Relationship Marketing Strategies for Starbucks: A Report

This report provides a comprehensive analysis of relationship marketing within Starbucks, examining its development and application. The report begins by defining relationship marketing and contrasting it with transactional marketing, highlighting its advantages in fostering customer loyalty and long-term engagement. It then delves into Starbucks' specific strategies, including the use of the Starbucks app, new product development based on customer feedback, and various promotional methods. The report further explores customer retention methods such as club memberships, discounting, and valued customer booking. The role of customer relationship management (CRM) systems in managing customer interactions and marketing activities is also discussed. Finally, the report concludes by assessing how relationship marketing activities contribute to Starbucks' strategic aims and objectives and the effectiveness of the methods used to retain customers.

Relationship Marketing

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 The development of relationship marketing...........................................................................3
TASK 2............................................................................................................................................5
P2 Application of relationship marketing in Starbucks...............................................................5
P3 Different methods used to attract and retain customers.........................................................5
P5 Use of customer relationship management system in Coffee company.................................6
TASK 3............................................................................................................................................6
M1 Ways in which relationship marketing activities helps in achieving strategic aims and
objectives.....................................................................................................................................6
TASK 4............................................................................................................................................7
D1 Contribution of relationship marketing activities to the effectiveness of the marketing
function........................................................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Relationship marketing is based on creating strong emotional bond with customers to grab
customer attention, retention and loyalty. This report will outline the development of relationship
marketing in Starbucks. Starbucks Corporation is an American coffee company and coffee house
chain. Starbucks was established in Seattle, Washington in 1971. Further, it will derive
application of relationship marketing and type of methods firm incorporates for retaining
consumers.
TASK 1
P1 The development of relationship marketing.
Relationship marketing is basically a strategy which is designed to grab customer loyalty,
interaction and long-term engagement with customers. It is helpful in building of long-term
relationships between customers and the Starbucks Company.
Figure 1: Relationship Marketing
(Source: Venn diagram - Relationship marketing, 2019)
Advantages of relationship marketing in Starbucks

 Relationship marketing is helpful in attaining consistent Customer Experience in the
Starbucks. It is helpful to ensure customer’s needs with minimum efforts.
 It is helpful in doing innovation of their consumer products through their website
Mystarbucksidea.com to invite and provide ideas by Customers.
 Customer feedback can quickly be addressed through Relationship marketing. Starbucks
relationship marketing facilitates an open communication and cooperation with consumer
concerns and complaints (Baker, 2014).
Difference between Transactional marketing and Relationship marketing
Transactional marketing Relationship marketing
It is focused on only one objective that is
making high sale of the products. It uses tactics
such as advertising and promotions to increase
turnover of the Company.
It is focused on broad and long-term
objectives. It is focus on maintaining long-
lasting relationships with customers and to
retain customer interest for the future.
Reasons for development of relationship marketing
The mission of Coffee house company is to inspire and nurture the human spirit and One
person, one cup and one neighbourhood at a time. However, objective of firm is to increase
market share and to provide better customer services. In accordance with analysis of advantages
of relationship marketing it can be said that there is a need of development of relationship
marketing in Starbucks because their objective is to provide better customer service. Further, it is
necessary for the business to focus on establishing their brand value and to retain consumers to
attain loyalty.
The development of relationship marketing of Starbucks will be done with the help of
marketing mix concept which consist of 7Ps product, price, place, promotion, people, processes
and customer service (Hajli, 2015). In accordance with concept Starbucks will focus on product
by providing customer brief detail about different types of coffee beans used for their beverages.
This will help the firm in managing transparency in coffee services. Further, in price focus of
firm will be on shifting from premium pricing to skimming price with the motive of providing
quality services to consumers. In place concept Starbucks will ensure that its services and

products are similar at every location across the globe. Further, promotion will be done by firm
by offering services at discounting offers and vouchers.
On the other hand, to manage success of relationship marketing Starbucks will be focusing
on people where firm will provide training to their employees to assist customized needs to
consumers. In process management will seek for instant follow up review and feedback by the
customer on website Mystarbucksidea.com. Last aspect of marketing mix that is physical
evidence will be managed for relationship marketing by fulfilling customized presentation of
beverages.
TASK 2
P2 Application of relationship marketing in Starbucks
As per marketing mix for developing relationship marketing Starbucks focuses on
introducing and promoting their Starbucks app with its smart features which supports direct
interaction with consumers. Further, to manage innovation in their products in products coffee
house company aim at introducing new coffee flavours like French Vanilla, Pumpkin Spice and
Caramel Macchiato based on customer feedback. To cut off price competition firm shift its focus
from specific price strategy like competitive, unit, skimming, etc.
On the other hand, development of relationship marketing is applied with successful
promotion plan where firm focuses on attracting visitors with discounting offers and schemes
(Vieira, Winklhofer and Ennew, 2014). To give unforgettable experience to their customers and
to build relationship marketing company focuses on opening new stores outlets at the middle of
the town to ensure easy consumers reach. In addition, firm focus on ongoing investment on
front-line employees to give them training. In Physical evidence firm provides customer Coffee
robusta and coffee arabica beans more into their coffee delight.
P3 Different methods used to attract and retain customers.
The Starbucks use club membership and discounting method to attain and retain customer
loyalty by attracting them through various offers. Starbucks has created reward scheme for its
loyal customers. This will help the firm in engaging with customers and managing successful
relationship marketing. In this customer service function of Starbucks focuses on giving
discounts through Starbucks gifts cards, Starbucks coupons and promo codes and through
amazing deals on beverages. In addition, the firm gives special discounting on birthdays and
anniversaries to attract and retain customers (Vieira, Winklhofer and Ennew, 2014).

