Overview of the Company Starbucks

Starbucks Corporation is an internationally renowned coffeehouse chain famous for its high-quality coffee,
unique customer experience, and powerful brand identity. Established in 1971 in Seattle, Washington,
Starbucks has expanded to become the largest coffeehouse chain globally, functioning in more than 80
countries with thousands of locations around the globe.

Business
Overview
Figure 01: Starbucks
Established: 1971
Creators: Jerry Baldwin, Gordon Bowker, and Zev Siegl
Main Office: Seattle, Washington, USA
CEO: Laxman Narasimhan (current as of 2023)
Sector: Food & Beverage (Specialty Coffee)
Tagline: “Motivated Instances of Bonding”

Model of Business
Starbucks functions under a premium coffeehouse model, providing top-notch coffee, artisanal drinks, and
food selections. Its approach to business centers around:

Company-operated locations & franchised locations: A combination of direct control and franchise
agreements.
Product variety: An extensive selection of coffee, tea, baked goods, and branded products.
Customer experience: A "third place" situated between home and work, highlighting atmosphere and
service.

Worldwide Presence
- More than 35,000 shops across the globe.
- Powerful presence in North America, Asia-Pacific, and Europe.
- Strategic alliances (e.g., Tata Starbucks in India).

Main Advantages
Brand Loyalty: A solid customer foundation characterized by elevated retention levels.
Innovation: Seasonal drinks, sustainability efforts, and digital integration (e.g., Starbucks Rewards App).
Sustainability & Responsible Sourcing: Dedication to sourcing coffee ethically via initiatives such as
C.A.F.E. (Coffee and Farmer Equity) practices.

Obstacles & Possibilities

Challenges: Rivalry from domestic and international brands, variable coffee prices, and operational
expenses.

Analysis by Using STP

Figure 02: STP

Starbucks' entry into the Indian market exemplifies a strategic use of Segmentation, Targeting, and
Positioning (STP) to modify its offerings according to local preferences, cultural nuances, and economic
circumstances. This strategy becomes apparent in the company's alterations to its range of goods, retail
architecture, and marketing strategies.

Segmentation
A sophisticated segmentation strategy is necessary considering the huge scope and variety of the Indian
market. Starbucks identified significant markets based on variables including economic conditions, social
norms, and urban development:

1. Urban Professionals: Recent graduates with financial resources who are attracted to multinational
companies have grown more and more prominent in big cities like Bangalore, Delhi, and Mumbai.
2. Traditional Tea Drinkers: In light of India's long tradition of tea use, an important
percentage of the populace favours tea to coffee.
3. Price-Sensitive Consumers: A significant segment of the market is cost-conscious, demanding
high-quality but affordable solutions.

Targeting
Starbucks modified their strategies to comply with the requirements of these particular market segments:

1. Urban Professionals: Starbucks targeted wealthy consumers expecting an additional upscale

coffee experience by positioning itself as a premium brand. This category finds significance in the
general atmosphere of stores like Starbucks, which operate as a sort of "third place" between home
and work.

2. Conventional Tea Drinking: Acknowledging tea's cultural significance, Starbucks launched the
Teavana collection, providing an array of teas, featuring a blend of noble Indian spices specifically
aimed at the Indian skies.

POSITIONING
Starbucks has established itself as a brand that honors and incorporates local culture, providing the
compensation of globally sourced coffee: high-quality coffee:

1. Product modification: Beyond tea, Starbucks incorporated local flavors into its food offerings,
featuring items like Tandoori Paneer Roll, Malai Chom-Chom Tiramisu, and Elaichi Mewa
Croissant. These statements reflect Indian flavor preferences, blending classic scents with the
Starbucks style. (Accredian, 2023)

2. Store Design: Each Starbucks outlet in India reflects local aesthetics and culture. For instance,
stores in Mumbai feature wooden tables and traditional carvings, while those in Pune showcase
copper artwork, paying homage to the city's copper culture. This localization fosters a sense of
familiarity and belonging among customers. (ABITA LLC&MARKETING JAPAN, n.d.)
 3. Marketing Communication: The Starbucks promotional campaign in India emphasizes cultural
integration and community involvement. Working together with local artists and engaging in
traditional festivals highlights the dedication of Indian culture brands. (Sally, 2024)

Starbuck's current IMC

Figure 03: IMC of Starbucks

This publication provides a thorough analysis of Starbucks' promotional mix, additionally referred to as
integrated marketing communication (IMC), in India, including an emphasis on how the company has
modified its marketing strategy to suit local preferences, cultural peculiarities, and consumer behaviors'.

