Starbucks Marketing

2008 - Starbucks founder Howard Schultz came back as CEO eight years after handing company to Orin Smith and then Jim Donald in 2005

15,000 stores in 19 regions around the globe

Shareholders had been getting triple-digit returns but had slumped 50% since 2006

“Had been investing in infrastructure ahead of a growth curve”

To prevent a more serious financial crisis, and to rescue the faltering US business, Schultz had to quickly implement a turnaround plan.

Starbucks brand: “Unlock the romance and mystery of coffee in coffee bars -> social aspect of coffee, ability to transform coffee from a commodity into a memorable and meaningful experience -> due to the people Starbucks hired

Partnered with Pepsi-Cola, SZBY inc and Kraft Foods and was able to sell coffee, the coffee makers and music.

Coffee card with preloaded amounts of cash

2003 – 6,400 stores in 30 locations but overseas presence accounted for 23% of stores and only 9% of sales & was a net money loser

Countries such as france -> provided “the real thing”

Starbucks was modelled on the European coffee bar but found itself being derided by some as a soulless McCoffee chain. Business lagged in Switzerland, Austria and Germany

1st year with Jim Donald Starbucks’ net income was almost 1/3 higher than the previous year

XM Radio station to capitalize on the popular in-store music programming

Stated goal of 20% growth was central to the strategy, and opened another 5,000 stores around the globe. Automated coffee systems, people poured their hearts into it

People the key to the quality of the experience -> attracting and retaining the right people. Significant training, called partners. Emotional tie to the company through relating to it

Total pay for employees, higher salaries than competitors plus stock plus universal-benefits program, community development through an employee-run program called Partner Connection, helping employees to share interests such as art, parenting, community...