Starbucks

Communications Strategy
Introduction

From their commitment to the highest quality coffee in the world, to their active role in

community civics around the world, Starbucks has proven to be the market leader of specialty coffee
year after year. The development of the international coffee house chain has appealed to the masses
for 40 years growing to over 16,000 locations in 50 countries. Starbucks daily mission promises to
inspire and nurture the human spirit one person, one cup and one neighborhood at a time, which
they accomplish through creating an enjoyable customer experience that goes beyond just delivering a
product. Starbucks strives to make a difference in the world by involving themselves in programs and
organizations that promote environmentally friendly actions and helping those who are less fortunate
in the community.

In order to maintain their current position in the market as the premier roaster and retailer of

specialty coffee in the world, Starbucks must continue to craft creative strategies and effective
advertising campaigns. The company must also consider exploring new opportunities to distinguish
themselves from the competition. Based on their current growth in sales dollars, Starbucks has great
potential to expand their stake in the coffee industry, which prompts the need for further research.
The following report will discuss and analyze their company and its current efforts, along with a view of
the industry as a whole.
Industry Overview
Brief History
Coffee houses originated in Turkey and continued to spread across Europe from 1475-1673.
The United States was first introduced to the beverage soon after colonization. The American business

community has embraced coffee houses; the Tontine Coffee House in New York was the original
location for the New York Stock Exchange because so much business was conducted there. In 1946,
the introduction of the commercial piston espresso machine expanded the coffee industry to what it is
today. Modern coffee shops sell anything from coffee and espresso drinks to pastries and other bakery
items.
Size of Industry
The United States coffee shop industry includes about 20,000 stores with total annual revenues
of about $10 billion. Major companies include Caribou Coffee, International Coffee & Tea, Peets
Coffee, and Starbucks. The top fifty companies generate more than seventy percent of sales, so the
industry is considered concentrated.
Stage in Product Life Cycle

Coffee shops are still very much in the growth stage of the product life cycle. Promotion must

build selective demand during this stage of product growth, and try to inform and persuade customers
of the competition to switch.
Legal/Regulatory Issues

The business structure may vary, although Starbucks and other big-brand companies are

corporations. The federal agencies involved in the coffee shop industry are: the IRS, the U.S.
Department of Labor, the U.S. Patent and Trademark Registration Office, and the Occupational Safety
and Health Administration. In addition, insurance, licenses and permits are required. These include: a
Business Operation License, Zoning and Land Use Permits, a Health Department Permit, a Sales Tax
License, Fire Department Permits, and a Special Federal Business License or Permit.
Seasonality

The coffee industry does experience continuity throughout the year based on avid coffee

drinkers and loyal customers. However, coffee shop sales can be seasonal, usually experiencing a peak
during the fourth quarter due to the winter holidays. During these time periods, companies will offer
limited time, seasonal products to increase their sales even further. For example, Starbucks releases
their famous Pumpkin Spice Latte in the month of October, followed by the Gingerbread Latte in
November; both of these festive drinks are only available during the holiday months, which encourages
individuals to purchase the item more than they normally would if the product was offered year-round.
Growth Potential/Forecasts

There is potential for growth in coffee shops which are located in bookstores. With declining

book sales due to electronics, coffee shops make better use of prime retail space. There is also a
strong support from business traffic due to features such as Wi-Fi Internet service and a relaxing,
contemporary environment. Coffee shops have become portable offices and are used for workplaces
in addition to social hotspots. There is also the possibility for product line extensions, including the
option of juices, soda, or perhaps alcoholic beverages to draw in different target markets at different
times throughout the day. Typical coffee sales occur before 2:00 p.m.; by introducing more drink
options, coffee shops could increase profitability and customer base.
The Economy

