Starbucks owes its success to its popular coffee and its business tactics – among which is a sophisticated marketing strategy that’s successfully turned a commodity into a destination. The company, which opened its first store in 1971 and has spanned across the globe over the following decades, uses multiple forms of media to build customer loyalty and portray the image of a coffee shop that fills the gap between home and work.
The Third Place
Perhaps the most famous Starbucks marketing strategy is its status as a “third place,” a comfortable hangout for customers that’s distinct from home and work. It’s a concept so central to Starbucks that it’s an explicit part of the company’s history, an effort from chairman and CEO Howard Schultz to bring “a place for conversation and a sense of community” to the domestic market. Starbucks' marketing paints its stores as a destination, a gathering place and a comfort zone for coffee and conversation.
Starbucks emphasizes rewards, both as part of its loyalty program and as ad hoc efforts designed to gather new business. The Starbucks Rewards program offers a free item for every 12 transactions, and the company also holds promotions for those who may not be in the formal program -- for example, via promotions offering a free coffee for those who buy one for someone else. Rewards are time-bound -- if you don't use them within the designated period, they expire. The intent is to get you back to the store to use the reward -- and perhaps buy something else in the meantime.
Few companies market seasonal products as effectively as Starbucks does its drinks. At Starbucks, autumn begins not with Labor Day, but with the debut of the pumpkin spice latte. Gingerbread lattes and red cups characterize the Christmas season. Seasonal beverages keep the menu fresh and also add a sense of urgency for customers, who know that if they miss the designated window to get their fill of those gingerbread lattes, they'll have to wait months for them to reappear.
One key to the Starbucks marketing strategy is its use of online and social media platforms to enhance its brand name. It uses its website, Facebook page, twitter account and other social media outlets to send complementary messages driving readers toward its pages – and its stores. For example, a photo might be pinned on Pinterest but also shared on Instagram, tweeted and posted on Facebook as a cross-promotional strategy. Its social outlets encourage its users to share their experiences – via posts, pictures, hashtags or other measures designed to get others to do the same.
Changing with the Times
Though Starbucks initially was reluctant to shift its focus from coffee, touting the smell of freshly roasted beans, it’s shown a willingness to move into other areas to increase revenue and fend off competition. In-store signage may tout a new line of pastries instead the daily coffee specials, and e-mail blasts offer discounts on breakfast sandwiches to compete with the fast-food establishment next door. By tweaking its menu and marketing those items. it's marketing itself as a breakfast or lunch destination as well as a coffeehouse.