Listening to Starbucks Alison Overholt July 2004 Leah Bungo Matt Smith Melissa Fredette.
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Transcript of Listening to Starbucks Alison Overholt July 2004 Leah Bungo Matt Smith Melissa Fredette.
Listening to StarbucksAlison Overholt
July 2004
Leah BungoMatt Smith
Melissa Fredette
Hear Music Background• Howard Schultz, chairman at Starbucks,
discovered Hear Music 10 Years ago in Palo Alto, California
• Starbucks purchased Hear Music in 1999 and launched Hear Music Coffeehouse
•Buy CDs and DVDs•Burn CDs from a
collection of Music (150,000 songs)
•Purchase Starbucks Hear Music on ITunes•Listen to music• Promote
independent artists
Why….• Starbucks operates in
the Coffee shop business– Reaching plateau
point?– Market becoming
Saturated?• Redefine their business• Music and coffee go
together– Personalized products– created individually
• Walt Disney (Cartoon Studio)– Theme Park– develops, produces, and
distributes films
• Martha Stewart (caterer)– Multimedia company:
Cookbooks, lifestyle-products, TV show
Redefining Businesses
Concept Roll out• Add CD- burning
capabilities to 10 Starbucks locations in Seattle
• With HP assistance have 1000 Hear Music locations by end of 2005 (mix of coffeehouse and retail)
Other Exclusives
• Artists Choice– Exclusive to Starbucks– Sold 400,000 copies
• Playing for Change– Launches April 28th– Connect people of the
world through music– Benefits (Red) Wire in
the fight against AIDS in Africa
2009 Update• Slower than expected roll out– Closing stores (600 in US)
• Expanded offerings– Promotes CDs, DVDs, and Books at almost all locations– Sold 4.4 million CDs in 2007– “Oprah’s Book Club” feel
• Conclusion– Increases foot traffic and time spent in stores by customers– diversifies revenue stream
Sources
• International Herald Tribune• Hear Music• Trading Markets• Playing for Change• Smart Brief