Starbucks Corporation is a global company that deals with coffee, salads, snacks, espresso drinks and pastries. So much is involved from the time, the cocoa beans are manufactured to the time that they get to the consumer to form a steaming cup of tasty coffee. Starbucks has employed the use of multiple distribution channels so that they can obtain a competitive advantage over other firms in the coffee industry. Making use of a hybrid of channels has led the company to grow rapidly as it presently has several stores and franchises worldwide.
Firstly, Starbuck sells its coffee by directly retailing it to the consumers. Usually, the company imports coffee and then processes and finally sells the coffee in their own stores under its own brand. Starbucks has also been able to use the internet to sell their products. The development in technology has made the internet a powerful tool for selling and marketing products. Direct distribution of coffee, snacks, salads and the like has seen the company incurs lower costs especially where the internet is concerned. Using the internet helps the company avoids logistical costs and challenges that come with transportation and storing Starbuck’s products (Nykiel, 2007). Even so, the company has been able to design an attractive website that shows pictures of the products they sell and even gives a detailed description of the coffee and other drinks they sell especially the decaffeinated coffee. This has given them a competitive advantage because their website strives to bring out the element of uniqueness hence the effectiveness of this distribution channel. Better still, Starbuck has used social media such as LinkedIn, Twitter and Facebook and this has given them an advantage because of the frequency with which they update their blogs.
Secondly, Starbucks sells its coffee as well as other products in shopping centers and supermarkets. This channel of distribution is one of selling from the company to retailers before they can eventually reach the consumer. In fact, Starbucks took the initiative to franchise its operations in places like bookstores, campuses, and airports. This has made it possible for the company to bring their products nearer to the consumer (Nykiel, 2007). Regardless of the type of distribution channel used the physical facility of the companies is normally very attractive. The atmosphere around the stores is convenient and inviting. This is evident from the comfortable sofas, and the high tables and chairs that are used within the stores. Starbucks is keen on gaining a competitive advantage in all stores and have thus adopted this serene atmosphere so that they can define their image as one of comfort.
The company’s management believes that providing comfort is similar to giving customers a “third place” which is different from the home and the work environment they are used to. Starbucks has an edge in the industry because it aims to break the monotonous environment where most of their clients spend time. Howard Schultz, the owner and founder of Starbucks incorporated the Italian culture in the setting of his stores. He discovered that most people would like to take coffee as they unwind after having a hectic day. Therefore, ensuring that their physical facilities adopt a cool and comfortable setting has led them to outdo their competitors (Lamb & McDaniel, 2009). Even the businesses they have franchised have to maintain a comfy setting as this is part of their brand. The other channel used by companies is that of distributing goods from Starbucks and then to the wholesalers then the retailers and eventually it gets to the consumer. These middlemen use means of transportation such as road and air transport to ensure that Starbucks goods get to consumers at the right thus giving them an edge.
Starbucks has opted to use a variety of channels, as this will enable them to attend to a wider market. Actually, it is because of using a variety of marketing chains that the company has been able to spread it stores in over 62 countries across the globe. It may be argued that using one supply chain is preferable as it enables a business to maintain proper control of the system. However, this is not the case with Starbucks because despite the hybrid system employed by the company in its distribution chain.
Conclusion
The multiple distribution system of Starbuck has had a positive effect on the activities of the company. This is especially because the company has been able to integrate the various individuals and firms in the supply chain to enhance the efficiency of the system. Making use of diverse distribution chains has made it possible for the company to cover a wider market. In the case of using a direct channel of distribution, the company has been able to capture a wider market because of having personal contact with the clients. Moreover, the internet has made it a lot easier because many people are now in touch with technology. Additionally, the intermediaries used in the distribution chain enhance the supply of the products to the target market because they have direct contact with consumers. Starbucks has a wonderful location with a cool and comfy setting. Generally, the suitable locations of Starbucks Company together with the well-integrated diversity of the company’s distribution have given it a competitive edge.
References
Lamb, C. W., Hair, J. F., & McDaniel, C. D. (2009). Marketing. Mason, Ohio: South-Western
Cengage Learning. Nykiel, R. A. (2007). Handbook of marketing research methodologies for hospitality and
Tourism. New York: Haworth Hospitality & Tourism Press.
