Starbucks Customer Experience Strategy
According to a January 30th article on adage.com, Howard Schultz, CEO of Starbucks, has been discussing future strategies to increase the company’s sales. As many are aware, Starbucks has recently started a new advertising campaign which includes television spots. The article said they are still waiting to see the results of that campaign, but they have positive expectations. In the mean time, the company plans to focus on customer experience while in the store, in hopes of rewarding investors in the long run. They are planning on testing out a $1 coffee, a similar deal to what McDonald’s already offers. Many in the market are likely to have negative feelings towards the company’s new plan.
I think working on customer experience while in the store is a great idea for helping with the company’s brand and image. However, testing out the $1 coffee seems confusing to me because it contradicts their current branding image. When I think of Starbucks, I don’t think of a dollar menu. I’m not sure that current Starbucks users are all that concerned with have a $1 coffee option. Still, the $1 coffee may attract new people to the brand and end up helping the company achieve their investment goals in the future. It will be interesting to see if Starbucks' image changes as a result of this new customer experience strategy.
This article can be found at http://adage.com/article?article_id=124753
posted by Alison @ 11:53 AM
4 Comments
4 Comments:
Although the “$1 dollar coffee” item doesn’t fit the Starbucks brand image exactly, it is really a new way for the company to reach consumers. Actually Mc Donald’s $1 dollar coffee is really works and it attracts lots of people. So if Starbuck can make good coffee as they usually do and mark it at a lower price, I believe people will certainly purchase it. Not only their original consumers but many new consumers would also like to try the cheaper better one. But I think the company should consider the cost problem seriously. If the new strategy not works very well or not as they expected over a long time period, then the company may need to change their strategy according to the cost problem. At that time, the failed strategy will bring big negative impacts for the brand. And it will become even harder for Starbucks to try any other new way.
This move will attract more customers that were unwilling to buy starbucks due to its higher price. But, you have to wonder how this new value concept is going to effect starbuck's current image. How are people that are already sold on starbucks (and their image) going to like this Mcdonaldzation of their classy coffee shop? It is possible that starbucks could lose some loyal customers.
Starbucks needs to hope that they can bring in new people without alienating the people they already have. If they can do this the results could potentially be remarkable.
I think that this new promotion needs to be as publicized as possible and an key aspect of their new ad campaign. They only way you are going to get non-starbuckers to break their prejudices against the brand is by letting them know something new is here for them.
Is there a link between the $1 coffee and the new advertising campaign? I'd say, "You bet." Starbucks must continue to grow -- and when you can actually see TWO other Starbucks from the one you're in, growth becomes difficult. Obviously, they need to bring in new customers. To reach them, they need advertising; to keep them, they need a product they want.
I agree that this represents a problem for the brand's image. What media outlets do you think might be able to convey both an upscale image and a cut-rate price effectively?
This idea of the $1 coffee did not seem like it would hurt Starbuck's brand image as much as people say it would. I understand that Starbuck's is a premium brand but it seems like this $1 coffee would appeal to a different crowd. I think most people that would be attracted to Starbuck's new offer would be those people who are just trying to get in and out fast and want a cup of coffee without all of the jazz. For the traditional Starbucks customers there would still be the overpriced options and the chance to sitdown and read or do work. I can't even see these people being so opposed to the idea either. It would provide a nice option to fall back on if you wanted to change it up or felt like getting a coffee but didn't want to go overboard and spend alot. By expanding their options they are getting more people in the door, which will lead to people getting something more than the $1 coffee. This just seems like a clever advertising plan to me. The amount of customers they will lose from offering a lower grade option just isn't worth the amount of growth they will gain.
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