The downturn in the economy is a major factor in every industry, but has had a lessened impact

on the coffee shop industry. Eighty percent of coffee drinkers have not altered their buying patterns
since the economic downturn. Coffee shops report a steady flow of loyal customers in addition to high
levels of customer loyalty to value-based purchasing. It is expected that during the recession, much of
the industrys growth will remain in the specialty coffee segment. Customer focus has turned to
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quality, but growth in independent retail beverage sales assumes that businesses can migrate to higher
prices for better coffee beverages.
Societal/Cultural Considerations

In the United States, coffee shops are considered social environments. To many individuals, the

atmosphere is more important than the menu. Customers often bring laptops, mp3 players, and e-
readers to occupy their time during long hours of relaxation at the shop. Several customers strike up
conversations with strangers and bond over coffee. Others, such as business professionals, appreciate
the quick service of the shops as they go along their busy day. Customers expect promptness when
they arrive for their coffee on-the-go.
Client Profile
History of Brand

The history of Starbucks began in Seattle in 1971. The first coffee house was opened by three

friends, Jerry Baldwin, Zev Siegl, and Gordon Bowker. The first store was small and sold fresh-roasted
gourmet coffee beans along with brewing and roasting accessories. The store ran this way with
moderate success up until the 1980s.
As Siegl sold out in the early 1980s, Howard Schultz, a plastics salesman, began to take an
interest in Starbucks and the number of plastic drip-brewing thermoses that the company was buying
from a company that he represented. Schultz was hired in 1982 as the new head of marketing. Soon
after, he was sent to Milan on business where he discovered the exciting coffee culture of Italy. He
admired the atmosphere of Italian cafs where the customers were seen socializing with one another
in sophisticated settings.

Schultz then decided to transform Starbucks into the community gathering places that he
observed overseas. He was also interested in the prospect of selling espresso by the cup.
Founder, Jerry Baldwin, was skeptical of Schultzs new ideas as he did not envision Starbucks becoming
any more than that which sold whole coffee beans. So, Schultz used the corner of a store to test a tiny
espresso bar.
In 1987, Schultz convinced a group of local investors to help him buy Starbucks from the
original owners. From there, he developed the ever recognizable mermaid logo and transformed the
six existing shops into classy, yet comfortable coffee houses. Expansion began with stores opening in
Canada, Oregon, Illinois, California, and various airport stores. A catalog was developed for people to
place orders where there were no locations. By 1992, Starbucks was the fastest growing chain in the
history of coffee.
Sales Data

By examining the sales data found in the 2010 Annual Report for Starbucks, the following chart

was created to visually depict trends in their company. Each year, sales dollars have increased, proving
the growth of their renowned brand. Even with the economic downturn in 2009, Starbucks only
experienced a slight decline in sales. The company was able to regain their dominance the following
year, producing the highest amount in sales dollars in comparison to the previous five years in the
market.

Starbucks: Total Sales Dollars

Sales Dollars (in Millions)

12,000.00
10,000.00
8,000.00
6,000.00
4,000.00

7,786.94

9,411.50

10,383.00

9,774.60

2008

2009

10,707.40

2,000.00
0.00
2006

2007

2010

Year

Advertising Expenditures, SOV, Media Mix

Through the use of the database AdSpender, the media mix and advertising expenditures for

Starbucks and its competitors were determined. The table below reveals that several media options
are used in order to promote their products, such as television, magazines, newspapers, radio, and
outdoor advertising. For Starbucks, their biggest expenditures occurred under magazine and
newspaper advertisements, which allow the company to appeal to the visual elements of their product
while also discussing features and benefits. They have chosen media that are self-paced, giving their
audience full ability to survey the advertisement on their own. However, Starbucks also distributed
their budget to include advertisements on network, cable, and spot television. In this way, they could
combine visual and audio elements to provide a more lifelike, interactive experience for the audience.





