Starbucks - Importance of Market Research
In the late 1980’s the standard coffee market was dropping in value due to people getting tired and bored of the standard cup of coffee. However the market for speciality coffees such as frappuccinos and other different new drinks were on the rise. Starbucks did some market research and found out that that 10% of the coffee market in 1989 was speciality based coffee, compared to the 3% in 1983. This then influenced them into bringing out their speciality coffees starting with the frappuccino that were first introduced in 1994 which have been a huge part of why they are as big as they are today.
Starbucks must keep up to date with their market research as they aim to stay at the top of the
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They are one of the main companies in the world that largely monitors their websites to see what their potential customers are interested in. Businesses in the ever growing coffee market are very influenced by external factors that they have no control over whatsoever. These factors include things like weather. This is a factor that needs to be in companies like Starbucks favour, as they need nice weather in their suppliers countries to have good yields of coffee beans otherwise they will not have enough stock, therefore they cannot satisfy their customers needs, meaning they could lose some brand loyalty from annoyed customers. Another external factor that influences coffee shops is how their coffee is sourced. They need to be the best quality possible as they charge premium prices. If the coffee beans are not as high quality as possible the customers may be able to tell in the taste of the coffee. This meaning Starbucks must choose the best suppliers possible to satisfy customers needs and wants.
The company used many types of market research in their rise to the top of the market. They have had to split up their market research in two specific ways. One being non-dairy products and also dairy products. Within the research for dairy products, they have had to look at different problems and methods of research,
CEO of Starbucks, Howard Schultz, originally had the idea that Starbucks would have the community/traditional feel in their stores, and still serve high-quality coffee (“Our Heritage” 1). Adding an Italian vibe to the coffee shops, keeping its traditional logo, which is based on a mythical creature, and advertising some of its products in a more “traditional” style accomplished the first goal. For an example, Starbucks recently created a commercial about their Refreshers, which was about cooling someone down in the summer time, with the scenery of Tuscany in the background. Serving high-quality coffee was obtained by ordering coffee beans from where they naturally grow and giving it a perfect roast to give to a customer. It was a marketing strategy that helped Starbucks grow and transform its commodity chain to support gathering more raw materials for a cheaper and more efficient way.
Starbucks is a coffee company that began in 1971 in Seattle, Washington. They own more than 24,000 retail stores in 70 countries (“Starbucks Company”). They offer an array of products from coffee to handcrafted beverages to fresh food. Starbucks believes in being a responsible company while participating in ethical sourcing and environmental stewardship. The company is an active user with sharing information on social media platforms like Instagram, Twitter, Facebook. They are on Twitter with 11.8 million followers and also on Instagram with 12.5 million followers. Starbucks is doing exceptional with their marketing strategies when compared to the followers of other known coffee companies. For example, Dunkin’ Donuts has 57.8K followers on
Starbucks purchases beans from Latin America, Africa, and Asia and roasts high-quality whole bean coffees and sells them, along with handcrafted coffee, ready-to-drink beverages, tea beverages and a variety of fresh food items, through company-operated retail stores. They sell coffee and tea products and license trademarks through other channels such as licensed retail stores. In addition to the flagship Starbucks brand, the portfolio includes brands such as Tazo Tea, Seattle’s Best Coffee. The main objective of Starbucks is to maintain its standing as one of the most recognized and respected brands in the world.
Starbucks Coffee (2014) mission statement is “Our mission: to inspire and nurture the human spirit-one person, one cup and one neighborhood at a time.” Starbucks values go beyond serving a cup of coffee to customers. Starbucks values go to the lengths of providing the highest quality of coffee; improving the lives of people who walk through the door; treating employees as partners; making sure shareholders receive incentives; providing a place for customer to escape the stress of life and enjoy a day with family and friends, and to be the most recognized and largest coffee retailers worldwide. According to Starbucks Coffee (2014), “Starbucks is fully accountable to get each of these elements right so that Starbucks-and everyone it touches-can endure and thrive.”
Great quality products, customized, served in clean, convenient placed stores for everyday coffee, friendly and fast serving, everything in a pleasant atmosphere - these were just few factors that lead to the great success of Starbucks during the nineties. Their USP was a place where every American could escape from home or work, for a coffee drinking ritual; high quality coffee, according to each customer's taste, served in a special, intimate ambience. Their image was supposed to appeal to anyone, being based on the idea of community, "exploiting" the need of people to interact with each other, in a "third place", away from home or work.
