Overview of Starbucks Distribution Channel in Singapore

In general, company can distribute products to customers through various of distribution channels, for example: stores/outlets, wholesalers, retailers and so on.

• Intensive Distribution Channel (Starbucks outlets / cafés, other retailers, online platfrom)
• Exclusive distribution channels for food delivery services (Foodpanda)

Intensive Distribution

Starbucks’ outlets hold significant place in their marketing strategy because the outlets are normally first venues where customer can access the company’s products and services. In Singapore, there are 140 outlets of Starbucks that spread over the island and generally these outlets are stationed in high traffic, high-visibility and easily accessible locations. The outlets / cafés are normally designed to provide comfort and homely ambience. With the combination of outlet design, high quality product and well-trained staff, the company aims to provide customer not just cup of beverage, but a drinking lifestyle and love for the company’s brand for every purchase.

Starbucks offer most of their products through their outlets / cafés. The products that are sold through their outlets include hand-crafted drink, coffee & tea, Frappuccino, food (pastries, sandwiches, yoghurt, cut fruit, etc) and merchandises (mugs, tumblers, instant coffee, and so on).

Starbucks also enhance their customer drinking experiences at the outlets by incorporating the Mobile Application which provides comprehensive information and features to their customers. Customers who download the Mobile application can view the product information, menu, stores location, promotion from their smartphones. Customers also enjoy the convenience of paying their purchases with fund card loaded in their mobile application, earning rewards, receiving instant promotion and new product alert straight to their phones.

Selected products from Starbucks - sealed / bottled cold drinks (Frappuccino) are sold through the intensive distribution channel members like supermarket (NTUC, Cold Storage, etc), mini-markets and convenient stores. The price of the bottled drink that sold through these retailers are relatively lower compared to price of beverage sold directly from Starbucks outlets / cafes. The product distribution through these members allows the company to appoint as many distributors as possible so that it helps to promote the company’s brand through mass-market selling. These channel members also help to reduce the logistic problems such as storing of goods and provide transactional function like reaching and promoting products to potential customers.

Some merchandises of Starbucks such as coffee mugs, tumblers, bottled drink (Frappuccino), instant coffee, etc can also be found at online order platforms such as qoo10, Lazada, ubuy.com.sg, etc. However, sometimes disputes might arise because customers question the authentication of these products purchased from these online platforms.

Exclusive Distribution (for Online Purchase & Delivery Service)

Besides intensive distribution channel, Starbucks also adopt exclusive distribution channel to meet the market demand, particularly in segment of food delivery service. Currently, Starbucks Singapore does NOT accept online order via their website or Starbucks mobile application and they only provide free delivery service for purchase that is made in their store with amount of at least S$30 and the delivery location is within 10 minutes walking distance to its store.

But as demand for food delivery service is increasing in Singapore, Starbucks has also collaborated with Foodpanda (food delivery service provider) to provide food delivery service for purchase made via FoodPanda's website (online) and mobile app. FoodPanda is the only food delivery company who has partnership with Starbucks for food delivery service in Singapore. The product selections for order through FoodPanda depend on the order location and are not as comprehensive compared to direct purchase from Starbucks outlets. However, customers still can enjoy high quality products from Starbucks at the convenience of having their order delivered to their doorsteps when making purchase through such platform.

Recommendation

The new product, Edible Straw, which will be used in sale of cold drink products like Frappuccino, cold brew, fruit juice, etc, will be introduced at all Starbucks outlets at during its launch. It is believed that the distribution strategy through all Starbucks outlets, the product will reach customers at the most direct and cost-effective way. And at the same time, the product quality can be maintained.