Core service offering of Starbucks

Question

Core service of Starbucks?

Answer

Starbucks is an American company founded in Seattle in 1971. It now operates a huge chain of coffee shops across many countries. The core product offered by Starbucks is coffee. They provide the product in a wide range of variations, such as cappuccino, macchiato and iced coffees. They also make use of flavoured syrups in order to allow some customisation of their coffees. They also sell food items based around snacks (such as cakes and pastries) and convenience meals for breakfast and lunch (such as sandwiches). Starbucks is targeted at affluent young consumers and working people, and it provides a premium product, whilst emphasising quality and ethical sourcing. Their stores provide products for consumption within the store or to be taken away – the stores provide a comfortable setting and promote mobile working through free wi-fi access. The core value that Starbucks provides to consumers is centred on a high quality product. A large increase in the popularity of coffee, and the so called ‘café culture’ has been a large component of Starbucks’ massive growth (Davidson, 2015). In addition, many coffee consumers seek fast service and familiar products that fit into a busy schedule, and Starbucks is positioned to provide this. Further value is offered to consumers through the caffeine content of the coffee – caffeine is a mildly addictive stimulant which is being consumed in increasing amounts through coffee, tea and other sources (Fitt, Pell and Cole, 2012). Starbucks faces competition from a number of rival chains such as Costa, Caffé Nero and Wild Bean Café, in the UK market. These chains compete on similar values of convenience and high quality products, showing that this is a main attraction for the coffee drinking market. Although, McDonalds are a major coffee seller and offer low price and convenience, showing how the market is segmented based on price tolerance.

References

Fitt, E., Pell, D and Cole, D. (2012) Assessing caffeine intake in the United Kingdom diet, Food Chemistry, 140(3), pp 421-426, available: [https://www.researchgate.net/publication/236250118_Assessing_caffeine_intake_in_the_United_Kingdom_diet] Davidson, L. (2015) Coffee shops stir £7.9bn into market as café culture dominates (online), The Telegraph, available