Your full name: Nguyen Ngoc Lan

ID student: CA9-124
Class: CityU9B

The adoption of 4Ps in Starbucks Corporation

I Introduction
In the world of marketing and business strategy, the 4P's marketing mix is a foundational
concept that has guided companies in achieving success for decades. Starbucks Corporation, a
global coffeehouse chain, has become a prime exemplar of implementing the 4P's marketing mix
successfully. Starbucks has not only achieved substantial financial growth but has also
transformed the way people perceive and consume coffee globally. Through its mastery of the
4P's marketing mix, Starbucks has managed to create a brand and customer experience that
resonates with millions worldwide. This analysis shall provide an in-depth look into the various
aspects of Starbucks, the company that has not only mastered the art of brewing coffee but also
the art of crafting an effective marketing mix.
--> còn thiu là phi i vào ánh giá vic áp dng và hiu qu áp dng ca 4Ps ch?

II Profile of Starbucks company

● The full name of the company: Starbucks Corporation.

● As of 2022, Starbucks employed approximately 402,000 people worldwide, of which

258,000 people were in the United States and 144,000 overseas (Pratap, 2023).

● Starbucks generated $32.5 billion in 2022, with a net operating income of $4.6 billion.

Total net revenues increased $3.2 billion, or 11%, over fiscal 2021, primarily due to
higher revenues from company-operated stores ($2.0 billion) (Starbucks Investor
Relations, 2023).
2.1. History of development

● 1971: Starbucks opens its first store in Seattle's historic Pike Place Market, founded by

Jerry Baldwin, Zev Siegl, and Gordon Bowker. The store primarily sells roasted coffee
beans, tea, and spices.

● 1982: Howard Schultz joins Starbucks as director of retail operations and marketing.

Inspired by Italian espresso bars, Schultz envisions transforming Starbucks into a

coffeehouse experience.

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● 1983: It was on a trip to Milan that Howard first experienced Italy’s coffeehouses, and

he returned to Seattle inspired to bring the warmth and artistry of its coffee culture to
Starbucks.

● 1998: Starbucks expands its reach to Europe, opening its first store in London. The

company also launches its online store, Starbucks.com, expanding its reach to digital
customers.

● 1999: Starbucks enters the Chinese market, opening its first store in Beijing. China

becomes one of its largest and fastest-growing markets.

● 2018: Starbucks acquires the Teavana brand from Unilever, solidifying its position in the

tea market and expanding its product portfolio.

● Headquarter of the company: SoDo neighborhood of Seattle, Washington.

(Starbucks, 2023)
2.2. Main business

● Industry: Retail coffee and snacks store industry.

● Product: Sub-sector

o Coffee beverages (hot and cold), Tea beverages, Espresso-based beverages,

Frappuccino blended beverages, Starbucks Refreshers, Smoothies, Tazo teas, Baked
pastries, Sandwiches, Salads, Yogurt parfaits, Packaged coffee beans, Ground coffee,
K-Cups
● Main market for the company’s business activities: Globally - with more than 40,000
stores in 80 countries
Its main markets include the United States, China, Canada, Japan, and various countries
in Europe. These regions constitute significant areas of focus for Starbucks' corporate
business activities, with a network of stores, partnerships, and strategies tailored to meet
the demands of diverse consumer bases in these locations.
2.3. Organizational structure

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2.4. Mission/ Core value of starbucks

● Starbucks mission: “With every cup, with every conversation, with every community -

we nurture the limitless possibilities of human connection.”

● Starbucks Values: “With our partners, our coffee and our customers at our core, we live

these values: Creating a culture of warmth and belonging, where everyone is welcome.
Acting with courage, challenging the status quo and finding new ways to grow our
company and each other. Being present, connecting with transparency, dignity and
respect.”
(Starbucks, 2023)

III. The adoption of marketing mix strategy 4Ps in Starbucks company

3.1. Definition

● Marketing

Marketing is the process of creating, communicating, delivering, and exchanging offerings that
have value for customers, clients, partners, and society at large. Its role is to help organizations
achieve their goals by creating and maintaining profitable customer relationships (American
Marketing Association, 2017).

