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Starbucks: Marketing Principles

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MARKETING REPORT OF STARBUCK
Unit 04 – Marketing Principles

Contents
EXECUTIVE SUMMARY 3
INTRODUCTION OF STARBUCKS 4
TASK 1 6
1.1 ELEMENTS OF THE MARKETING PROCESS 6
1.2 BENEFITS AND COSTS OF A MARKETING ORIENTATION 7
2.1 MACRO AND MICRO ENVIRONMENTAL FACTORS 8
Macro Environment (PESTEL) 8
Micro Environment (Porter’s 5 forces model) 9
3.1 COMPETITIVE ADVANTAGE 10
A Connected Customer Experience 10
Starbucks Rewards Card 11
The Finest Coffee Beans 11
Porter's Generic Strategies 11
3.2 CHANNELS OF DISTRIBUTION 12
3.3 PRICING STRATEGIES 14
Premium Pricing 14
Economy Pricing 14
Psychological Pricing 14
STARBUCKS PRICING STRATEGIES 14
3.4 PROMOTIONAL STRATEGIES 15
Social Media 15
Branded Promotional Gifts 16
Causes and Charity 16
STARBUCKS
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The company competes with other sellers, like Dunkin Donuts and McDonalds, in the coffee market, but ultimately is overwhelmingly dominant. In the monopoly, Starbucks has had to create a unique identity and brand image for itself in order to succeed amongst competitors. Starbucks has been able to successfully differentiate itself from its competition by priding itself in quality assurance to its customers as well as its distinctive brand marketing strategy, which includes a large number of stores and little to no paid advertising; the company feels their high quality products speak for themselves and a high presence of storefronts allows customers to purchase their products at their own…show more content…
It's a strategy that can be effectively used when there is something unique about the product or when the product is first to market and the business has a distinct competitive advantage. Premium pricing can be a good strategy for companies entering the market with a new market and hoping to maximize revenue during the early stages of the product life cycle.

Economy Pricing
Economy pricing is a familiar pricing strategy for organizations that include Wal-Mart, whose brand is based on this strategy. Aldi, a food store, is another example of economy pricing strategy. Companies take a very basic, low-cost approach to marketing--nothing fancy, just the bare minimum to keep prices low and attract a specific segment of the market that is very price sensitive (Hartley, 2001).

Psychological Pricing
Psychological pricing strategy is commonly used by marketers in the prices they establish for their products. For instance, $99 is psychologically "less" in the minds of consumers than $100. It's a minor distinction that can make a big difference.

STARBUCKS PRICING STRATEGIES

Starbucks is the leader of the coffee market. As an individual company, it controls several times more market share than any of its competitors. More than just a high-priced coffee shop, Starbucks offers a combination of quality, authority and relative value (Corporation,
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