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Advertising Expenditures $ (000)

Total

Network
TV

Cable TV

Spot TV

Magazine

National
Newspaper
s

Network
Radio

National
Spot
Radio

Local
Radio

Outdoor

Starbucks

225295.4

16519.5

25978.9

25978.9

62089.4

36385.5

33.8 20697.6

23011.6

14600.2

Dunkin'
Donuts
McDonald
s
Nestle

501489.0

96235.1

68342.8 202710.9

20138.4

792.8

0 21007.2

65352.7

26909.1

2840876.0 1060964.4 462297.0 580557.4 147301.5

787.1

Total
Category

4785.7

90.4

0.9

2315.3

2201.9

3572446.1 1173719.0 556709.1 809248.1 231844.6

40167.3

8635.9 15440.0 262659.7 302233.0

0

177.2

8669.7 57144.8 351024.0 343919.5

By performing the Share of Voice calculation for each media listed in the above table, Starbucks

and its competitors can be compared based on their advertising expenditures. The table below
contains percentages that reveal each companys dominance within a medium. Although Starbucks
seems to have a low Share of Voice overall and within each medium, they are also being compared to
companies who have several products outside of the coffee industry and much larger advertising
budgets. However, it is important to look at data from the companies as a whole because Starbucks
offers more than coffee products as well, including baked goods, music, and books. Another important
consideration is that audiences base their views and opinions of certain products through the entire
brand. Each advertisement for a company influences an individuals decision to choose their particular
brand regardless of the specific product mentioned. For example, McDonalds could be advertising for
a new sandwich, but impressions of the overall company will be made from that advertisement, aiding
in an individuals decision to choose their company for other products as well.
Based on other research, it is obvious that Starbucks holds the leading position in the market
for specialty coffee, which is the main focus of their business. Yet, by only observing the Share of Voice
data, the company should consider increasing their advertising budget in order to control more share
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within their chosen media. The data for McDonalds shows a strong dominance in the market, with a
Share of Voice of 79.52%, leaving Starbucks to only control 6.31%. However, in the media where
Starbucks spent a large amount of their advertising expenditures, they do control a favorable amount
of the market. For magazines and newspapers, the company has a Share of Voice of 26.78% and
90.58%, respectively.

Share of Voice

Total

Network
TV

Cable
TV

Spot
TV

Magazine

National
Newspapers

Network
Radio

National
Spot
Radio

Local
Radio

Outdoor

Starbucks

6.31

1.41

4.67

3.21

26.78

90.58

0.39

36.22

6.56

4.25

Dunkin'
Donuts
McDonalds

14.04

8.20

12.28

25.05

8.69

1.97

0.00

36.76

18.62

7.82

79.52

90.39

83.04

71.74

63.53

1.96

99.61

27.02

74.83

87.88

0.13

0.00

0.02

0.00

1.00

5.48

0.00

0.00

0.00

0.05

100.00

100.00

100.00

100.0
0

100.00

100.00

100.00

100.00

100.00

100.00

Nestle
Total
Category

Positioning

Starbucks prides itself on producing the highest quality coffee products. They aim to create not

only a fashionable eatery, but a home away from home atmosphere where people would want to go
just to hang out and chat with others. The company maintains priority in community involvement.
Starbucks promotes an attainable green lifestyle with recyclable/reusable cups, front of store
recycling, and green building.
Creative Strategy

Starbucks seeks to obtain the attention of the consumer and bait buyers into making purchases.

Coffee drinkers are looking for quality, experience, brand perception, and most importantly

convenience to fit on-the-go lifestyles. The attraction of Starbucks is that it is not only the worlds #1
coffee house, but remains accessible and consistent.
Starbucks promotes itself as a social tool that overshadows a corporate image of being the
best. Advertising needs to be familiar and light with the idea that the advertisement is engaging in
the type of conversation that the consumer may have within a Starbucks franchise.
The company looks to get the on-the-go consumer in the door and then create an atmosphere
that makes them want to stick around for a while. Doing so may engage the consumer into buying
other products offered. Starbucks brand power comes from the fact that it is lasting and recognizable
to the average man and woman.
New Developments

In honor of the companys 40th anniversary, Starbucks has redesigned its infamous mermaid

logo. Also, in honor of the anniversary is the introduction of a Tribute Blend and new tiny sized baked
goods.