● Marketing mix

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Class: CityU9B

According to Kareh (2018), The marketing mix refers to a set of tactical tools or variables that
allows companies to tailor their strategies to meet the needs of their target market effectively. It's
a versatile framework that helps in crafting a cohesive marketing strategy while considering
various elements that contribute to a product's success in the market. (The Economic Times,
2023).

● 4P’s

A marketing mix, also known as the 4Ps of marketing, is the framework marketers use to
develop and implement effective marketing strategies. The 4Ps of the marketing mix are Product,
Price, Place, and Promotion. The concept helps businesses identify and optimize the key
components necessary to promote and sell their products or services (Coursera, 2023).
3.2. Analysis
The Starbucks marketing strategy & marketing mix (4Ps) has helped to lay down the
groundwork for customer engagement with potential and existing customers through its product
strategy, price strategy, place strategy, digital marketing and promotional mix. It makes sure that
the premium products offer full value and complete customer satisfaction. The premium coffee
brand has gained a competitive advantage in the beverages industry and this is all because of the
excellent Starbucks marketing mix framework.
3.2.1. Products - Marketing mix strategy for Starbucks products

❖ Definition: This refers to the physical or intangible goods and services that a company

offers to meet the needs and wants of its target customers. Product decisions involve
choices related to product design, features, quality, branding, packaging, and more.

❖ Apply

− Elements that make up the product “Starbucks coffee”

● Quality

Starbucks is known for its quality coffee, sourced from around the world and roasted to
perfection with its signature espresso flavor. Starbucks sources only the best Arabian coffee -

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one of two main types of coffee, this coffee is famous for its delicate aroma, high acidity and is
the only coffee that can withstand the heat of the dark roasting process. makes Arabica taste even
more complete. Starbucks focuses on sourcing high-quality Arabica from renowned producing
regions around the world, such as Ethiopia, Colombia and Costa Rica. This ensures that the
coffee they use has a distinctive and unique flavor.

● Icon

The name Starbucks makes an impression with the meaning of creating a feeling of the
traditional sea voyages of old coffee merchants. Regarding the color of the logo, from a
psychological perspective, blue, used in the Starbucks Coffee logo, will stimulate appetite, is a
bright color and attracts attention. Green also shows similarity with the culture of Starbucks
Coffee, which can be considered as an image showing that Starbucks Coffee is a green business,
a business for the community. The image of “Siren” - a goddess with a human body and a fish
tail - means a storyteller, carrying the story of Starbucks Coffee into the future and remembering
the past and always inspiring us and motivating us. push us toward the future.

● Merchandise

Starbucks sells items like coffee mugs, coffee mugs, coffee accessories, and even its own line of
coffee beans for customers to brew at home. These items are strategically placed in stores to
enhance the brand experience and serve as mementos for loyal customers.

● Service

Enjoying coffee and music at the same time at Starbucks Coffee stores has become a habit of
many people. Not long after, Starbucks Coffee released CDs with songs compiled by themselves.
In 1999, Starbucks Coffee purchased a music selection and mixing company, and tasked them
with building the presence of the Starbucks Coffee brand through songs. When they felt that
customers wanted to stay at the Coffee shop longer, they started providing a free WIFI network
in 2010, ahead of other coffee shops.

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● Product

Starbucks offers a range of exceptional products that customers enjoy in stores, at home, and on
the go. In the process of developing their brand, Starbucks realized that they could also attract a
large number of customers who do not love coffee, but want to experience and bond with the
Starbucks space. From there, Starbucks developed other product lines to serve that customer
group. In the 4P strategy in marketing, this is called the P of product.

+ Coffee: More than 30 blends and single‐origin premium coffees. Starbucks also sells

coffee beans and ground coffee for customers who prefer brewing their coffee at home.

+ Non-coffee beverages: In addition to coffee, Starbucks serves an assortment of non-

coffee beverages, including teas, hot chocolate, smoothies, and a selection of cold drinks
like iced teas, lemonades, and refreshers.

