Starbuck\'s Christmas Blend Coffee Starbucks

Starbuck's Christmas Blend Coffee

Starbucks (NASDAQ:SBUX) is known globally for its exceptional channel management, new location planning, research & development, and fair trade supply chain practices (Starbucks Investor Relations). Over the history of Starbucks' existence, there are products that quickly gain a strong employee following and become favorites inside the company before being launched to customers through the hundreds of stores the company operates. This is exactly what happened with the Starbucks Christmas Blend which continues to a favorite of employees and has become one of the best-selling coffees in the company's history (Starbucks Investor Relations). Starbucks has successfully been able to successfully interlink specific drinks or products with the experience in their stores and the holiday season. The Starbucks Christmas Blend is exceptionally successful because in the minds of consumers it is interlinked to the experience of enjoying a visit to Starbucks while enjoying the holiday season and its many opportunities to socialize (Allison, 8).

Starbucks Christmas Blend Marketing Mix Analysis

The product, pricing, promotion, place or distribution and packaging (or packing) of the Starbucks Christmas Blend is analyzed and critiqued in this area of the paper. The fact that the Christmas Blend coffee brand has a long history within the corporate culture of Starbucks can be seen from Figure 1 Winter, 1985 Internal Company Announcement, the first known internal announcement of the blend to employees in writing. Figure 2: Winter, 1994 Announcement to Channel Partners and Store management is more formalized and communicates the market position and unique value proposition for resellers and channel partners. The final image, Figure 3: 1996 -- 2000 Ad Campaign Aligning Christmas Blend and Winter, shows how effective the Starbucks marketing strategies have progressed with the St. Bernard, the international symbol of rescue on the slopes of the Austrian Alps, with a fresh bag of Christmas Blend under his collar. If one looks at the progression of messaging in the appendix it is evident the direction from the utilitarian and functional to the trusted has happened with the messaging around the Christmas Blend. For employees Christ Blend is synonymous and one of the symbols they rely on to define the holiday season for themselves and their friends. Starbucks has ironically done an excellent job of marketing Christ Bland within the company so it is synonymous with the holiday experience as well.

Product

The product has long had a reputation for having a taste that evokes memories of holiday eggnog and cinnamon-flavored drinks, as is mentioned in the first printed materials released throughout the company in 1985 and seen in Figure 1. The product has since gone through several product generations, with each subsequent modification to the coffee to align the best-selling blend to the Fair Trade practices that pervade the Starbucks supply chains (Starbucks Investor Relations). Starbucks is known for having one of the most focused and highly efficient research & development (R&D) process, with a strategy of completing testing globally to ensure a continual launch of season-specific products. The testing of the Frappuccino in Australia during their winter for launch in the Northern hemisphere during summer is a case in point (Starbucks Investor Relations). The strategy of around-the-globe development is one of the factors that also contributed to the exceptional success of the Christmas Blend Coffee (Scott, et.al.).

Price

Starbucks has experimented with low-price products during the recessionary periods of 2009 and early 2010 to counter the drop in same-store spending they were noticing over time (Rowe, 3, 4). The company quickly realized that many of their products are inelastic and do not increase in volume with price reductions, counter to what often happens with more commoditized products. On a bright note, senior management at Starbucks has ascertained that they have a unique market position with Christmas Blend and can actually use it for bundling and substantiating price increases on the most popular product bundles (Starbucks Investor Relations). Once Starbucks senior management realized this relationship between price and volume, their sales have ironically skyrocketed on Christmas Blend coffee and products associated with this best-selling coffee. On December 2, 2010, Starbucks sold more bean-based coffee than any other day in their history, led by heavy promotion of Starbucks Christmas Blend (Engleman, 122).

Promotion

Starbucks Marketing has defined a series of best practices that make their multichannel marketing strategies among the best in the coffee retailing and food retailing industries. The pervasive use of in-store displays and pervasive use of in-store placards, counter placards, and the use of Web-based marketing all support the strategy of maximizing the sales the Christmas Blend throughout the holiday season. The figure to the right shows the current promotional materials used throughout the Starbucks locations to promote the Christmas Blend.

In addition, Starbucks is offering coupons on Christ Blend bundles with coffee mugs and discount pricing on the combination of these two items. The promotion strategy is aimed at sustaining the pricing and margins on bundles with the brand loyalty that the Christmas Blend evokes (Starbucks Investor Relations). Finally, the promotional strategy is specifically focused on uniting and strengthening the experience of visiting a Starbucks, getting a fresh, hot cup of Christmas Bland and enjoying the holidays with friends. This approach to experience-based marketing built around the Christmas Blend continues to be one of the most effective differentiator the company has against competitors, both national and regional in scope (Dobnik, 23, 24).

Place or Distribution

The experience of having a fresh, hot cup of Christmas Blend is at the center of the marketing strategies for this product. Starbucks has successfully expanded this brands' presence throughout several different distribution channels, including retailing, in-store displays at mass merchandisers, online sales and the most well-known, in-store purchase of bags (Starbucks Investor Relations). Starbucks continues to expand its multichannel focus on the Christmas Blend specifically, given its pervasive appeal and its best-selling status within the company, leading to record sales on December 2, 2010 of this year (Engleman, 122). As the Christmas Blend has been selling for 26 years, there is a large and very loyal customer base for this specific blend. Starbucks has led its multichannel selling efforts with it as a result, often choosing to expand channels during the holidays as retailers, resellers and store manager are assured of higher sales (Starbucks Investor Relations).

Packaging

The packaging of the Christmas Blend is festive and evokes the emotions that Starbucks is trying to associate with the experience of consuming the drink. The packaging is designed to also be festive and associate the coffee with all that is the most positive about the season. The packaging of this years' Christmas Blend is shown to the right.

Competitive Analysis