On the other hand, coffee company make use of valued customer booking method where
visitors are attracted through 3R's Response, relationship and revolution and successful customer
loyalty method. Starbucks plans to infuse human connection in response stage where firm
provide valued booking to visitors. Further, relationship is managed by setting standards for
service policies and communication with potential consumers. Lastly, revolution is created by
digital communication by virtual teams over quality of services. In accordance with this function
customer service function is maintained by pre transactional, transactional and post transactional
customer services (Gautam and Sharma, 2017). In pre transactional service stage focus of
Starbucks is on providing valued customer booking. In transactional coffee firm offer services to
consumers such as order cancellation or customization of order and in post service Starbucks aim
at seeking suggestion of visitors over their experience. These are the successful methods which
are used by coffee company for retaining consumers and gaining individual loyalty.
P5 Use of customer relationship management system in Coffee company
Customer relationship management system of Starbucks is managed through a software
which helps the firm in managing interaction with potential visitors of Coffee house. The system
helps in managing indirect contacts such as billing, analysis of customer data and triggering sales
promotion activities (Ritter and Andersen, 2014). This software is used for reviewing and
planning of marketing activities like analysis of customers into different target groups, sharing
intelligence between different departments within the Starbucks. Customer relationship
management campaign is the most successful campaign of Starbucks for the gold cards
members. A database is being made for their customers to give special benefits on their
birthdays. The company make use of website that is MyStarbucksideas.com where customers put
their views on the modification of their products. Apparently, firm make use of CRM software of
planning of market activities where firm aim at determining response of buyers over business
and its services.
TASK 3
M1 Ways in which relationship marketing activities helps in achieving strategic aims and
objectives
The aim of Starbucks is to inspire and nurture the human spirit and One person, one cup
and one neighbourhood at a time. Relationship marketing helps in achieving aim by fulfilling
basic visitors needs like special members offers and benefits like free beverages in-store refills

which helps them to attracts and inspire the human spirit to enjoy premium quality coffee.
Further, objective is to increase market share and to provide better customer services for which
focus of Starbucks is on making consumers aware about different types of premium coffee beans
used for making coffee. This helps the firm in managing transparency in services and gaining
individual trust and loyalty which is the basis of relationship marketing.
M2 Effectiveness of methods used to retain customers
Starbucks uses club membership, discounting and valued customer booking method to retain
customer loyalty. Club membership is effective approach of retaining customers because in this
firm rewards member get other benefits like free beverages in-store refills where Starbucks is
able to determine interests and desire of visitors. Discounting method of Starbuck like gifts
cards, Starbucks coupons and promo codes are effective as the firm is able to attract more
customers which helps in increasing sales and creating awareness (MacInnis, Park and Priester,
2014).
Valued customer booking method is an effective method of relationship marketing to retain
customer because it helps the coffee firm in meeting individual expectation. This is beneficial for
Starbucks because with the helps of this organisational is able to understand and meet marketing
funnel stages that is loyalty, advocacy, awareness, consideration and conversion.
TASK 4
D1 Contribution of relationship marketing activities to the effectiveness of the marketing
function
Relationship marketing is based on Customer interaction which helps Starbucks in
marketing functions that is marketing planning which is based on customer needs, market trends,
choices and preferences in the food beverages. Relationship marketing is based on attaining
Customers complaints and queries which is contributes in developing marketing plan on the
basis of reviews and suggestion over quality and changes in food and beverages.
CONCLUSION
The report concluded with development and application of relationship marketing by
Starbucks. The study discussed about Customer relationship marketing system and methods
which are essential Strategy for Starbucks for customer retention and loyalty.

REFERENCES
Books and Journals
Baker, M.J., 2014. Marketing strategy and management. Macmillan International Higher
Education.
Gautam, V. and Sharma, V., 2017. The mediating role of customer relationship on the social
media marketing and purchase intention relationship with special reference to luxury
fashion brands. Journal of Promotion Management. 23(6). pp.872-888.
Hajli, N. ed., 2015. Handbook of research on integrating social media into strategic marketing.
IGI Global.
MacInnis, D.J., Park, C.W. and Priester, J.W., 2014. Handbook of brand relationships.
Routledge.
Ritter, T. and Andersen, H., 2014. A relationship strategy perspective on relationship portfolios:
Linking customer profitability, commitment, and growth potential to relationship
strategy. Industrial Marketing Management. 43(6). pp.1005-1011.
Vieira, A.L., Winklhofer, H. and Ennew, C., 2014. The effects of relationship marketing on share
of business: a synthesis and comparison of models. Journal of Business-to-Business
Marketing. 21(2). pp.85-110.
Online
Venn diagram - Relationship marketing. 2019. [Online]. Available through: <
https://www.conceptdraw.com/examples/diagram-of-relationship-marketing>.