Starbucks

A: In 1990, Starbucks entered the market as a premium brand based on three factors:

1. Coffee: No one can deny the fact that at that time Starbucks was a market leader in the category of premium coffee. There weren’t any premium coffee competitors in the market at that time which created a monopoly of Starbucks creating a new trend of coffee in the market. At that time there was no strong concept of coffee in US, so SB bought the European culture in US and provided the customers with a premium high quality product. Moreover, whole coffee beans became the core revenue business of Starbucks because of the fact that SB never compromised on quality.

2. Ambiance: Starbucks wanted to create a third home for the affluent customers of Starbucks. The décor along with music created a relaxing environment for the customers which created loyal customers of Starbucks with frequent visits of almost 18 visits per month. Starbucks philosophy was simple; they didn’t want to compromise on the services they provided to the customers. That’s why they were very against franchise system which in turn dilutes brand image.

3. Service: What attracts a customer more than quality and environment? Worldwide recognized fact is that the level of service which a company provides creates bonds between the customer and the company. The best the service is, the stronger the bond will be. Starbucks creates sense of belongingness for its customers so that every time they visit the store they will feel welcomed. Starbucks provided soft skills to Baristas so that they try to know their customers along with their preferences in the coffee. Their value preposition was simple, provide the customer with the best service as possible.