Howard Schultz on building the Starbucks brand: 'I know a little bit about marketing'

Howard Schultz
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Starbucks' former chair and CEO Howard Schultz is making news for his possible plans to run for U.S. president in 2020, and he used an interview at the South by Southwest conference in Austin, Texas to pitch himself as a "centrist independent outside of the two-party system."

But he also made a few salient points about how he built Starbucks into a $86 billion company.

"You can create shareholder value and you can create value for your people. We've also learned something at Starbucks that by doing good things to your people, your customers are going to build a large reservoir of trust around the equity of the brand, because they want to support a company whose values are compatible with their own," he told NBC News' Dylan Byers at the event Saturday.

Asked about how he would market himself as a presidential candidate after former President Barack Obama's "Yes We Can," and President Donald Trump's "Make America Great Again," slogans Schultz said: "I have not officially said that I am running for president. I think if you were going to give me a little bit of credit I think you'd have to say that over the course of the last 40 years I know a little bit about building a brand."

How Starbucks went from one coffee bean store to an $80B business

"100 million people this week went into Starbucks stores, we have 4,000 stores in China, we open a store every day. Starbucks was just named (Fortune magazine's) fifth most admired and respected company in the world. I know a little bit about marketing. So, give me some time to kind of feel my way through. When we get to the point that if I'm going to announce that I'm running for president, you'll be the first to hear what the slogan is."

Schultz also said giving staff shares in the company was the most important decision he made when building the Starbucks brand.

"We did that when we were private and losing money and what we did, basically, is we figured out a way to give everyone at Starbucks, including part-time people, 14 percent of their base pay in the form of stock options," he said.

"The secret of Starbucks … is the culture and values and guiding principles of the company, the level of behavior, and how people are treated. We're not perfect, we make mistakes, you know we employ 400,000 people and have 30,000 stores but we've demonstrated over a 40-year period that culture really does matter," he added.

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Schultz also said he disagreed with Trump's lowering of corporate tax from 35 percent to 21 percent, and that if he ran for president and won, there would be tax incentives for companies that "do the right thing" for their employees.

But Starbucks has faced criticism in the U.K. for paying an effective tax rate of 2.8 percent in the year ended October 2017 after its profits were inflated by a dividend from another part of the company, according to a report in the Financial Times in October. The U.K. corporate tax rate is 19 percent and the company told the FT that it "pays all its taxes and meets all international standards and regulations."

Schultz is the largest individual shareholder of Starbucks, with a holding of around 37 million shares worth over $2.5 billion, and he would take the "necessary" steps needed to distance himself from financial interests if he does run for president in 2020.