1. Advertising: Creating a Localized Appeal

For the purpose of to connect with its target audience in India, Starbucks has intentionally leveraged
digital as well as traditional advertising. TV & Print Ads: Starbucks has employed print and
television during special campaigns, but nowadays its main concentration is on digital marketing.
For instance, Starbucks advertising exclusive goods in newspapers around festivals like Diwali,
emphasising its beverages that are currently accessible only in India. Outdoor Billboard & Transit
Advertising: Massive billboards in major towns like Bangalore, Delhi, and Bombay promote
loyalty programs, new store openings, and seasonal beverages. In order to guarantee visibility in
areas with significant foot traffic, Starbucks additionally places billboards on transportation
systems, especially metro stations and airports.

2. Public Relations: Strengthening Brand Trust

By promoting social causes while sustaining strong relationships with stakeholders, Starbucks
has built up an established corporate reputation in India. Local Partnerships (Tata Alliance):
Starbucks sources superior Indian coffee beans through its joint venture with Tata Global beverage
company (Tata Starbucks). Its public image is strengthened by this local link, which also appeals
to Indian consumers who value homemade products. Social Responsibility as well as Community
Participation: In India, Starbucks frequently takes part in CSR (Corporate Social Responsibility)
 initiatives. Brand trust is strengthened via efforts like "Empowering Women in Coffee" and youth
employment training, that promote India's aims for growth in both society and economy.

3. Sales Promotions: Driving Customer Engagement

A crucial aspect of Starbucks India's acquisition and retention of clients strategy includes sales
promotions. Seasonal Revenues & Limited-Edition Items: Particularly during festivals like Diwali
and Holi, Starbucks provides India-only beverages like Cardamom Latte, Masala Chai, and
Turmeric Latte. These brief advertisements generate a sense of urgency and encourage return
visits. Happy Hours & Discount Offers: To attract more shoppers during off-peak hours, Starbucks
frequently organises Happy Hour promotions and "Buy One Get One Free" (BOGO) deals on an
assortment of beverages. Starbucks Rewards Program: By honouring every purchase alongside
stars which can be swapped for complimentary beverages, birthday treats, and high-quality
products, the My Starbucks Rewards Program encourages customer loyalty.

4. Direct Marketing: Personalized Customer Engagement.

Starbucks leverages an assortment of personalised channels to interact with its consumer base
through data-driven direct marketing. Email and SMS Campaigns: Based on previous buying
decisions, registered Starbucks India customers receive individualised emails with regard to the
debut of new products, special deals, and discounts. Push Notification by means of a Mobile App:
powered by artificial intelligence recommendations have been employed by the Starbucks India
app to advertise beverages, generate loyalty advantages. and notify consumers of their overdue
honors.

5. Personal Selling: The Starbucks Experience

Starbucks emphasizes in-store personalisation to enhance the overall customer experience. Trained
Baristas: In India, baristas are crucial in upselling while offering tailored suggestions according to
the preferences of their customers. The brand sets themselves apart from its local competitors by
making sure that every encounter at the counter is pleasant and interesting. Personalisation &
Customizations: For the purpose to satisfy an extensive variety of Indian taste buds, Starbucks lets
consumers modify their drinks (sugar levels, preference milk, supplementary espresso shots, etc.).

6. Digital & Social Media Marketing: Engaging the Youth & Millennials
In India, Starbucks is actively pursuing a digital-first plan of action, engaging younger consumers
on social media and online. Advertising on Facebook and Instagram: Starbucks engages in
interactive advertising tactics like influencer collaboration, holiday-themed posts, and photo
challenges to make its brand extremely accessible to Indian millennials. YouTube Video
Marketing: Starbucks India strengthens its premium brand positioning by producing top-notch
promotional videos that highlight coffee craftsmanship, coffee beans of Indian origin, and
sustainability endeavors. Starbucks Mobile App: The app enhances customer convenience includes
features which involves contactless purchases, mobile ordering, and AI-based recommendations.

7. Event Sponsorships & Local Collaborations

 Starbucks India promotes its reputation by collaborating with local events and endorsing initiatives.
Cultural Festivals & Influencer Collaborations: Starbucks provides distinctive menu items and
collaborates with Indian social media influencers to promote them throughout regional celebrations
like Diwali, Durga Puja, and Navratri. Book Readings & Open Mic Events: In along with serving
coffee, Starbucks frequently promotes community-driven events including poetry slams and book
readings, establishing a "third place" experience. Sustainability Partnerships: To keep improving
its standing among consumers, Starbucks works with Tata Trusts upon an assortment of
sustainability endeavours, notably recyclable cups and ethical coffee sourcing.

Starbucks' IMC Success in India

Via the commencement of a multi-channel, customized IMC strategy, Starbucks seamlessly integrates
Indian cultural preferences with global branding. A flawless brand experience all throughout public
relations, advertising, sales promotions, direct marketing, personal selling, digital marketing, and event
sponsorships is provided by its promotional mix.

