Wake up and smell the aroma of the Starbucks¡¯ coffee everywhere. Starbucks is the world's most specialized coffee retailer. Flash Rosenburg, an American photographer, director, and producer, said, ¡°I believe that civilization has done a lot of amazing things. Not just because they are intelligent but because they have the fingers to make a delightful thing called coffee.¡± Coffee is a great drink that many people around world love to drink. Coffee is one of the most favored drink and many coffee lovers choose Starbucks. The questioned is: why do so many of the people choose Starbucks from hundreds of other coffee retailers. What factors made Starbucks so famous?
In 1971, the very first Starbucks, called ¡°Starbucks Coffee, Tea, and Spice,¡± was opened in Pike Place Market, Seattle, Washington. The three founders of Starbucks were Jerry Baldwin-an English teacher; Zev Siegel, a history teacher and Gordon Bowker-a writer. They named the store after the Moby Dick character, Starbuck. They also thought that ¡®st¡¯ sound would be attractive and stay in people¡¯s mind. The surprising fact is that the first Starbucks store did not actually sell beverages, but only sold coffee beans.
The second Starbucks store opened in Seattle, 1972, and 12 years later the store finally acquired its fifth store. As it can be seen, Starbucks showed a steady growth. Later when they made the first espresso bar and sold coffee drinks, Starbucks had become very famous across the nation. Finally, franchises were opened in Vancouver, Canada, Chicago, Illinois and Columbia, England in 1987. In addition, just ten years ago, Starbucks came into Asia, to Tokyo, Japan, and soon opened 400 retailers. Surprisingly, in 2003, 6,400 Starbucks shops were around the world.
These later successes could take place because of CEO, Howard Schultz. In 1982, he joined the Starbucks Company and decamped all of the managers in 1987. He redeveloped the management plan, by emphasizing that the employees are most important for the better service. He re-trained all the employees to be amiable and sociable. He said, ¡°We don¡¯t only sell coffee, but also service¡± and he always ordered to get closer with the consumers. Schultz is still the CEO and also became the chairman.
That Schultz do not spend a lot of money on advertising is true. Tomas Yang, the international marketing vice president, said, ¡°We [Starbucks] did not spend any money on papers or media when Starbuck first opened in the Japanese market (first Starbucks in Asia).¡± Then, why can so many people find Starbucks, even though Starbucks do not advertise much. Why Starbucks? What makes Starbucks so special? This leads to the answer that Starbucks has certain specialties that bring people to drink at Starbucks. The difference was that Starbucks had different marketing strategies from other coffee shops.
As mentioned above, employees were re-taught to be friendly and more
welcoming toward the consumers. Schultz also presented kind of marketing plans, ¡®Get the Morning Market¡¯, and ¡®Make a Representative Product¡¯. For marketing other countries, Starbucks made trends with words such as ¡®Take-out¡¯, and ¡®Espresso¡¯. These words led luxurious coffee culture closer to public. Also, because Asian culture was used to eat in seats, Starbucks in Asia opened reconsidering its size to make more tables. People also say the Starbucks shops fulfill Asians¡¯ desire for new Western culture. In total, Starbucks volunteered to address certain social problems, such as recycling, helping the poor, and donating to Children¡¯s hospitals. These aspects made its image different from other coffee shops. Starbucks shops not only sell coffee, but also service, and places to meet and rest. This concept of ¡®brand coffee¡¯ was had never been thought of at the time. Schultz clamed, ¡°Starbucks is not a trend, but a form of life¡± and he did not advertise the company in any special ways.
Schultz¡¯s marketing strategy is called as ¡°Sensitivity Marketing.¡± Sensitivity Marketing is made up of four ¡®P¡¯s, which are product, price, place, and people. From Starbucks, consumers are provided with best qualified products, refined and polished places, prices, and contacts with people. Frankly speaking, Starbucks¡¯ prices can not be defined as reasonable prices. This shows how much its brand has power over the consumers. A company¡¯s similar product is less than two dollars, while Starbucks¡¯ regular coffee is three dollars and fifty cents. About this, Yang said, ¡°Starbucks became a living for them [consumers], not a choice.¡± Among these four promotions, each one became an indispensable marketing plan. Marketing professionals pick Starbucks as the most successful example of ¡°Sensitivity Marketing.¡±
As a top ranking coffee maker, Starbucks¡¯ income is amazingly high. In 2005, Starbucks earned $6,369.3 million and shows 20.3% growth each year. In Net income, they earned $494.5 million, and have 115,000 employees. Since Schultz bought Starbucks for $3.8 million, this international coffee shop can not be denied as a one of the best succeeding company.
The question, ¡°Why Starbucks?¡± is asked many times to the consumers. The Starbucks lover Lim is a woman who spends $300 on Starbucks per a month. She said, ¡°Starbucks is far different from vending machines¡¯ and instants¡¯. Not only the coffee was enchanting, but also its interior, props, and service attracted me. The Starbucks¡¯ logo, mug cup, and jazz music just surrender me into it.¡± Many other consumers answered that Starbucks may be expensive, but according to its taste of coffee and atmosphere, it is worth the extra expense dollars. Nevertheless the question, ¡°Is Starbucks¡¯ coffee tastes the best?¡± is meaningless. To consumers, the fulfillment of sensibility and craving is more important.
On the contrary there are those who abhor Starbucks. Critics say that Starbucks is just a ¡°Drinking Brand,¡± which urges people to drink to show off. They claim that this brand preference brings feeling of being fallacy and social status difference. They also put up the news report that says that the coffee¡¯s cost of production is just a few cents. Critics disparage Starbucks as being only a common coffee that is just wrapped and decorated wall.
From a shop in Seattle, Starbucks became a world wide company. Schultz said, "We are in the infant stages of the growth of the business, even in America. And now, seeing what we've done internationally, we are going to shock people in terms of what Starbucks is going to be." Schultz says Starbucks will grow more one of the greatest marketing consultant. I think Schultz¡¯s self-confidence and straight forward actions brought Starbucks to where it is at now. Even though Starbuck was made just few decades ago, now it is know world wide. Korea tends to have certain companies which the government brings up. I think it is necessary for individual Koreans to stand up and make international companies looking up Starbucks as a model.
Work Cited
Periodicals
Kim, Duck Han ¡°Ridiculous Starbucks¡± Cho Sun Daily News. Pg4. March 22, 2006
Kim, Duck Han ¡°Starbucks, clears out McDonalds in 5 years¡± Guck Min Daily News. Pg 3. April 10, 2006
Online
Hoff, James. Starbucks Coffee Company Timeline. 2006. September 16, 2006. [Available]
http://www.twoop.com/food_drink/archives/2005/10/starbucks_coffee_company.html
Starbucks coffee company. 2006. September 16, 2006. [Available] http://www.starbucks.com.au/en-AU/
Starbuck 2006. September 16, 2006. [Available] http://www.radessays.com/viewpaper.php?nats=MTAxMToyOjE,0,0,0,0&request=42553
Skeen, Dan. biography: Howard Schultz, Starbucks. 2006. September 18, 2006. [Available] http://www.myprimetime.com/work/ge/schultzbio/index.shtml
Books
Haan, Sarah. Starbucks¡¯ Success. New York, Modern Library, 2001
Schimmer, Ann. How to¡¦ Marketing. New York, Bradford, 2003
Links to other sites on the Web