+ Food items: Starbucks offers a range of food items, such as pastries, sandwiches, salads,

breakfast items, and snacks, to complement its beverages. The menu varies by location
and often includes both sweet and savory options.

+ Consumer Products

Coffee and Tea: Whole bean and ground coffee (Starbucks and Seattle’s Best Coffee
brands), Starbucks VIA Ready Brew, Starbucks K‐Cup portion packs, Verismo pods,
Tazo tea filterbags, and tea latte concentrates.

Ready‐to‐Drink (RTD): Starbucks bottled Frappuccino coffee drinks, Starbucks

Discoveries chilled cup coffees, Starbucks Discoveries Iced Café Favorites, Starbucks
Iced Coffee, Starbucks Doubleshot espresso drinks, Starbucks Doubleshot
Energy+Coffee drinks; Starbucks Refreshers beverages, Evolution Fresh bottled juices,
Tazo bottled iced and juiced teas.

(Davison, 2015)

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● Seasonal and limited time offers

In addition to products sold all year round, Starbucks also constantly renews its products and
product lines with seasonal products, limited edition products, products for the holiday season,...
Most prominent Among them is Pumpkin spice latte, dubbed the "Taste of Fall", a unique
combination of spicy and sweet, or Peppermint Mocha during the holiday season. Or just
entering the hot weather of May, recently, Starbucks Vietnam has quickly launched summer
cooling drinks such as Okayama Peach Apple Cold Brew or Okayama Peach Apple Cold Foam
Oolong.

(The Most Amazing Starbucks Drinks Around the World by Candace Braun Davison)
3.2.2. Price - Marketing mix strategy for Starbucks price

❖ Definition: Price is the amount of money customers are willing to pay for a product or

service. Pricing strategies involve determining the appropriate price point to maximize
sales and profitability, considering factors like cost, competition, and perceived value.

❖ Apply

It's easy to see that drinks and cakes at Starbuck are priced higher than usual. However, many
people are still loyal to this "luxurious" coffee brand. Starbucks' pricing strategy is quite simple:
they think that if customers have experienced and loved premium beverage products, it is not too

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difficult for them to spend more money to enjoy that great service. They care a lot about whether
the product is of high quality, what the quality inspection process is, and whether the customer
care team is enthusiastic and professional. At that time, price was only secondary.

Starbucks' marketing mix has adopted a mixed strategy that includes psychological, geographic,
and premium pricing depending on the type of food and beverages the company offers.

● Premium pricing

Instead of trying to compete with lower-priced chains, Starbucks uses “premium” prices to
differentiate itself and build its brand image as a purveyor of sophisticated, high-quality coffee
and other products. accompanying product. This brand from the US realized that competing with
beverage chains in a country with strengths in coffee like Vietnam is not easy. If they only
compete on products, Starbucks will certainly be at a disadvantage. Therefore, Starbucks not
only sells drinks but also focuses on selling experiences to customers. It can be seen that
Starbucks has made a lot of effort to differentiate itself from domestic brands such as Highlands
Coffee or The Coffee House.

● Geographical Pricing

The Starbucks marketing mix has adopted a geographical pricing strategy so that the product
prices are in sync with the local currency of a specific region. A White Mocha Coconut Barfi
Latte in India costs INR 345 but its product prices will be relatively different in USA and UK to
match the local currency. Similarly, a Tall Latte is priced at USD 7.17 and USD 1.31 in
Switzerland and Turkey respectively and this is because of the difference in the local currency of
that geographical location.

● Custom

Starbucks allows customers to customize their drinks, which allows them to create a personalized
experience tailored to their taste preferences. While customization options can affect the final

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price of the product, it also provides a feeling of value to customers because they can tailor their
drinks to their preferences.

This is a strategy that targets consumer behavior trends, when customers always think that more
expensive products are more valuable. Therefore, Starbucks can easily maintain its image as a
premium brand with its number one product quality.

