Starbucks has perfected the art of getting customers to pay more for coffee, even with plenty of other great coffee brands out there. Yet, Starbucks is valued at over $100 billion. So, what exactly are they doing to make you overpay for coffee and keep coming back for more?
1. They use Italian names to make their product seem high end
Starbucks uses Italian names, like “venti” and “grande,” as part of its marketing strategy to make its coffee products feel more upscale and exclusive. This unique marketing approach helps Starbucks stand out from other coffee shops by creating a sense of sophistication and quality. By integrating Italian terms, Starbucks marketing strengthens the brand’s identity and gives customers the impression that they’re experiencing something special, almost like a luxury coffee experience. Starbucks marketing has effectively positioned the brand as high-end, using these Italian names to add to its appeal and attract customers seeking a premium coffee experience.
2. Starbucks tries to build connection with each of thier costumers
Starbucks connects personally with customers by asking for their names and writing them on their cups, which is a key part of Starbucks’ marketing approach. This small act of personalization makes the experience feel warm and individual, as if the barista is crafting a drink just for that person. By calling out each customer’s name when their order is ready, Starbucks creates a welcoming atmosphere that feels more like a friendly exchange than just a transaction. This simple but thoughtful gesture helps customers feel recognized and valued, strengthening their connection to Starbucks. In doing so, Starbucks’ marketing fosters a unique brand loyalty, making customers feel like they’re part of a community rather than just another customer in line.
3. Starbucks Doesn’t Sell Coffee; They Sell an Experience
Starbucks isn’t just about coffee—it’s about offering a memorable experience that keeps customers coming back. From the moment you walk in, the ambiance feels warm and inviting, with comfortable seating, relaxing music, and the welcoming aroma of freshly brewed coffee. Customers can fully customize their orders, choosing everything from the milk type to the flavor shots, which makes each drink feel personal and special. With free Wi-Fi and a cozy atmosphere, Starbucks has become a popular spot for people to work, study, or meet up with friends. This “third place” experience—somewhere between home and work—is what makes Starbucks stand out. By focusing on an inviting environment and customer-centric amenities, Starbucks creates a place where people want to spend time, making it far more than just a coffee shop.
4. “owning the competition” or “dual-branding”
Starbucks uses a strategy called “owning the competition” by owning Seattle’s Best Coffee, which is another coffee brand. This means that even if customers prefer Seattle’s Best over Starbucks or dislike Starbucks, the company still profits because both brands are owned by the same parent company. So, whether people buy from Starbucks or Seattle’s Best, the money goes back to Starbucks. This strategy allows Starbucks to capture more sales by offering customers different choices, while still controlling the market and making a profit from both brands.