Introduction

Retail Strategy
• Their Retail Strategy is based on :
a. brand experience
b. Brand quality
c. Convenient Access

• Target market
• Primary:
– As Starbucks is a premium coffee brand, its main target market consist of middle and
high earners with disposable income which includes “affluent, well-educated, white-
collar patrons between the ages of 25 and 44.” 
» The economic boom, essential morning routine, sophisticated customers.
• Secondary:
– Over time, market research teams have recognized the new target market as college
students between age group of 17-24“younger, less well-educated, and in a lower
income bracket than their more established customer.”
» Alternative place to study other than library and college dorm rooms.
– Teenagers between age group of 13-17. Because starbucks serve variety of foods and
drinks which include cheeseburger and milkshakes and hence could be a place to
hangout and talk.
 Competitive advantage
• “Experience at the store level”
• The combination of high quality drinks and friendly
environment with good music, Relaxed atmosphere,
comfortable chairs, and good services which creates
“Starbucks experience”.
• Their customers can easily relate to Starbucks because
apart from standard variety of beverages they customize to
the local preference in terms of snack foods and
customization that they can relate which leads to brand
loyalty
• Need to add few more points
 Retail mix:
• Location strategy
- conquering one area of city.
- Hub & Clustering Model.
- Traffic major determinants.
- Highly visible locations.

• Merchandise Assortment
- initially low in variety and low in
assortment.
- high on Varity and high on assortment.
 Retail mix contd..
• Pricing
- high end coffee and food beverages pricing.
- combination of price, features, high quality, good service
and other attribute.
- International competitors price their product on par with
Starbucks or lower while local coffee house normally price
their coffee 40% - 50% cheaper than Starbucks.

• Advertisement & Promotion

- Not been marketing on tv and radio. Mostly internal advertisement – posters,
new product signage etc.

- promote through rapid expansion - Stores are located in or near a variety

settings, including downtown and suburban retail centers, office buildings
and university campuses. It also locates retail stores in shopping malls,
and in select rural and off-highway locations.

- Seductive atmosphere and Word of mouth.

 Retail mix contd..
• Retail formats
- company operated retail stores – located at high
traffic, high visibility locations.
- licensing retail stores.
- specialty operations
- licensing – packages and coffee – with kraft foods.
- licensing through partnership – pepsi.
- Food services - Sells whole bean and ground coffees,
to institutional foodservice companies that services
business and industry, education, healthcare, airlines
and other retailers.
Swot analysis