Starbucks Company’s Marketing Mix and Corporate Social Responsibility

Introduction

Organizations employ numerous strategies to build their reputations and market themselves in competitive global markets. This assignment will focus on marketing mix and corporate social responsibility (CSR) because they are two crucial concepts that organizations utilize in ensuring that they gain significant market share and dominate competitive markets. Marketing mix constitutes strategies that organizations modulate to influence consumer purchasing decisions. Isoraite (2016) explains that organizations focus on product, promotion, placement, and price strategies in improving the purchasing experience of customers.

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CSR is a management strategy that enables organizations to ethical activities and operations, which consider social, economic, environmental, legal, and philanthropic factors in a given business environment. According to Godos-Díez, Cabeza-García, and Fernández-González (2018), CSR is a competitive strategy that organizations utilize to improve their economic, social, and environmental aspects. As the application of these concepts of the marketing mix and CRS in organizations, this assignment will explore them using the case study of Starbucks.

This case study is relevant since Starbucks is an international organization with various brands in diverse global markets. Overall, the purpose of this assignment is to describe marketing mix and CSR and highlight their importance to organizations with the view to apply them in the case study of Starbucks.

Marketing Mix

The marketing mix is a primary marketing tool that enables managers to improve the experiences of consumers, as well as influence their purchasing decisions. Using the marketing mix, organizations control the way they design products, distribute, promote and price them (Isoraite 2016). The exposition of these concepts of the marketing mix, namely, product, placement, promotion, and price, would highlight their relevance to modern businesses.

Product

Product is an essential element of the marketing mix since it considers the nature of goods and services availed to customers in the market. Features that determine the value of a product in the market design, the technology employed, utility, quality, brand, packaging, and guarantees offered to customers (Isoraite 2016). A marketable product should have an appealing design, employ modern technology and provide composite utilities for customers to enjoy diverse functionalities and get value for their money. Al-Badi (2018) explains that organizations should vary the features and attributes of their products in response to the needs and wants of the target consumers and competitive market environment. Therefore, the ability of organizations to generate products that match the needs and wants of customers reflects their competitiveness in markets.

Placement

Placement of products in strategic locations for customers to view and purchase is an essential concept of the marketing mix. Factors that determine the distribution and placement of products are market locations, distribution channels, logistics, and inventory methods (Isoraite 2016). Organizations have to ensure that their products reach target markets in time for customers to make purchases. According to Kawa and Maryniak (2019), the life cycle of products, outbound logistics, warehousing, locations of markets, and nature of products determine if organizations employ lean or agile logistics in distributing and placing their products at strategic stores for customers to access and purchase.

Promotion

Promotion is also an integral element of the marketing mix because it influences customer awareness. Having the right product and placing it at the strategic shopping centers does not guarantee sales without customer awareness. Promotion informs, convinces, and prompts the target customers of the availability of a new product in the market for them to view, purchase and experience its utility (Erdil and Ozdemir 2016). Strategies employed in the promotion of products include advertisement, sales promotion, direct marketing, word-of-mouth, leaflets, exhibitions, trade fairs, posters, and gifts (Isoraite 2016: 31). Promotion does not only create awareness, but it also builds loyalty among customers, leading to customer retention and expansion of market share.

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Price

The price of a product is a significant element of the marketing mix because it influences the sales and purchasing power of customers. A pricing strategy depends on the cost of production, degree of competition, market share, perceived value, and the level of differentiation (Al-Badi 2018). Organizations can employ different pricing strategies, depending on the nature of products and the prevailing conditions in the markets.

The typical pricing strategies are based on the levels of demand, cost, premium, and competition (Toni et al., 2017). The demand-based method fixes prices according to consumer needs and preferences, the cost-based technique focuses on gaining profit margins, the premium-based strategy relies on branding, and the competition-based method ensures organizations remain competitive in the market.

Corporate Social Responsibility

CSR strategy plays a central role in business because it ensures that organizations undertake their activities while remaining accountable to shareholders, society, and the environment. The focus of CSR strategy is to ensure the achievement of customer satisfaction and loyalty by complying with economic, ethical, environmental, and philanthropic requirements.

Economic Responsibility

Financial responsibility is one of the aspects of CSR, which ensures that there prudent utilization of capital and profits by organizations. Since organizations are profit-making entities, they have the economic responsibility of ensuring that shareholders reap profits from their investments (Galant and Cadez 2016). Through economic responsibility, organizations do not only focus on profits but also fiscal progress for the benefit of employees, society, and the general economy (Galant and Cadez 2016).

