Faculty of Law

Batch 2019-24
ROUGH DRAFT

PRINCIPLES OF MARKETING

Topic:
MARKETING STRATEGIES OF STARBUCKS

Submitted to: Submitted by:

Mr.Krunal Purohit Vamaxi Chauhan
Associate Professor 91901041011
Faculty of Law B.Com LLB (Hons.)
Marwadi University Faculty of Law

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DECLARATION BY THE STUDENT

I the undersigned solemnly declare that the project report titled MARKETING
STRATGIES BY STARBUCKS is based on my own work carried out during the
course of our study under the supervision of PROF.KRUNAL PUROHIT. I assert
the statements made and conclusions drawn are an outcome of my research work.
I further certify that
• The work contained in the report is original and has been done by me under
the general supervision of my supervisor.
• The work has not been submitted to any other Institution for any other
degree/diploma/certificate in this university or any other University of
India or abroad.
• We have followed the guidelines provided by the university in writing the
report.
• Whenever we have used materials (data, theoretical analysis, and text)
from other sources, we have given due credit to them in the text of the
report and giving their details in the references.

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SUPERVISOR’S CERTIFICATE

This is to certify that the work incorporated in the project report entitled
“MARKETING STRATEGIES OF STARBUCKS” is a record of work carried
out by VAMAXI SHIVKUMAR CHAUHAN,91901041011 Under my guidance
and supervision for the award of Degree OF B.Com LLB (Hons.), Faculty of Law,
Marwadi University,Rajkot, India. To the best of my/our knowledge and belief
the project report

• Embodies the work of the candidates themselves,

• Has duly been completed,
• Fulfils the requirement of the Ordinance relating to the degree of the
Marwadi University and
• Is up to the desired standard both in respect of contents and language for
being referred to the examiners.

MR KRUNAL PUROHIT,
Associate Professor
Faculty of Law
Marwadi Univeristy

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ACKNOWLEDGEMENT

The success and final outcome of this project required a lot of guidance and
assistance from many people and I am extremely privileged to have got this all
along the completion of my project. All that I have done is only due to such
supervision and assistance and I would not forget to thank them.

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INDEX:

Sr. No. Particulars Pg. No.

1 Introduction 6-7

2 Starbucks target market 8

3 Marketing Mix of Starbucks 9

4 Other marketing strategies of Starbucks 10-13

5 Conclusion 13

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INTRODUCTION:

Principles of Marketing:

Marketing is the process by which producers of goods and services aim to find out where a
demand exists for certain services and products and then find solutions to those needs as well
as the way to make consumers aware of the solutions. Marketing is the aspect of business which
is most consumer focused as all of the principles of marketing relate directly to the consumer.
The principles of marketing follow a logical sequence. First, a target consumer of a particular
product or service must be identified. Knowing who uses a given product or service is essential
to determining what that consumer wants and how to get it to them. This is essential for
companies operating in the free market as success depends upon identifying and retaining
customers in order to remain profitable and ensure business growth.

One of the fundamental principles of marketing is the marketing mix. The marketing mix
consists of four different factors which businesses need to get right in order to successfully sell
their goods and services. The marketing mix is also known as the four p’s, and is as follows.

• Product – This is the first step of the marketing mix. Without a product, there is nothing
to market! The product should aim to fill a gap in the market in some way or fulfil some
type of consumer need. The product should be designed according to consumer need
and desire.

• Price – The price of a product should be one which consumer are prepared to pay while
simultaneously allowing the manufacturers to generate profit. Price is dependent upon
the cost of product production, the desired level of profit, and also the price of
competing products.

• Promotion – This refers to the methods a company uses to make consumers aware of
and attracted to a particular product or service. The promotion should be one which
shows the product in its best light and also reaches the consumer. Different target
markets are likely to respond to different types of promotion and this should be kept in
mind when designing a promotional campaign. Examples of promotional methods
include television commercials, radio commercials, internet advertising, introductory
prices, PR events and so forth.

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 • Place – This refers to the method of distribution for a product, or the place where
consumers will be able to purchase it. Considerations relating to place include whether
a particular product should be sold in all markets or is more suitable for a particular
region or nation, the choice of retailers for a certain product, and so on. For example, if
the product is a toy, it should be available to consumers in toy stores, as this is where
people expect to find toys.

Starbucks:

Starbucks Corporation is an American multinational chain of coffeehouses and roastery

reserves headquartered in Seattle, Washington. As the world's largest coffeehouse chain,
Starbucks is seen to be the main representation of the United States' second wave of coffee
culture. As of September 2020, the company had 32,660 stores in 83 countries, including
16,637 company operated stores and 16,023 licensed stores. Of these 32,660 stores, 18,354
were in the United States, Canada, and Latin America. Starbucks locations serve hot and cold
drinks, whole-bean coffee, micro ground instant coffee known as VIA, espresso, caffe latte,
full- and loose-leaf teas including Teavana tea products, Evolution Fresh
juices, Frappuccino beverages, La Boulange pastries, and snacks including items such as chips
and crackers; some offerings (including the annual fall launch of the Pumpkin Spice Latte) are
seasonal or specific to the locality of the store. Depending on the country, most locations offer
free Wi-Fi.

