Context, Need, Pricing of Starbucks - Research Paper

Paper Type:  Research paper
Pages:  6
Wordcount:  1517 Words
Date:  2022-12-20


Starbuck was first started in 1971 as a single store located at a place that is historic in Seattle's Pike Place Market. By then it was a simple narrow front store. It offers one of the finest freshly roasted whole coffee bean in the whole wide world. These coffee beans are sourced from firms in Asia, Africa, and Latin America; these coffee beans are grown under very high-quality standards, using ethical farming techniques to source out the best quality coffee bean. The name was out of Moby Dick inspiration. He catalyzed the romance of seafaring and the high seas tradition of the coffee traders who existed. The sea inspired its company logo. In 1983 it was sold to Howard Schultz after he visited Italy were the romantic experience of the coffee from the coffee bar was so captivating. He had envisioned to bring that Italian coffee bar back in the United States. That's when he opted to go back and buy Starbucks to start a rich culture of taking coffee that exists up to date. Starbucks Company has not been settling for less but comes up with an innovative way of expanding its business through product diversification. They have joined hands with Anheuser-Busch and came up with a new Teavana Craft Iced Teas bottled product. This product is more than just normal tea or fruits or botanicals. It comes with six different flavors of passion tango herbal tea, peach green tea, mango black tea, pineapple berry blue herbal tea, unsweetened Meyer lemon black tea and unsweetened strawberry apple green tea which come with the correct amount of sweetness that was crafted from the finest botanical, teas and natural, premium fruit flavors (Ozer & Zheng, 2012).

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Branding and Idea Context

Corporate Mission

"Create a modern day tea culture with tea products and experiences that we hope our customers will enjoy." Starbuck aim catering the needs of the tea loves by experiencing Teavana Craft Ice Tea which brings bold flavors, tea innovation and exotic blends in one cup that the customers would definitely enjoy (Kapferer, 2012).

Internal and External Product Marketing

Premium Quality Crafted Products

Starbuck has a rich history of producing a quality coffee product. This history itself is one of the marketing strategies in promoting Teavana Craft Ice Tea. Through their loyal customer and their popularity, they can take advantage of it to push the new product in the market.


Starbuck has always positioned itself as a place where one can sit down and relax while sipping his/her drink with ease. It offers an excellent customer experience by creating a good and peaceful environment. Segmentation: offers different privileges at one single place. People who are traveling can stop by and have a drink in a relaxed environment. The upper class or the middle-upper class and the economic upper class can all be accommodated and feel welcomed in a place that is usually peaceful.

Unique brand merchandise: the new product has a Starbuck logo printed on the bottle. The bottle looks attractive and pushes the brand name further (Mooney, 2007). Ethical brand: Starbucks has always branded itself as a client-oriented, ethical brand and quality focus. Apart from their good looking store, it is known to operate a strong and unique brand.

Advertising: Starbucks has to invest in advertising on television commercials on their new Teavana Craft Ice Tea. They have been able to reach a bigger audience through these commercials.

Marketing through social media: Starbucks has been known to be active in social media; they have more than 500 videos in YouTube pushing for their products and brand name.

How It Is Differentiating From the Competition

Connects With Its Customers

Starbuck creates a strong emotional bond with its customers that makes them feel home. They always emphasize building a positive customer experience.

Reward Card

Starbuck has introduced a reward card to provide benefits to clients the more they make their purchases.

Quality Coffee Beans

Starbucks is known from our sourcing quality coffee bean to make their coffee. Since they have diversified in making Teavana Ice Tea they always strive in sourcing quality ingredient from the farms.

Alignment of Pricing With Market Position and Corporate Mission

Starbuck is known to be charging 25% more than the value brand, and people still buy the coffee. It has established its brand and clients have gained its trust in producing quality beverages. The drink has always nurtured the spirit of people through its romantic experience you have while drinking it.

Substantiated Opinion on Brand Effectiveness

Starbuck has taken its precise time to build its brand. It has always been clear to its customers that they source their quality ingredients straight from the farm. They are keen on every step when making their products. These features have always sold the name of the company within and beyond their borders.

