Following the Guardian’s interview with Starbucks founder, Howard Schultz (http://tinyurl.com/ycffluw) there has been a lot of tweeting about the rights and wrongs of his strategy for Starbucks. The fact is that Starbucks ranked number 90 on Interbrand’s 2009 list of global brands (http://tinyurl.com/3e9lyp), down five places on a year ago, coinciding with a 16% decrease in brand value; so something has to be done.
Schultz’s diagnosis of the company’s problem is that growth had been seen as a strategy when, in fact, it is merely a tactic. By putting too much of the company’s focus on growth, mistakes were made that were disguised, when they should have been investigated and corrected. His solution is to go back to his original inspiration of the ‘romance of coffee-making’ and cater for the communities that Starbucks serve with an individual, non-corporate look.
The first experiment of this new look was in London’s Conduit Street that opened in November 2009 (see photos at http://tinyurl.com/ye79s8r). It looks more upmarket, with great attention to the furnishings, and the coffee counter has apparently been designed to emphasise the brand’s coffee authority. There are due to be another 100 of these individual refits across the UK by the end of 2010.
Whilst, in this new look, the corporate branding is much more recessive, even tasteful, in Seattle, USA, Starbucks has gone a stage further and is trialling three totally unbranded stores that have been designed to resemble independent local cafes. Critics have dubbed these outlets as ‘Stealth Starbucks’.
Fundamentally, I believe Starbucks has two marketing problems in the UK. Firstly, the brand needs to engage with its consumers and deliver the type of coffee experience they want. It can’t do this by refitting stores to ‘pretend’ to be a local coffee shop that will be rejected when people realise it’s really global brand Starbucks. They should look at the challenger brands that have grown up in their wake and see why consumers. In many cases, have a closer relationship with some of these.
Secondly, and most importantly for me, they need to look at their product. I am a real coffee drinker. I drink my coffee black (ideally a double espresso) and unsweetened, not frappuccinoed with fruit juices and cream! So I actually TASTE what I drink and Starbucks coffee is not good! I can only really liken the thin flavour and strange aftertaste to the comparison between real 70% cocoa chocolate and American chocolate like Hershey’s. There is no comparison.
So, if you’re listening Mr Schultz, marketing is all about the product too!