In a stranger turn of events, Starbucks has reported that because the majority of their

customers pass through before 2:00 p.m., they plan to break into the alcohol business by serving
regional wine, beer, and local cheeses. The other perk of this new spin on the traditional coffee house
is completely green construction and design. Starbucks has attempted this new product line in Seattle
and Portland earlier this year; results of this bold move have not been collected yet, but if customers
are responsive, more of these trendy, new found coffee/alcohol cafs will begin to emerge. If this
opportunity becomes a success, Starbucks will increase their sales by obtaining a night time crowd
while still maintaining their typical before 2:00 p.m. customers.

Starbucks has also developed a lighter roast of coffee, cleverly called the Blonde roast, for those

consumers who want caffeine with a lighter taste. This product can add yet another dimension to their
long list of offerings, catering to another group of consumers.
Competitor Profiles

Starbucks has many competitors even though Starbucks has created a niche market for

themselves. Starbucks does hold a dominant position in the specialty coffee shop market, and they
compete mainly with other specialty coffee shops, restaurants, and doughnut shops. According to
many financial sources, Starbucks primary competitors are Dunkin Brands Group INC, McDonalds
Corporation, and Nestle S.A. Additional secondary competitors, include: Caribou Coffee, Panera Bread,
Krispy Kreme, and Tim Hortons. The table below illustrates each of the direct competitors and
Starbucks themselves, in addition to the overall data for the coffee industry. While it may appear that
Starbucks ranks lower in most categories, it is important to remember that their information is based
on the specialty coffee market. McDonalds, Dunkin Donuts, and Nestle are all very large companies
with various product offerings that are not meant to be in competition with Starbucks.








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Direct Competitor Comparison

Market Cap:
Employees:
Qtrly Rev Growth (yoy):
Revenue (ttm):
Gross Margin (ttm):
EBITDA (ttm):
Operating Margin (ttm):
Net Income (ttm):
EPS (ttm):
P/E (ttm):
PEG (5 yr expected):
P/S (ttm):

SBUX
31.71B

DNKN
3.35B

MCD
96.25B

NSRGY.PK
191.82B

Industry
264.42M

137,000
12.30%
11.51B

1,130
4.40%
595.49M

400,000
13.70%
26.40B

281,000
-5.00%
116.22B

15.90K
20.90%
1.67B

58.29%
2.04B

80.30%
256.24M

39.58%
9.43B

56.66%
18.33B

35.01%
280.56M

12.97%
1.17B

34.02%
82.59M

30.49%
5.37B

13.30%
9.95B

5.76%
N/A

1.52
27.94
1.61
2.79

0.69
40.19
2.17
5.67

5.1
18.3
1.79
3.65

11.59
5.14
4.29
1.64

1.66
27.14
1.47
2.07

An expenditure report was generated in AdSpender to analyze Starbucks advertising spending
during a five year period. During the five year period, August 2007 August 2011, Starbucks spent
$247,375.5 (000) which averages to $49,475.1 (000) annually. According to the report, Starbucks
spends the most on advertising through magazines which totals $62,089.4 (000) during the five year
period.
Dunkin Donuts
Dunkin Donuts is Starbucks number one competitor with about 6,000 locations in the U.S.
alone. Dunkin Donuts is privately owned and was founded in 1950 in Canton, Massachusetts. They
were originally focused on baked goods, but half of their current business results from coffee sales.
Dunkin Donuts also owns Baskin-Robbins and often the two stores are located next to each other, or

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in the same complex. Dunkin Donuts net income is 82.59 million and has 1,130 employees as
compared to Starbucks 1.17 billion and 137,000 employees.
Dunkin has had many advertising slogans over the years starting with their original Sounds
Good, Tastes Even Better. Their current slogan is America Runs on Dunkin, which has been very
successful. Many of their current commercials have been directly mocking Starbucks sizing system and
the lifestyle associated with the Starbucks brand.
A report was generated on AdSpender to analyze the advertising budget of Dunkin Donuts over
a five year period. During the five year period, August 2007 August 2011, Dunkin Donuts spent a
total of $550,824.1 (000) which totals $110,164.82 (000) annually. Dunkin Donuts spends the must
advertising dollars on cable television with a total of $68,342.8 (000) during a five year period.
Many themes of Dunkin Donuts and Starbucks overlap, which makes Dunkin the number one
competitor for Starbucks; the customer experience is one part that separates the two. Dunkin is more
of a coffee-to-go location, while Starbucks prides themselves on their third place to work and relax
model.
McDonalds

