STRATEGIC MARKETING

Introduction

Starbucks chairman and founder is Howard Schultz.

Starbucks focus is to meet the expectations of customers.
Starbucks had 4500 stores which increased to 5,886 stores in 2002.
Starbucks targeted customers are affluent, well educated, white collar workers between the ages of 25-44.

Core Competencies of Starbucks

Starbucks brand strategy was best captured by its live coffee mantra, a phrase that reflected the
importance the company attached to keeping the national coffee culture alive. There were three
components to branding strategy.
The coffee itself (high quality coffee).
Service (customer intimacy)
Atmosphere
The company went into joint venture with Pepsi-Cola to distribute bottle Frappuccino beverages and
Dreyers Grand Ice Cream to distribute and develop line for premium ice cream.
Starbucks treated its workers as partners and encourage internal promotion.
Starbucks partners are going into two types of training:
Hard Skills (how to use cash register and learning how to mix drinks).
Soft Skills (to connect with customers)
Give sample coffee as free to customers who dont have cash and want to pay with check.
Just Say Yes empowered partners to go beyond company rules.
Starbucks use Customer Snapshot strategy to measure performance of stores; service, cleanliness,
product quality, and speed of service.
Starbucks overall objective was to become the most recognized and respected brand in the world by two
company growth drivers; retail expansion and product innovation.
Starbucks two service innovations; store-value card (SVC) in November 2001 and T-Mobile Hotspot in
August, 2002.

Recommendations:
Starbucks need to meet their customers expectations, which was not achieved by their high Customer
Snapshot scores.
Starbucks do not have any Chief Marketing Officer. Starbucks need proper marketing department with
marketing experience to effectively communicate with their customers.
Starbucks can increase its sale by converting its satisfying customers into lower customers.
Starbucks should invest in additional 20 hours of labor, per week, per store, at a cost of an extra $40
million per year.
Starbucks need to improve their speed of service.