Marketing Mix Elements

Starbucks Marketing Mix Paper

Aiza Ashley
Starbucks Marketing Mix Paper
A good marketing plan must possess a strong marketing mix strategy.
Organization uses marketing mix strategy modeling to estimate causal
relationships and measure how marketing activity affects outcomes. The
Marketing-mix models analyze data from a variety of sources, such as
retailer scanner data, company shipment data, pricing, media, and
promotion spending data, to understand more precisely the effects of
specific marketing activities. In this paper there will be a description of the
four elements of marketing mix: product, price, place, and production. It will
describe how the four elements of marketing mix affect the development of
the marketing strategy for Starbucks.
The Four Elements of the Marketing Mix Modeling
The four elements of the marketing mix modeling products, price, place,
and promotions also known as the four Ps of marketing were known as the
controllable parameters likely to influence the consumer buying process
and decisions (Constantinides, 2006). The strength of the four Ps approach
is that it represents a memorable and practical framework for marketing
decision-making and has proved useful for case study analysis in business
schools for many years (Constantinides, 2006).
Product
Product refers to aspects such as the firms portfolio of products, the
newness of those products, their differentiation from competitors, or their
superiority to rivals products in terms of quality (Shahhosseini & Ardahaey,
2011). Products are goods manufactured by organizations for the endusers are called products. These products can be of two types: tangible
products and intangible product (services). An individual can see, touch,
and feel tangible products with physical attributes, compared to intangible

products. A product in a market place is something, which a seller sells to

the buyers in exchange of money (managementstudyguide.com, 2012).
Price
Price refers to the products list price or any incentive sales promotion such
as quantity discounts, temporary price cuts, or deals (Shahhosseini &
Ardahaey, 2011). Price could also be interpreting as the money, which a
consumer pays for a product. The price of a product is indirectly
proportional to its availability in the market. Lesser its availability, more
would be its price and vice a versa. Retail stores, which stock unique
products (not available at any other store) such as antiques and specialty
items,
can
quote
a
higher
price
from
the
buyers
(managementstudyguide.com, 2012).
Place
Place refers to delivery of the product measured by variables such as
distribution, availability, and shelf space (Shahhosseini & Ardahaey, 2011).
Place also refers to where the products are available and can be sold or
purchased. Consumers can purchase products either from physical
markets or from virtual markets. In a physical market consumers and
sellers can meet physically and interact with each other whereas in a virtual
market
buyers
and
sellers
meet
through
Internet
(managementstudyguide.com, 2012).
Promotion
Promotion refers to advertising, detailing, or informative sales promotions
such as features and displays (Shahhosseini & Ardahaey, 2011).
Advertising can be done through print media, television, and radios, which
are the more effective ways to entice customers and make them aware of
the brands existence. Billboards, hoardings, banners installed intelligently
at strategic locations with heavy traffic areas, crossings, railways stations,
bust stands can attract the passing individuals toward a particular brand.
Taglines also increase the recall value of the brand amongst the customers
(managementstudyguide.com, 2008- 2012).

