Promotion and Pricing
- Clement A
- Apr 14, 2024
- 1 min read
Updated: Apr 14, 2024
(DALLE AI-Generated Photo)
Starbucks uses different promotional strategies to engage with its customers and maintain its brand position as a premium coffee retailer.
Strategies
These strategies include:
Advertising:
Starbucks has accounts on popular social media sites and utilizes those to push out more advertising to existing customers as well as potential customers.
Apart from digital platforms, Starbucks also advertises on TV.
Sales Promotions:
Starbucks utilizes various sales promotions such as seasonal promotions, loyalty programs like its rewards programs, and limited-time offers.
Public Relations:
Starbucks emphasizes community involvement and sustainability through a variety of initiatives. They are committed to improving the lives of people who grow their coffee, as well as the communities around their stores, and as a whole, the planet. They actively work to create opportunities and foster inclusivity which reflects their commitment to social responsibility.
Inclusion and Diversity: Starbucks is dedicated to building a diverse and inclusive company. They focus on increasing visibility and opportunities for underrepresented groups, fostering an environment where everyone feels they belong. This initiative is part of their broader goal to reflect the communities they serve at every level within the company. https://stories.starbucks.com/stories/inclusion-diversity/
Opportunities: Through education and training programs particularly aimed at young people, Starbucks creates pathways to opportunities. For example, they offer programs aimed at engaging youth and providing them with the skills necessary for career success and within Starbucks itself. https://stories.starbucks.com/stories/opportunity/
Community Engagement: Starbucks strives to be a positive force in the communities where they operate. This includes local community service projects and supporting local causes that are important to their employees and customers. You can view their community stories here: https://stories.starbucks.com/stories/community/
Direct Marketing:
Starbucks often uses email marketing campaigns effectively to notify customers of new products and special offers. With their extensive customer database, they can send personalized emails that cater to individual preferences and previous purchase behaviours. This inadvertently enhances customer engagement and loyalty and promotes new or seasonal offerings.
Personal Selling:
Baristas at Starbucks plays a crucial role in the promotional mix by providing personalized customer service. They are trained to offer a high level of customer interaction, from recommending beverages to understanding individual customer preferences, which enhances the overall customer experience. This personal selling approach is integral to Starbucks' strategy of building a loyal customer base and differentiating itself through superior service.
Example Ads:
Some example promotions and ads:
Starbucks is running a promotion called Star Days where you can participate in the “Road to Gold.” It requires you to purchase items to earn “Stars”.
https://www.starbucksstardays.ca/#/landing
This is an example of persuasive and reminder advertising.
Persuasive Advertising: Primarily, this campaign persuades customers to participate in the rewards program by highlighting the benefits of collecting Stars and the rewards they can earn, which encourages increased purchasing behaviour.
Reminder Advertising: For existing customers, particularly those already enrolled in the Starbucks Rewards program, this promotion serves as a reminder to keep engaging with the program and to take advantage of the benefits it offers, thus maintaining customer loyalty.
Starbucks has also introduced an additional menu item “Ooh la lavender.” “Vibe into spring with the new caffeine-free Lavender Oat Chill, featuring subtle floral notes and real dragonfruit pieces. Here for a limited time.”
https://www.starbucks.ca/menu/product/2123857/iced
This is an example of informative and persuasive advertising.
Informative Advertising: This campaign educates the audience about a new product, detailing its unique ingredients and flavour profile, which is critical for attracting customers interested in new experiences.
Persuasive Advertising: By describing the product in appealing terms ("subtle floral notes and real dragonfruit pieces") and noting its limited availability, the ad also persuades customers to try the new drink, while it is available, creating a sense of urgency.
