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Starbucks Marketing Analysis

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What factors accounted for the extraordinary success of Starbucks in the early 1990s? What was so compelling about the Starbucks value proposition? What brand image did Starbucks develop during this period? Describe the original target market.

After joining Starbucks’ marketing team in 1997, Howard Schultz traveled to Italy. He was very impressed by the Milanese coffee culture and the way of its services. He really liked the espresso bar that had attracted a lot of customers. Upon his return he suggested that Starbucks set up an espresso bar in the corner of their downtown shop. His idea was to make it a place where people go to relax and enjoy others, or just be alone - a third place in people’s lives besides home and work. When given the opportunity, Schultz purchased the company from the original founders and began opening new stores. At a time when the market was flooded with cheap, 50 cent coffee, Schultz decided to sell whole beans and premium-priced coffee beverages by the cup. His primary market was affluent, well-educated, white-collar patrons (skewed female) between the ages of 25 and 44. Starbucks branding strategy was divided into three components: coffee, service, and atmosphere. The company prided itself on offering the highest-quality coffee in the world, sources from Africa, Central and South America, and Asia-Pacific regions. The second component, service, refers to the company’s personal relationship with the customer; an effort to reach out and create an uplifting experience. Finally, Starbucks wanted to create an appealing atmosphere in each of its stores that would encourage customers to lounge around for a while. These three components would create an “experience” around the consumption of coffee, adding an alluring activity which could be weaved into people’s everyday lives....

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