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In 1983, Howard Schultz was inspired to buy the Starbucks Coffee Company, and according to his book Pour Your Heart into It – this occurred because of a cup of watered-down, bland instant coffee that he was served on a flight to Canada. On that flight, he was inspired to bring a European-caliber appreciation for coffee to the United States. Prior to the arrival of Starbucks, many Americans had never heard or, let alone tasted cappuccinos, lattes, and espresso. However, the price to maintain such pristine coffee houses would prove to be very costly – Schultz would never be able to charge $3.00 for a cup of premium coffee while a gas station was charging $.75 for a cup of coffee. Yet, he was convinced that if he could introduce the United States to a “coffee culture”, his new company would become one of the most recognized brands in the world.

Schultz opened up Starbuck’s coffee houses that were furnished to look like a combination of a living room and a reading room. The soft lamps and the plush décor were more than inviting. The menu suggested that one needed to be sophisticated to order coffee from there; he introduced new terms and concepts just for ordering coffee. The baristas (Starbucks employees) educated their customers about coffee in a brand new and passionate light. Rather than purchasing a Styrofoam cup of bland coffee from a gas station, coffee purchases became personal and social experiences.

Schultz’s main goal was to have his employees forge relationships with his customers through education, while creating real personal relationships with them. Soon enough, “Community Activity” boards hung in Starbucks – Community and town meetings were consistently being held in local Starbucks. Beyond that, the baristas were asked to memorize the drinks that the “usuals” ordered, and believe it or not, baristas are oftentimes requested by certain customers to personally make their drink.

Ultimately, the inflated price of the coffee was dwarfed by the intimate and extraordinary experience provided by Starbucks; thousands of newfound coffee connoisseurs vowed to never buy coffee anywhere else.

Is Starbucks’ coffee really better than anywhere else that sells coffee? You’ll hear mixed answers should you pose that question. However, the answer to the question itself is irrelevant – Howard Schultz is a master of product differentiation. He chooses to layer his product in a package of multiple benefits that make the customers feel both tied AND loyal to Starbucks. He became so well-versed in coffee culture, that the difference between his company and his competition was more than obvious; Starbucks was the new synonym for coffee.

Howard Schultz didn’t reinvent the wheel. Though many people enjoy his coffee, there are many other people who believe that coffee from Dunkin’ Donuts is just as good (if not better). However, the customer service and customer relations truly separate Starbucks from its competitors.