Marketing Mix to Starbuck.

Figure 04: 8P of Marketing Mix

To enhance its presence in the Indian market, Starbucks needs to improve its 8P Marketing Mix (Product,
Price, Place, Promotion, People, Process, Programs, and Performance) by focusing on affordability, cultural
tastes, and digital interaction.

1. Product - Broadening Community-Based and Healthier Choices

 Add more beverages that are specific to India, including Masala Chai Latte, Filter Kaapi, Thandai
Cold Brew, and drinks infused with Paan.
 Broaden health-focused choices, such as sugarless, keto-compatible, and plant-derived milk
substitutes.
 Provide local snacks such as Vada Pav, Samosas, Poha, and Millet Cookies to suit regional
preferences.

2. Price - Budget-Friendly & Structured Pricing

 Local pricing strategies to enhance product accessibility in Tier-2 and Tier-3 cities.
 Introduce 99 Rupee “Mini Starbucks” choices for budget-conscious consumers, maintaining
affordability while upholding quality.
 Coffee subscription plans, enabling regular customers to access reduced monthly bundles.

3. Place - Increasing Reach and Accessibility

 Establish express kiosks at metro stations, IT parks, and airports for fast-service patrons.
 Increase the number of drive-thru stores on primary highways and in city regions.
 Expand reach in Tier-2 and Tier-3 cities (Indore, Chandigarh, Lucknow, etc.).

4. Promotion - Captivating & Digital-First Promotion

 Collaborations with local influencers to build a more relatable online presence.
 Festive promotions featuring exclusive beverages and merchandise inspired by Diwali/Eid.
 Provide environmentally-friendly discounts for customers who bring reusable cups to encourage
sustainability.

5. People – Improving Customer Experience and Inclusivity

 Enhance barista training to boost personalization and involvement.
 Hire additional women and individuals with disabilities, strengthening Starbucks’ dedication to
inclusivity.
 Recognize dedicated employees by offering them professional advancement and training
initiatives.

6. Process – Quicker, Smoother, & Technology-Driven Solutions

 Improve the Starbucks app by incorporating AI-driven suggestions and mobile ordering features.
 Implement self-order kiosks in busy locations to decrease waiting periods.
 Enhance the supply chain with Tata Coffee for sustainable and economical sourcing.

7. Performance – Monitoring Progress & Sustainability Objectives

 Leverage customer insights and data analysis to enhance products.
 Strive for carbon-neutral operations by 2030, prioritizing sustainability and responsible sourcing.
 Track the development of Tier-2 and online sales to secure sustainable success.
 Figure 05: High and Low Mobility

The distribution by the hour, day, month, and year is an important segmentation when
characterizing and analyzing a POI, since it allows: estimating the times and schedules of certain
premises or locations and knowing when they are more and less crowded, estimating the
average time that certain records are spent in or near specific areas, finding the times of day that
are more and less favorable for implementing a product or service.

(Footfall Analytics: The Largest Starbucks in India - PREDIK Data-Driven, 2021)

Conclusion
With a well-executed Segmentation, Targeting, and Positioning (STP) model and an integrated
marketing communication (IMC) strategy that appeals to local customers, Starbucks' strategic
approach in India is impressive. Starbucks is a high-end but culturally sensitive coffee shop that
has effectively positioned itself by combining localized products with global brand consistency. Its
competitive edge in the Indian market is further reinforced by its marketing mix, which emphasizes
affordability, digital engagement, and community-based inclusivity. Starbucks must keep
improving its tactics by catering to local preferences, growing into Tier-2 and Tier-3 cities, and
utilizing technology-driven customer experiences if it hopes to sustain long-term growth. Starbucks
can maintain its market dominance and strengthen its relationship with Indian customers by striking
a balance between premium branding and accessibility.

Reference
 Accredian. (2023, October 9). How Starbucks conquered the world through expansion,

localization, & brand building success? - Accredian blog. Accredian Blog.

https://blog.accredian.com/how-starbucks-conquered-the-world-through-expansion-

localization-and-brand-building-success/

 ABITA LLC&MARKETING JAPAN. (n.d.). Starbucks’ unique growth strategy and

future prospects in India | ABITA LLC&MARKETING JAPAN.

https://1xmarketing.com/news/en/world-marketing-diary-240917075521/

 Sally. (2024, September 13). 10 Customs and Traditions in Indian Culture - Authentic

India Tours. Authentic India Tours. https://www.authenticindiatours.com/2021/02/10/10-

customs-and-traditions-in-indian-culture/

 Footfall analytics: The largest Starbucks in India - PREDIK Data-Driven. (2021,

December 15). PREDIK Data-Driven -. https://predikdata.com/footfall-
analytics-the-largest-tata-starbucks-in-india/