Selling through intermediaries
Dual distribution
Reverse distribution
Starbucks is using direct selling and selling through intermediaries or partners to sell its coffee to the end users. Selling the coffee through its stores directly to the end users is called direct selling. It is the main distribution channel as it has lots of stores in all the major countries. The other way of distribution used by Starbucks is to sell its coffee to shopping malls, theatres, restaurants, and school or college campuses etc. which then sell the coffee to the end users. It also gives franchise options as its international marketing strategy. Strategies used by Starbucks. Methods used by the organizations to set the price of the products of services are called pricing strategies. Pricing strategy depends on the total cost incurred by the organization and also on the expected returns. It also considers marketing objectives and demand and supply of the product (Dolgui, 2010). To be sustainable in the market pricing should be done keeping competitors pricing for the same products. Our prices should not be much more as compared to the competitors. If prices are higher organization should be able to justify the difference either by some extra benefit from the product or by providing better service as compared to the competitors. Pricing strategy used by Starbucks is called skimming the market as it follows the premium pricing strategy. Value based pricing is the other pricing strategy used by Starbucks. Starbucks gives an opportunity to the customers to spend a quality time with their friends in Starbucks’ stores. Economic factors like exchange rate, inflation, interest rate, recession etc. should also be considered while setting the pricing. Discuss promotional activities of Starbucks and explain how promotional strategies used by Starbucks are integrated and related to marketing objectives of the organization. Promotion and advertising is very important and vital part of marketing as it helps in communication the value of the product or services to the customer. All the promotional strategies used by the organization should be integrated which means that promotional strategies should be aligned with the marketing objectives which in turn should be aligned with the mission or vision of the organization. The three important promotional ways used by Starbucks to promote its brand are word of mouth, social media and viral marketing. The viral social media campaign has been successful in creating a community around the brand. Individuals are allowed to give their feedbacks and to share their experience on the social networking sites like Facebook. Twitter and on other blogs. These promotional strategies have helped the organization in becoming $4.1 Bn Company. Starbucks is using print media, advertising, and media marketing to increase the awareness of its brand. Starbucks is spending 1.4 % of its revenue every year on advertising. Additional elements of the extended marketing.
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