Chapter 5  | Survey and Observation 153a Online Video Case 5.1
Starbucks: Staying Local While Going
Global Through Marketing Research
Named after the first mate in the novel Moby-Dick, Starbucks is the largest coffeehouse company in
the world. As of 2014, it had more than 18,000 stores in over sixty countries. The company’s objective is to establish Starbucks as the most recognized and respected brand in the world. It expects
to achieve this by continuing with rapid expansion of retail stores and growing its specialty sales
and other operations. It will also continually pursue other opportunities to leverage the Starbucks
brand through new products and new distribution channels that meet consumer needs determined by marketing research. Over the last two decades, Starbucks has revitalized the coffee industry. The inspiration behind Starbucks was conceived when CEO Howard Schultz visited Italy.
At that time, Starbucks was a coffee company, and people were very passionate about the coffee,
but in Milan, Howard saw the passion around the coffeehouse experience. In Milan, Howard
went from one espresso bar to the next and saw how people at the coffeehouses knew each other.
These people were getting their daily coffees, but they also were making daily connections with
other people, with the baristas, and with the artistry; the folks making the drinks were connecting
with their customers and knew them personally. From this experience, Howard recognized that
although Starbucks was passionate about the coffee, it also had the opportunity to be equally passionate about the coffeehouse experience.
Marketing research determined four strategic pillars for expressing the Starbucks brand. The
four pillars are (1) the coffee, which is Starbucks’ foundation and which gives Starbucks its credibility; (2) some of the finest products that are associated with the coffee experience; (3) the warm,
welcoming, and inspiring environment; and (4) community involvement. Even though the coffee
and the products are important, the key to Starbucks’ success has been the latter two. It has designed an environment that is warm and welcoming and provides an experience that makes the
company a part of the community or local culture. It has been able to achieve this success by emphasizing the Starbucks culture.
Starbucks also draws upon customers for ideas by conducting extensive marketing research.
Many of its products and services are a direct result of suggestions from patrons or local employees.
Much more than most companies, consumers touch and influence the corporation. Many innovations and retail items resulted directly from customers’ feedback obtained by conducting marketing research and by suggestions made to the baristas. From customized CD music collections to
sales of sandwiches, gums, and chocolates—all were a result of customer recommendations. Many
stores even offer wireless Internet access in response to customer demand. Through its baristas,
Starbucks found that people were interested in an iced Starbucks drink and a blended Starbucks
drink, and thus the Frappuccino was born—an idea that came from customers and the baristas
rather than corporate headquarters.
This local connection with customers and the consequent brand building have allowed
Starbucks to move into other successful venues—from coffee bean sales at grocery stores to partnership with United Airlines, Marriott, Pepsi, Kraft, and others. Starbucks has some of the best coffee in the world, but it was missing from grocery stores, which is where most coffee is purchased.
Syndicated data from The Nielsen Company showed that grocery stores sell two-thirds of the coffee
in the United States, and Starbucks has been able to enter this lucrative market. It has also used
partnerships in other industries to increase revenue.
In the past few years, Starbucks has been aggressively expanding its global footprint by entering newer markets and strengthening its position in countries in which it already has a presence.
Growing a brand overseas, however, can be different from doing so in Starbucks’ home market.
According to Thomas Yang, former senior VP of International Marketing, this difference in growth M05_MALH6735_01_SE_C05.indd 1 11/18/13 3:13 PM 153b Part 2  |  Research Design Formulation behavior in different countries can be attributed to Starbucks’ different stages of development
in the United States and different parts of the world. In international markets, Starbucks is at the
brand development and establishment stage, allowing consumers to discover what the brand is
about and what the Starbucks experience is about. In contrast, Starbucks has had a presence in
North America since 1971. In the United States, the Starbucks experience is pretty well-known and
understood, and thus it is in a different stage.
Starbucks has been extremely successful in achieving its objectives. It has been able to maintain a local feel despite massive growth around the globe. It has done this by stressing its culture
and placing the focus on its employees and customers through marketing research. Starbucks
hopes to continue staying local while going global through marketing research. Conclusion
Starbucks has gone from a small local coffee startup in the 1970s to the largest coffeehouse company in the world. This success has largely been due to the strong connection it has been able to
foster with its consumers and to maintaining a local charm and feel in its stores even as it continues to expand globally at breakneck speed. This strong connection has also enabled Starbucks to
gather useful feedback and marketing research information from customers, leading to the introduction of several successful new products and penetration into new global markets. Questions 1. Use the Internet to identify secondary sources of information pertaining to coffee
consumption in the United States. What insights into coffee consumption can be obtained
from social media research? 2. What are consumers looking for in a coffeehouse experience? How do they view the Starbucks
coffeehouse experience? How can Starbucks determine answers to these questions? 3. A survey is to be conducted to determine the image coffee drinkers have of Starbucks and
other coffee chains. Which survey method should be used and why? 4. Starbucks is thinking of introducing a new gourmet coffee with a strong aroma. Can a survey
be used to determine the consumer reaction to this coffee prior to national introduction? If
so, which method should be used? 5. Starbucks is thinking of introducing a new gourmet coffee with a strong aroma. Can the
observation method be used to determine the consumer reaction to this coffee prior to
national introduction? If so, which observation method should be used?
References
1. www.starbucks.com, accessed July 15, 2013.
2. Steven Gray and Kate Kelly, “Starbucks Plans to Make Debut in Movie Business,” Wall Street Journal (January 12,
2006): A1, A8.
3. Bob Keefe, “Starbucks to Offer CD-Burning Capabilities at Stores in Future,” Knight Ridder Tribune Business
News (June 28, 2004): 1. M05_MALH6735_01_SE_C05.indd 2 11/18/13 3:13 PM

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