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Introduction
Starbucks Corporation is an American global coffee company and widely known in the world
consisting of 6 continents which are Africa, North America, Oceania, South America, Asia
and Europe.
In Starbucks, they are not only sells the beverages product, which is hot and cold beverage
include the coffee, tea and fruit juice. They also sell a variety of products which are pastries,
snacks, cakes, and sandwiches. Additionally, Starbucks serves their beverages with different
cup sizes and there are designated names for the sizes following from small to large namely,
Demi, Short, Tall, Grande, Venti, and Trenta.
Starbucks Malaysia did not sell the types of product as much as other countries, they are only
choose the several popular and best sell product to sell in Malaysia. Starbucks Malaysia only
sells espresso beverages, brewed coffee ,chocolate beverages, Frappuccino Blended Coffee,
Frappuccino Blended Crme, Frappuccino Blended Juice Drinks, Brewed Tea ,
Starbucks Iced Shaken Teas ,bakery ,savories ,cakes and desserts .
The objective of preparing this assignment is to make a research on Starbucks Corporation
marketing skills. Besides, we can know the marketing skills and knowledge other than
references book .
For this assignment, we will be only concentrating on Malaysia Starbucks beverages product.
For this, we will do research work to understand their marketing strategic and to do a report.

Company Background
Starbucks began in 1971 as a coffee bean roaster and retailer in single store at Seattles Pike
Place Market and it is opened by the three partners; English teacher Jerry Baldwin, history
teacher Zev Siegl, and writer Gordon Bowker. The three were inspired to sell high-quality
coffee beans and equipment .Entrepreneur Alfred Peet, expertise in coffee roasting taught
them his style of roasting beans. From that onwards, the company has expanded rapidly.
Originally the company was to be called Pequod, after the whaling ship from Moby-Dick, but
the name was rejected by some of the co-founders. The company was instead named after the
chief mate on the Pequod, Starbucks. Since 1987, Starbucks has opened on average two new
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stores every day. Starbucks mission is to inspired and nurture the human spirit one person,
one cup and one neighborhood at a time.
Today, there are 19,767 Starbucks stores (as of September 29 2013) and Howard Schultz, is
the current CEO of Starbucks.
Starbucks partner with Barnes and Barnes and Nobles bookstores in 1993 to provide in-house
coffee shops, in benefit for both retailers. In 1996, Starbucks partnered with PepsiCo to bottle,
distribute and sell to the popular coffee-based drink, Frappuccino. The alliance between
United Airlines and Starbucks has resulted in their coffee being offered on flights with the
Starbucks logo on the cups .Moreover, Kraft food form an alliance between Starbucks has
resulted in Starbucks coffee being marketed in grocery stores. In 2006, Starbucks formed an
alliance with the NAACP, the sole purpose of which was to advance the company's and the
NAACP's goals of social and economic justice.
Folklore
Starbucks is named after the first mate in Herman Melvilles Moby Dick. The logo is also
inspired by the sea-featuring a twin tailed siren from Greek mythology
Starbucks offer the finest coffee in the world, grown and serve by the finest people .It is said
by Starbucks that their employees are their partners, at the heart of the Starbucks
Experience. In fact, Starbucks coffee beans are imported from Latin America, Africa and
Asia-pacific.
Segmentation, targeting and positioning
Segmentation
Starbucks using demographic segmentation, psychographic segmentation and behavioral
segmentation to divide their market into smaller segment.(refer to appendix I)
a) Demographic segmentation
They analyze the consumers income to segment their customers. They divide them the into 3
categories, such as low incomes ,average incomes and high income. In Malaysia, Starbucks
consider a luxury good. The customers who are receive average and higher income more
willing to pay for luxury good than the low incomes receiver.
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b) Psychographic segmentation
They separate the customer according their lifestyle, example interest in food. The analyze
them to 2 part, which is are them interest in coffee and not interest in coffee .For those who
are not interest in coffee, they find out their interest taste.
c) Behavioral segmentation
Starbucks divide the customer follow by their user status, Starbuck analyze their customer to
coffee drinker and non-coffee drinker. Besides, they separate the coffee drinker according
their user rate, example light coffee drinker, middle coffee drinker and heavy coffee drinker.
Targeting
Starbucks using differentiated marketing to target their market. Starbucks mostly target at the
college students ,workers who have average and high income, because they are the one that
could afford to purchase the luxury good. On the other hand, Starbucks provide a place that
suitable people gather, relax and doing discussion to attract more customer. Other than this,
they using different product to target different people. They offer the product that customer
wants for each categories to fulfill each customer.
Positioning
Positioning that Starbucks have created in Malaysia is high class coffee. The position that
Starbucks in customer mind is high price and high quality(refer to appendix II).When public
want to drink coffee, they will think about Starbucks. Their value proposition is more for
more compare with their competitor. Although they are more expensive than their competitor,
but they will offering more value than competitor. They want to provide delight rather than
satisfaction of customer.
