A visit to Whole Foods Market (Retailing)

Few days ago I went to a Whole Foods Market. The purpose of my visit was to observe some details related to retailer and also to buy some food.
Whole Food market is an example of a supermarket retailer store. It is a large and departmentalized store which specializes in food and nonfood products. The supermarket meets the needs of all types of consumers offering vegetarian products, vegan products, dairy and meat items. In addition, the store has a lot of organic foods and prepared meals. As I mentioned before the nonfood departments get a large space in the supermarket. As a result, there are departments with products like: cosmetics, accessories, bath products and many others.

The prices in Whole Foods Markets are higher than other market's prices. The reason of high pricing is the quality and variety.

Being a self-serving retailer, I didn't get involved in any interaction with the supermarket's employee.

I had a good experience in this store because I found the products that I was looking for. In addition, the way the items are organized and the cleanness of the store make me come back.

Starbucks' Retailing

Retailers can be classified by the form of ownership:independent, part of chain or franchise outlet. Starbucks Company is an example of chain because the stores are operated as a group by a single organization, in this case Starbucks. Starbucks has around 16,000 store in over 50 countries.
Talking about the types of retail operations, Starbucks coffeehouses can be considered specialty retailer because the company is specialized on a specific type of products: coffee products.

Important facts for retailers:

• Level of service - Starbucks is concerned about its service. Even though it's a global company with millions of costumers , they focus on the relationship between costumer and employee. As the CEO, Howard Schultz, said when he returned to his position in 2008, that the company has to refocus on "costumer experience".


• Product Assortment - The company has a large product assortment. There are 87,000 different beverage options (according to Starbucks Newsroom). In addition, they sell many food products , ready to drink beverages and coffee beans.


• Price - Starbucks pricing it's a big issue. Are Starbucks products overpriced? Well, if thinking about a product from the perspective of utility, quality and value, no Starbucks coffee is not overpriced. "It's not just coffee. It's Starbucks". Few examples of Starbucks prices: a tall coffee is $1.65, twelve ounce latte costs $3.10, a tall mocha costs $3.40.

In conclusion, Starbucks chain is a retailer that expended globally and is always ready to make additional changes in order to keep its costumers.

Product Concepts II

Starbucks company has a large variety of products:

• 1. Starbucks Beverages - Starbucks has more than 87.000 different beverages option. They can be classified as handcrafted beverages and ready to drink beverages. Some examples of handcrafted beverages are: espresso, brewed coffee, tazo tea, cappuccino.Ready to drink beverages, which are sold outside the retail store through a number of channels, are: Starbucks Double shot,Starbucks Double shot Energy+Coffee, Frappucciono.

2.Starbucks Food - Starbucks has a line of nutritious food options for breakfast. Breakfast items ingredients are:whole grains, fruits, natural fats from nuts and seeds. Some items of Starbucks foods are:

• Perfect Oatmeal with Choice of Dried Fruits
• Power Protein Plate
• Baked Berry Stella
• Apple Brown Muffin
• Multi grain Roll with Spreads

3. Starbucks Coffee Beans:

• Latin American Coffee
• African Arabica Coffee
• Asian Pacific coffee
• Cafe Verona
• Organic Shade Mexico

Starbucks always adds new products and new lines of products in order to satisfy costumer's expectations. Starbucks is an example of a brand that listens to its costumers and is ready to make changes where necessary.

Product Concepts I

After just few weeks of introducing its new product Starbucks Via Ready Brew, the company is announcing a decaf option starting November 17.

The instant coffee Via exceeds its expectation. In addition ,

Progressive Grocer in their annual 2009 Editor's Pick called the newest Starbucks product "The Best New Consumer Product".

The new Via Ready Brew Decaf Italian Roast will be introduced on November 17, just before the Holidays. The new product is made from the same high quality arabica coffee, being roasted to the specific Starbucks Roast profile to deliver the aroma, body and rich flavor.

Starbucks Via Ready Brew has been voted "Most Innovated New Product of the Year" by Allegra Strategies in the U.K, and "Best New Consumer Product" by Progressive Grocer magazine in the U.S. These positions place the product as a leader in the instant coffee market.

The new Via ready Brew Decaf coffee will be sold in single packets and is packaged in books of three or boxes of 12. The costumer will pay $2.95 for a three-pack, and 10.95 for a twelve-pack.

The company gives costumers the possibility to have a Starbucks coffee for less than $1. As the tests showed, the majority of the costumers couldn't recognize the difference between the Via instant coffee and the regular Starbucks coffee. It's interesting to see if the product will bring the maximum profit, as the CEO said that Via product represents a business of $21 billion.

Segmenting and Targeting Markets II

Starbucks is the favorite restaurant for teens, according to a new study Piper Jaffray & Co. The study showed that restaurants with a value message are becoming more popular among teens.

Piper Jaffray survey reflects the opinion of more than 11,200 teens, average age 16 years old; 1,200 of teens were surveyed at school and 10,000 online. Starbucks is the teens favorite restaurant brand, garnering a 12% share on the school survey and 9% share online.

Teens' decisions of where to dine is created around idea of value. While taste and menu selection are the factors having the highest influence in buying decision, the value is the third factor.

