Case-Starbuck

1. What were the key factors of success for Starbucks in building the brand? Justify
your answer.

Answer:

One of the key factors that helped Starbucks to build a strong brand in the market was it’s
emphasize on quality whole bean coffee retail- something that was relatively new in the
US market. It understood the needs of something new for the consumers and through the
unique offerings, the company managed to occupy a distinct position in the market with a
positive brand image.

Starbucks also managed to come up with the finest product by introducing best
ingredients and brewing equipments in an attempt to make sure that the customers are
getting an extra ordinary coffee experience.

In addition to the product quality, Starbucks succeeded to enhance its brand by improving
the environment of the stores through attractive furnishing, fixtures, artwork and music.
The company portrayed itself as a point that served as the bridge between the workplace
and home for the consumers. Considerable amount of emphasize was given to create a
warm and comfortable environment for the customers who would always feel different
when they would come to a Starbucks store to consume coffee.

In addition to this, developing joint venture with some of the most reputed corporations
of the United States including Pepsi, Kraft, Dryer’s and Capitol Record helped Starbucks
to create a positive brand image in the market as it successfully managed to utilize the
brand name of these renowned companies for promoting its own offerings.

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At the conclusion, it can be said that uniqueness through developing an extra ordinary
store based experience of coffee consumption, emphasize on the quality management and
developing a close bond with some of the strong corporations of the United States
allowed Starbucks to build a positive brand image in the coffee market.
2. According to your group what were the brand values of Starbucks and what were
their sources of brand equity that contributed significantly toward their growth?

Answer:

Starbucks now operates more than 5,000 coffeehouses in North America, Europe, the
Middle East, and the Pacific Rim. The coffee trading practiced by Starbucks involves an
entirely different kind of romance. Starbucks aims to provide quality coffee in a relaxed
atmosphere for those seeking a respite between home and work. A typical Starbucks sells
between 20 and 25 different coffees, many with such alluring names as Brazil Ipanema
Bourbon and Komodo Dragon Blend.
So as Starbuck evolve and expand categories it is often useful to define a set of brand
values to capture the important dimensions of the brand meaning and what it represents.
Core brand values can serve as an important foundation for branding strategy in
numerous ways.

The main brand values of Starbucks:

1. First of all, the core value created by Starbuck was, best of class coffees from
world’s best class ingredients and also a wide range of flavors.

2. Special packaging system that will keep the coffee fresh if it is exported to the
remote areas.

3. Store designs were flexible enough to be tailored to a variety of locations

including office buildings, malls, airport etc

4. Unique kind of internet ordering system, which enables Starbuck’s loyal

customers to order coffee and other items from Starbucks.
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 5. Starbuck claim that, everything in their store are special, therefore it is also a core
brand value that differentiate their products from competitors.

3. How would your group evaluate Starbuck’s partnership with other brand-marketer?
Are there things your group would have done differently if your group were in charge
of making “Starbucks” a global brand? Justify your answer.

Answer:

Starbuck’s Partnership Evaluation

Starbuck’s partnership with other brand-marketer has created a geographical market

expansion aimed at benefiting from the profitable business opportunities that would arise
from being associated with the dynamic, high-growth Starbucks brand. Starbucks
partnerships with companies like:

• United Airlines
– Generated brand awareness globally as Starbucks is served in the all the
flights of UA.
– Initiated many customer ‘trial’ experience with the brand.14% Starbucks
customers had their first Starbucks coffee in UA flight

• Kraft
– Benefited from Kraft’s extensive distribution network. Starbucks coffee beans
are distributed by Kraft in North America
– Created scope for marketing food products through Kraft.

• Pepsi and Dryers(to increase brand awareness & innovative product development)
– Creation of various ready to drink coffee in cans & bottles including
‘Frappuccino’. (product line extension)
– Creation of six coffee flavor ice creams in joint venture with Dryer’s.
(category extension)

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 • Marriot
– Increased brand awareness
– Provided people, from various sphere of society, the Starbucks experience as
it was served in airport concessions, hotel lobbies & malls

Starbucks has undertaken brand partnership, a very useful tactis to cultivate a new market
with the brand is to engage into partnership ranging joint-venture, licenses etc.
They have understood the similarities and difference in the global branding landscape.
To do so that has undertaken an established market infrastructure to manufacture,
distribution and logistical requirement. So it is clear that Starbucks has established
themselves in the global arena with their partners as well.

Issues we would have handled differently

Strarbucks’ growth strategy has been working brilliantly. It is effectively expanding
through out the globe and has established itself as a global brand. However, our group
believes there is couple of issues where the company could have worked.

• Expanding core retail opportunity worldwide

• Continued to innovate
• Expanded customer base
• Increased average unit volumes
• Leveraged Starbucks brand in other products and channels

Firstly, Starbucks did not take India into consideration in its global expansion strategy,
although Asia plays a vital role in its expansion plan. India represents a huge market with
rising number of middle class and upper middle class who appreciates the lifestyle
Starbucks represents. It is almost certain that Starbucks will attract these new generations
of Indians, accustomed to a modern busy way of life.

Secondly, Starbucks can forge partnership with media companies in order to increase its
brand awareness and enhance its brand image as the “Third place”. Under these

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partnerships, Starbucks will be shown in the movies and TV serials as a place where the
movie characters hangout, relax and of course, enjoy coffee. As, Hollywood movies and
some popular TV series can reach people world wide, it will be very helpful in
establishing Starbucks as a global brand. Starbucks has already started a partnership with
Oxygen media but the objective is only to develop programs for women.

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