Marketing environment
Mircoenvironment
Competitors
Starbucks is facing many strong competitors in market, such as Dunkin Donuts, and
McCafe. Starbucks try to differentiate themselves from the competitors. They wanted
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to provide customer greater value than the competitors so than consumer will choose
them as their choices. They seek to provide best possible drinks to customer.
Consumer
Based on consumer market, they are mostly sold them product through individual and
household. They direct sell the product to the final consumers. They also involve in
the international market. They not only open their stores and outlet in Malaysia, they
also opened stores around the world.
Suppliers
Starbucks encourage and work with other companies. Example like Starbucks help
care for their planet. Starbucks has to create the job opportunities to the coffee farmer.
Starbucks not only helping the coffee farmers generate additional income ,it also
ensure them can supply the high-quality coffee beans to Starbucks, so that Starbucks
can achieve customers satisfaction.
Marcoenviroment
Demographic environment
The human population that Starbucks serve is according by age. The age range is
from 25 to 40,which is millennial and generation X.
Natural environment
Starbucks are using Go Green method to do the packaging. When customer order
take away beverages, they will use the paper materials mould to replace the plastic
materials mould. Due to this action, they can reduce environmental footprint.
Technological environment
Starbucks using technologic to save their time in manage customer. They developed
the Starbucks card, which is the pre-paid reward card. This card can avoid waste time
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when doing payment. Besides, this card can record the customers buying history and
information. Customer also can receive greater benefit ,example free drinks according
the information in the card.
Product
Starbucks is known very well in the global market due to its high quality coffee that they
care in selection and expertise in roast. It purchases coffee beans that have been well grown
and processed which meets strict environmental, social and good quality standards, which is
suitable & appropriate for the market and the customers.
Starbucks establishes its longer lasting and more profitable competitive advantages by
differentiating its coffee and coffee related products depending its competence and
innovation. They are fierce competitor that other coffee company. Starbucks logo defined as
a two tails smiling mermaid for greek mythology. The girl on the logo is Queen Esther. She is
a Jewish queen at Persian Empire in Hebrew Bible.
Starbucks Company has a lot kind of beverages in Malaysia. As well as, hot beverage,
cold beverage, blended beverage and chocolate beverage. For Starbucks main hot and cold
beverages as coffee, has been categorized into 11 kinds. For example, Caff Americano,
Caff Latte, Caramel Latte, Hazelnut Latte, Cappuccino, Caramel Macchiato, Vanilla Latte,
Espresso, and Espresso Macchiato. Next, chocolate beverages form Starbucks has only 3
kinds as well as Caramel Signature, Hazelnut Signature, Signature hot chocolate.
Starbucks Company has Frappuccino blended beverages in Malaysia that categorised
into Frappuccino blended coffee and cream. For example, Caramel Frappuccino, Dark Mocha,
Java Chip, Espresso, Chocolate Cream, Green Tea Cream and also Vanilla Cream.
Starbucks package their beverage with different types. If hot beverage, they use paper
cup for packaging. Customer must be more caution to the hot beverage because it easy to
scald. For cold and blended beverage, they use plastic cup for packaging. If customer want
take away their beverage, Starbucks give a recycle carrier for 2 beverages. Customer may
easily to take their beverages.
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Starbucks partner will make coffee for customer. Customer may be allowed to add on
or customize their own beverage. Starbucks partner will serve their customer with their best.
(Refer to Appendix)
Place
The decisions of Starbucks about where to site its stores depends on reaching its potential
customers and providing better service to its existing customers. Its stores are typically
crowded in high-traffic and high visibility locations. When Starbucks opens a new store, it is
generally intended to have long customer lines. It takes more than just location to be
successful. Attracting customers to Starbucks happens by providing high-quality coffee as
well as creating inviting, comfortable places located in suitable location. The store expansion
strategy for Starbucks is by entering new markets wherever the opportunity exists to become
the leading specialty coffee retailer.
On 17 December 1998, first Starbucks Malaysia store opened in Kuala Lumpur after
joint-venture between Starbucks Coffee Company and Berjaya Group Berhad. Starbucks has
opened 141 stores across Malaysia on the following years. Starbucks outlets can be found in
every popular shopping mall around all the states, include Sabah and Sarawak. Customers
can go to the outlet and have a break after their shopping. It is a nice and comfortable
environment to enjoy beverage. In 2010, Starbucks Company has their first own drive-thru
outlet in Klang Valley,Selangor. Moreover, they opened more drive-thru outlets across few
states, for example, Penang, Perak, Negeri Sembilan, Johor Bahru and Pahang. It is very
beneficial for working adults to save their time instead of line up the long queue to buy.