McDonalds is the worlds largest fast food restaurant which serves 64 million customers per day

in over 115 countries. They are publicly owned and were founded in 1940 in Bernardino, California,
employing more than 1.5 million people. McDonalds has over 33,000 locations worldwide and
originally served primarily hamburgers. In the early 2000s, McDonalds started testing the McCafe,
which is now a vital part of their business. McDonalds recognized the growing popularity in Starbucks
and wanted a piece of the coffee market. By incorporating the McCafe, many stores noticed a 60%
increase in sales. McDonalds current net income is 5.37 billion as compared to Starbucks 1.17 billion.
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Over the years, McDonalds has maintained a quite extensive advertising campaign. They have
had a total of roughly 23 slogans, most currently recognized by their slogan, Im Lovin It, which
originated in 2003. In the past few years, they started implementing their new What Were Made Of
campaign.
A report was generated in AdSpender to analyze the adverting expenditures of McDonalds over
a five year period. During the five year period, August 2007 August 2011, McDonalds spent a total of
$3,456,921.7 (000) which reports an average of $691,384.34 (000) annually. McDonalds spends most
of their advertising dollars on network television with a total of $3,456,921.7 (000) during the five year
period. To get a better understanding of how much McDonalds spends on their coffee alone, a report
was generated on solely for their product, the McCafe. McDonalds spent $175.2 (000) during the five
year period on McCafe promotions.
Even though the business models of McDonalds and Starbucks are very different, they still
compete directly with coffee sales. McDonalds offers their McCafe coffees at a much lower price than
many Starbucks drinks, which may drive some Starbucks customers to purchase their coffee from
McDonalds. This may be the case especially in an economic downturn.
Nestle
Nestle S.A. is the largest food and nutrition company in the world and was founded in Vevey,
Switzerland in 1866. Currently, their company operates in 86 countries internationally and employs
over 280,000 people. Nestle has about 6,000 brands with a large array of products across a large
number of markets; two of these brands, Nescafe and Nespresso, are included in the coffee market.
Nescafe is one of the most popular brands of coffee and is known around the globe. Drinks make up

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only 23% of Nestls sales and only 26% of their total sales are generated in the United States. Nestls
net income is currently 9.95 billion, which is the highest among the four companies.
Since Nestle is the largest food company in the world, which includes over 6,000 brands, a
report was generated in AdSpender to analyze the advertising expenditures of Nestls top two selling
coffee brands, Nescafe and Nespresso, over a five year span. During this time period of August 2007
August 2011, Nestle spent $9,234.1 (000) which averages to $1,864.84 (000) annually. Nestle spends
most of their advertising dollars on Spanish Language television stations, which is their primary target
market.
Since a large amount of Starbucks revenue is generated by sales outside of their store
locations, such as in supermarkets and convenience stores, Nestle is a direct competitor to Starbucks.
Their competition can literally occur shelves away from each other at these alternate locations as
individuals decided which brand will provide them with more value.

To summarize Starbucks direct competitors, Starbucks spends less on advertising than their top

competitor, Dunkin Donuts which totals $247,375.5 (000) and $550, 824.1 (000) respectively.
McDonalds spends the most on overall advertising, but does not spend very much on promoting their
McCafe products as shown by the report. Nestle is still considered one of Starbucks direct
competitors, even though they make most of their sales internationally, thus spending most of their
advertising dollars on Spanish Language television channels. Overall, Starbucks is competing against
large companies who do not specialize in one particular area, but have several product offerings. This
could perhaps be the reason for their dominance of the coffee market, despite a lower advertising
budget and lower Share of Voice. Starbucks has the ability to focus on one particular market and
achieve the greatest success in that market.
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Comparative Analysis (SWOT)

After analyzing each of Starbucks competitors, the SWOT matrix below describes current

strengths and weaknesses of the company, as well as opportunities that they could attempt in the
future and threats to be aware of as they make decisions.