3.3.3. Places - Marketing mix strategy for Starbucks place

❖ Definition: Place, also known as distribution, involves making the product or service

available to the target market. It encompasses decisions about distribution channels, such
as retail stores, e-commerce platforms, or direct sales, as well as issues related to
location, logistics, and supply chain management.

❖ Apply

With Starbucks' place marketing strategy, the company has a quite clear vision, which is to build
direct and personalized relationships with customers. This vision led to the company distributing
its products in coffee shops, Starbucks online stores, through the Starbucks App, and through
retailers.

● Store locations

The company strategically selects locations for its stores, often placing them in high-traffic areas
such as city centers, shopping malls, office buildings, and transportation hubs. This approach
ensures maximum visibility and accessibility for customers. At the airport area or at financial
centers and famous commercial centers, Starbucks Coffee is a luxurious bar and accordingly,
expensive cups of coffee. Maybe this is suitable for entrepreneurs, bosses and senior managers.
These people always find Starbucks Coffee a suitable place to negotiate, or relax in the on the
lounge to read a book with a cup of coffee.

● Store layout and design

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Class: CityU9B

Starbucks invests in creating a consistent and appealing store design to provide customers with a
comfortable and inviting atmosphere. The store layout typically includes ample seating areas,
warm lighting, and elements that reflect the brand's identity. This consistency in design helps
establish a recognizable brand experience and ambiance for customers, regardless of the specific
location.

● E-commerce and mobile app

As the Internet grows, Starbucks offers products in Starbucks Online stores. Additionally, some
products are sold through retailers worldwide. Starbucks also leverages digital channels to
enhance customer convenience. The Starbucks mobile app allows customers to place orders
ahead of time, pay for their purchases, and access the Starbucks Rewards loyalty program.

● Wholesale distribution

However, at supermarkets, train stations, universities or crowded tourist areas, Starbucks Coffee
has very affordable options. There are no luxurious porcelain bowls or shiny glass cups here.
Instead, people see "very convenient American-style" cups and utensils made of cardboard or
thin plastic, bottled beverages through various retail channels, including grocery stores and
online retailers. This strategy helps the company reach a wider audience and increase brand
exposure.

● Global Presence

Starbucks has a vast network of stores across the globe, with more than 40,000 stores in over 80
countries (Starbucks, 2023). This extensive network allows the company to serve a diverse and
international customer base.

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(Distribution of Starbucks chain of stores around the world)

3.3.4. Promotion - Marketing mix strategy for Starbucks promotion

❖ Definition: Promotion involves the marketing and communication strategies used to

inform, persuade, and influence potential customers. It includes advertising, public

relations, sales promotions, social media, and other methods to create awareness,
generate interest, and encourage purchasing.

❖ Apply

● Word of mouth

Starbucks has effectively utilized word-of-mouth marketing to create a craze among coffee
lovers. The brand's international quality coffee and unique experiences have made people
"crazy" about Starbucks. The brand's image of a Starbucks coffee cup on newsfeeds instantly
evokes a luxurious life when checking in. John Writer Smith, a coffee lover, explored Starbucks
stores worldwide, enjoying the delicious taste at over 4,000 locations. His images were captured

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on StarbucksEverywhere.net, a Google-ranked website, resulting in a free and highly effective

word-of-mouth advertising campaign (Nguyen, 2020).

● Advertising Campaigns

Starbucks frequently launches advertising campaigns to create brand awareness and promote its
products. One notable campaign was the "Red Cups" holiday marketing campaign. Each year,
Starbucks introduces special holiday-themed red cups in November (Meisenzahl, 2022). This
created anticipation and excitement among customers, and the design of these cups became a
topic of discussion and social media buzz. These cups, adorned with seasonal graphics, served as
a visual representation of Starbucks' association with the holiday season, effectively driving foot
traffic to their stores. Besides, "Meet Me at Starbucks" campaign highlights the coffeehouse as a
third place, a place for connection and community beyond home and work (McCarthy, 2014).
The campaign features a series of commercials applauding people meeting at Starbucks for
various purposes, from catching up with friends to conducting business meetings. Moreover,
Starbucks has a history of partnering with celebrities to promote its brand and products. These
partnerships leverage the celebrity's popularity and influence to reach a wider audience and
enhance the brand's appeal. According Grant (2023), Starbucks has teamed up with Taylor Swift
to re-release her album Red. Starbucks has given fans the opportunity to order a drink called
"Taylor's Latte" or "Taylor's Edition" from Starbucks and receive the singer-songwriter's favorite
drink “Grande Caramel Nonfat Latte”.