For Starbucks Coffee Company, global logistics system was important because of its
far-flung supply chain. Fortunately, Starbucks manage their logistics system well. The
company generally brings the coffee beans from Latin America, Africa, and Asia to the
United States and Europe in ocean containers. From the point of origin, the fresh beans are
trucked to six storage sites, either at a roasting plant or something else. After the beans are
roasted and packaged, the finished product is trucked to regional distribution centers.
Starbucks runs the five regional distribution centers (DCs) in the United States, two are
company-owned and the other three are operated by third-party logistics companies (3PLs). It
also has two distribution centers in Europe and has two in Asia, all of which are managed by
3PLs. Coffee is the only one of many products held at these warehouses. They also handle
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other items required by Starbucks' retail outlets, as example, everything from furniture to
cappuccino mix.
Depending on their own location, the stores are supplied by the large, regional DCs or
by smaller warehouses called central distribution centers (CDCs). Starbucks uses 33 such
CDCs in all around the world currently, one of it are operated by 3PLS. The CDCs carry
dairy products, baked goods, and paper items like cups and napkins. They combine the coffee
with these other items to make frequent deliveries with their own truck fleets to Starbucks'
own retail stores and to other retail outlets that sell Starbucks-branded products.
Although Starbucks has a flat structure for evaluating supply chain performance, it
focuses on four different high-level categories to create consistency and balance across the
global supply chain team, safety in operations, service measured by on-time delivery and
order fill rates, total end-to-end supply chain costs, and enterprise savings.
(Refer to Appendix)
Price
There are different selling price in Malaysia and USA. In USA, Starbucks beverages
price is very low. Actually one cup of coffee in USA only 1.5 dollars. Most of citizens are
afford to buy the beverages. At there, Starbucks consider a normal good only. Meanwhile,
Starbucks beverages are cost high in Malaysia due to exchange currency and the government
tax. The lowest price of beverage is RM 8. The highest price of beverage is RM16.00.
Because of this, some of Malaysians think that Starbucks beverages are expensive and there
is high standard coffee. Besides, some of them could not afford to buy the beverage
frequently.
Well, Starbucks beverages are cost different prices with different size of the cup. They
differentiate the size of the cup as tall, grande and venti. Tall means small size and it price is
the cheapest between the beverages, as example, RM 9 to RM 11. Grande means medium
size and it cost average, for example, RM 12 to RM 14. Lastly, Venti means large size and it
cost quite high, for example, RM 15 to RM 17. According the different favorites, they will
charges you with different price. They also will be charge you base on value-added pricing.
Example, some of customer likes to enjoy beverage with the cream on the top. Starbucks will
charge them higher price.
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Starbucks prices continuously matches with its competitors competitively and fiercely. It
represents Starbucks have an attractive combination of features, high quality, excellent
service and other interesting attributes. For example, Coffee Beans beverage cost RM 9 and
Starbucks beverage only cost RM 8.
Besides that, Starbucks has discount for customer. If customer buys a beverage with
Starbucks bottle, they will get RM 2 discount. Starbucks do this because to prevent pollution
and create awareness of social environmental responsibility.
Customers must pay on time of their beverage. If a customer unable to pay cash,
Starbucks Company may receive credit terms such as debit card and credit card. Moreover,
Starbucks have Starbucks membership card promotion for every customer. Customer enable
reload the prepaid card and it benefits a lot. Customer may able to save their time instead of
paying cash.
Recommendations
1) Free Gifts
Starbucks is more focus on their product, but now Starbucks also should focus on
more attractive gift, such as the planner, doll and many more. The new gift can be a desirable
gift, so that Starbucks only can attain the both high immediate satisfaction and high short-run
benefits. The gift can attract more customers to come and buy the drinks. The result of this
action will increase the sales, increase the number of customers and more profit that company
will earned.
2) Service Improvement
Secondly, we suggest that Starbucks beverage price can be reduce and affordable,
because if reduce the coffee price, it can target more of the regular customers, and also can
compete with other coffee shop easily. Starbucks Company should provide a better training to
their partners, employees. Employees can serve a better service to customers, so that
company has the good impression from the customers. Furthermore, employees must always
keep the quality of company. If employee did not keep the satisfaction, customers will not
feel satisfaction with the services and might prefer to visit other coffee shop.
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3) Delivery Service
Thirdly, Starbucks Company should have a delivery service to customers every day
from breakfast to teatime .Customer can make a delivery call or order via internet through
their websites. Besides that, there will be a menu posted in their websites as it will help the
customers to choose and make an order easily.
4) Advertising
Lastly, Starbucks can advertise their company through many ways such as online
media, bus stops, and the pedestrian bridge, so the people may easily notice about it and have
a picture in their minds. In addition, Starbucks can organize a campaign during public
holidays or any event. This action may able to let Starbucks have a chance to promote their
product.
Conclusion