The Starbucks Phenomenon

EXAMINING THE STARBUCKS PHENOMENON: IS THE COMPANY SELLING A COMMODITY OR A LIFESTYLE?

Starbucks began in Seattle in 1971, but it was not until current CEO Howard Schultz assumed control of the company in 1987 that the company transformed itself into a cultural icon. A coffee house culture is centuries old in Western Europe and a somewhat different coffee house culture developed in California in the 1960s and 1970s. In Western Europe, coffee and social intercourse underlies the coffee house culture on an equal basis. In the 1960s and 1970s in California and other parts of the United States, the coffee house was a venue for social causes, which were of greater importance than the coffee. The Starbucks phenomenon appears to be different. The coffee appears to be important; however, identification as a Starbucks consumer may be of greater importance. This identification with Starbucks may replace both social intercourse and the venue for social causes.

The purpose of this study was to investigate the Starbucks phenomenon in an effort to determine whether Starbucks is marketing a commodity (coffee) or a culture (a lifestyle with which consumers identify). The hypothesis tested was that cultural motivations, more so than price or product preferences, explain the motivations for consumers either choosing to patronize Starbucks or choosing not to patronize S

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g to recast its image as once that is compatible with the new (to Britain) coffee-drinking culture (Dicum & MacLean, 1999; Mintz, 1993). A major problem for traditional coffee marketers is that overall coffee consumption is declining in major geographical markets, while the demographics of coffee consumption also are changing. In the United States, as an example, the out-of-home share of the coffee consumption market is increasing. This trend is an indicator of a change in the coffee drinking culture in the United States (International Coffee Organization, 2002). A change in the coffee drinking culture will cause some coffee producers and coffee retailers to change their marketing foci to reflect a changing culture. 2.3 Changing Nature of Consumer Marketing Major forces are creating changes in consumer marketing and these forces affect marketing strategies. The transition from mass production to mass customization is relevant to the role of culture in marketing coffee. Mass customization implies the development of product variations that satisfy a variety of consumer needs, as opposed to providing a single product for all consumers. The premise of mass marketing that all markets are homogeneous is no longer relevant in the c

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