Product And Pricing Decisions Starbucks

Starbucks entered its twenty-sixth year as the uncontested leader of the gourmet coffee market. The company had already experienced incredible growth， with sales approaching $700 million in 1996， and Schultz had plans to continue expanding， opening almost 900 new stores over the next several years. But the coming years would undoubtedly prove challenging. Competitors like The Second Cup， Seattle's Best Coffee， and Barnie's had expansion plans of their own. And many companies imitated Schultz's formula for success with the hope of beating Starbucks at its own game. The Starbucks marketing team had to be savvy to stay on top.

The team began by extensively researching both competitors' and Starbucks' stores. They brought in hidden cameras to document how well the employees knew their coffee， and they asked customers how they felt about the products， atmosphere， service， and coffee. The insights they gained became the foundation of their strategy.

As with all good marketing strategies， the heart of the plan was a vision of how they wanted to position Starbucks in the coffee market. In addition to remaining the quality leader， they wanted Starbucks stores to appear more like local cafes than a national chain and more like a sanctuary from daily stresses than just a take-out coffee store. Other goals included boosting stagnant sales in older stores， establishing a central focus for all Starbucks products， and developing national advertising that would convey a consistent image. Achieving these objectives required making changes in products， distribution， and promotion.'

Over the years， Starbucks core products， coffee beans and beverages， had already undergone changes to meet customer preferences. But some merchandise， such as mugs and coffee makers， had been left untouched. Now new merchandise was planned for all stores. In addition， new food items were offered to attract customers throughout the day （because half the day's sales were typically made during the morning hours）。

New products were targeted for grocery store distribution， including cold coffee drinks and ice cream novelties. However， the company was adamant about maintaining its identity through strict product standards. If a product wasn't fundamentally related to coffee and to Starbucks' core values， it wouldn't carry the Starbucks logo.

The retail distribution strategy had to address additional challenges. To combat the fears of certain communities about losing their uniqueness， Starbucks began designing new stores to reflect local cultures. For example， a store in Seattle's upscale Queen Anne neighborhood has a fireplace and large chairs that invite customers to linger and relax.