Word of mouth can also help promote a product. One satisfied customer
brings 10 more customers along with him or her whereas one dis-satisfied
customer takes away 10 more customers. This is the importance of word of
mouth. Positive word of mouth goes a long way in promoting brands among
the customers (managementstudyguide.com, 2008-2012).
Starbucks Marketing Mix
Starbucks is a worldwide coffee company. It was founded in 1971 in Seattle
as a single store. Starbucks is part of the food industry. Its mission is to
inspire and nurture the human spirit one person, one cup, and one
neighborhood at a time. Today, with more than 17,000 stores in 55
countries, Starbuck is the premier roaster and retailer of specialty coffee in
the world. Starbucks offer the finest coffees in the world, grown, prepared,
and served by the finest people (Starbuck.com, 2012).
Starbucks was initially not very famous choice but with a little change in
strategy it entered into small and large enterprises and hit the market
saturation. Today Starbucks is the total coffee supplier and retail market in
United State. The company is popular because of being user friendly as it
organizes the music and book events and with Wi-Fi connection, which is
available at all the outlets just like a home or office. Originally Starbucks
target market was white collared, sophisticated people. But with the
passage of time new strategies evolved and low budget and class friendly
outlets were established, while maintain its initial strategy in its real form,
which is to inculcate the desire of having the Starbucks experience in its
customers with its affordable luxury, which on the other hand allowed
premium for Starbucks products. The company revenue is generated by
the sale of whole bean coffees, which are 76%, and secondarily through
equipment by 18% and follow by foods and beverages at 3% each
(Marketing Mixx, 2012).
So it is safe to state that Starbuck main product is coffee. Starbucks offers
54 different types of coffee to its consumer. There are around 100 different
specialties coffee beverages. From brewed coffee to Frappuccino blended
beverages such as cappuccino, latte, mocha, macchiato. Add to these
chocolate drinks such as salted caramel hot chocolate (seasonal offering),
white hot chocolate and hot chocolate. It also offers Tazo teas, such as

Chai tea latte, Earl Grey brewed tea, and Iced Awake tea, just to mention
some. Starbuck also sell bottled drinks such as Starbucks energy coffee
drinks, Starbucks refreshers (with fruit flavors), and Starbucks bottled
coffee Frappuccino drinks. Starburst also offers children drinks. Beside
drinks, Starbuck also sells pastries and sandwiches, salads, and breakfast
items, which are made with high quality, simple ingredients
(Starbucks.com, 2012).
Starbucks also sells other products. It sells cups and mugs, tumblers, and
travel mugs, accessories such as reusable cup sleeve, stainless steel red
carafe, and others. It also sells coffee makers and other products. Overall
Starbucks follows the multi-brand strategy by building a portfolio of branded
business units beyond the Starbucks retail brand. Starbucks portfolio
includes Starbuck branded coffee, Seattles Best Coffee, Tazo tea brand,
evolution Fresh, La Boulange, and Torrefazione Italia Coffee.
Starbucks pricing strategy is based on quality, differentiation, and authority
value. Starbucks offers products of high quality and provide excellent
service for customers; they are ready to pay more for better quality and
better services. Starbucks spends many efforts to differentiate itself from
the competitors: new kinds of specialty coffee drinks, interior design to
make time spent at Starbucks coffeehouses even more pleasant, new
services, its social network community, etc., it does all this to create
additional value for customers for, which they are ready to pay more.
Overall Starbucks is a strong global brand positioning itself as a coffee
expert and its products are price according to the upscale image related to
the brand (Helmikuuta, 2012).
Starbucks is caters in most of the locations in United States, Canada, and
United Kingdom. As mention before, Starbuck is operating in more than 50
countries around the world, including all the continents. Starbucks stores
are unique environments created by designers to explore innovations within
the coffeehouse. The stores have a regional modern, which embodies a
trend-setting style that is comfortable and welcoming (Starbucks.com,
2012). Starbucks also offers the choice to purchase online.
Starbucks pride itself of having a good relationship with its customers.
Starbucks promotional strategy focuses on the level of how it relates to

