Starbucks

z
Case Study
By: Anjali, Brian, & Zach
When Howard Schultz launched Starbucks, who was the target
market,
z how was Starbucks positioned and what decisions
about product, price, distribution and promotion supported this
positioning?

 The target market: White collar, office workers, Those who viewed
Starbucks as premiuim (luxury Brand)

 Decisions about Product: “premium product”

 Decisions about Price: expensive due to quality

 Decisions about Distribution: highly visible locations

 Decisions about Promotions: One big community event, local

charity and community participation
Wall Street and Starbucks management placed great emphasis on the company’s ability to continue its
impressive growth rate. What were some of the growth initiatives undertaken by Starbucks and how did
z they fuel company growth?

 Introductions of new types of drinks

 Adding food to their menus

 Expanding the food menu

 Added promotional items such as stuffed animals

 Added Drive-thru
It’s clear that, in general, the company’s growth initiatives were sound in terms of generating the growth
expected by Wall Street. But which of Starbucks’ initiatives, in retrospect, were sound decisions for the
z brand and which were inconsistent with brand positioning?

 Drive through:
 Positioned the company more in the realm of fast food and less of one that was a specialty
coffee shop

 Quality Products:
 The higher price point of the premium take home products
 z
What role should foreign expansion play in Starbucks' strategy?

 Important, but rapid global growth to appease Wall St should not

be their main strategy.

 Expanded to over 4500 stores in 43 countries by 2008.

 Increases customer base.

 Expands product offerings.

 More real estate opportunities.

 z
How Should Starbucks define its target market and positioning after its decline
in 2007?

 Get back to core competencies.

 Avoid discounting .

 Continue to promote premiere coffee drinks and accept the

image of being the high end brand.

 Focus on coffee but remember their true long term success

comes when their culture is all about serving the customer.

 Offer additional options to their customer all while remembering

the true reason they came to Starbucks.