Product Strategy Starbucks Product Strategy

Product Strategy

Starbucks Product Strategy Summary

A statement of objective(s) that the product should attain

Starbuck's core coffee products' objectives are to first differential the chain with a unique, rich-tasting coffee that can be tailored to the individual wants and needs of the customers who visit locations globally. Approximately 70% of all Starbuck's drinks are customized to the unique preferences and tastes of customers (Simon, 2008). Our primary objective in providing this benefit to customers is to provide the opportunity for unique, one-of-a-kind beverages that reflect their tastes and preferences. The second objective is to continually add new drinks and be the leader in Research & Development (R&D) in the coffee and beverage industry (Plog, 2005). Starbucks sees this as critical for increasing the number of Starbuck's visits per month from 4.2 for the average consumer to 7.2 for the brand-loyal one (Seiler, 2005). The entire product development cycle and customer experience is aimed at increasing the number of visits per month. The most loyal Starbucks customers visit 18 times a month (Seiler, 2005).

Strategic Alternative(s)

Starbuck's has worked on creating breakfast, brunch and lunch items and averages nearly 10% of revenue from these sources. The company has also piloted a gaming download service and its own WiFi network in Seattle, yet has not launched these globally. The core focus is on the supply chain and expertise of the drink production and mixing processes that must be consistent across all locations to ensure a high level of quality (Marahao, Carrieri, 2007)

Customer Targets

The primary customer target markets for Starbucks are 18- to 45-year-old males and females, followed by males less than 18 years of age (Plog, 2005). Figure 1, Distribution of Starbucks Customers Worldwide, 2009 was derived from the company's filings with the Security and Exchange Commission and their annual reports. The most brand-loyal customers on average spend $4.42 per visit and also have loyalty cards and Starbucks credit cards as well (Seiler, 2005).

Figure 1: Distribution of Starbucks Customers, Worldwide 2009

Market Segment

Share

Males 18-45

37.0%

Females 18-45

28.0%

Males

Females

Males >45

6.0%

Females >45

2.0%

Source: Based on Analysis from http://investor.starbucks.com/phoenix.zhtml?c=99518&p=irol-irhome

Competitor Targets