed and iced teas, tea lattes and distinctive sparkling and tea fusion beverages.

Resellers

           Starbucks coffee company is reseller company which is more like retail business because they buy coffee beans from producers and make high quality of coffee drinks and mainly directly sell coffee drinks to final consumers.

Major Equipment

         In order to get high quality coffee drinks, Starbucks purchases very expensive espresso machines. They are custom-designed for Starbucks, it helps baristas grind and pour shots to the precise time required for the peak flavor.

Chapter 8 - Segmenting and Targeting Markets

Positioning
Starbucks has positioned itself as an high-level brand. Starbucks remaining high quality of coffee drinks and services. Customers are willing to pay for their high quality of products, services, comfortable environment, and famous brand effect. Starbucks have to keep their high quality and value to satisfy customers.

Market Segmentation
Starbucks use multisegment targeting strategy. 

       For example, Starbucks use phychographic segmentation( on the basis of personality, motives, lifestyles, and geodemographics). For example, there are much more Starbucks in Manhattan (which is more like business area) than in Queens (which is more like live area.) Many business men, women and student like to grab a coffee, then go to work or study; and business men, women and students need a place to communicate with their business partners or classmate. So there are many Starbucks located in Mahattan. 

       Geographic segmentation( market size, climate, region and so on). Starbucks opened participate stores all over the world. consider of different cultures, habits and traditions, Starbucks  offers different drinks in different countries. 

       Benefit segmentation: Starbucks offers lucky dozen reward and free birthday drink reward to their registered customers. Every registered customer will get a free birthday drink for celebrate his/her birthday. Moreover, registered Starbucks cardholders can get stars when they purchase Starbucks drinks. When they collect 12 stars, they can get a free drink or food at Starbucks participate stores.

Chapter 11-Developing and Managing Products

           Recently in October 2013, Starbucks opened the first-of-its-kind Teavana Fine Teas + Tea Bar with Teavana (which Starbucks bought for $620 million last November), in New York City’s Upper East Side. The Tea Bar will elevate the premium tea experience by delivering a carefully curated assortment of handcrafted tea beverages, premium loose leaf teas, tea-inspired food offerings and beautifully made tea merchandise, making the ritual of tea more elevated and accessible for customers.  Over the course of the past year, Starbucks has leveraged a number of its unique assets and capabilities into the Teavana customer experience – including social, digital media, loyalty, card and mobile. The first Teavana Fine Teas + Tea Bar will bring together Starbucks strengths in store design and customer experience, with Teavana’s deep expertise in tea sourcing and blending. Starbucks will slowly add tea bars to its 300 or so existing Teavana stores, which until now sold loose-leaf tea plus gifts and accessories like ceramic teapots and stainless steel infusers. As well as drinks like Matcha Lattes, the new tea bars will sell food to appeal to a health-conscious customer 
          According to recent Euromonitor data, with Starbucks-saturated countries like Japan, China, Canada and the U.K. leading the trend. Globally, tea is the second-most consumed beverage besides water. While Americans still consume coffee at a far greater rate than tea, their taste for leaves versus beans is growing. Data from the Tea Association USA says America’s interest in tea has grown by 16% over the past five years.

Chapter-18: Social Media and Marketing

Starbucks use some social media to facilitate conversation. 

         First of all, Starbucks have accounts on mainstream social networking websites, like Facebook, Twitter, Instagram, Youtube, and Flicker group. And on all of these websites, Starbucks have a quite large number of followers, so they can communicate with their customers conveniently. 

            The most important one I want to mention is, on the official Starbucks website, there is a section called "My Starbucks Idea". People can leave his/her idea to Starbucks on the website. People can share the ideas that matter to them and they can find out how Starbucks are putting those ideas to work, to  shape the future of Starbucks. Any visitor can look at the ideas that have been posted and read Starbucks Ideas in Action blog. If people sign up to be a registered member of the site, they can also submit their own ideas, vote and comment on ideas submitted by other people.

Starbucks sometimes use social media to hold some special event. For example, few days ago, Starbucks hold a "tweet a coffee" event on Twitter. Tweet-a-coffee is a NEW way to send $5 Starbucks Card eGifts to Twitter friends and followers. It is very simple to tweet a $5 dollar eGift card to your twitter friends, or followers, just go to twitter, link it to your Starbucks account and tweet @tweetacoffee to @the one you want to give him/her a eGift card,  then you are all set, he/she can redeem the eGift card right on his/her mobile phone or at Starbucks participating stores.

Chapter 10 - Product Concepts

       
       Starbucks products are mostly consumer products, which means their product are bought to satisfy an customer's personal wants and needs.

Product line
             Product line means a group of closely related product items. To Starbucks,they have several product lines: Coffees contain iced coffee, latte, frappucino, espresso and so on; Beverages like tazo tea, juices,milk; food include muffin, croissant, sandwich, salad; equipment like french press, coffee grinder, espresso machine, coffee machine and so on.

