Marketing Management

This report discusses the major customer personas of Starbucks and evaluates the marketing mix elements. Recommendations are made for product, price, promotion, and place strategies.

Running head: MARKETING MANAGEMENT
Marketing management
Name of the student
Name of the university
Author note

1MARKETING MANAGEMENT
Executive summary
The objective of this report is to discuss about the different major customer personas of
Starbucks and it is identified that different customers are having different sets of expectations
and requirements. Hence, it is a challenging situation for Starbucks to meet these diverse sets of
global scenario. On the basis of the identified customer personas, the seven elements of the
marketing mix are discussed and evaluated. It is seen in this report that the existing strategy of
Starbucks is not effective for enhancing their existing market share. In this case, it is
recommended that new customer segments should be targeted and market penetration strategy
should be initiated.

2MARKETING MANAGEMENT
Table of Contents
Introduction......................................................................................................................................3
Background..................................................................................................................................3
Determination of the customer personas.........................................................................................4
Marketing mix recommendations....................................................................................................7
Product.........................................................................................................................................7
Price.............................................................................................................................................8
Promotion....................................................................................................................................9
Place...........................................................................................................................................10
Process.......................................................................................................................................11
Physical evidence.......................................................................................................................11
People........................................................................................................................................12
Conclusion.....................................................................................................................................12
Reference.......................................................................................................................................14

3MARKETING MANAGEMENT
Introduction
The contemporary business state of affairs are challenging as well as opportunities for the
business entities. In addition, there are different trends of the customers also to be faced.
However, in this case, it is important to first determine the personas of the target market
customers and initiate the marketing strategies accordingly. Starbucks is a large scale business
entity operating across the world and thus they are having different customer personas (Lemon &
Verhoef, 2016). This report will identify each of the major customer personas of Starbucks. In
accordance to the identified personas, seven elements of the marketing mix will be discussed and
strategies will be recommended. These marketing mix elements will be beneficial for Starbucks
in ensuring their long term business viability.
Background
Starbucks is one of the leading coffee chains in the world based in the United States.
They are founded in 1971 and currently they are having more than 30000 stores across the world.
In the initial stage, Starbucks started their business with different varieties of coffee from their
chains and later on added products are also being offered. This includes ice creams, sizzlers and
sandwiches. Thus, it should be noted that with the increase in the diversity of the offered
products of Starbucks, their target customer base also got diversified with catering to different
taste and preference pattern of the customers. In the recent time, there are number of new
competitors entered in the global coffee chain industry and posing challenges for Starbucks.
Some of the competitors also gained international brand identity whole some others are
competing with Starbucks at the local levels in different markets (Bookman, 2013). In this case,
it is important for Starbucks to review their existing business strategies and amend according to

4MARKETING MANAGEMENT
the current needs. The new business strategies should be designed in such as a manner that it will
help Starbucks in gaming competitive advantages in the long term and effectively fending off the
competition in different markets.
Determination of the customer personas
Figure: 1
Name: Ana Douglas
Age: 26
Marital status: single
Lives: Melbourne, Australia
Occupation: private service. Ana is working as an executive in a private firm and she is earning
a good sum of money each months. She has completed MBS degree and currently doing her job
in the marketing and sales department. She is not a price conscious girl and can afford premium
service. She is a frequent visitor to different café and restaurants for her business meetings and
acquaintances.

5MARKETING MANAGEMENT
Family life: She is having a family of four including brother, father and mother. All are living in
Melbourne and Ana is living with her family. Thus, her cost of fooding and lodging is low and
she is enjoying higher affordability. In addition, her family is living in a tier I city with having
the access to different high end food joints.
Technology: Ana is quite comfortable with newer technologies and she is using all the latest
kinds of technologies. Due to the reason that she is working as a sales executive, Ana is
comfortable with different software and hardware such as computers, laptops, smartphones,
email and instant messaging apps and social media. She is extensively active in the social media
including facebook and twitter.
Problems: The major problem for Ana is lack of free and quality personal time. This is due to
the reason that she is having busy schedule across the day and hardly finds any free and personal
time for herself. In this case, it is complained by her family members about her lack of family
time. She always finds to have some free time and spends some quality time in any food joints.
Figure: 2
Name: Edwards Long

