Analyzing Starbucks' 7Ps Marketing Mix

Strategy in the Global Coffee Industry

Wily Mohammad1*, Syifa Izzati Zahira2

PT Chishiki NoHikari Indonesia1, Visiona Science2
Email: wilymohammad15@gmail.com*

ARTICLE INFO ABSTRACT

Date received : 31 July 2023
Revision date : 20 August 2023
Date published : 4 September
2023
Keywords: 7Ps; Marketing Mix
This qualitative research aims to comprehensively analyze Starbucks'
marketing mix strategy, focusing on the 7Ps framework. Starbucks, a
global coffee industry leader, has strategically employed Product, Price,
Promotion, Place, People, Process, and Technology to maintain its
position in the market and expand its global reach. In examining the
"Products" aspect, we delve into Starbucks' evolution from coffee beans
to ready-made drinks and the iconic Siren mermaid logo. The "Price"
component explores Starbucks' premium pricing strategy and its
pricing tiers. "Promotion" details the Starbucks Rewards program and
its customer loyalty initiatives. Under "Place," we investigate Starbucks'
global expansion through partnerships and strategic locations near key
demographics. The "People" aspect highlights the importance of well-
trained baristas and communication skills in Starbucks' service delivery.
"Process" describes Starbucks' direct sourcing from farmers, changes in
coffee production, and digital innovations. Lastly, "Technology"
discusses Starbucks' mobile app and collaborations with food delivery
platforms. This research provides valuable insights into Starbucks'
marketing strategies and their impact on the coffee industry, shedding
light on its continued success in a competitive market.

INTRODUCTION
In the contemporary business landscape, marked by ever-evolving consumer preferences
and a fiercely competitive market, the importance of strategic marketing cannot be
overstated [1]. Successful businesses recognize that their ability to thrive and expand
hinges on their capacity to effectively navigate the dynamic terrain of consumer
expectations, market trends, and technological advancements [2, 3]. One such industry
where these dynamics are vividly at play is the coffee business, a global juggernaut that
has witnessed both innovation and intense competition. The coffee industry, with its
sprawling network of cafes, artisanal roasters, and global franchises, has undergone a
remarkable transformation in recent decades [4]. The infusion of specialty brews, craft
techniques, and experiential coffee consumption has redefined not only the coffee itself
but also the expectations of coffee enthusiasts worldwide. Amid this evolution, one brand
has consistently stood out: Starbucks.

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Wily Mohammad, Syifa Izzati Zahira

Starbucks, founded in 1971, has become synonymous with premium coffee experiences,
serving as an exemplar of effective marketing strategy within the coffee industry and
beyond [5]. The success of Starbucks can be attributed, in no small part, to its adept
utilization of the 7Ps marketing mix framework. This framework, encompassing Product,
Price, Promotion, Place, People, Process, and Technology, serves as a cornerstone for
crafting a holistic and impactful marketing strategy [6, 7, 8, 9, 10, 11]. Within the coffee
industry, the 7Ps framework plays a pivotal role in shaping the competitive landscape,
with Starbucks serving as a beacon of how these principles can be harnessed to achieve
global dominance.
As we embark on this research journey, it is imperative to recognize the multifaceted
importance of our exploration. First and foremost, this research underscores the enduring
significance of effective marketing strategy in contemporary business. In an era marked
by information overload, the ability to distinguish a brand, connect with consumers, and
foster loyalty is paramount for business survival and growth. Furthermore, within the
coffee business, this study highlights the unique challenges and opportunities that
companies face as they strive to carve a niche in an industry saturated with choices. The
coffee industry is no longer confined to serving a caffeinated beverage; it has
transformed into an experiential realm where consumers seek not only a product but an
ambiance, a connection, and a story.
Within this context, the 7Ps marketing mix framework emerges as a crucial tool for
companies to navigate the complexities of the coffee industry. This framework allows
businesses to systematically address the key elements that influence consumers'
perceptions and choices, thereby shaping their competitive position in the market.
Starbucks, with its global reach and unwavering customer base, provides a compelling
case study for the application of the 7Ps framework. By meticulously examining how
Starbucks leverages Product differentiation, Pricing strategies, Promotion tactics, Place
selection, People-focused service, refined Processes, and cutting-edge Technology, we
gain insights into how a brand can transcend the status of a mere coffee provider to
become a global cultural icon.
Ultimately, this research serves a dual purpose: to unravel the secrets behind Starbucks'
enduring success and to offer a valuable resource for marketers, business practitioners,
and enthusiasts seeking to understand the symbiotic relationship between strategic
marketing and industry prominence in the context of the ever-evolving coffee business.
By dissecting Starbucks' 7Ps marketing mix strategy, we shed light on the blueprint that
has not only shaped the coffee industry but also continues to influence the broader
business landscape.

