What’s the Perfect Blend?

May 19th, 2009

by John R. Sedivy

6a00d834515c0a69e201156f6bf68d970c This morning I had found a link from the Starbucks news feed on Facebook to a New York Times article which outlines a new marketing strategy for Starbucks. The article is called “New Starbucks Ads Seek To Recruit Online Fans”, click here to read the article, it is a pretty short but interesting read. Basically Starbucks is taking the approach of focusing their advertising on the quality of the coffee – how it is made and where it comes from. Advertising will be in the form of spreading posters around cities with marketing slogans. Starbucks is integrating this approach with social media by having a contest where people are encouraged to find the posters, take a picture and post to Twitter in the hopes of being the first to do so.

The heading on Facebook was “Major Ad Campaign for Starbucks to Focus on Quality”. This sparked my interest given the recent attacks by competitors who are looking to undercut Starbucks by focusing on price rather than quality. As I mentioned in a previous article I would much rather pay an extra $1.00 for a cup of coffee (or forgo if necessary) than jump to a cheaper alternative. Besides, personally I prefer Starbucks for the experience, the coffee is secondary – I had written about this in my article called “The Customer Experience”.

As with many other industries, quality is assumed – it gets you in the game. It is not a true differentiator. That being said – Starbucks is the only one of it’s competitors who focuses strictly on coffee – so there is some advantage to be gained here. However my thought is that it should not be the primary focus in their advertising campaign.

Given both my interest in the brand and social media my curiosity was peaked. Throw in the title of the Times article and the Facebook heading and my thought was that they must be on the right track – not so fast, all is not as it appears, I will explain.

The Current Score
Recently I have been following Starbucks progress in reaction to the changing economic landscape. As with many other companies, and individuals, Starbucks appears to be attempting to find their groove in the new economy. Here is what I have noticed and documented so far – I have provided a link to each article that I had used at that point in time so as not to duplicate too much effort and detail:

1. Starbucks releases low cost alternatives such as Via to offset reduced consumer spending. Refer to my article “The Death Of A Brand?” for additional detail. My overall opinion – bad move, at least for the long term – Starbucks is cheapening their brand by taking this action.

2. Announcement by competitors that they will be entering the premium coffee market. Starbucks counters with ad campaign – “Beware the cheaper cup of coffee it comes with a price.” My opinion is that this was a definite positive – well done! See the details in my article “The Customer Experience”. One customer interviewed in a NBC video referenced in the article emphasizes the customer experience – pay attention Starbucks!

3. Starbucks undertakes efforts to solicit feedback from customers via market surveys, that in my opinion were masterfully executed. See “The Customer Experience” for additional detail. This may have only been a local activity to Cape Cod as that is where I experienced the survey, but thought it was worth documenting nonetheless – well done!

4. The new ad campaign documented in the New York Times which is the subject of today’s blog – My opinion is that there is a disconnect here and that overall it is not a good long-term strategy – I will explain more.

So far I believe that there are two negatives and two positives here – today’s announcement makes their activities to date a draw. For basic information on the importance of keeping your brand exclusive and acting consistently to achieve this see my article on “Consistency And Exclusivity”.

Quality Or Experience?
With this latest campaign I believe that Starbucks has great intentions but poor execution. First, the focus is incorrect, and I am not alone in this assessment as stated in the above referenced New York Times article:

“That might not be the right strategy for young people, said Richard Honack, a professor of marketing at the Kellogg School of Management at Northwestern. Unlike Starbucks’ older customers, “Generation Y goes to Starbucks for the Internet, the music, a place to hang out,” he said. “Selling them the coffee and where the coffee comes from? I just don’t know if that’s a good idea.”

Again, Starbucks should focus on the experience it provides. I frequent Starbucks for the very same reasons – “the Internet, the music, a place to hang out,”. Sure the quality of the coffee is great, however quality is subjective as may be witnessed by at least one set of consumer taste test results. For an additional take on this theme check out this video as originally provided as part of an earlier article.

Furthermore, I am in agreement with the statement from Richard Honack, this message is geared towards the wrong generation. I am in the Generation X crowd and I feel this message is outdated for me as well. I recall as a child seeing the commercials geared towards my parents – the famous Juan Valdez and the benefits of 100%-Colombian coffee. This theme may have worked in the past, but this, in my opinion is outdated and the consumer (at least Generations X and Y) no longer care. Again, quality is assumed by most consumers – what else do you have to offer me?

Push Vs. Pull
In past articles I had discussed at length the differences between push vs. pull marketing. Push or outbound marketing is unwanted advertisements that are originated from a company and pushed upon the consumer. This is the form of traditional advertising such as commercials, posters, mass mailings, etc. Today’s consumer is savvy to this sort of manipulation and has conditioned themselves to tune it out, therefore it has become a very ineffective means of marketing.

The opposite of this is pull or inbound marketing. It may be likened to viral marketing where you just put yourself and your brand out there for others to discover, talk about, and spread the word among themselves. You provide all the necessary information for the consumer to take action, but you do not impose unwanted information and interrupt their activities. This sort of marketing takes the form of websites, blogs, social media, etc.

Based on everything I have read inbound marketing is most effective, especially for Generation Y – those more at home on the Internet than with a physical presence. Personally I am more receptive to inbound marketing. Nearly every purchase I make is by means of the Internet. The point of sale is not necessarily the Internet, but my initial research is conducted on the Internet prior to me leaving the house. I have even started transitioning in this direction towards news. Most the news I receive is by means of social media such as Facebook and Twitter – passed along by friends or favorite brands – case in point the article passed along by Starbucks this morning.

To wrap things up I believe that Starbucks has some great intentions here but needs to tweak execution. I feel as if they have one foot in push marketing and the other in pull marketing. A mix is appropriate, as one should not discard the lessons from the past and push marketing is appropriate for some audiences and circumstances. However my feeling based on the Times article this morning was that Starbucks had a heavy push focus with a tad bit of pull marketing. If so, this is the wrong focus and should be revisited.

Another aspect to consider – think about the title of the latest Times article: “New Starbucks Ads Seek To Recruit Online Fans”. The title itself suggests an incongruent strategy. How is one to seek online fans via offline means? One must go online to find online fans and offline to find offline fans. Something to seriously consider with any new endeavor – the means employed need to be congruent with the desired result.

My guess is that Starbucks is like many of us in this new economy, they are just trying to find their way in a changing competitive landscape. Change is hard – as is letting go of the past. The bigger you are the more you have to lose, and Starbucks is a big brand, with many fans. With success comes detractors who would hope to see them fail. I am not one of these detractors, but rather a great fan of the brand – the experience and product. As I had mentioned in past articles I am rooting for Starbucks and wish them the best. But as with most things a person cares most about it life – I am most critical. And this should be the most flattering of all to Starbucks.

Starbucks should focus more on the experience and less on the quality aspect of their brand!

-John R. Sedivy of Cape Cod Branding