6MARKETING MANAGEMENT
Age: 40
Marital status: Married
Lives: Sydney, Australia
Occupation: Edwards is a business man and he is having the business of agricultural farm. He is
looking after his inherited business as he grows huge interest in the agricultural activities. His
farm is having nearly 30 employees and it is situated in the outskirts of Sydney nearly the
distance 75 kilometers. He daily drives to and fro between his home and farm and looks after
each of the business activities by own. He is enjoying immense affordability considering the fact
that his farm is doing good business. He spends a good amount of money in leisurely activities.
Family life: He is having a family of five members and that includes his wife, sons, and
daughter in law and grandson. He son is a business graduate from a renowned college in
Australia and currently employed in the family business with his father. Thus, the responsibility
of Edwards is going down with the involvement of his son and now he is having more free time
to spend.
Technology: Edwards is not much comfortable with new technologies especially the latest
communication technologies and gadgets. He is kind of old school and still prefers to have the
authentic old school experiences. However, he has immense knowledge in the agriculture sector
and knows about the latest development in this sector. He have mobile device for communication
and but is involved or active in any social media platforms or any other types of communication
process. He watches television and read newspaper on a daily basis.

7MARKETING MANAGEMENT
Problem: His main problem is the lack of pure and authentic experiences in current crowded
metro cities. He does not prefer crowds and noise rather he is having preference for calm
environment. In the case of leisurely activities also, he is much choosy and cannot get
accommodated in any locations. He prefers quality and ambience prior to the selection of any
food joints and is not fond of fast foods.
Marketing mix recommendations
Product
It is recommended that the core product level of Starbucks should be taste and quality,
which is already being followed. Thus, the same approach should be continued in this case.
However, the major change will be evident in the added product level. This is due to the reason
that as of now, added product level of Starbucks included designs of the coffee cups and store
ambience. However, it is now recommended that other elements of the services should also be
included in the added product level as in the current time, service quality determines the
attractiveness among the customers especially among the premium customers (O’Cass, Heirati &
Ngo, 2014). It should also be noted that point of differences in terms of core product is less and
these can be enhanced product level. Thus, the customers will not only be attracted towards
Starbucks for quality and taste of the coffee rather they will also get attracted for service quality
like effective customer care and convenience in the ordering system. The sources of gaining
competitive advantages will get increased for Starbucks.
It is also recommended that market penetration strategy should be initiated by them. This
is due to the reason that according to the Ansoff matrix, market penetration strategy can be
beneficial for Starbucks in further gaining more sales revenue from their existing markets. The

8MARKETING MANAGEMENT
existing markets where Starbucks is currently operating are steadily becoming saturated with the
entry of other premium joints. In this case, the existing premium positioning might not be
effective enough (Alstete, 2014). In this case, it is recommended that Starbucks should initiate
market penetration strategy and develop new products across different customer levels. This can
be done under a new mass market sub-brand for catering larger section of customers. Lastly, the
service elements of Starbucks should also include proper and ideal environment for corporate
hangouts as it is becoming more common for the corporate executives to hold their causal
meetings in these joints (Chua & Banerjee, 2013). In the above customer persona, Ana is one
such customer who prefers to hold the corporate affairs in the food joints such as Starbucks.
Hence, these customers should be provided with proper ambience and environment and
infrastructure.
Price
Pricing decision is also important because it will determine their effectiveness and
efficiency in attracting new customers, retaining the existing ones and staying ahead in the
competition. As of now, Starbucks is following premium pricing strategy for maintaining their
premium and high end positioning in the market. However, it is now recommended that product
life cycle based pricing and price skimming strategy should be initiated. This is due to the reason
that with the help of the product life cycle pricing strategy, pricing should be done based on the
stage where they are situated (Prasad, Venkatesh & Mahajan, 2015). For example, any of their
coffee variants that are already being offered from years can be priced low in the current time as
it lost its attractiveness in the current competition. The reduction in the price of these products
will help to cater to the larger sections of customers and sales revenue can be maintained. On the
other hand, the price skimming strategy should also be initiated as it will help Starbucks to