METHODOLOGY
This study employs a qualitative approach to address its research objectives. Qualitative
methods are employed in social research to gather descriptive information through
words and visual materials. Unlike quantitative research, which deals with numerical data,
qualitative research focuses on non-numerical data like words and images. The
qualitative research approach doesn't rely on statistical analysis, but instead on
qualitative insights. It involves gathering descriptive data through techniques such as

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 Analyzing Starbucks' 7Ps Marketing Mix Strategy in the Global Coffee Industry

interviews, observations, and document analysis. The researcher's role is to interpret and
make sense of the information collected from these sources, aiming to provide
comprehensive and in-depth answers to the research questions [12].
Utilizing a qualitative descriptive methodology, the analysis of collected data (comprising
textual, visual, or behavioral content) involves presenting an explanatory or descriptive
account of the studied situation or phenomenon. This narrative depiction is employed
instead of numerical or statistical methods. The objective presentation of findings is
crucial to minimize the influence of the researcher's personal biases and interpretations
[13].
Primary data pertains to information directly gathered by the researcher, often through
interviews, tracking, and similar approaches. For this research, primary data originates
from direct researcher observations and from participants who shared insights during
interviews. An interview involves posing questions to the interviewee and engaging in a
face-to-face conversation. Observation entails closely examining a process or object to
gain a deeper understanding of a phenomenon, drawing on existing knowledge and
concepts. This approach aids in gathering essential information to advance the research
endeavor [14].

RESULTS AND DISCUSSION

The 7Ps is a comprehensive marketing mix framework that encompasses seven essential
elements crucial for crafting a successful marketing strategy. These elements are Product
(the goods or services a company offers), Price (the pricing strategy employed),
Promotion (marketing and advertising efforts), Place (the distribution channels and
location strategy), People (the personnel and customer interactions), Process (the
operational and production processes), and Technology (the use of technology and
digital tools). The 7Ps framework provides a structured approach for businesses to
address key aspects of their marketing strategy, ensuring that they meet customer needs,
differentiate themselves in the market, and achieve their business objectives. The
following are applications of 7ps at Starbucks:
Product
Starbucks' commitment to product excellence has been at the heart of its success. From
its early days of sourcing coffee beans to its current global presence, Starbucks has
consistently delivered quality coffee products. The evolution from selling coffee beans to
ready-made drinks reflects Starbucks' adaptability to changing consumer preferences.
The iconic Siren mermaid logo has undergone several iterations but remains an indelible
part of the brand's identity, instantly recognizable to consumers. Starbucks' product
differentiation strategy extends to offering a range of coffee products, including freshly
brewed coffee in its cafes, ready-made beverages, and coffee beans available in
supermarkets. This diversified product portfolio not only caters to a broad customer base
but also reinforces brand recognition.
Price
Starbucks has strategically positioned itself as a premium coffee provider. In markets like
Indonesia, where Starbucks operates, products are priced at a premium compared to
other coffee options. However, the company has mitigated this premium perception by

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Wily Mohammad, Syifa Izzati Zahira