Many stores sell pre-packaged food items, pastries, hot and cold sandwiches, and drinkware
including mugs and tumblers. There are also several select "Starbucks Evenings" locations
which offer beer, wine, and appetizers. Starbucks-brand coffee, ice cream, and bottled cold
coffee drinks are also sold at grocery stores in the United States and other countries. In 2010,
the company began its Starbucks Reserve program for single-origin coffees and high-end
coffee shops. It planned to open 1,000 Reserve coffee shops by the end of 2020. Starbucks
operates six roasteries with tasting rooms and 43 coffee bars as part of the program. The latest
roastery location opened on Chicago's Magnificent Mile in November 2019, and is the world's
largest Starbucks. The company has received significant and sustained criticism about its
business practices, corporate affairs, and role in society. Conversely, its franchise has
commanded substantial brand loyalty, market share, and company value.

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STARBUCKS TARGET MARKET:

Starbucks is a premium coffee brand, with customers primarily from the upper economic
segment, also known as the upper middle and upper classes. The brand is aimed at people who
want a relaxing environment to drink coffee and unwind. These are mostly higher-wage-
earning professionals, business owners, or other higher-end customers between the ages of 22
and 50. People who live a fast-paced lifestyle want good coffee and a place to unwind after a
long day. Starbucks provides all of these benefits in one location. Starbucks' target audience
includes both male and female customers, with the majority of these customers falling between
the ages of 25 and 45. Specifically, urban, health-conscious, and class-conscious customers.
The truth is that the company has done so well because it knows exactly who its target audience
is at any given time and goes out of its way to cater to that group of people.

So, to summarize, their target audience is-

High-income spenders

On the go, urban-ish

Early adopters of technology

Professionals who are concerned about their health

Adaptable to change

Extending Our Influence Beyond the Storefront

Now that we have a better understanding of their foundation and business, we can finally start
delving into the marketing strategies that have led to Starbucks becoming the behemoth that it
is today.

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PRINCIPLES OF MARKETING OF STARBUCKS:

Product:

Starbucks’ product has to be high quality to get their target audience to justify buying it. You’re
paying for premium coffee which means it needs to taste better than the same iced macchiato
that you could get at a McDonald’s drive-through for less.

It’s being able to craft a high-quality product every time that keeps people coming back. Not
to mention their barista promise, that if you don’t like your drink, they’ll fix it.

Price:

Starbucks sells their coffee at a premium price, or at least 25% higher than value brands. In
1990, only three percent of the coffee sold in the United States was sold at premium prices. By
2000, that number rose to 40% in what the Harvard Business Review calls, “The Starbucks
Effect.”

Place:

Read anything about Starbucks, and they’ll probably mention the idea of "the third place."
Their efforts to create a space where people want to come and hang out and relax. They do this
by creating a similar environment in every Starbucks location.

Promotion:

Starbucks uses a large variety of channels to market their product from social media to TV
spots and ads. It’s their mix of marketing media that makes their brand recognizable, and it’s
the consistent message that comes across every time that makes them stand out.

All of that promotion isn’t cheap. However, compared to other major global brands like Apple
and Nike, Starbucks spends significantly less on their marketing and can still make an impact.

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OTHER MARKETING STRATEGIES USED BY STARBUCKS:

Starbucks Social Media Strategy

Most people are familiar with Starbucks on social media. The company’s many social media
accounts are known for their distinctive branding, interactive posts, and visually pleasing
content. The diverse range of content includes recipes, photography, articles and features. But
there’s more than meets the eye. The stream of content can be broken down into a series of
campaigns geared at creating a greater sense of brand awareness and community.

Starbucks Product-based Marketing Campaigns

Starbucks focuses on promoting unique and fan-favorite beverages. The brand knows how
popular their flagship items are, but more importantly, they know their audience craves this
kind of content. They’ve even created social accounts for customers’ favourites -Pumpkin
Spiced Latte and Frappuccino- where they push relevant and relatable memes to their die-hard
audience. This is also where user-generated content (UGC) comes in. Consumer images of the
more Instagrammable products, such as the Unicorn Frappuccino, are often selected to be re-
shared via the official channels and also used in influencer campaigns.

Starbucks Corporate Social Responsibility-based campaign

Starbucks uses social change as a marketing tool, positioning itself as open-minded and
inclusive. One example is the #ExtraShotOfPride campaign that supports the LGBT+
community.

Community-based campaigns
Another facet of Starbucks’ digital strategy is its emphasis on highlighting individuals and
communities. Take a look at the #RedCupArt campaign, which not only increases engagement
but also provides them with a library of UGC content. They use storytelling to show acts of
courage and kindness in American communities, localizing the content. Starbucks puts in
conscious efforts to humanize the company by sharing stories on their account which highlights
the employees who play an essential role especially when consumers are distrustful of big
brands. This sense of community also makes online coffee content social, very similar to how
they practically invented the modern coffeehouse culture back in the day.

