Coffee and business are at variance with each other, yet world’s largest coffeehouse chain, Starbucks is one of the key players in the market of coffee with a net worth of $110 billion as of 2021. What made Starbucks a multi-billion-dollar company? And why people are willing to spend $4 on just a cup of coffee? Is it only coffee or is it something extraordinary? Howard Behar, the former president of Starbucks said, “We’re not in the coffee business serving people, we’re in the people’s business serving coffee.” Their entire model is based on remarkable customer service. There is a lot that one can learn through Starbucks’ strategies and success.
Starbucks emerged as a coffee roaster and retailer back in 1971. Now, there are 32,660 stores worldwide as of Oct, 2020. The logo features a siren from Greek mythology, and the name was inspired from a character in a novel named ‘Moby Dick’. Howard Schultz, CEO (1987-2000, 2008-2017) of Starbucks, made the company turn into a coffeehouse chain expanding worldwide.
Starbucks’ mission is to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time. The present logo rightly embraces the heritage and interprets what it truly stands for- freedom and flexibility to think beyond coffee.
Starbucks: ‘Third Place’ that extends far beyond coffee:
Third place refers to the place where people spend time outside home or work. Starbucks has become the perfect spot where people can hangout or work with a perfect cup of coffee but it is more than that. The Starbucks experience is not only coffee but the consistency of the experience that one can get. You’ll go through a similar experience in every store regardless of where the store is located.
The Personalized experience:
The feel one gets, is truly personalized in unique and innovative ways that one might not expect from a coffee shop. One way to lure the customers into them is offering coffee cups with their names on them, but misspelled. While one may ponder that this may disappoint the customer, but it doesn’t matter if the spelling is correct or not, it is the feeling of your name on a cup which is more important.
The personalized music experience is another case. The environment in which you have the joy of coffee matters a lot. The second you enter Starbucks, you’d notice the music well picked and well suited, and for your “What’s this song!” moment, Starbucks has partnered with Spotify for its music filled in-store experience. Customers can discover and save songs that are playing, through the Starbucks mobile app. The Starbucks App is the digital trendsetter that provides ordering online, also supports payments and moreover suggests drinks according to the weather. The integration with other platforms like Spotify to curate your own playlist, save songs that are playing in-store and the Starbucks Rewards program is the prime example of the digital ecosystem it has created.
Starbucks adopted traditional marketing strategies, putting advertisements on billboards, through posters, and word-of-mouth. People are willing to pay $2 to $4 not only for a cup of coffee, but the experience. The concept of Starbucks coffee is inspired by the Italian coffee culture as evident in the drinks’ names (grande, venti, tall). Also, it adds up to the economy by gentrification, a Starbucks in the hood tends to rise current and future housing prices in accordance with ‘Frappuccino Effect’. Speaking of their employees, Starbucks gives authority to them to manage how they want to. For Starbucks, their every employee is their partner and taken full care of along with providing valuable training.
There’s much more to it than I could talk about here, but this is the overview into few aspects which makes the company stands out and makes it different from its competitors globally.