In this view, organizations should remain transparent and accountable to shareholders in all investments. In addition to generating profits for shareholders, organizations should meet other financial obligations, such as paying their employees well, remitting taxes to the government, and settling debts with their suppliers. In essence, economic responsibility is a CSR practice, which demands the management of organizations to invest their capital and generate profits.

Environmental Sustainability

Environmental sustainability is a critical aspect of CSR since it protects natural resources from overexploitation, depletion, and pollution. Natural resources, such as land, water, air, and energy, are prone to misuse by organizations, resulting in adverse effects on the environment. Owing to the scarcity of natural resources, organizations should ensure that they consume them in a sustainable manner (Abbas et al., 2019). The objective of environmental sustainability is to optimize the consumption of natural resources in generating profits while protecting the environment. In modern society, the increasing use of renewable resources and decreasing consumption of natural resources indicate how organizations adhere to environmental sustainability (Batista and Francisco 2018). Thus, organizations adopt green strategies to protect the environment and ensure there is sustainable use of natural resources.

Ethical and Legal Responsibilities

Business activities are subject to prevailing laws and legislation, which ensure that businesses undertake ethical practices. According to Hategan et al. (2018), organizations ought to perform their business activities in ways that respect the rights of employees, other businesses, the community, society, and the environment. Organizations should adhere to labor laws by providing decent working conditions, paying employees well, allowing employees to join trade unions, and cultivating favorable industrial relations.

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Violation of laws and regulations has significant consequences on organizations because it attracts lawsuits and penalties, which have adverse effects on the reputation and legal standing. Moreover, organizations have ethical obligations to ensure that they use clean energy, consume natural resources sustainably, recycle materials and protect communities and the environment from pollution.

Philanthropic Responsibility

Given that organizations derive their resources from the environment, employees, communities, and society, they have an obligation to make meaningful contributions. Organizations can perform philanthropic activities, such as donating money, offering volunteer activities, conserving the environment, providing medical care, or educating needy children (Iwannanda, Sudarmiatin, and Adiputra 2017). CSR of philanthropic responsibility allows companies to have a positive impact on people, communities, and the environment in which they operate and make profits.

Case Study: Starbucks

Starbucks is a contemporary business case that employs marketing mix and CSR strategies in its commercial activities. In this section, the assignment provides an analysis of Starbucks by examining its marketing mix and CSR strategies.

Marketing Mix of Starbucks

Starbucks employs a marketing mix by providing different products to meet the unique needs of customers. The strategy of product differentiation is evident because Starbucks offers drinks, food, home coffee, and shopping bags. According to Starbucks (2019), coffee, tea, smoothies, baked food, and Frappuccino as major products it offers to customers in diverse markets across the world. These products make Starbucks stand out in the competitive markets because they are not only quality but also satisfy the diverse needs of customers. To ensure that customers have access to its products, Starbucks has opened stores in various cities and towns globally.

Starbucks (2019) reports that it has improved accessibility to its products by opening over 30,000 retail stores in more than 80 varied markets. In addition to retail stores, Starbucks market its products in cafes. To keep in tandem with technology, Starbucks utilizes mobile apps, which allow customers to place their orders in various cafes.

In marketing its products, Starbucks uses diverse strategies of promotion. Advertising, word-of-mouth, sales promotions, and public relations are common strategies that Starbucks uses in promoting its products across the world. In advertising, Starbucks uses print media, television, websites, and social media. Starbucks provides quality goods and services for customers to get the most exquisite experience and persuade them to spread positive word-of-mouth in different social settings. When introducing new products into the market, Starbucks uses sales promotions and public relations. In pricing its products, Starbucks adopts a premium pricing strategy (Haskova 2015).

Promotional strategies have enabled Starbucks to build a reputable brand with a considerable number of loyal customers. Since Starbucks prides itself as the best coffee café, its brand has attracted customers from high-end markets. Based on its notable brand and quality of coffee, Starbucks offers premium prices, and customers are willing to purchase their products. Premium pricing strategy has ensured that Starbucks remains as the leading competitive brand of coffee.

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CSR Strategies of Starbucks

Starbucks is one of the leading companies globally in the use of CSR strategies in the business world. The analysis of an economic aspect of CSR shows that Starbucks is a profitable company, which allows stakeholders, employees, and farmers to get substantial benefits from their inputs. Starbucks earns revenue of about $25 billion, and the share index has increased four times in the past eight years, from approximately $23 in 2010 to $80 in 2018 (Starbucks 2019).

The increase signifies the economic responsibility of Starbucks in empowering its stakeholders, shareholders, and economy. The analysis of environmental responsibility shows that Starbucks exhibits a high level of CSR. Starbucks recycles its mugs and straws to protect the environment from pollution, as well as utilizes 20% of electricity from renewable sources (Starbucks 2019). To conserve water, Starbucks employs mechanical dishwashers. Since Starbucks produces considerable amounts of greenhouse gases, it has partnered with conservationists in planting trees and preserving habitats to alleviate climate change.