Brand loyalty 
        Brand loyalty is a consistent preference for one brand over all others. For me, and maybe for many other customers, Starbucks not only provide high quality coffee drinks, but also provide their customers a comfortable and relax place to stay, people enjoy coffees and environments that Starbucks provide, they get used to come to Starbucks frequently, then become Starbucks loyal customers who prefer go to Starbucks than other coffee houses. In addition, one of the important element of the reason I have brand loyalty for Starbucks is there are Starbucks stores near my school and my home. It is very easy to find a Starbucks store on the street, so it is very convenient.

   
Starbucks trademark

          Starbucks trade mark is a green roundness with a two-tailed mermaid, or which was called a siren, a mythical creature whose stories tell of luring fisherman through song. Before 2011, there are also "Starbucks coffee" brand logo on it, but as Starbucks is well known by people, and with the meaning of expanding to other areas not only coffee drinks, Starbucks take off the logo of "Starbucks coffee"

Chapter 17- Personal Selling and Sales Management

Personal selling.

          Starbucks are using personal selling business. Starbucks main purpose is to sell coffee drinks and good services. It is more like direct communication between a salesperson and individual customers. Baristas of Starbucks can communicate with their customers one to one and answer questions their customers had, and tell the differences between different type of coffee drinks. Selling coffee drinks are mostly short term sales, it is focus on products delivery and sales follow-up is short term.


Retaining Loyal Customers

          In order to  retain loyal customers, Starbucks gives out Starbucks card membership. Here are three levels of Starbucks card membership requirements and benefits of each level: 

1) Welcome level 

        All the customers need to do is register their Starbucks card. (People can get Starbucks card at any retail store or via Starbucks website.) Then they can enjoy a free birthday drink each year and plus 15% off of a purchase on Starbucks online store. 

2) Green level
       Every customer who registered a Starbucks card can get one star per visit to a Starbucks store. After you get 5 star, you are at green level. Customers at green level can get the benefits from the welcome level, and in additional, customers can get free refills in the store if they paying with registered Starbucks Cards or mobile app get customers brewed and iced coffee and tea refills at no charge during their visit at a participating store.

3) Gold level

        After customers who have registered a Starbucks collect 30 stars within 12 month, they are upgraded to Gold level. With Gold level, customers can get all the Welcome and Green level benefits plus :
I)free drink or food reward every 12 stars. 

II) Personalized Gold card with the customer's name and cardholder time. 

III) Special offers just for Gold card members. Starbucks will send Gold card members special offers and coupons via mail, email or text message.  

          Once customers are at Gold level it takes another 30 Stars to maintain Gold level for another 12 months. But if customers don’t qualify for the Gold level again by their anniversary date (i.e. the date they qualified for the Gold level), they’ll revert to the Green level and lose all their Stars. If a customer earn 30 Stars again within 12 months, he/she will move from Green level right back to Gold level.

         With this Starbucks card system, as there are both rewards(free refill, free drink and so on) and threats (threat of not qualify for golden card for another year), Starbucks can retain a lot of loyal customers.


Cross-Selling other Products and Services

        Starbucks carries some other brand products, too. Such as Tazo tea, La Boulange bakery, Evolution Fresh juice, French Press machine and so on.

Chapter 16 - Advertising, Public Relations and Sales Promotion

Starbucks website

         Starbucks have their website to introduce their coffee drinks and other products. The website also provides news, contact, and their company information. Customers can login their Starbucks accounts and manage their Starbucks card. Also, there has an online store section, customers can buy Starbucks products online at home.  

Sampling

       

Starbucks gives out samples sometimes. People can get samples for free and try if they like that kind of drink. In this way, customers be familiar with their coffees or new drinks, if they like the drink after they tasted the sample, they may purchase from the Starbucks store. It is also good for Starbucks to discover potential customers.


Sales promotion

         Starbucks always have some sales promotion. Usually there are 'happy hours' and 'holiday promotion' in Starbucks retail store. It is during certain days, from 2pm-5pm, or from 3pm-5pm,the specific coffee drinks are half prices or buy one get one free. There's also another sales promotion which is called 'Treat Receipt': During certain days, if you purchase drinks before 2pm, get any grande size drinks for $2 dollars after 2pm. Also there are some sales promotion only for their registered customers. They will send you a code with a expire date that you can use to get discount at a specific drinks or sandwiches. They will inform their customer these sales promotion by email, or by the Starbucks mobile app.

Product Placement

          


















       
     TV commercials are not very effective, because most people open their television for news, dramas, movies and so on. But nobody will open television for just watching TV commercials. It is more interest and rememberable if products appears in movies, TV series. Starbucks also have Product placement in movies and Tv series. The most recently one I saw was in '2 Broke Girls', Max and Caroline hold Starbucks drinks.



