3. Starbucks mission statement
• To inspire and nurture the human spirit – one person, one cup and one
neighbourhood at a time.
• Starbucks principles
– Our Coffee: We’re passionate about ethically sourcing the finest coffee beans, roasting
them with great care, and improving the lives of people who grow them.
– Our Partners: We’re called partners, because it’s not just a job, it’s our passion.
Together, we embrace diversity to create a place where each of us can be ourselves. We
always treat each other with respect and dignity.
– Our Customers: When we are fully engaged, we connect with, laugh with, and uplift the
lives of our customers – even if just for a few moments.
– Our Stores: When our customers feel this sense of belonging, our stores become a
haven, a break from the worries outside, a place where you can meet with friends.
4. Starbucks value proposition
• It’s all about experience.
• Three components of branding strategy:
– First component: Coffee itself. Coffees were of high quality and were sourced from
Africa, Central and South America and Asia – pacific regions. It worked directly with
growers in various countries of origin to purchase green coffee beans, supervised
roasting process and distribution to retail stores around the world.
– Second component: Service. Goal is to create an uplifting experience every time
customer walks through the door.
– Third component: Ambience. People come for coffee but it is the ambience that makes
them want to stay. It has generated the need to come together.
• Customers second, Employees first. Employees were given training on how to
prepare and serve coffee. They were also empowered by offering them ESOP,
comprehensive health care. Respect employees and employees will respect
customers which in turn leads to customer satisfaction.
• Corporate Social Responsibility: opening up of hospitals, AIDS foundations, food
5. Product innovation
Whole bean coffee
Coffee related product
6. Product innovation
• Introduced at least one new hot beverage every holiday season.
• New product development process generally operated on 12 – 18 months cycle.
• Internal research and development team tinkered with product formulations, ran
focus groups, in – store experiments and market tests.
• Introduced frappuccino beverages.
• Introduced bottled version of frappuccino, distributed by PepsiCo.
7. Service innovation
• Introduced Starbucks’ stored value card (SVC) – a swipeable smart card for
• T – Mobile hotspot wireless internet service.
• Service delivery:
– Employees were trained on hard skills like learning to use cash register, how to mix
– Employees were also trained on “Just say yes” policy.
• Measuring service performance:
– Monthly status report
– Self – report checklists
– Mystery shopper program “Customer Snapshot”: measured on the basis of
service, cleanliness, product quality, speed of service.
8. Corporate diversification
• Sold Jazz and Blue CDs.
• Special compilations , done by Starbucks, were used as store background music.
• Sold Oprah’s book club selections.
Caffeinating the world
• Starbucks selected large cities to serve as a “HUB”; teams of professionals were
located in these hub cities with a goal of opening 20 more stores in the hub.
• Once the stores blanketed the hub, additional stores were opened in
smaller, surrounding areas “SPOKE”.
9. Starbucks focus
• Office goers
• Middle and high income group.
Starbucks in India
• 50:50 joint venture between starbucks and Tata Global beverages. Finalizing deals
to open 10 locations in country.
• Possible competition from Café Coffee day, Barista, Costa Coffee, Gloria
• Possible substitutes could be burgers, donuts.