Founded in 1971 at Seattle’s Pike Place Market, Starbucks Coffee, Tea and Spices, as it was originally called, has been “brewing-up” its famous blends in over 43 countries, including the United States. Now called Starbucks Coffee Company, business isn’t just about the coffee and tea anymore. Starbucks has its own line of bottled water, handcrafted beverages, fresh food, entertainment, merchandise and a Starbucks Card. The company has received numerous awards for their outstanding business practices. Fortune Magazine has ranked them as one of “The Best 100 Companies to Work For” in 1998, 2000, 2002, and 2008 (Starbucks, 2008). The Starbucks Experience provides consumers and the general public a direct line a of business communication. From friendly baristas to press releases from CEO Howard Schultz, Starbucks keeps its “partners” informed.
Emphasis on quality, Starbucks Experience, brand image, and important suppliers to dispute lower price contributions to competitors hence increasing profits
One of these factors was labor. Under this factor fall manufacturers, executive members, growers, processors, exporters, the roasters, and the staff that run all of their stores. Starbucks needed to ensure that everyone was cooperating and withstanding Starbucks standards. All of the “baristas” in other countries needed to go through a rigorous training to make sure they understand the menu and the procedures. A lot goes into the coffee that Starbucks customers are served, which most people are unaware of. Another factor is where was Starbucks going to get their coffee? Starbucks is known to buy their coffee from their three main growing regions: Africa/Arabia, Latin America, and Asia Pacific. Starbucks has been part of international trade for their coffee for many years now. They need to make sure that the coffee meets their requirements and that the farmers are following protocol. Starbucks is known to be very particular about how their coffee is harvested and processed. Additionally, they had to consider their capital goods such as their coffee machines, farming equipment and machinery to plant and process beans and also their roasters. Starbucks is very particular about what machinery they use especially in their
When Starbucks started their target market were people who enjoyed coffee not just for the energy boost that they got from the caffeine, but people who enjoyed sitting down and drinking a well-prepared cup of coffee. Upon visiting Italy and falling in love with the coffee bars and the experience that they offered, Schultz envisioned a place between home and work where you could just sit and enjoy your coffee. Starbucks wanted to control their coffee from “raw green bean to the steaming cup” this meant that they had to talk with their farmers to make sure the quality was up to their standards. They
Starbucks is currently the industry leader in specialty coffee. They purchased more high quality coffee beans than anyone else in the world and keep in good standings with the producers to ensure they get the best beans. Getting the best beans is only the first part, Starbucks also has a “closed loop system” that protects the beans from oxygen immediately after roasting to the time of packaging. They did this through their invention of a one-way valve which let the natural gasses escape but keeping oxygen out. This gave them the unique ability to ensure freshness and extended the shelf life to 26 weeks. Starbucks isn’t only about the coffee, it’s also about a place where people can escape to enjoy music, reflect, read, or just chat. It is a total coffee experience. The retail outlet has been responsible for much of Starbucks growth and has contributed substantially to their brand equity.
In 2003, Starbucks was listed as one of the Fortune 500. Despite the ongoing recession, the company had managed a 31% increase in net revenues for the year. This was reasonable, considering they only spent about 1% of total sales on marketing. All of this, coupled with the fact that they were popular with customers and employees, was a sure recipe for success.
Koehn, N.F., Besharov, M.A., & Miller, K. (2008). Starbucks Coffee Company in the 21st Century. [Case study]. Boston, MA: Harvard Business School Publishing.
...nscious as some consumers are. However, Starbucks uses their preferences and adapts to it so as to satisfy their consumers.
In addition to being best-known supplier of the finest coffee and promising only the highest quality products, Starbucks emphasizes firm values, provides guidelines to enhance employee self-esteem. This is to ensure continued customer satisfaction. Moreover, diversity has become a priority to providing an inviting environment to all consumers. Starbucks continues to abide by a strict, slow growth policy in which they set out to dominate a market before moving on to expand, thus history has shown this strategy to be successful for Starbucks, making them one the fastest growing companies nationwide.
With clear core values towards providing quality coffee, the best service, and atmosphere, Starbucks has enjoyed great success since it was founded 30 years ago. The company has being doing very well for last 11 years with 5% or more store sales increase, even with the rest economy still reeling from the post-9/11 recession. However recent research, conducted to Starbucks, have showed some concerns regarding company’s problem meeting customers’ expectations.