Starbucks complies with the ethical and legal requirements of diverse business activities. Since Starbucks relies on raw materials sourced from farmers, it ensures that ethical practices apply in the farming process. In central Africa, Starbucks initiated support centers where it empowers farmers and communities to provide quality cocoa and coffee. In its philanthropic responsibility, Starbucks established its foundation and tasked it with the obligation of undertaking charitable activities (Starbucks 2019). For example, Starbucks Foundation donated millions of dollars to support youth, employees, communities, farmers, and the provision of clean water.

Summary and Conclusion

The analysis of the case study of Starbucks shows that it employs the marketing mix and CSR strategies to build its unique brand across the world. The notable overlap of the marketing mix and CSR strategies is that they are potent tools of brand development globally. Starbucks offers various quality products, such as coffee, tea, and baked food, and sells them in over 30,000 retail stores and cafes across the world. Starbucks also promotes its products using print, online, and television media. Since Starbucks offers quality products and has a notable brand image, it employs a premium pricing strategy.

This form of pricing strategy has enabled Starbucks to remain competitive in the high-end markets of the hospitality industry. Further analysis of the case study reveals that it uses a CSR strategy in marketing and branding its products. Starbucks is economically responsible since it generates profits to shareholders, pays its employees well, earns increasing revenue, and contributes to the fiscal growth of the country it operates. In the environmental aspect of CSR, Starbucks has made elaborate efforts of using green energy, recycling waste products, conserving water, and preserving habitats. In its operations, Starbucks ensures that farming practices are ethical and legal, and it undertakes philanthropic activities of empowering farmers, communities and providing clean water.

Reference List

Abbas, J., Mahmood, S., Ali, H., Raza, M. A., Ali, G., Aman, J., Bano, S., and Nurunnabi, M. (2019) ‘The Effects of Corporate Social Responsibility Practices and Environmental Factors through a Moderating Role of Social Media Marketing on Sustainable Performance of Firms’ Operating in Multan, Pakistan.’ Sustainability 11(3434), 1-33. Web.

Al-Badi, K. S. (2018) ‘The Impact of Marketing Mix on the Competitive Advantage of the SME Sector in the Al Buraimi Governorate in Oman.’ SAGE Open 8(10), 1-10. Web.

Batista, A., and Francisco, A. C. (2018) ‘Organizational Sustainability Practices: A Study of the Firms Listed by the Corporate Sustainability Index. Sustainability 10(226), 1-13. Web.

Erdil, S., and Ozdemir, O. (2016) ‘The Determinants of Relationship between Marketing Mix Strategy and Drivers of Export Performance in Foreign Markets: An Application on Turkish Clothing Industry.’ Procedia-Social and Behavioural Sciences 235(1), 546-556. Web.

Galant, A., and Cadez, S. (2016) ‘Corporate Social Responsibility and Financial Performance Relationship: A Review of Measurement Approaches.’ Economic Research 30(1), 676-693. Web.

Godos-Díez, J., Cabeza-García, L., and Fernández-González, C. (2018) ‘Relationship between Corporate Social Responsibility (CSR) and Internationalisation Strategies: A Descriptive Study in the Spanish Context’. Administrative Sciences 8(57), 1-20. Web.

Haskova, K. (2015) ‘Starbucks Marketing Analysis.’ CRIS Bulletin 1(1), 11-28. Web.

Hategan, C., Sirghi, N., Curea-Pitorac, R., and Hategan, V. (2018) ‘Doing Well or Doing Good: The Relationship between Corporate Social Responsibility and Profit in Romanian Companies.’ Sustainability 10(1041), 1-23. Web.

Isoraite, M. (2016) ‘Marketing Mix Theoretical Aspects.’ International Journal of Research 4(6), 25-37. Web.

Iwannanda, R., Sudarmiatin, S., and Adiputra, W. J. (2017) ‘Philanthropic Corporate Social Responsibility: A Case Study. International Journal of Academic Research in Business and Social Sciences 7(6), 876-886. Web.

Kawa, A., and Maryniak, A. (2019) ‘Lean and Agile Supply Chains of E-Commerce: Empirical Research.’ Journal of Information and Telecommunication 3(2), 235-247. Web.

Starbucks (2019) About Us: Starbucks Company Profile. Web.

Toni, D. D., Milan, G. S., Saciloto, E. B., and Larentis, F. (2017) ‘Pricing strategies and levels of impact on corporate profitability. Revista de Administração 52(1), 120-133. Web.

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