Chapter 14 - Marketing Channels and Retailing

      Time utility means the increase in customer satisfaction gained by making a good or service available at the appropriate time.

        Starbucks put a lot efforts in customer service. They set their stores in very convenience place, you don’t need to cross 10 street to just grab a coffee. Starbucks provide people a clean and comfortable place to rest, work, study, chat with friends or just enjoy one’s free time. They provide free WIFI network, music in air. 

         In rush hours, such as in the morning, there will be someone come up to you to take your order while you are in the line, this will save customer’s time. Customers don’t need to wait in a long line and order their drinks until you move up to the cashier. Your coffee will be prepared while you waiting in the line move up to the cashier. 

         The baristas of Starbucks have very good attitude. If they make wrong drinks, they will apologize and remake it for customers immediately. Sometimes they will make you the drink you want and ask if you also want the wrong one. If the answer is Yes, they will give it to you for free. If they notice that a customer wait there for a long time (about 5-10 minutes), they will ask what you are waiting for and make it for you right away. Usually they will upgrade the drink, like if you order a grande drink, they will give you a venti one instead as their apology. 

Multiple Distribution

           Starbucks have multiple channels to distribute their products to their customer. They have their own store to sell coffee, coffee beans and other products. They also have bottle coffees to sell in supermarkets, Costco and some restaurants.

 Nonstore retailing

Starbucks Online Store

          Starbucks have their own online store to sell products that people can make Starbucks’ coffee at home by themselves. 

Chapter6 - Consumer Decision Making

          

          Nowadays there are many choices of everything. Various brand, different looks, different  price and qualities... There are so many factors influence customers' decision. 

        Cultural factor is one of the important factors influence people's choice. People in different countries have different culture and values. Starbucks have a drink : 'Americano'. There was no Americano before the Second World War. After the Second World War, Americans finished the war in Europe, many American armies came to south Europe, the soldiers can not get use to the espresso coffee in Europe, so they add water to the espresso to dilute the strength and taste of the espresso coffee. Because at that time, only American soldiers drink espresso coffee in this way, so people named this kind of coffee 'Americano'. Starbucks play an important role of Americano's popularization. Because the cultural difference, there came out a new American style coffee. 

           Individual factor is also a very important factor which influence people's choices. Everybody have different taste, habit, and so on. For example, Starbucks have customers of different ages and genders. When parents bring their kids to Starbucks, they want to buy juice or milk instead of coffees. Because coffee is not good for kids and they should drink coffee when they are so young. Another example, some people like to drink ice coffee, and others like to drink hot coffee. Some people like dark roast but some other people think that dark roast is too strong and bitter for them. In order to satisfy customers' tastes, Starbucks provide hot and cold drinks, blonde roast coffee, medium roast coffee, and dark roast coffee and so on. 

           Starbucks have customers from widely social levels. Americans prefer convenient things. Starbucks are so popular and its stores are all over the streets. People from no matter what social class can come in and grab a drink. I saw several times even homeless people went to Starbucks buy drinks after they get some money.    

 

            One factor that influencing the external information search is product experience. When consumers have had previous experience with a good or service, the level of involvement typically decreases. I like to spend my free time in Starbucks, when I enjoy my time in Starbucks, I saw several times that the worker in Starbucks would make some samples of their new drink in the one shot size cup, and give these samples to different customers, introduce them what is this new drink. Because consumers are familiar with the new drinks and know whether it will satisfy their needs, they become less involved in the purchase.

Chapter 5 - Developing a Global Vision

                                                          

 Starbucks in World-wide

            Today, having global vision means recognizing and reacting to international marketing opportunities, using effective global marketing strategies, and being aware of threats from foreign competitors in all markets. Starbucks company, as a coffee giant, it has already opened about 18000 stores in world-wide. 

           After Starbucks expansion in North America, it expand to world-wide. The first Starbucks location outside North America opened , in 1996 in Tokyo, Japan. Starbucks entered the U.K. market in 1998 with the $83 million acquisition of the then 65-outlet, UK-based Seattle Coffee Company, re-branding all the stores as Starbucks. In September 2002, Starbucks opened its first store in Latin America, at Mexico. 

         Open business in the international market is difficult, a company who want to open the international market have to prepare to compete with native companies, do many social investigations about foreign countries’ culture, tradition, people’s habits, flavors and so on. To open a business in a foreign country, company have to adjust their products to cater to that country’s people’s taste. Starbucks Company does good job. According to different culture and tastes in different countries, Starbucks decorate different stores with different elements and designs. 