9MARKETING MANAGEMENT
leverage on the initial buzz around a new product in the market and maximized the revenue from
it. Charging higher price for the newly introduced products will still attracts the customers as
they will be interested for the new tastes. Thus, the chance of gaining more revenues from them
is high and the price can be gradually declined with time. Thus, the key objective of the pricing
strategy of Starbucks will be to gain the maximum market reach and attract as much as
population to the stores (Spann, Fischer & Tellis, 2014). Both the customer personas discussed in
the above sections are from the premium and higher end category and beyond that there are
larger portion of the middle class population can also be the target audience for Starbucks and
this recommended pricing strategy can be effective in that.
Promotion
Currently, Starbucks is following Omni channel promotional strategy involving both the
online and offline mediums. However, the level of offline mediums in their promotional strategy
is low compared to their online strategy. This is due to the reason that their current promotional
strategy is in the line of catering to the premium customers only. However, based on their new
market penetration strategy, it is recommended that offline mediums should also be given the
equal consideration and importance especially the traditional mediums (Verhoef, Kannan &
Inman, 2015). For instance, Starbucks should put out external mediums such as billboards in the
central locations in the cities and in tier II cities to attract the major customer segments. These
external mediums should only communicate the new offers to attract the larger customer
segments. On the other hand, it is also recommended that television commercials should be
designed and aired across different popular channels in the prime time. This is due to the reason
that in the current social scenario, television is still having higher market penetration compared
to the social media networks (Ailawadi & Ferris, 2017). For example, in the above customer

10MARKETING MANAGEMENT
persona, it is identified that Edwards is not comfortable with smartphones but he is regular in
watching television. However, he is belonging from the premium class and can afford the
services of Starbucks. Thus, extensive usages of the external mediums will help Starbucks to
cater these types of customer segments. Sales promotion might be another effective mode of
promotion because it will help the new customers to have the hands on experience of the core
product level of Starbucks. In the case of sales promotion, customers can experience the rich
taste and aura of the coffee of Starbucks and it will influence them. There are large number of
customers who are willing to avail the service of Starbucks and can afford also but are not sure
about the quality and other factors of Starbucks. The new recommended promotional strategy
will help Starbucks to cater to the larger customer segments.
Place
As of now, Starbucks coffee is available though both offline and online mediums.
However, the intensity of the offline mediums is more due to the store based service process of
them. Moreover, with the online service, the service elements of Starbucks cannot be availed. It
is recommended that more products of Starbucks should offer through their online services and
in this case, the third party vendors can be beneficial. This is due to the reason that there are
different third parry online food delivering services operating and tie up with them with help
Starbucks to have lower responsibilities for online services. In addition, it is also recommended
that stores of Starbucks should be increased in the new locations especially in the tier II cities.
Currently, Starbucks is only having their stores in the tier I cities and they are following
exclusive distribution approach (Mena et al., 2016). Thus, the presence in the market for
Starbucks is also limited. According to the different market reports, economy growth and
business opportunities are getting more from the tier II cities and thus it is recommended that

11MARKETING MANAGEMENT
Starbucks should have their stores in these areas as well. Moreover, the distribution strategy
should be made more intensive compared to their existing exclusive strategy. This will ensure
more stores of Starbucks and customers will find any stores within their reach. Thus, the more
will be the market availability of Starbucks, the more will be their sales volume.
Process
Effectiveness of the process is also a major determinant for Starbucks due to the reason
that service delivery process will determine the extent to which the customers will be satisfied. It
is identified that at one point of time, Starbucks followed the handmade process of coffee in their
stores but in the later stage they opted for machined process to cater to larger customer segments
and to reduce the service delivery time. Thus, in the current time, the service delivery process of
Starbucks is effective and efficient and is incurring less time (Villamagna, Angermeier &
Bennett, 2013). However, on the other hand, it is recommended that they should follow both the
handmade process and machined process as well. This is due to the reason that there are few
customers such as Edwards who are more preferable towards the old school and authentic flavor.
Thus, these customers can be targeted with the help of having different processes in place. The
more will be the diversity in the process, the more will be the capability of Starbucks in meeting
the expectations of different sets of customers.
Physical evidence
Physical evidence for Starbucks refers to the cups and carriers being provided in addition
to the merchandise being sold by Starbucks in their stores. These merchandises are helping
Starbucks in generating additional sources of revenue along with increasing the brand identity. It
is further recommended that co-branding can also be beneficial for Starbucks in increasing their

