Archive for the ‘quality’ category

Can Starbucks Brew Effective Advertising?

May 11th, 2009

I’ve been a big fan Starbucks for many years. As a consumer, I love their coffee, their ambience, their music, their food, their other products and their service. As a businessperson who is in the brand loyalty business, I admire how loyal they’ve made me–and millions of others–to their brand. To me, Starbucks is about so much more than just coffee, and as a result, it is in a class by itself.

Even though my career has always revolved around advertising, I also love the fact that Starbucks was able to build their business on the basis of word-of-mouth support rather than conventional advertising. But now Starbucks, like so many other companies, is feeling the impact of a deep economic recession, and they’ve decided to lean heavily on advertising to help reverse their fortunes. From what I’ve seen so far, I like their strategy, but I’m not yet sure about their tactics. Their strategy is to counter attacks from lower-priced competitors like McDonalds not by slashing prices, but by communicating that they deliver excellent value because their higher pricing is accompanied by significantly higher quality. It’s always refreshing to see a company that maintains the courage of its convictions in tough economic times and holds the line on pricing rather than taking the easy and myopic way out by simply taking its prices down.

However, while I certainly endorse this strategy, I’m not sure Starbucks will be up to the task of effectively executing it. Their first print ad  features a feint image of a coffee bean sack and the headline, “Beware of a cheaper cup of coffee. It comes with a price.” There are two things that concern me about this ad. First, it’s not visually arresting.  Second, it focuses more on attacking the competition than on singing the praises of Starbucks.

Coming up with effective advertising is very hard, which is why you see so little of it. Starbucks is good at many things, but it’s never had to be good at advertising before. Perhaps they’ll figure it out, but the odds aren’t in their favor. Still, it will be interesting to watch their progress, and I’ll be rooting for them every step of the way.