Making Jaun Proud

The Company is organized into a number of business units. The Company’s North American retail business sells coffee beverages, whole bean coffees and related hardware and equipment through company-operated retail stores in the United States and Canada. The Company’s international retail business consists of entities that own and operate retail stores abroad. These two retail segments are managed by different presidents within the company and are measured and evaluated separately by senior management. The Company operates other business units as well and each is managed and evaluated independently. These other business units are organized around the strategic relationships that govern the distribution of products to the customer. These relationships include retail store licensing agreements, grocery channel licensing agreements, wholesale accounts, and joint ventures.

Starbucks Corporation and its subsidiaries buy and roast high quality whole coffee beans. To insure high quality of the product, Starbucks built three roasting plants of it’s own, where highly trained and experienced personnel monitor roasting of beans. Quality standards are so high that entire batches are thrown away after testing if qualifications differ from acceptable standards. Later, beans are sold in primarily company-operated stores along with fresh, rich-brewed coffee, Italian-style espresso beverages, decaffeinated beverages, cold blended beverages, a variety of pastries and confections, coffee-related accessories and equipment, and a line of premium teas. Starbucks sees its success in constant development of its products to bring new experiences and ideas to loyal customers of their coffee-empire. High quality of a product that will appeal to coffee lovers around the world is Starbucks main consideration.

Starbucks sells a lifestyle, to customers and employees alike. It has learned from the experience of Pepsi and others to link its brand to new trends. Starbucks' success could be attributed to an objective to meet their customer’s needs, and innovative new product offerings. Selecting a marketing strategy based on a product mix is a key to Starbucks success. Coffee is the second most traded commodity in the world (McMahon, 2001), and as a result, Starbucks was forced to adopt a high product differentiation strategy. This strategy differentiates the company from the competition, making its product unique, by targeting quality, service, and the price conscious customer. Starbucks retail stores are usually located in high-traffic locations and high visibility areas. To reduce risk of failure and economic fluctuations, properties for the stores are leased. Brand name recognition of Starbucks therefore comes from people being frequently exposed to it.