Defining Product and Service Needs

Buying style of organizational buyers and why they are a good choice. Young executive generation is a good target of our product since the bottle is stylish and gives you sort of a class when you are seen with it.

What Unsatisfying Need the Product or Service Fulfilled

Teavana Craft Ice Tea was only locally available because it was packed in cups. After partnering with Anheuser-Busch who came up with the bottles, Starbuck can now supply across Europe, Africa, and the Middle East to share the great experience of tea culture. It is a refreshing drink that is mostly served will cold during the summer.

How Customers Seek Information to Fill the Need

This product is useful when it is hot during the summer, and you need to refresh yourself with a cold drink to cold your body temperature. It is rich in antioxidant which prevents cell damage. It helps in losing weight and also helps to reduce the chances of getting heart disease (Venkatraman & Nelson, 2008).

How the Product Is Purchased (Characterize the Buying Situation)

The product is found in high-end stores across the nations. It can be bought online through the website or through a mobile app.

Why Your Chosen Target Market Is the Best

On-the-go audience: they are the best target market since they would prefer to catch a light drink of Teavana Ice Tea while they are still moving on with their journey. They usually spend a lot of time in their car going to different places like the gym, their child's sporting activities or to the market (Friedman & Parkes, 2003).


Explain the fixed and variable cost and how these fit with the company's short and long term goals.

When the fixed cost is higher than variable cost a high margin is achieved in long term goal since the revenue will increase but the cost won't. While in short term goals the margin would be lower (Kamp, n.d).

Examine competitors' pricing and explain the reasoning for the difference

Differentiation: Starbuck prices are higher because they usually strive to be up to date with the latest technology. This makes them unique and outstanding from the rest of the competitors'. Value of authority: Starbuck has positioned itself on a higher rank when it comes to coffee and can charge premium price without losing its client. Most of their new products are high in price because they are known to be of high quality.

Quality: when people feel the value of their money, they will be willing to spend to get the good or service. Starbuck has proven itself in producing high-end goods. Estimate how much you think the target market is willing to pay for your product/service. The drink cost Twenty dollars per bottle because of intangibles. This is a unique drink that has been created with a secret formula that has been patented. It cannot be replicated by any other company. It is one of a kind product.

What pricing strategy is most appropriate and why?

The premium strategy is most appropriate when it comes to pricing of the new product. Starbuck has already established a good reputation of establishing premium quality goods and services, and it would only work to their advantage if they continue with the tradition. The clients believe there is value on their products and don't mind the price tag (Adams & Lamont, 2003).


Adams, G. L., & Lamont, B. T. (2003). Knowledge management systems and developing sustainable competitive advantage. Journal of Knowledge Management, 7(2), 142-154. doi:10.1108/13673270310477342

Friedman, E. J., & Parkes, D. C. (2003). Pricing WiFi at Starbucks. Proceedings of the 4th ACM conference on Electronic commerce - EC '03. doi:10.1145/779950.779978

Kamp, B. P. (n.d.). Predatory Pricing and Strategic Entry Barriers. 21st Century Economics: A Reference Handbook, 135-140. doi:10.4135/9781412979290.n13

Kapferer, J. (2012). The New Strategic Brand Management: Advanced Insights and Strategic Thinking. London, England: Kogan Page Publishers.

Mooney, A. (2007). Core Competence, Distinctive Competence, and Competitive Advantage: What Is the Difference? Journal of Education for Business, 83(2), 110-115. doi:10.3200/joeb.83.2.110-115

Venkatraman, M., & Nelson, T. (2008). From servicescape to consumptionscape: a photo-elicitation study of Starbucks in the New China. Journal of International Business Studies, 39(6), 1010-1026. doi:10.1057/palgrave.jibs.8400353

Ozer, O., & Zheng, Y. (2012). Behavioral Issues in Pricing Management. Oxford Handbooks Online. doi:10.1093/oxfordhb/9780199543175.013.0020

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Context, Need, Pricing of Starbucks - Research Paper. (2022, Dec 20). Retrieved from

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