According to its company profile, Starbucks has 16,706 stores located in over 50 countries (as of December 2009). Consumers do not have to order a tall caramel Frappuccino bearing the green lady logo to order a Starbucks product, either: The business's portfolio includes Tazo tea and Seattle's Best Coffee, as well.
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"Third Place" Concept
The CEO of Starbucks, Howard Schultz, envisioned opening a business where people gather, socialise or mingle between work and home. This "third place" concept is one of the key marketing strategies of Starbucks. Kim Fellner, author of the book "Wrestling with Starbucks," says this strategy is so successful because it is applicable to people of varying race, age and socioeconomic status. Furthermore, Starbucks is so ever-present that people from all different neighbourhoods and communities could indulge in this "third place" to meet or commune with one another.
Economic recessions present real threats for companies that offer luxury products such as Starbucks: During an economic downturn, several customers cut back on £3 venti cappuccinos. However, the company's adaptation to these economic forces allows the company to retain its strong marketing strategy. A recent example is Starbucks penetrating the instant coffee market by introducing its own product, Via, in several flavours and at different price points. Budget-conscious consumers can still identify with the brand while spending less money.
O.C. Ferrell and Michael Hartline explain in their book, "Marketing Strategy" that Starbucks gained a significant advantage by being one of the first chain coffee shops in the U.S. Before Starbucks, only 200 coffee shops were in business in the U.S. The expansion of the business compelled other cafes to try and emulate their success. This first-mover advantage allowed Starbucks to get a jump start on branding efforts, name recognition and establishing a niche. This advantage continues in the overseas markets: Starbucks also can piggyback on the trendiness of American products and name brands, particularly in Asian countries.
When you go to the store and grab a Starbucks Double Shot from the shelves, you might not that realise Pepsi Company is the distributor of these products. Joseph Hair, Charles Lamb and Carl McDaniel explain in the book "Essentials of Marketing," that as of 2008, this alliance has existed for the past 15 years. Though Starbucks develops its ready-to-drink beverages, including its glass-cased Frappuccinos and energy drinks, the Pepsi network is what provides the company an outlet to sell these RTDs in grocery stores, gas stations and other convenience stores. Starbucks also develops alliances with plantations all over the world to provide eco-conscious customers with ethically-grown coffee.
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