What Starbucks Sold Beyond the Coffee

There was a time in South Korea when going to Starbucks could get you called a doenjang-nyeo or doenjang-nam, mocking labels for someone perceived to spend beyond their means on status goods. The chain went on to become so familiar that a crowded store scarcely needs an explanation.

I have seen locations struggle under one café brand and fill up when a Starbucks moved in. It made me wonder what customers expected to find there beyond the address and a cup of coffee.

Why did Starbucks catch on in South Korea?

Kim Young-han’s book looks at how Starbucks built a business in South Korea even in a difficult economy.

Its starting point is a question I recognize. What did people find worth paying for and coming back to?

Kim offers 77 principles, from what to serve in the morning to how a store should feel when you walk through the door.

The fifth P is people

The traditional marketing mix has four Ps: product, price, place and promotion. Kim adds people as a fifth and uses the framework to examine Starbucks.

The examples range from decisions about the drink to the work involved in making a visit feel familiar across different stores.

The contents lay out much of the argument. You can see how a book about a coffee company becomes a book about service.

The book at a glance

Contents

Part 1. Customers looking for an experience

1. Pay attention to young women as customers.
2. Find out what experience-oriented customers value.
3. Study the people you are trying to reach.
4. Tailor the service.
5. Give customers a taste of romance.
6. Put people at the heart of marketing.

Part 2. Five ways Starbucks shapes the visit

• Product

1. Develop a signature product.
2. Introduce customers to new flavors.
3. Build expertise of your own.
4. Keep ingredients and products fresh.
5. Pay attention to customers’ tastes.
6. Develop seasonal menus.
7. Feature a drink of the day.
8. Set standards for how things should taste.
9. Create offerings suited to each region.
10. Find a reason for customers to come in the morning.
11. Serve food that pairs with the drink.
12. Make products easy to take with you.
13. Look for ways to give customers a pleasant surprise.

• Price

1. Use a premium price where it fits the product.
2. Make quality worth paying for.
3. Offer complementary goods.
4. Think beyond discounts.
5. Build a recognizable brand.
6. Pay attention to what customers want from the experience.

• Place

1. Give customers somewhere to recharge.
2. Give people a place to meet.
3. Keep the experience consistent.
4. Let customers try things for themselves.
5. Think about what the store smells like.
6. Give people a flavor to come back for.
7. Make the room pleasing to look at.
8. Pay attention to how things feel in the hand.
9. Choose music for the room.
10. Make the shop somewhere people want to linger.
11. Respect local culture.
12. Design for customers who live online.
13. Consider customers whose needs are easy to miss.
14. Adapt to the setting.
15. Think about how several stores can serve the same area.
16. Choose locations on the routes people already take.

• Promotion

1. Give customers something to be curious about.
2. Make it easy for people to tell a friend.
3. Work with cultural events and interests.
4. Invest in a name people will remember.
5. Choose business partners carefully.
6. Reach customers in settings that feel natural.
7. Consider campaigns that serve a public purpose.
8. Build relationships in the neighborhood.
9. Take practical steps on environmental issues.
10. Use promotional cards.
11. Try limited runs.
12. Make full use of the store.
13. Use publications to reach readers.
14. Let communities form around the store.
15. Give groups something to compete over.
16. Look for arrangements that help both partners.
17. Offer a sample.

• People

1. Start with the people doing the work.
2. Hire people who notice how customers feel.
3. See the business from the staff’s point of view.
4. Give staff something to take pride in.
5. Teach service as part of the job.
6. Look for ways to say yes.
7. Make room for conversation with customers.
8. Teach service as a skill.
9. Train baristas.
10. Help new staff develop good habits.
11. Invest in ongoing training.
12. Set shared service standards.

Part 3. Leading a service business

1. Care from staff can encourage care in return.
2. Turn a vision into work people can do.
3. Operate shops directly where the model calls for it.
4. Treat staff as partners.
5. Use technology to understand what customers value.
6. Give staff reasons to enjoy the work.
7. Make the idea behind the shop tangible.

The list brings different causes into view. A popular drink, an accessible location and well-trained staff can all be part of the same visit.

A third place

The idea that made the most sense to me was Starbucks as a third place, somewhere to spend time between home and work.

If you needed somewhere to meet and nothing else came to mind, you could suggest Starbucks. Being the answer to that ordinary question is an advantage a café can build on.

I remember feeling more conscious of taking up a table in many cafés before the chain became common. Starbucks made it easy for me to imagine sitting for a while after the drink was gone.

That freedom to stay could distinguish the shop before anyone had an opinion about the coffee.

Making good service repeatable

The shop only works as a familiar meeting place if customers know roughly what will happen when they come in. Kim sees the service standards as part of how Starbucks turned an idea about customers into something staff could repeat.

I thought of Amazon, another business that makes much of the customer’s experience. The service itself is different, but the customer is often where the company says it starts.

Staff as partners

I was also interested in the choice to call staff partners. Kim treats it as an idea about what people can learn and build together at work.

Starbucks’ Bean Stock program began in 1991, before the company went public. It granted stock options to eligible workers, offering them a share in the company’s future.

Some Amazon roles also come with equity that vests over time. The idea that staff can share in what they help build appealed to me in both cases.

The people in the room

The parts of the book I kept thinking about were the ones that put a person back in the picture. Someone wants a place to meet. Someone on shift has to help them feel welcome. The details that bring those two people together are where Kim’s argument about service feels most persuasive.

Book details

Benchmark Starbucks

Author

Kim Young-han

Korean edition published

December 10, 2020

ISBN-13

9791191209297

View on YES24

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