consumers at a personal level, which means it has stayed away from mass
marketing and mass media outlets, and this is why it is rarely for an
individual to find a Starbucks advertisement in a billboard, advertisement
space, newspaper or poster in places where it can be expected to see
advertisements form most other establishments, such as McDonalds
(Marketing Teacher Ltd 2000-2012). The only form of public relations or
mass media that Starbucks uses will be press release presented online
directly through its website and mostly issue three months before products
is launched. An example of using its own website for marketing is when
Starbuck started a community website, My Starbucks Idea, designed to
collect suggestions and feedback from customers. My Starbucks reward
program allows members to earn a free drink after every 15 purchases at
participating Starbucks stores (Marketing Teacher Ltd 2000-2012).
Starbucks utilizes direct marketing such as podcast, advertising on
Facebook, Twitter, in-store posters chalkboard, and sending out e-mails.
Also, sales promotions such as coupons are sent using online mailing list;
as well to provide to in-store consumers and informational pamphlets,
personal selling strategy is also provided by in-store employees by offering
samples (wsanneh1, 2011).
Conclusion
The marketing mix modeling with it four Ps elements: product, price, place,
and promotions have been implemented as part of the marketing strategy.
The marketing mix is important because its help organizations on its
decision on how to best market its product, where to sell it, how to price,
and how to advertise its. This paper show how Starbucks change its
marketing strategy and implemented the marketing mix and other strategy
to help it grow into what it is today the best known coffee supplier in the
world.
Reference
Constantinides, E. E. (2006). The Marketing Mix Revisited: Toward the 21st
Century Marketing. Journal Of Marketing Management, 22(3/4), 407-438.
Helmikuuta, (2012). The Marketing Mix of Starbucks. Retrieved from
http://thecoffeeteam.blogspot.com/2012/02/marketing-mix-ofstarbucks.html

managementstudyguide.com. (2008-2012). Elements of Marketing Mix.

Retrieved from http://www.managementstudyguide.com/marketing-mix.htm
Marketing
Mixx.
(2012).
Marketing
Mixx.
Retrieved
from
http://marketingmixx.com/marketing-plan-2/162-starbucks-marketingplan.html
Marketing Teacher Ltd. (2000-2012). Starbucks Marketing Mix. Retrieved
from
http://www.marketingteacher.com/case-study/starbucks-casestudy.html#
Shahhosseini, A., & Ardahaey, F. (2011). Marketing Mix Practices in the
Cultural Industry. International Journal Of Business & Management, 6(8),
230-234. doi:10.5539/ijbm.v6n8p230
Starbucks.
(2012).
Coffeehouse.
http://www.starbucks.com/coffeehouse

Retrieved

from

wsanneh1 (2011). Promotion Mix of Starbucks. StudyMode.com. Retrieved

06, 2011, from http://www.studymode.com/essays/Promotion-Mix-OfStarbucks-714893.html

The Marketing Mix

The Marketing Mix
The marketing mix is the variables that can be control by marketing
managers to satisfy the needs of target customers. A typical marketing mix
includes a product, offered at a price, with some promotion to tell potential
customers about the product, and a way to reach the customers place
(Perreault & McCarthy, 2009, p. 36). This paper the subject to describe is
the four elements of the marketing mix; product, place, promotion, and
price. In addition, the four elements of the marketing mix will be discussed
on the impact in the development of Googles marketing strategy and
tactics.
The Marketing Mix
There are variables in marketing that can be control for the purpose of
making a sale take place. The customer itself cannot be control but can be
led by setting the right price, location, advertising, and product attributes.
These variables are interdependent and can be used to solve a marketing
problem.
Product. The product area is concerned with developing the right product
for the target market (Perreault, et al. 2009, p. 36). Customers have wants
or needs that need to be satisfied through a product that can either be a
physical object or service. A product can be any of the following three
levels:
1) The actual product has features and attributes unique to the
customers needs (e.g. iphone from Apple)
2) The core product meets customers needs while providing a benefit
(e.g. efficient technology)
3) The augmented product addition services to help generate multiple
revenue (e.g. accessories for iphone)

