Saturday, November 24, 2012

Chapter 11: Developing and Managing Products

Over the last four decades, Starbucks has developed new products and continues to do so.  A new product is new to the world, the market, the producer, the seller, or some combination of these.  This can include new-to-the-world products, new product lines, additions to existing product lines, improvements or revisions of existing products, repositioned products, or lower-priced products.  Starbucks is very innovative when it comes to their products, whether it's their seasonal coffees, their iced beverages, or their coffee/espresso makers.

An innovative, new Starbucks product are the Starbucks Refreshers, which is a product that uses green coffee extract (a natural source of energy), resulting in thirst-quenching, low-calorie, refreshment with a boost of natural energy from caffeine and fruit juices.  This makes Starbucks the first to bring green coffee extract innovations to customers, on a global scale nonetheless.  According to Starbucks' newsroom, this gives the company an opportunity to introduce a new offering globally and continue to expand through innovation.  This also extends their product line of coffees, making more variety for customers to purchase.

Another example of an innovative product, which recently was released, is the Starbucks Verismo System.  This is a machine that makes both coffee and espresso.   The machine features three different pod types -- espresso pods, coffee pods and milk pods that can be combined in a number of ways to make custom drinks.  If a consumer invests in this system, price range is from $199-$399, then they may save on buying coffee everyday from Starbucks in the long run.
Because these items have just recently been introduced into the Starbucks product mix, they are just in the introductory stage of the product life cycle.  As reactions start to increase amongst the Starbucks customer and people start to buy or reject the products, then the product will be in the growth stage.  If they last the growth stage, then they may just complete the cycle into the maturity stage and all the way to the decline.  For the Starbucks Refreshers, people seem to have mainly positive reviews on the taste.  According to a blog called YumSugar, their tasters thought the drink had a "crisp, fresh taste" adding it was "ideal for pop lovers who want a healthier alternative."  While some praised the "nice fizziness level," others still pulled down the voting average, claiming the beverage was "too reminiscent of Red Bull" and the "pungent, syrupy sweet smell" was overwhelming.  It is still rather early to tell seeing it just came out this year. 
As for the Verismo System, someone from the Huffington Post stated, "Somehow Starbucks has learned the art of coffee making through this machine. It made a latte better than I've ever had in a Starbucks coffee shop" and for espresso making, someone said from the same news source "I tried the espresso and the house blend.  I'm not someone who's that familiar with Starbucks espresso, but I would say the espresso from the machine tasted as genuine and close to the real thing as I could ask for.  At no point did I feel the slightest inkling of being duped into drinking fake or knock-off espresso. It was tasty, and I already feel slightly more productive at work."  From these reviews, it seems Starbucks is using innovation as a key strategy to continue to gain profit and make their customers happy with the products they offer.  Huffington Post couldn't have said it better, "The verdict: We were a little surprised at how much we liked this machine. If you like Starbucks coffee and you want to drink it at home, this is the ticket."  This view would be ideal if all of their innovative products had the same reaction.

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