     Starbucks in Beijing

         Starbucks in Japan

Starbucks in Dubai

Starbucks in HongKong

Not only that, based on original Starbucks drinks, they also make special drinks in different countries. For example, in China, there are special drinks like “Espresso Con Panna”,”Mudan White Tea”, “Biluochun Green Tea” and so on. In addition, Starbucks also provide their official website in different languages which also contain not exactly the same drinks and products. 

   Even though Starbucks have to face many threats by opening business in the international market, global business do bring much business profit to the company. In the USA or other countries in North America, Starbucks probably more civil, but in some countries, it is more genteel. In New York, Starbucks is like in every where, But in China, most Starbucks store opened in big shopping mall, and it’s a deluxe place to go for most people. Starbucks grande size green tea frappuccino is about 30 Yuan, it’s about 6 times expensive than in the USA.  That’s just only one example . In this way, Starbucks earn a lot of profits in the international markets. 

           In the future, Starbucks is still planing to open more stores(about 1300 stores) world-wide. The company is planning for China to be the second largest market by 2014, about 600 more stores will be opened in China. Because according to the first fiscal quarter of 2013 the China/Asia Pacific segment alone achieved sales of $214.3 Million. The potential for future growth in China is very important for Starbucks. 

Ch. 4 - The Marketing Environment

Target market.

The first big group of Starbucks target customers are adults aged 25-40. they account for about half of Starbucks customer, most of them are mid-income levels, and majority of these customers have high level education experience. Most of them are business men and women who have professional careers.

The next big throng of Starbucks target customers are young adults aged 18-24, who account for about 40% of Starbucks customers. College students like to stay at Starbucks do their homework, papers, projects while enjoy having coffee and listening to music. They also stay there to chat with their friends or just enjoy a relax time. 

Also, there are a small group of kids and teens aged 13-17 are Starbucks customers, too. Starbucks offer kids drinks and milk and fruit juice for them. 

Various food and beverages

Starbucks coffee, started as a coffee house, which just provide whole bean coffees at beginning, along with the develop and expansion, now provides various kinds of coffee, coffee beans, beverages, sandwiches, bagels,Tazo teas, cups and so on, to satisfy different needs of their customers. For example, if a college student is busy doing his/hers project or term-paper at Starbucks for a long time, he/she maybe hungry, he can simply buy a bagel or sandwich at the Starbucks store instead of goes to somewhere else to get food. This actually saves times for the student and also increase the Starbucks profits. Also, customers can buy Starbucks cups for themselves and friends or relatives as gifts. 

Competitive factor

Starbucks’ founders realized that people need a place with good environment to enjoy high quality of coffee and communicate with their friends. So Starbucks coffee house opened. Starbucks now serve people with extensive menu include drinks, breakfast, lunch and so on. They also offering organic soy milk, and other different kinds of milks for their customers. Wifi is available at Starbucks retail stores. They also play CDs and iTunes music in their stores to give people a relax environment. All of these makes Starbucks a great place to stay.

Value influence buyers’ habit. People are prefer high quality of goods at lower price. Starbucks provides high quality coffees and other products to their customers. In order to provide high quality coffees, they helps farmers and teach them how to plant coffee in an efficient way and increase the quality of the supply of coffee beans. They take care of their coffee from raw materials to finished products. 

Ch. 3 - Ethics & Social Responsibility

Starbucks, as a company who has 18000 stores in more than 60 countries,  believes that conducting business ethically and striving to do the right thing are vital to the success of the company.

Business Ethics and Compliance is a program that supports Starbucks Mission and helps protect Starbucks culture and their reputation by providing resources that help partners make ethical decisions at work.

Starbucks Coffee  Company puts efforts in environmental impact. In 2004, Starbucks began reducing the size of their paper napkins and garbage bags. And their polypropylene cups use 15% less plastic and create 45% carbon emissions than a cup made from PET. In 2009, the Starbucks implemented a new water saving solution,they changed dipper wells with push button metered faucets for rinsing. According to the report, this new technology saves up to 150 gal of water per day in every store.They also put efforts in recycle. In 1999, Starbucks started a program called"Grounds for your Garden". That means Starbucks recycles used coffee grounds and use them as compost  in the garden.Now they use corrugated sleeves made from 60% post-consumer recycled fiber. and customers can get 10 cents discount if they bring their own reusable cups.That's is a method to remind people to bring their own cup and reduce the usage of the paper cups. Also, they use electric hand dryers instead of paper towels in their restrooms, which is friendly to the environment and reduce wastes of trees.

Starbucks provides community services. Every year, during the Starbucks’ Global Month of Service, Through their relationships with local nonprofit organizations, they are helping support neighborhood revitalization efforts to improve community education, employment, health, housing and safety.

Starbucks helps farmers with grow plants in an efficient way. Starbucks has established Farmer Support Centers in Costa Rica and Rwanda to provide local farmers with the resources and expertise that help lower the cost of production, reduce fungus infections, improve coffee quality and increase the yield of premium coffees.