Business Innovation at Starbucks

Business Innovation at Starbucks

Since its founding days in the early 1990s, Starbucks has strived to build its brand identity by offering customers a relaxing and enjoyable experience. From the very beginning, the experiential aspect of the brand has been consistently and effectively implemented in all its stores across the world. In addition, Starbucks has also built its brand on things that tend to be out of the box, by consistently defying conventional wisdom.

When companies were aggressively advertising, Starbucks decided not to advertise. When cost cutting was the dominant paradigm of the industry, Starbucks chose to emphasize non-routine procedures to create excitement among the baristas instead of streamlining procedures to minimize cost. Unlike most other companies, Starbucks made its employees its partners, by offering them stock options and health insurance.

Question 1: Innovation at Starbucks (30 marks, 300 words)

1. Why is Starbucks an innovative company? Support your answer with examples. (10 marks)
2. Discuss the role of four business functions at Starbucks. Give at least two innovation examples for each business function at Starbucks (20 marks)

Question 2: Product offering and targeting (30 marks, 300 words)

1. Discuss the three levels of a product by using Starbucks’ Vanilla Latte as an example. (15 marks)
2. Discuss the four targeting strategies. Which targeting strategy does Starbucks use for its Vanilla Latte beverage? Justify your answer. (Check Starbucks website if you are not familiar with this product) (15 marks)

Question 3: The marketing mix and innovation (40 marks, 500 words)

Starbucks’s marketing strategy consists of market segmentation, targeting, positioning and the marketing mix. Starbucks’s marketing strategy enables the company to be a successful player in the global market. Using your B207A course material, evaluate how the innovation in Starbucks’s marketing mix elements is used to position the products within the minds of consumers. Your answer should contain the following:

• Starbucks’s market segmentation and targeting
• What is positioning. How is it related to the marketing mix?
• Examples of Starbucks’s marketing mix elements and their contribution to brand positioning.