galilee's marketing: Paul Kim 20501005

Starbucks’ 5p marketing mix

After reading chapter 1 in my book, I could comprehend the overall concept of marketing 4P mix and Value-based marketing. Searching a company that has successful case in marketing, I found Starbucks’ 5P mix that was very interesting to me. According to my book, 4P mix consists of product, price, place and promotion. However Starbucks has one more P which is ‘People’. I wondered why!! Several questions came to my mind. “Why did Starbucks put one more P to marketing 4P mix?” “What kind of marketing plan made Starbucks so successful?” etc… Let’s check these out!

Product: The main point of product strategy is identical coffee taste in all Starbucks stores throughout the world. In order to keep the same taste, they use special cups which have several check points so that baristas can control the amount of water and also customers can customize their coffee up to their preference.
% Barista(Italian): People who make coffee in the bar.

Price: As you know, Starbucks’ coffee has quite high level of price, but it also has high quality. Targeting career women in their twenties and thirties, Starbuck has been keeping price high as well as quality. At first Starbucks began its business in Korea, many people might have thought the price was too expensive. Despite that price which is even more expensive than the price of a meal, it made such a great selling record. From this fact, I could notice that many customers seem to have willingness to pay for coffee with high price as long as it has high quality and satisfies their needs.

Place: As I mentioned, Starbucks’ main target is career women in their twenties and thirties, so it launched many stores at the places where many women are working and passing. For instance, there are more than four stores in Samsung dong, Kang nam, where many targets are.

Promotion: I have never seen any Starbucks’ ad in a TV. Starbucks uses spread marketing (from mouth to mouth) which does not need money. Actually, Starbucks did not intend to use spread marketing. The reason why they had to use that kind of marketing was because they just didn’t have enough money to put an ad in a TV. Anyway, it was so successful and Starbucks has realized that spread marketing is very effective.

People: In my opinion, this is mainly related to customer service. This looks one that only Starbucks’ marketing plan has. But I guess many other companies today might also consider it as an important element. I think Starbucks wanted to strongly emphasize the importance of service and staff education. That might be why they use 5P marketing mix which has one more P(People).

To sum up, Starbucks has been really successful. Behind that there is a critical reason which is Starbucks has been considering customer service its top priority and offering coffee at high quality. In other words, Starbucks has been customer-oriented. Starbucks exactly knew the importance of customer service and satisfaction. I am sure that would be the key to success today.