Starbucks Case Study

About Starbucks

Based in Seattle, Starbucks operates almost 10,000 coffee shops in over 30 countries. The company sells coffee drinks and beans, pastries, and other food items and beverages, as well as mugs, coffeemakers, coffee grinders, and storage containers at stores under the name Starbuck's. The company also sells its beans to more than 4,200 restaurants, businesses, airlines, and hotels.

1. Target customer

Starbucks targets both males and females, mainly 18-30 year olds, but really does cater for all age's needs. Since young children don't usually drink coffee, Starbucks offers a range of non-coffee beverages to cater for the whole family. Such a non-coffee beverages include summer drink favors also well known as Frappucino and all sorts of fine quality teas and water. In addition, hanging out in Starbucks gives the impression of being very with it and most of the people sitting in the stores give off the images of having some sort of social status. Starbucks customers are mainly in their final years of high school, in university or just starting to work. But in general, they all have had a good education, and if they do have a job, it almost certainly includes a big income as well. For the psychographic features of customers, Starbucks is very heavily involved in charity and is making significant efforts to be a socially and environmentally responsible company. Therefore, we can say that Starbucks aims to target and try to reach people who are generous and charitable, as well as people who like to have fun and enjoy the creative and entertaining side of life. Starbucks also has a strong commitment to the environment and the company's policy to recycle and conserve wherever possible is exemplified by the 10% discount it provides to customers who reduce waste by using their own mugs or refillable coffee bags.

2. Competitive advantages

Starbucks competes directly against specialty coffees sold at retail through supermarkets, specialty retails, and a growing number of other specialties coffee stores. In addition, Starbucks competes for whole bean coffee sales with franchise operators and independent specialty coffee stores. Among those competitors, two largest competitors are Dunkin Donuts and Krispy Kreme which are also well-know national chains. These companies threats Starbucks using aggressive price-cutting, up to 20%, for their drinks. The other direct competitor, Coffee Bean, is the oldest importers, roasters and multi retailers of specialty coffee and tea in the United States. Like Starbucks, Coffee Bean offers a diverse range of original coffee, ice blends and roast styles as well as four varieties of daily brews including flavored pre-ground coffee. Another similarity with Starbucks is that Coffee Bean also has a large offering of food and beverages that appeal to all age groups from all walks of life. The indirect competitors for the new product line of Starbucks are Jamba Juice, fast food chains such as McDonald’s and Burger King, and other small coffee alternative providers. To differentiate with these companies, Starbucks offers some exclusive features such as quality of product and enjoyable experience at a convenient location.

3. Merchandise Mix

Starbucks stores offers a choice of regular or decaffeinated coffee beverages, a special coffee of the day, and a broad selection of Italian-style espresso drinks. In addition, customers could choose from a wide selection of fresh-roasted whole-bean coffees which could be ground on the premises or carried home in distinctive packages, a selection of fresh pastries and other food items, sodas, juices, teas, and coffee-related hardware and equipment.

The company's retail sales mix was roughly 61 percent coffee beverages, 15 percent whole-bean coffees, 16 percent food items, and 8 percent coffee-related products and equipment. The product mix in each store varied, depending on the size and location of each store. Larger stores carried a greater variety of whole coffee beans, gourmet food items, teas, coffee mugs, coffee grinders, coffee-making equipment, filters, storage containers, and other accessories. Smaller stores and kiosks typically sold a full line of coffee beverages, a limited selection of whole-bean coffees, and a few hardware items.

In recent years, the company began selling special jazz and blues CDs, which in some cases were special compilations