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Thursday, March 19, 2009

Tears in Starbucks Coffee

Those of you who have been reading this blog for a while may recall that in 2007, I tried to warn Starbucks of why their company was tanking. At that time, nobody wanted to hear it. They were all convinced that Starbucks was one of the country's best brands.

Wrong.

Despite the stock's swan dive well before anyone had even sniffed any kind of recession, all the telltale signs were there. Sure, everyone knew Starbucks. The problem was that nobody knew why they should evangelize Starbucks. Today, they still don't. And likely never will.

In a desperate attempt to right his listing ship, Starbucks CEO, Howard Schultz, has been trying all kinds of really, well, strange tricks. Earlier, he introduced the concept of Via, an instant coffee product sold in bags. Via pretty much got a frigid reception, especially from Starbucks' most loyal users, who avoid instant coffees like the plague. Old Starbucks fans became confused -- and by all indications, felt somewhat betrayed -- by their caffeinated ideal's capitulation to mass market tactics. Starbucks sold out, losing the loyalty of its users who by now are questioning whether Starbucks stands for anything at this point.

It's a good question, considering that Schultz himself recently admitted in the Los Angeles Times that "we've allowed other people to define us."

Yes, Howard, you have. And good for you for recognizing that. What's not good is that nowhere do we see signs of you rectifying the problem. As I've been telling you for the last decade, they don't know if you don't tell them. And nobody -- including Starbucks management -- can tell you why the brand should be perceived as the only solution.

So, what's going to happen with Starbucks? If history is any indication, Schultz will probably hire some hack "brand identity" or advertising agency to apply some oblique, short-term media-driven solution. We still won't know why we should insist on, or pay premium for Starbucks. The company will continue to slide and everyone will keep wondering what went wrong.

Except for McDonald's and Dunkin Donuts, of course.

3 Comments:

Blogger Ramon Ray said...

Hey Rob, so good to see you going strong after so many years! Frankelbiz and etc.

Ramon Ray, Editor & Technology Evangelist, Smallbiztechnology.com

PS - I could not find ur email address but email me ramon at smallbiztechnology.com

4:22 AM  
Blogger William said...

Question-Did Starbucks initially hire a branding company and if so who was it? At leaast there graphics are nice.

9:54 AM  
Blogger Rob Frankel said...

It's my understanding that Starbucks hired a graphic design company, although these days, everyone calls himself a "branding" agency, so who really knows?

10:03 AM  

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