dolution

Starbucks, which first originated from Seattle in 1971, is a company that specializes on its coffeehouses. Providing high quality coffee, good ambience, and genuine service to their customers. Over time, Starbucks diversify its products into tea, ice creams, juices, and savory delights.

The target market for Starbucks used to be the established customers, which includes the middle to high economic class of the society such as the elderly and the professional workers who enjoys high quality coffee. However, as their business expands, its customers are becoming more diversified. Starbucks’ target market moves towards the “younger, less well-educated, and in a lower income bracket than their more established customers.”

Starbucks has developed strong brand loyalty and convenience to its customers by providing great distribution and coffeehouse experience. Starbucks position itself as a brand which provides high quality products and is environmentally conscious. Nowadays, people are becoming more environmentally friendly due to higher knowledge on global warming. Therefore, Starbucks can improve its brand image by using a recycled packaging.

Product

Starbucks stores hot and cold drinks, whole-bean coffee, micro ground instant coffee, teas, juices, pastries, and snacks. Some offerings are seasonal or specific to the locality of the store. Starbucks-brand coffee, ice cream, and bottled cold coffee drinks are also sold at grocery stores. Starbucks creates a homely atmosphere in its cafe where people can socialize and enjoy their coffee.

Price

Due to high competition in the coffee house industry, Starbucks must be cautious in setting its prices. If the price is too high and is beyond consumers’ price range, they might switch to other competitors, and if it is too low, it may signal low quality. Starbucks uses market-skimming strategy in which they set higher price compared to others to indicate higher quality.

Promotion

Starbucks does not frequently use traditional means of advertising. In fact, they do not spend a lot on advertising and only depend upon their customer through their word-of-mouth advertising. This word-of-mouth advertising is mostly due to the customers’ acceptance and positive reviews, and it has been proven to be an external influence that plays positive and important role to Starbucks.

Place

Most coffee houses are not only about its coffee anymore, but they are also widely known as places for people to socialize, and therefore the location of Starbucks stores should be easily found, and the place should be comfortable. Starbucks distributes their product widely in places that enables consumers to easily reach them and for them to reach their customers. As of 2018, the company operates 28,218 locations worldwide.

Question 1

Identify and discuss TWO bases of positioning that might be used by Starbucks.