Strengths
Recognized brand name and strong brand image.
Leading retailer and roaster for brand specialty
coee in the world.
Global organizaqon with more than 16,000
retails in 50 countries around the world.
Values customer experience; selling more than
product.
High quality of service results in loyal customers.
Sophisqcated atmosphere provides a relaxed
serng; also conducive for business meeqngs.
Wi-Fi Internet service.
Wide variety of avors and styles of coee
products.
Responsible company dedicated to saving the
environment and community involvement.

Weaknesses
Higher pricing.
Very reliable on the success of US locaqons;
vulnerable to unforeseen changes.
Dependence on advantage of being a specialty
coee house could hinder future needs of
diversifying their product oerings.
Company prots are completely reliant on their
single coee product line.
Too much innovaqon could result in the loss of
originality of the brand.

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Opportunities

Threats

Easier to penetrate and remain dominant in the

market due to selling fulllment of self esteem
or belonging through their products; many
benets to becoming a loyal Starbucks
customer.
Expanding to other countries on a global level.
Extend product line/ brand beyond coee.
Requiring every Starbucks locaqon to use
organic beans in support of the Green
Movement would relate to changing tastes of
consumers and result in higher prot margins.
Serving beer, wine, and cheese to increase
prots during night hours; Starbucks has already
experimented with this idea in Seaule and
Portland.

Lower prices from compeqtors may auract

current Starbucks customers.
Subsqtute products such as soda, juices, and
teas.
Negaqve eects of coee from society could
lower sales and customer loyalty.
Hard economic qmes cause people to spend
less, eliminaqng unnecessary products which
could mean the high expense of Starbucks
coee or the product of coee altogether.
Increasing number of compeqtors in this
growing market.
Unfavorable publicity concerning poorly treated
farmers who supply coee beans and other
goods.

Starbucks has created a well-known brand name through their domestic and global positioning,
excellent customer service, high quality products, and commitment to social responsibility. They have
just launched their newest endeavor on November 1, known as Create Jobs for the U.S.A, which
encourages individuals to donate $5 in exchange for a wristband to show support. The Starbucks
Foundation will donate $5 million to demonstrate their commitment, while also giving 100% of the
proceeds to the organization in order to create and sustain small business jobs across America. The
company is also affiliated with Product (RED), which contributes to the Global Fund to help people
living with HIV/AIDS in Africa.

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Starbucks: 2010 Revenue by Segment

Other
Global CPG 1.40%
6.60%
United States
Internaqonal
Global CPG

International
21.40%

Other
United States
70.60%

Although Starbucks prides themselves on delivering high quality products, their prices are

considerably higher than competitor options. This weakness could turn into a threat of losing
customers to other companies, especially in times of economic downturn. Also, the company is often
criticized for relying heavily on U.S. locations, which makes them vulnerable to unforeseen changes,
such as a decline in the U.S. coffee market or the entry of strictly U.S. competitors. As depicted by the
pie chart below, revenue from the U.S. segment of Starbucks amounts to 70.60%, almost three fourths
of total sales. Clearly, Starbucks is taking a risk by predominantly relying on the success of U.S.
locations to maintain their position as a market leader.

