The Marketing Mix of Starbucks

The Marketing Mix of Starbucks

Product

What would Starbucks offer in the Finnish market? Usually companies offer similar selection in each market, and Finland is not likely to be an exception. What is the main product beloved by millions and successfully provided by Starbucks since 1971? Right, Coffee. Around 100 different specialty coffee beverages! From Brewed coffee to Frappuccino blended beverages add to these chocolate drinks, tea and juices and you'll get a head-spinning range of only drinks... It's probably too much for customers as they would be too much challenged by choosing.

On average Finnish coffee shops offer from 15-30 kinds of coffee-beverages, for Starbucks it's nothing, thus this is a place to overplay the rivals. 50 drink items probably would be enough. Most of cafes offer traditional menu consisting of filtered coffee (a must in Finland), espresso based drinks, such as Espresso, Americano, Cappuccino, Latte, Glasse, Mocha, Machiato, rarely with different dressings and tastes. Here Starbucks comes and bits all of them with its Frappuccino (a line of blended coffee beverages trademarked and sold by Starbucks).(1)

Perfect collection of tea by Tazo Teas would not leave indifferent those who do not consider themselves as coffee lovers. All coffee range is accompanied with wide offer of pastries salads and breakfast options.

Starbucks product line is not limited with conventional beverages one can drink in coffeehouses, it offers also bottled coffee drinks which are sold in supermarkets, souvenirs, drinkware (glasses, mugs, bottles), coffee machines, coffee&tea presses, grinders and other coffee related equipment.

Besides customers can find CDs with the music playing in Starbucks coffeehouses and one more things need to be mentioned Ethos water, 5 cents from each sold bottle in the world go to Ethos Water Fund, which is created to help children from emerging countries to have clean water "So far more than $6 million has been granted to help support water, sanitation and hygiene education programs in water-stressed countries - benefiting more than 420,000 people around the world" (2).

Overall Starbucks follows the multi-brand strategy "by building a portfolio of branded business units beyond the Starbucks retail brand." (3) Starbucks brands portfolio includes: Starbucks branded coffee, Tazo - tea brand, Etho Water, Frappuccino.

Price

Starbucks pricing strategy is based on quality, differentiation and authority value. (4) Starbucks offers products of high quality and provide excellent service for customers, they are ready to pay more for better quality and better service. Starbucks should maintain the quality of coffee sourcing and the level of services to justify higher prices. Starbucks spends much efforts to differentiate itself from the competitors: new kinds of specialty coffee drinks, interior design to make time spent at Starbucks coffeehouses even more pleasant, new services (Starbucks goes mobile), Starbucks social network community and etc, all this to create additional value for customers for which they are ready to pay more. Overall Starbucks is a strong global brand positioning itself as a coffee expert and its products are priced according to the upscale image related to the brand.

I have been exploring coffee prices in Finland and it seems that local competitors have relatively the same pricing level I even personally visited two coffee chains popular in Finland. So If you go to Robert's Coffee you will pay around 3.50-3.90 Euro (depends on the type: with or without dressings) for Latte of standard size and 4.10-5.10 Euro for Latte in Wayne's