Promotion and Prize Analysis Term Paper

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Promotion and Pricing

Starbucks, the company, is both a product and a service. It is a product in the sense that Starbucks as a company trade purveys coffee and sold coffee beverages. However, because these coffee, tea, and other kinds of drinkable and comestible products are sold not simply over the Internet, but at retail outlets all over the nation, the company essentially provides a service as well to consumers, a service of making beverages and giving consumers a place to 'hang out' in and call their own, where, if not everyone knows their name, at least the consumer knows what he or she can expect when ordering the favorite Frappucino of the month.

Starbucks is also interesting as a company from a marketing and promotional standpoint because it is a profitable company with an ostentatiously environmentalist, even 'crunchy' or hippie-oriented image that traces back to its early Seattle roots and its literary identification as well, with the one, good character seeking Moby Dick in Melville's esteemed novel about the great, white whale. But although it has expanded its image and product line internationally, Starbucks is also, according to some industry analysts topping out in terms of its corporate expansion, and it seeks to reassure economists that this is not the case.

Thus, there are a combination of agendas that Starbucks is using to both reassure its core customers that its image and company is sound, ethically and speaking in terms of its quality, that it is still purveying a tasty and also a tasteful product line, but that it has an attraction that has yet to be explored and can be expanded upon beyond the current loyal product and consumer base to its many investors. Starbucks continues to stress customization of coffee and other beverages and caring towards its employees as well as its customers amongst its core values, while deploying an international image that attempts to rally further investment and further consumers to buy its middle-priced, middle-of-the-line coffee brands and beverages.

Sometimes the coffee stirs you," notes the slogan of the new Starbucks slogan on the internet (http://www.starbucks.com/retail/fall.asp) that stresses not so much a specific Starbucks product line, but the constant seeking of the company to achieve perfection in manufacturing the perfect customized blend and cup of coffee. This seeks to assure analysts that Starbucks is constantly engaged in self-examination and self-perfectionism in a kind of searching, inner analysis, but is still 'itself,' despite any proposed innovations and changes that might be spotted over the course of its evolution as a company. This acts as a defense against consumers who attempt to compare, for instance, the Frappucino with cheaper, more downscale versions offered by competitors such as Dunkin' Doughnuts -- nothing is like Starbucks, this stirring slogan suggests, in its quality. ("Sometimes the Coffee Stirs You," Official Website, 2004)

The company is additionally clearly also attempting to convey an image additional exclusivity in its image, by stressing its ability to purvey "the four tasting tips, of aroma, body, flavor, and acidly." ("The Four Fundamentals," 2004) Even at its retail stores, in other words, coffee connoisseurship vs. price is stressed. A visitor to a Starbucks retail store will frequently see, in the storefront, bunches of preserved coffee beans in various stages of ripeness, showing how the perfect coffee is grown, ripened, and then achieved, through brewing, to become something unique, the Starbucks corporate product, as opposed to a mere cup of fifty cent coffee purchased at a local 7-11 or worse, made with an ordinary drip spout with Maxwell House at home. These experiences are neither as tasty nor as ambient as the Starbucks culinary experience, such 'coffee education' strategies as "The Four Fundamentals," and consumer education about roasting and brewing suggests to the critical viewer's eye.

However, Starbucks promotions are not only exclusive in their images, but also, with Starbuck's entrance into ordinary supermarkets, more mainstream than ever before. Here, conveniences, from bottled Frappucinos, to pre-ground blends are stressed, as opposed to exclusivity, ambiance, and originality. "Love at first bite," proclaims the more prosaically oriented point of purchase Starbucks slogan for coffee and chocolate flavored ice creme at local retail stores, for example, in contrast to the stores themselves, where strains of Nina Simone jazz can be heard in the background, as consumers purvey the product and read about the corporate history through its various stages of development. Still, even in the promotions strategy used in grocery stores, because of higher prices, convenience rather than cost is stressed -- the implication is that one can gain the Starbucks experience at home, not that Starbucks is all about value. (http://www.starbucks.com/grocery/default.asp)

Starbucks thus strives to be all things, to all people in the varieties of its positioning, from the web, to its own stores, to grocery outlets -- it can be both culinary sophisticated and convenient -- it can be anything but low-cost. Unlike Dunkin' Doughnuts, for example, it makes little use of direct mail as a company, and seldom makes use of outright sales or coupons to discount its product. Its corporate history stresses its environmental commitment and its commitment to providing fair benefits and wages for its workers, that are, it assures the reader, just as customized as the coffee, rather than stressing low, low prices alone. ("About us," 2004)

Television and radio, more crass media, one might say, are not used by Starbucks, and promotional strategies, such as the Starbucks card, are available for gifts and discounts to desiring customers. Even one recent direct mail and paper promotion, the 'have it your way' coupon found in some circulars, such as Sunday newspapers, that entitled the bearer to a free shot of syrup or espresso emphasized the company's exclusivity rather than low cost, even though it was a free promotion, and customization vs. pure low-cost convenience.

Despite its careful cultivation of image, however, Starbucks' ubiquity and popularity has made it a frequent target for mogul-hating mavericks, and the fact that it has put neighborhood coffee shops out of business, or attempted to commercialize the coffee shop, once the dark haunt of the urban hipster, into a place frequented for frothy drinks by frothy teenage girls who drive SUVs but still buy into the images articulated in Starbuck's environmentally and culturally friendly slogans. Starbucks maintains its 'crunchy' image but because of its cost, this strategy is growing more difficult.

The company is clearly still expanding, locally, internationally, and in its product lines, but it remains to be seen if new promotional strategies will mesh with its image of the past. Today, there is even a Starbucks Visa card, or a purchased 'discount' card that can be given as a gift, thus enabling one to give both the service as well as the product to an individual, perhaps a teenager whom one knows 'hangs out' at the coffee shop frequently. One gives the place as well as the card, since the card does not bestow rewards savings upon the ground coffee, but only individual beverages purchased for consumption at Starbucks places.

Thus, Starbucks as an experience is reinforced through 'Starbucks cards,' that contain the cards but also exotic images from the far away places where the coffee is purchased. Again, pricing is not stressed, even though the products are not exorbitantly expensive. Still, they are more expensive than ordinary coffee, and Starbucks has shifted dramatically upward the amount of funds the average consumer is willing to spend upon once low-cost goods like fast food coffee. Although technically mid-level in pricing, at Starbucks it is always in its product promotion and advertising positioning on the web, in paper coupons and advertisements, and even at the local supermarket, the customization and unique image and experience that is the focus.

Starbucks continues to purvey its influence over a wide array of channels, while…[continue]

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