The outcome of a products development is influence on two

considerations. One to develop products that meet the customers needs
on a constant level while giving them direct and valuable benefits. Another
reason is to improve the competitors product with better features and
attributes.
Promotion. Promotion is concerned with telling the target market or others
in the channel of distribution about the right product (Perreault, et al.
2009, p. 40). Promotion is a form of communication used by companies
that helps them establish not only a sale but also a relationship with the
consumer. This term is often used to identify marketing. The use of
promotion is considered a very valuable tool in developing consumer
perceptions of the value of the product while identifying the consumers
demand and willingness to acquire the product.
Place. Place is concerned with all the decisions involved in getting the
right product to the target markets place (Perreault, et al. 2009, p. 39).
This is where the product design for a target consumer is place. An
example is Wal-Marts brand Great Value target at consumers who are
looking for savings and who frequency discount department stores. Another
example is Wal-Marts location, which is target at consumers from
backwater towns rather than urban areas.
Price. Price setting must consider the kind of competition in the target
market and the cost of the whole marketing mix (Perreault, et al. 2009, p.
40). This is the only element of the marketing functions that produces
revenue. After all the elements of the product are calculated the price of the
product is determined. Often the price set for a product is miscalculated
when the costs of the other three functions are not included into the price.
Price is also the only element that can be changed based on the demand
because the other functions determined by other elements (e.g. gas price,
labor coast, etc.). Pricing is very important, it gives the consumer a mindset
on the value of the product and if under price the consumer may believe
the product to be of little value.
Google Marketing Mix

Googles mission statement is to organize the worlds information and make

it universally accessible and useful (Google, 2010). Google has made good
use of the four marketing elements to help create an excellent impact in the
development of their marketing tactics and strategies. Google originated in
Stanford University campus with a vision to organize an infinite amount of
information on the web is considered the best search engine. Google
achieved this by creating successful marketing strategy. Google customers
include people of diverse ethnicity, income, and age group with varying
tastes and interest. With this diverse clientele, Google has faced a
challenge in marketing to target all of these diverse groups of people.
During the 90s many dotcom companies were founded but only a few
survived after the Internet Boom in 2000. Googles primary industry is that
of web search/advertising and its innovative marketing plan makes it
unique. The marketing plan for Google consists of the four Ps of marketing;
product, price, promotion, and place.
Product. The main product offered by Google is service. Googles service
consist of advertisement, which is their biggest revenue generate and a
web search engine. Google also has other services that include desktop,
mobile, hardware, and web. Googles core product web search has been
very success because it is crawlable by web uses making Google desirable
for other companies to advertise their products through Google.
Promotion. Google is a company that has a core product based on
advertising but the method is not used by them for their own product.
Googles success is based on word of mouth and is depended on this
strategy. The strategy is that as others use the product he or she will
recommend it to others making it a credible brand which in turn gives it a
wider spread.
Place. The place where the product will have the most success is
depended on the target consumer. Googles target consumers are those
that use the Internet for just about everything. Google has opened up the
Internet and has made it more accessible. Through Googles search engine
other web pages can be found making consumers depended on the service
and for this reason Google has been successful.

Price. Google has made advertising attractive, easy, and accessible for just
about every business venture through their pricing. Pricing of Googles core
product AdWords is very flexible claiming that the cost is control by the
consumer not by Google. Options such as no minimum spending
requirement, daily budgets, and pay per use (only if someone clicks on the
ad) are what have made this product so attractive. Google has made it their
business to take consideration with what is involved with the elements that
need to be considered when pricing their product.
Conclusion
When developing marketing, all decisions impact the four Ps should be
made at the same time. The four elements are just as important. This is
because the products, places, prices, and promotions of an organization
surround the most important element; the customer (Perreault, et al. 2009).
According to Googles 2009 annual report, finding important technological
areas where progress is currently slow, but could be made fast, is what
Google is all about (Google, 2010). Google has proven to stay on top of
their market. However, Google and any organization need to examine
continuously their marketing mix to stay competitive and profitable. By
successfully completing the circle of the four Ps, Google has established a
multimillion dollar organization that is a Fortune 200 Company.
Reference
Google, Inc. (2010). 2009 Annual report. Retrieved from
http://investor.google.com/pdf/2009_google_annual_report.pdf
Perreault, W. D. & McCarthy, E. J. (2009). Basic Marketing: A GlobalManagerial Approach.
The McGraw-Hill Companies. Retrieved April 9, 2011 from
https://mycampus.phoenix.edu/secure/resource/resource.asp