● Loyalty Programs

Starbucks Rewards is one of the most successful loyalty programs in the industry. It incentivizes
customers to return and make repeat purchases. Starbucks’ loyalty reward program has grown
exponentially, contributing to 40% of its total sales (as of March 2019) (H, 2020). Starbucks
Rewards members can redeem their accumulated Stars for various beverages, food items, and
merchandise at participating Starbucks stores in the United States, Canada, and Puerto Rico. The
redemption tiers at participating Starbucks stores in the United States are as follows:

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+ 25 Stars: an extra shot of espresso, extra syrup or sauce, or a milk alternative (such as soy

milk, almond milk, oat milk or coconut milk), up to a value of $1 US.

+ 100 Stars: hot brewed coffee or hot steeped tea, iced brewed coffee or iced tea, or a

pastry or snack packaging or one Cold Siren Logo Plastic To-Go Cup or one Siren Logo
Plastic Hot Cup.

+ 200 Stars: any handcrafted beverage (like a latte or Frappuccino blend) or any hot

breakfast item (like a breakfast sandwich) breakfast or oatmeal.

+ 300 Stars: a packaged salad or lunch sandwich or a packaged protein box or a packaged

coffee item (such as whole bean coffee).

+ 400 Stars: a select merchandise item valued up to $20.

● Social media

Starbucks is active on various social media platforms, using them to engage with customers,
promote new products, and share the Starbucks experience. For example, they leverage
Instagram to showcase visually appealing images of their drinks and encourage user-generated
content. Starbucks often features seasonal and limited-time offerings on platforms like Twitter
and Facebook, creating a sense of urgency among customers (Cucu, 2023) . They also run
contests and interactive campaigns to encourage user participation. One example is the
#StarbucksForLife campaign, where customers could win various rewards, including free coffee
for a month or even for life, by making purchases and playing Starbucks-themed games
(Starbucks Stories, 2022).
IV. Evaluation
Starbucks' 4P marketing strategy is an exemplary demonstration of combination - successfully
applying the 4P marketing mix model to business and promotional activities. In its marketing
strategy, Starbucks knows how to flexibly apply each element to bring the highest efficiency and
long-term direction for the brand. Starbucks was named the world's fifth most admired company
by Fortune magazine, which released its annual rankings on Friday. Starbucks is also ranked
number one in the food and beverage industry. This is the 16th consecutive year Starbucks has
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appeared on the global list. Starbucks is the only traditional retail business to make the top 10 list
(Starbucks Newsroom, 2022). The ranking has been published by Fortune since 1983, compiled
by surveying thousands of executives and stock analysts about reputation. businesses of about
1,500 companies - the 1,000 largest US companies ranked by revenue, along with non-US
companies in Fortune's Global 500 database with revenues of at least $10 billion. Starbucks
Vietnam was honored in the category "Excellent Enterprise 2022" Table B - Organizational
Capacity Development Strategy Category and "Excellent Enterprise 2022" Category B -
Management Model Innovation Strategy Category human resources within the framework of
Vietnam HR Awards (VnExpress, 2023).
V Conclusion
In conclusion, Starbucks Corporation's successful application of the 4Ps marketing strategy has played a
pivotal role in the company's global recognition and financial achievements. By consistently focusing on
product quality, favorable prices, strategic positioning and creative advertising, Starbucks has created a
brand that resonates with customers around the world. To further enhance its strategy, Starbucks can
continue to innovate while finding ways to serve cost-conscious consumers without compromising its
premium brand image.
(...words)

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Class: CityU9B

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Class: CityU9B

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