12MARKETING MANAGEMENT
physical evidence along with the revenue. For instance, co-branding with the soft drinks brand
and voucher brands will help Starbucks to increase their reach in the market along with
leveraging on the brand value of the partnered firm. Furthermore, it is also identified that the co-
branding of Starbucks should be in the business line or related business line. This is due to the
reason that if the co-branding strategy can be initiated in the related or same business line, then
the customer recalling value will be more and long term viability will be gained by Starbucks.
People
Starbucks is having diverse workforce from different regions across the world. It is
beneficial for them in meeting the expectations of the diverse sets of customers. It is
recommended that polycentric approach to staffing should be followed by Starbucks because it
will help them to meet the local expectations (Lakshman, Lakshman & Estay, 2017). This is
important because different regions are having different taste and preferences towards coffee.
For instance, Americans prefer more bitter and strong taste of coffee while sweet taste is
dominant in the Indian subcontinent region. In this case, initiation of the polycentric approach to
staffing will be beneficial for Starbucks by employing the host country nationals as the
managers. Hence, the will have the better understanding about the local taste and preference
pattern and can design the organizational and business strategies accordingly (Dörrenbächer et
al., 2013). On the other hand, it is also recommended that the elements of the human resource
management such as training and development activities of Starbucks should be adopted
according to the local market trends. This will ensure that the service of Starbucks is based on
the local culture.
Conclusion

13MARKETING MANAGEMENT
This report concludes that the existing marketing mix elements of Starbucks are effective
enough but in order to gain more market share and targeting larger customer segments, these
existing elements are not effective enough. In this case, this report discussed about different and
relevant major customer personas for Starbucks. These personas are drawn on the basis majority
customer base of them. It is identified that each of the customers is having different expectations
and problems. The market mix elements for Starbucks are discussed on the basis of these
customer differences. Each of the seven elements of the marketing mix is discussed in this
report. This report recommended that Starbucks should develop their added product level in
order to increase the points of differences with their competitors. In addition, it is also
recommended that Starbucks should follow market penetration pricing strategy to target the
larger customer segments. There are number of other recommendations also being discussed in
this report based on other market mix elements. It is expected that these recommendations will
be beneficial for Starbucks in gaining long term sustainability and viability.

14MARKETING MANAGEMENT
Reference
Alstete, J. W. (2014). Strategy choices of potential entrepreneurs. Journal of Education for
Business, 89(2), 77-83.
Bookman, S. (2013). Branded cosmopolitanisms:‘Global’coffee brands and the co-creation of
‘cosmopolitan cool’. Cultural Sociology, 7(1), 56-72.
Chen, J., Neubaum, D. O., Reilly, R. R., & Lynn, G. S. (2015). The relationship between team
autonomy and new product development performance under different levels of
technological turbulence. Journal of Operations Management, 33, 83-96.
Chua, A. Y., & Banerjee, S. (2013). Customer knowledge management via social media: the case
of Starbucks. Journal of Knowledge Management, 17(2), 237-249.
Dörrenbächer, C., Gammelgaard, J., McDonald, F., Stephan, A., & Tüselmann, H. (2013).
Staffing foreign subsidiaries with parent country nationals or host country nationals?
Insights from European subsidiaries (No. 74). Working Papers of the Institute of
Management Berlin at the Berlin School of Economics and Law (HWR Berlin).
Lakshman, S., Lakshman, C., & Estay, C. (2017). The relationship between MNCs’ strategies
and executive staffing. International Journal of Organizational Analysis, 25(2), 233-250.
Lemon, K. N., & Verhoef, P. C. (2016). Understanding customer experience throughout the
customer journey. Journal of marketing, 80(6), 69-96.
Mena, C., Bourlakis, M., Hübner, A., Wollenburg, J., & Holzapfel, A. (2016). Retail logistics in
the transition from multi-channel to omni-channel. International Journal of Physical
Distribution & Logistics Management.

15MARKETING MANAGEMENT
O'Cass, A., Heirati, N., & Ngo, L. V. (2014). Achieving new product success via the
synchronization of exploration and exploitation across multiple levels and functional
areas. Industrial Marketing Management, 43(5), 862-872.
Prasad, A., Venkatesh, R., & Mahajan, V. (2015). Product bundling or reserved product pricing?
Price discrimination with myopic and strategic consumers. International Journal of
Research in Marketing, 32(1), 1-8.
Spann, M., Fischer, M., & Tellis, G. J. (2014). Skimming or penetration? Strategic dynamic
pricing for new products. Marketing Science, 34(2), 235-249.
Verhoef, P. C., Kannan, P. K., & Inman, J. J. (2015). From multi-channel retailing to omni-
channel retailing: introduction to the special issue on multi-channel retailing. Journal of
retailing, 91(2), 174-181.
Villamagna, A. M., Angermeier, P. L., & Bennett, E. M. (2013). Capacity, pressure, demand,
and flow: a conceptual framework for analyzing ecosystem service provision and
delivery. Ecological Complexity, 15, 114-121.