Digital Advertising:
Starbucks uses a range of digital advertising strategies to reach and engage its customers. These include:
Expansion of Digital Platforms: Starbucks is continually enhancing its digital platforms to create a seamless customer experience. This includes the integration of advanced technologies such as AI and machine learning into their operations. The use of these technologies not only improves efficiency but also personalizes the customer experience, significantly impacting customer satisfaction and retention rates. https://stories.starbucks.com/stories/2023/whats-next-starbucks-unveils-long-term-growth-strategy-for-a-limitless-future/
Mobile App Innovations: Starbucks has heavily invested in its mobile app, integrating features that allow for mobile ordering, payment, and rewards accumulation. This aims to cater to convenience that the modern world is leaning towards and it enables Starbucks to maintain a stronger connection with its customers by offering personalized promotions and reducing wait times in stores. https://stories.starbucks.com/stories/2023/whats-next-starbucks-unveils-long-term-growth-strategy-for-a-limitless-future/ https://stories.starbucks.com/stories/2022/starbucks-creating-the-digital-third-place/
Loyalty and Rewards Enhancements: The Starbucks Rewards Program is an integral piece of their digital strategy, it is used to deepen customer relationships. Regular updates to the program provide more personalized choices and rewards, and members are engaged and encouraged to visit their platforms more frequently. Supported by their data-driven marketing efforts, this approach helps in tailoring offers and communications that match individual preferences. https://stories.starbucks.com/press/2018/starbucks-announces-strategic-priorities/
These strategies have been proven effective for Starbucks as they have been an, if not, almost, global entity; They have significantly contributed to Starbucks’ growth in customer engagement and sales. As the world becomes more digital, companies like Starbucks must follow suit to keep up with the ever-changing environment.
Social Media Influencer Advertising
https://keyhole.co/blog/starbucks-social-media-strategy/
Starbucks partners with influencers that align with their brand values to leverage social media influencer advertising efficiently. Campaigns like the Unicorn Frappuccino, they posted 240 posts of which 45% were photos and 48% reels. In addition seasonal promotions have demonstrated the effectiveness of this technique by driving substantial online engagement and cultivating strong customer loyalty. Starbucks uses positive feedback and engagement rates to gauge the performance of these programs, and these metrics show that their influencer collaborations effectively increase customer engagement and brand recognition.
Pushing vs Pulling Marketing Strategies
Starbucks largely uses a pull marketing strategy, which focuses on increasing demand and drawing customers through brand recognition and customer loyalty campaigns. This strategy is shown in their significant use of social media, influencer relationships, and engaging advertising campaigns that speak to consumers' lifestyles and ideals.
Starbucks' attempts to develop a strong brand identity that appeals directly to consumers help support the pull strategy. Keyhole and Econsultancy report that Starbucks uses seasonal promotions like the Pumpkin Spice Latte and unique items like the Unicorn Frappuccino to attract people to their outlets. Starbucks' emphasis on narrative and community, shown by social media initiatives and material like "Starbucks Stories," strengthens their brand appeal and drives customer interest in their products.(https://econsultancy.com/eight-awesome-social-campaigns-from-starbucks/)
This method works for Starbucks because it creates a strong emotional connection with customers, generating a sense of belonging and loyalty to the company. Starbucks maintains its position as a major player in the coffee industry by attracting customers rather than pushing things onto them.(https://keyhole.co/blog/starbucks-social-media-strategy/)
Alternative pricing strategies
Starbucks uses various different price tactics to preserve a premium brand image while catering to a varied client base. Here are a few significant tactics they employ:
Premium Pricing: Starbucks is recognized for charging greater pricing than many of its competitors. This premium pricing strategy is consistent with Starbucks' high-quality image and service-oriented experience, reinforcing the notion of Starbucks as a luxury or treat rather than a coffee shop.
Price Skimming: Starbucks frequently releases new products at a higher price range, leveraging the novelty and uniqueness of items such as the Unicorn Frappuccino or limited edition holiday drinks. Prices may fluctuate over time, depending on the product's life cycle and popularity.
Psychological pricing: Starbucks gives customers the impression that they are getting a better value, such as pricing things just below whole numbers (e.g., $4.95 instead of $5.00). This method can make prices appear lower than they are.
Value-based pricing: Starbucks uses it for some of their products, which reflects their commitment to sustainability and ethical sourcing. Prices are determined by the perceived value of environmental and social responsibility to consumers ready to pay a premium for ethically sourced and sustainable items.
Starbucks uses these price techniques to effectively manage its brand appeal, increase profitability, and serve a diverse variety of customers while keeping its image of quality and sustainability.
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