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Place Strategy
Store Ambience: People generally had only two places where they spent maximum time-
work and home. But, Howard believed that they needed another place where they could sit,
relax and network with others around. Hence, Starbucks provided ambience that would make
them to stay. It had seating areas that would encourage lounging and layouts were designed
such as to provide an inviting environment for the people.
Distribution Channels: Almost all the Starbucks stores were located in high visibility and
traffic areas achieved by early expansion by means of taking the company public, through this
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one can achieve low rental cost etc. It sold coffee through other channels as well known as
“Specialty Operations” and had international licensed stores, warehouse clubs, grocery stores,
mail order and online sales. It also had a joint venture with Pepsi to distribute Frappuccino
beverages and it partnered with Dreyer’s Grand Ice Cream to distribute premium ice creams.
The value proposition of Starbucks is compelling because they give utmost priority to customers
and to the service provided to them. They offered the customer, the highest quality coffee. Also,
the value proposition is not only about the coffee but also the “experience” around its
consumption.
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