One thing is clear, teens are getting the company's messages. It's not just coffee, it's Starbucks - that's what teens assimilate. Starbucks is a place where many teens meet with friends, enjoy, have fun and also drink beverages. Looking from the ethical perspective, I don't think that it is ethical to engage teens in drinking coffee and high calories beverages. On the other hand, the company is getting another market segment that can bring profit.

Segmenting and Targeting Markets I

Segmentation represents a marketing strategy that allows an organization to group their costumers and to create products that will satisfy costumer's needs.The main objective of segmentation is to provide the products that will best benefit the specific groups.

Starbucks consumer segment falls in the following characteristics:

• Women 18-49 represents 43% of the consumers, compared to the 29 % of men 18-49
• 42% of pulled have children that fall into 6-17 year old range
• 30% of consumers have graduated college, or any post college education
• 39% have a house hold income between $75,000-149,999
• The Western United States has the highest concentration of Starbucks consumers (36%), followed closely by the South
• 57% of the costumers are currently married
• 82% of the consumers are moderate to heavy Internet users

As a conclusion, Starbucks targets both male and female between 18-49 years old. However, studies show that the company has more female customers. Starbucks houses educated people: college graduates, business professionals and usually from a dual income households. The main target audience is college graduates with a high income.

Starbucks Types of Business Products(Business Marketing)

There are several categories of business products. I will discuss the main business products of Starbucks: raw materials and equipment.

The main raw material for Starbucks is the coffee beans. The company buys coffee beans from many continents: South America, Africa, Asia . Every country has its own way of preparation of the product ,and the coffee has different flavors and aromas. This way costumers can find a diversity of coffees in Starbucks stores.

Another important business product of Starbucks is their equipment. Starbucks uses brewing equipment, coffee presses, grinders, espresso machines. The newest innovation in equipment is the acquiring of the Clover machines. The new technique blends the best of the vacuum pot and coffee press method and gives the unique flavor nuances of specialty coffee.

Starbucks Online (Business marketing I)

Starbucks has a high online popularity. Let's see the reasons:

• Being a worldwide company, the company has a well-designed selling official website http://www.starbucksstore.com/ , where a customer can find from Starbucks coffee products to their brewing equipment, Starbucks cards and gift ideas.


• Online community - My Starbucks Idea,where customers can get in touch with the company and make suggestions.


• Starbucks joins iPhone by introducing 2 official iPhone applications: My Starbucks and Starbucks Card Mobile .While the first application gives information about Starbucks locations and nutrition, allowing the customers to create their coffee configuration, the second application gives costumers the opportunity to check their card balance and to transfer more funds. The point of these applications is to pay with the iPhone. Card Mobile makes the process of payment easier. By displaying a scanable bar code on the iPhone screen, users can pay for purchases within a Starbucks store.

Consumer Decision Making II

Starbucks is working on satisfying consumer's needs by improving and innovating.
As the CEO of the company, Howard Schultz says for Starbucks the costumer represents the priority in doing business.
Even though Starbucks is known as selling ready beverages, on September 29 the company introduced the first "ready brew"instant coffee VIA. As the Charmain says the instant coffee business represents a $21 billion business.

Each innovation the company makes is influenced by costumers. By introducing instant coffee the largest coffeehouse is approaching another consumer need: to have Starbucks coffee without going into the store. The CEO said that VIA is made with 100% natural roasted arabica coffee and it took 20 years to develop "a proprietary, U.S patent- pending micro grind technology"that preserves the taste of fresh coffee.
In other words, the taste of the VIA instant coffee should be the same as a Starbucks coffee bought from the store.
Starbucks is an example of a company that is always seeking for new ways of expanding the business and satisfying consumer's needs.

Consumer Decision Making

Why Starbucks?


Costumer's decision in choosing products varies. There are many reasons why a person will choose a certain product or brand; it can be the price, the quality , the experience, the taste and so on.

Starbucks became a successful coffee brand because the company always focused on its costumer's needs. Why a coffee drinker would choose Starbucks? Let's see:

• seeking for quality - Starbucks has premium - quality coffee. The company pays around $1.49 per pound for its premium-quality arabica coffee beans.


• variety of products- According to Starbucks Newsroom, the company has around 86,ooo different options of beverages.
• status - Yes.. Starbucks coffee is a pricey coffee even in USA. In addition, in poor countries the price of a cup of Starbucks coffee can reach the amount of money a person earns for one day. Not everybody can afford drinking Starbucks coffee. Paying a high price for a product shows someone's status.
• willing to buy products from a social responsible company- Yes, the answer is Starbucks. The company is promoting ethical business practices(supporting farmer's rights); Starbucks is concerned about environmental responsibilities (recycling, climate change actions, going green)
• high quality service- Starbucks baristas are trained to give the best service to the customers. In addition, the company is making motion researches in order to see what can be improved in terms of serving costumers.
• number of locations- The company has over 15.000 stores worldwide. Finding a Starbucks store doesn't require any effort; they are everywhere.

In conclusion, Starbucks is an example of a company that takes in consideration and satisfies it's consumer's needs.