Marketing Strategy New Product Development Term Paper

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The Power Frappuccino was however not introduced directly in all markets, but was first of all tested in different representative markets for a reaction from the customers. We can see from this example that the two main sources for new product ideas worked closely together before this product was introduced.

Another product that was tested during the late 1990s was the Chai Tea Latte, combining black tea, exotic spices, honey and milk. The move in itself could have been considered quite risky, given the fact that Starbucks is recognized as a coffee seller rather than tea shop, but the move did not affect the Starbucks brand. In fact, it showed the customers that there was a lot coming from Starbucks in terms of new product development and that they can virtually expect the company to come up with new ideas not only in the sector where they are market leaders, but also in related segments.

This is the same case as when Starbucks decided to sell food and cakes in its shops as well, for example. The Starbucks brand has always been associated with coffee and this type of horizontal expansion, while beneficial for the company and business, could have been regarded as an unwanted change in management direction. Nevertheless, it was perceived as a new product diversification and as an attempt by the company management to diversify its services and offer its customer even more than they were receiving. This way, one could enjoy a full breakfast at Starbucks, or a full desert.

In my opinion, when referring to Starbucks, we cannot discuss only new product development, but we can expand this concept to include new ways of doing business, new services that the company is proposing etc. These can all be included in a larger category of new product development, in the sense that changing the distribution and the way the services are promoted, for example, will also coincide with the innovatory policies that Starbucks is promoting. The innovative marketing strategy cannot only be resumed to a simple product development.

As we have shown here, new product development, along with diversification and constant innovation, are among the most important marketing strategies that Starbucks uses in order to increase its market share and continuously cultivate its image as a trend setter and market leader.

Its proactive approach allows Starbucks to dominate its competition, to promote new business models and to bring forth innovative ways of doing business, along with innovative products and services. In this sense, despite being described as a reaction to competitors (new product development out of fear of losing market share), this type of marketing strategy is in fact applied at Starbucks as a proactive instrument to act before competitors.

There is no one boasting not only the diversified product portfolio that Starbucks has, but indeed the culture of coffee in itself. If we examine, for example, the way that the idea of coffee and its meaning is promoted in Starbucks locations, going from descriptive prospects to brochures of how coffee is made, what is the difference between the different coffee blends and how to draw the most out of a cup of coffee, we may conclude that the new product diversification refers to a business model as much as to a product in itself.

The new product diversification marketing strategy has ensured Starbucks a leader positioning in the beverage and food markets. Innovation seems the key to success in this area.


1. New Product Marketing Strategy Breakthroughs. On the Internet at retrieved on July 17, 2007

2. Starbucks Gossip. On the Internet at retrieved on July 17, 2007

3. Starbucks Corporation. On the Internet at retrieved on July 17, 2007

New Product Marketing Strategy Breakthroughs. On the Internet at retrieved on July 17, 2007

Starbucks Gossip. On the Internet at retrieved on July 17, 2007

New Product Marketing Strategy Breakthroughs. On the Internet at retrieved on July 17, 2007

Starbucks Corporation. On the Internet at retrieved on July 17, 2007[continue]

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