4 P’s of Starbucks

Pricing
Premium Pricing involves setting the prices of products higher than comparable products.
It is usually used to boost profits in areas where the customer is happy to pay more. Some
brands, such as Starbucks can charge a premium price because their entire brand
image is based around luxury. Starbucks sets its prices on a simple idea: high value at
moderate cost. When people feel like they are getting a good deal for their money, they
are more likely to pay a higher cost. Starbucks appreciates that the mainstream of their
customer base is impervious to price, and uses small price rises that everyday customers
may not notice to increase margins. The goal is to use the price increases to guide the
customer towards your most profitable product. Starbucks do not increase the prices of
their products with the highest margins. Starbucks raised the price of a tall coffee in order
to convince customers to buy a larger coffee size (with slightly higher margins) How many
times have you walked into a coffee shop and decided on a larger cup because there is
only 20/30p difference? How can a company justify these price increases? Well, if you’ve
ever been into Starbucks you might notice that they spend lot of time and energy
differentiating themselves from their competitors. The design of its coffee shops, the music
played and the types of products it sells. They situate themselves as selling luxury and
sought after products, as well as being a luxury and sought after brand.
Promotion

 Starbucks Coffee’s Promotions

 Starbucks promotes its products mainly through advertising. This component of
the marketing mix refers to the communication strategies used to disseminate
information about the firm and its products. Starbucks’ promotional mix is as
follows:
 Advertising
 Public relations
 Sales promotions
 The company advertises its products through television, print media and the
Internet. The company infrequently uses public relations, which has not always
been successful for the business. For example, Starbucks’ Race Together public
relations campaign was widely criticized. In addition, the firm uses sales
promotions, such as the Starbucks Card that customers can use to get freebies.
This part of Starbucks’ marketing mix shows the core significance of advertising,
and the supporting roles of public relations and sales promotions for the
company.
Place

 The company offers most of its products through Starbucks cafés. This
component of the marketing mix determines the venues at which customers
can access the products. In Starbucks Coffee’s case, the following are the main
places used for the distribution of products:
 Cafés
 Online Store
 Starbucks App
 Retailers
 Originally, the firm sold its products through Starbucks cafés. Through the
Internet, the company now offers some of its products through the online
Starbucks Store. Also, the firm now sells some merchandise through retailers. In
addition, the company uses the Starbucks App to allow customers to place their
orders. This part of Starbucks’ marketing mix shows how the firm adapts to
changing times, technologies, and market conditions.
Product

Starbucks Coffee’s Products

Starbucks continues to innovate its product mix to capture more of the market.
This component of the marketing mix focuses on what the business offers to
customers. At present, the following are the main categories of Starbucks
products:
1.Coffee
2.Tea
3.Pastries
4.Frappuccino beverages
5.Smoothies
6.Merchandise (mugs, instant coffee, etc.)
This product mix is a result of years of business innovation. For instance,
Starbucks added the Frappuccino line after it acquired The Coffee Connection in
1994. The company also has an ongoing product innovation process that aims to
offer new products to attract and keep more customers. Thus, this part of
Starbucks’ marketing mix involves beverages, food, and merchandise.