offering three cup sizes: tall, grande, and venti, allowing customers to choose products
that align with their budgets. This tiered pricing strategy ensures accessibility while
preserving Starbucks' premium image. Starbucks' pricing strategy is designed to balance
the perception of quality and value, a key factor in retaining customer loyalty.
Promotion
Starbucks' promotional efforts are exemplified by its Starbucks Rewards program. This
loyalty program encourages repeat business by rewarding customers with stars for every
transaction. These stars can be redeemed for various attractive offers, from drink
toppings to free coffee bean products. Starbucks' Rewards program not only incentivizes
customer loyalty but also collects valuable data on consumer preferences, enabling
personalized marketing efforts. This approach creates a symbiotic relationship between
Starbucks and its customers, driving engagement and enhancing the brand's presence.
Place
Starbucks' global footprint is a testament to its astute location strategy. The company
strategically places its stores near tourist attractions, universities, and business districts,
ensuring a steady stream of foot traffic. For instance, Starbucks Margonda, Indonesia, is
strategically situated near major campuses, tapping into the vibrant student community.
This approach not only maximizes visibility but also caters to diverse customer segments.
Moreover, Starbucks adopts a partnership model to expand its presence, allowing
licensed partners to open stores in addition to those directly operated by the company.
This dual approach has fueled Starbucks' global expansion, making it one of the most
ubiquitous coffee brands worldwide.
People
Starbucks places a strong emphasis on its baristas, who are integral to the customer
experience. In the United States, Starbucks closed all its outlets for a day after the 2008
financial crisis to retrain its baristas, emphasizing the importance of well-trained staff. In
Indonesia, baristas are expected to possess a high service spirit and communicate in
English, underscoring the brand's commitment to customer satisfaction. Starbucks'
investment in its people ensures consistent service quality and fosters positive customer
interactions, further solidifying its reputation.
Process
Starbucks' journey in sourcing coffee beans has evolved from buying them through
brokers to direct sourcing from farmers. This shift has not only reduced production costs
but also allowed Starbucks to select the best coffee beans independently. Additionally,
changes in the coffee production process, such as reintroducing in-house grinding
machines and eliminating automatic cappuccino makers, demonstrate Starbucks'
commitment to enhancing the customer experience by emphasizing the direct
connection to the coffee-making process. Starbucks also embraces technology by
offering a dedicated mobile app for ordering and payment, as well as collaborating with
online food delivery platforms to expand its reach. These streamlined processes enhance
convenience and accessibility for customers.
CONCLUSION
In the contemporary business landscape, where competition is fierce and consumer
preferences are ever-evolving, effective marketing strategies are the linchpin of success.

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 Analyzing Starbucks' 7Ps Marketing Mix Strategy in the Global Coffee Industry

Within the vibrant and dynamic coffee industry, Starbucks has emerged as an undisputed
titan, not solely due to its finely roasted beans or meticulously crafted beverages but,
perhaps more importantly, because of its shrewd application of the 7Ps marketing mix
framework.
This research journey through the realms of Product, Price, Promotion, Place, People,
Process, and Technology within Starbucks has illuminated key facets of the brand's
enduring success. Starbucks' ability to adapt its product offerings, from coffee beans to
ready-made drinks, while preserving its iconic Siren logo, underscores its astute product
strategy. The tiered pricing structure, offering a range of cup sizes, positions Starbucks
as a premium provider while maintaining accessibility. Starbucks' promotional prowess,
particularly through the Starbucks Rewards program, nurtures customer loyalty and
engagement.
The strategic placement of Starbucks outlets near tourist attractions, universities, and
business districts not only maximizes visibility but also taps into diverse customer
segments. The brand's dual approach, combining company-operated stores with
licensed partners, has fueled its global expansion. Starbucks' investment in barista
training and customer-centric service has solidified its reputation. The evolution of
sourcing practices and the embrace of technology have streamlined processes and
enhanced customer convenience.
In essence, Starbucks' mastery of the 7Ps marketing mix framework serves as a blueprint
for navigating the complexities of the coffee industry and beyond. It demonstrates how
a brand can transcend being a mere coffee provider to become a global cultural icon and
a model for others to emulate.
As we conclude this research, we underscore the vital importance of strategic marketing
in contemporary business. Starbucks' journey exemplifies how an effective marketing mix
can not only sustain a brand's relevance but also catapult it to global prominence. This
research provides valuable insights into Starbucks' success, offering a resource for
marketers, business practitioners, and enthusiasts eager to explore the intricate interplay
between marketing strategy and industry leadership within the dynamic world of coffee.
Starbucks stands as a testament to the power of astute marketing, and its story will
continue to inspire and inform businesses across industries for generations to come

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6 Yumeka: Journal of Digital Business and Economics, Vol. 01, No. 01, September 2023