MKT 362: Marketing Case 2 Starbucks: Managing A High Growth Brand
Students: Hin-Yeung Pong & Terrance Duong
One of the keys of success for Starbucks in building the brand is that Starbucks placed quality as its top priority. To distinguish their coffee from the bland and tasteless store brands, Starbucks only purchased Arabica beans from a carefully selected network of suppliers across the globe. Arabica beans were selected because the bean’s chemistry could withstand high roasting temperatures, resulting in a richer flavor. Starbucks also sought vendors who sold products that would protect, and even enhance, the Arabica’s flavor, which required the formation of partnerships across the globe with coffee brewing equipment suppliers who provided products that captured the essence of the coffee brewing tradition. Simplicity was valued over advanced technology because the machines Europeans and others had been using to brew coffee for centuries often proved the most effective in delivering the richest flavor. Other key factor is that Starbucks in its early stage had great success in converting its small group of loyal Seattle customers into coffee enthusiasts, and by this they started the trend of consuming fresh coffee in a sociable coffeehouse atmosphere which had already been very popular in Europe. And by converting Starbucks from a coffee retailer into a café business resulted in a several important competitive advantages. First, it increased quality control because the coffee was brewed by its own knowledgeable employees. Second, Starbucks captured the business of Seattle’s business community who loved high quality coffee, but had hectic schedules. Starbucks made enjoying good coffee convenient, thereby enabling the entire community to enjoy all the brand had to offer. Lastly, incorporating a coffee service aspect into business differentiated Starbucks from its coffee retail competitors, who were quickly growing in Seattle and in...