Starbucks - Smarter Marketing

While we were driving to the Palm Desert last week for Coachella, I saw tons of Starbucks billboards everywhere. Driving East on the 10 Freeway, past Riverside and through the valley of the windmills, countless Starbucks ads battle for your attention over the enticements from Indian casinos. They are on both sides of the freeway, drilling into your head that they now serve coffee.

Really? Coffee?

Today at the office in our weekly staff meeting, I brought up the topic of Starbucks marketing. The feedback and ensuing discussion were fantastic. Starbucks really touches a nerve.

Let me back up for a second.

We recently moved our offices. For 8 years we were in an old Tudor house that had nothing around it to visit besides a groovy vegan restaurant and a lousy gas station/convenience store. Then one day, about 8 months ago, a Starbucks opened across the street.

People smiled. They cheered. All of a sudden they had a certain skip in their step. I had never seen anything like it. Starbucks made our employees happier.

I found myself befuddled. How can this be? I mean, I like a Frappuccino every now and then, but why would people want to spend $4 every day on coffee that we were offering for free?

I was impressed. I was inspired. When we move, I thought, we need to be near a Starbucks.

Now we've moved and there is a Starbucks a block a way and there are two Coffee Bean and Tea Leaf stores about the same distance. Plus there are several other coffee vendors in this new neighborhood.

So you see, Starbucks had been planted in my mind before last week's road trip.

Today we all sat down and I showed everyone a few slides about Starbucks, what they were doing to drive people back into their stores, and what the competition was doing. Specifically the strategic attempts that McDonalds and Dunkin' Donuts were doing to steal away the coffee customer.

I'm aware of what Starbucks is doing. They are reminding people that they serve coffee. They are giving their customers the opportunity to suggest changes via the website My Starbucks Idea.

But the real question is, can they bring people back? Here are the hurdles as I see it:

1. We're in a recession (or close to it) - people have to cut back on spending, a Caramel Macchiato is a luxury item, not a necessity.

2. Starbucks is the corporate giant - why would anyone support Starbucks? What has Starbucks done for them?

3. Competition - McDonalds' coffee is cheaper, and many are saying it's better.

And what is Starbucks doing to counter these obstacles?

They are claiming that they have coffee.

Good thing they are letting everyone know that the brand that made it ok to spend $4 on a coffee drink actually sells... coffee.