In the future, Starbucks has several opportunities to grow and expand their brand. By

emphasizing that each individual receives more than just a product through their Starbucks purchase,
the base of loyal customers will increase. Also, due to the companys lack of emphasis on international
locations, they have the ability to greatly improve their brand in these areas and become more of a
global competitor. Aside from increasing customers and locations, Starbucks has the opportunity to
17

completely construct a new product line and build another aspect of their business and product
offerings. Having already started the experiment in Seattle and Portland, the company is testing their
ability to attract a night time audience by supplying beer, wine, and local cheeses at their barista. With
the help of a strong brand image and loyal customer base, Starbucks has great potential to move in any
of these directions and add to their success.
Consumer Analysis

To find information concerning the consumers of Starbucks products, the database PeekYou

was utilized. PeekYou is a massive DNS server, or search engine, for people and identities. From this
technology, the company has created PeekData, which takes all of the information in just about every
important social media platform, and organizes it into one particular database. PeekData is then made
available to any individual seeking such information.
PeekYou has the opportunity to create mappings based on demographics, lifestyles, school
affiliations, occupations, social profiles, market schema, and more. The benefits of using such a system
have been observed by many individuals, namely Marshall Sponder, who used PeekYou to create case
studies which led to postings about Starbucks and the results of his findings. Below depicts the
gender, age, and estimated income of Starbucks consumers found by using the PeekYou database.
Additional facts pertaining to the consumers involvement in social media allowed Starbucks to identify
hobbies, interests, and specific locations of their demographic segments. After analyzing the data,
PeekYou determined that the largest demographic segment was males, ages 26-34, living in the West
Coast who had an estimated income of $30-60K.

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Demographics

Starbucks generally targets people with more discretionary income because this group enjoys a

higher level of luxury consumption and has the means to provide for such desires. These adults ages
25-40 make up 49% of Starbucks total business. Targeting this demographic group can be
accomplished by portraying a contemporary, hip status through their sophisticated specialty coffee
and relaxed environment. From the business professional in a hurry to get to work, to a stay-at-home
mother who needs a mid-morning pick-me-up, Starbucks caters to their needs. Another strong
demographic group that should be targeted consists of young adults ages 18-24. This segment
accounts for 40% of the business because the company has positioned themselves as a place for
students to study, work, and meet new people.
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Psychographics
Starbucks customers have a wide range of lifestyles, behaviors, and attitudes; however, they all
share the desire for quality coffee and excellent service. Whether the individual is in a rush to get to
work or enjoying the day by reading a book at the caf, Starbucks ensures that each customer is taken
care of quickly, efficiently, and effectively. Due to Starbucks higher price of coffee, customers typically
have more disposable income, which can account for attitudes such as high expectations of quality,
service, and attentiveness. Customers want to receive as much value as possible from their products
when more money is being spent. As for targeting the younger demographic group, their lifestyles
may be more relaxed, simplistic, and carefree. They may see coming to Starbucks as an escape to hang
out with friends or a quiet environment to study for exams. While the psychographics of Starbucks
customers have a wide range of possibilities, the company has made a name for themselves as far as
being an upscale, reliable coffee house, which builds self-esteem and a sense of belonging upon
entering the door.
Summary

The purpose of researching the company of Starbucks was to seek out their potential for

growth in the future, their current limitations, and their uprising to the status of a market leader in the
coffee industry. Throughout their 40 years in the business, Starbucks has created a well-known and
well-respected brand image which has built a loyal customer base. By offering high quality products
and outstanding customer service, the company set themselves apart from the competition and has
experienced increasing sales on a yearly basis. The opportunities to introduce new product lines and
focus on established international locations could add to the success of their company and further
increase their competitive advantage. Although their prices remain higher than other companies,
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Starbucks must focus on the additional benefits that come along with purchasing their products, such
as the sense of belonging and self-esteem values. Starbucks also gives back to the community and gets
their customers involved in causes, including Product (RED) and Create Jobs for the U.S.A.

Overall, Starbucks values their customers and strives to make each interaction worthwhile and

satisfactory. By focusing on their principles of coffee, partners, customers, stores, neighborhood, and
shareholders, the company hopes to remain the leading provider of the highest quality coffee in the
world. Based on the findings throughout this report, Starbucks seems to have the determination, will
power, and resources to remain a market leader and an establishment that individuals are proud to
support.













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