Festive Marketing

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Starbucks has also initiated a new seasonal whole-bean coffee, #StarbucksDiwaliBlend, for
their consumers across the country and select global markets. The latest exquisite blend is hand-
picked and sourced from Tata Estates in Karnataka and Tamil Nadu. Starbucks Diwali Blend
is intended as a tribute to the region’s rich and cultural coffee heritage and expertise.
It launched the #SketchTheBlend campaign where customers have to share their creativity on
the Diwali Blend cup and sleeve and could win 5 free beverages.

Starbucks Digital Marketing Presence

Starbucks knows its audience is technologically advanced, which makes it imperative for them
to have a strong digital marketing strategy. It’s clear how Starbucks prefers marketing on
platforms where they have two-way communication instead of platforms like print and
television which is more of one-way communication.
• Instagram – 248K+ followers
• Facebook – 1.1M+ likes
• Twitter – 161K+ followers
• Starbucks posts daily on its social media handles and comes up with challenges and
games to engage its customers and increase its fan base
• The posts and engagement are consistent through all platforms and believe in creating
an experience as compared to just a promotion channel
The recent Flipkart Starbucks twitter battle was an example of how active and fun a brand like
Starbucks is and shows exactly why the brand is sought after with its target audience, especially
the millennials. Outside of campaigns, they show numerous images on their platforms of
friends and family enjoying drinks of Starbucks coffee together, interspersed with high-quality
content that promotes seasonal products. By doing this, Starbucks has integrated itself into
consumers’ social life.

Marketing During Covid-19

We are all aware of how suddenly the Covid-19 pandemic took over the world. All businesses,
globally, were hit overnight. And had to figure out how to sustain themselves in these
unprecedented times. The pandemic definitely impacted the Indian market heavily but
Starbucks constantly improvised to mitigate the economic impact. A case study in itself, these
were the steps taken by the coffee giant during the pandemic which proves why it’s the most
valued –

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Expansion
CEO Navin Gurnaney announced that they are launching drive-thrus to encourage people to
engage with them, and home delivery to make sure they are connected with their customers
during the pandemic. The first drive-thru was at Ambala Chandigarh Expressway in Zirakpur.
They have also launched their app – Starbucks India App so that customers can easily navigate
and purchase their offerings.

#ReconnectWithStarbucks campaign
Starbucks launched its social media campaign in 2 phases. The first phase was where they
asked their customers to share their ways of reconnecting amidst the pandemic and share their
favourite Starbucks memory on their personal Instagram handles with the hashtag
#ReconnectWithStarbucks.
In the second phase- “Half Cup Full”- they asked their customers to comment on their favourite
beverage on the post. They then sent these customers voice notes of baristas hollering the
customers’ names along with their favourite beverage to remind them of the famous in-store
experience.
This was a great campaign as it not only reminded the people of all the good memories with
Starbucks but also made them feel important and valued.

#StarbucksAtHome and #StarbucksDance

Starbucks launched 1 litre of freshly brewed beverages that could be bought via take-away or
ordering through Swiggy and Zomato. 7 flavours were launched at the price of Rs.550 per
bottle.
To promote the same, Starbucks launched the #StarbucksDance challenge where it asked its
customers to shoot a dance video with the drink and upload them on their personal stories. They
promised a year of free Starbucks for the winner.

Signature Merchandise launch with Flipkart

The pandemic caused a great shift in how people shop and also encouraged people to shop for
home-grown products as compared to imported or foreign-based products. Starbucks used this
shift to partner with Flipkart, to launch Starbucks Signature Merchandise on the online
platform. The product range included custom mugs, tumblers, cold cups, and more. Customers
can also soon order coffee brewing equipment from the comfort of their own homes. Starbucks
operated in 12 cities only and hence, this was a strategic move to reach out to customers pan
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India at their homes during the pandemic while taking advantage of the growing dependence
on E-Commerce

Standup Comedy Festival

Starbucks recently announced the #StarbucksComedyFestival where few lucky customers can
win a free invitation to the comedy festival. The lucky codes would be present on the
customer’s invoice. With a popular line-up of hosts like Sapan Verma, Azeem Banatwalla and
Rahul Subramanian, customers will now be enthusiastic to shop more at Starbucks and stand a
chance to win the invitation.

CONCLUSION:

In conclusion, Starbucks dominates the market due to its global presence and leadership.
Because of its intimate atmosphere, welcoming environment, and unrivalled service, a
consumer's experience at a Starbucks location is arguably unlike any other coffee shop. Their
inviting "ideal coffee shop ambience" should provide them with a long-term competitive
advantage. Starbucks' implemented strategy of retail locations and on-site partnerships has
resulted in higher response rates, propelling them to the forefront of the mature industry. As a
result of its all-encompassing marketing strategy, Starbucks has a strong market position.

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