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February 05, 2009

Riffing on a MarketingProfs Post

Writing for the MarketingProfs blog, Ted Mininni posted his take on a recent McDonald’s ad for their McCafe coffee drinks. His post begins …

”Score one for McDonald’s... at the expense of Starbucks and all of the other high-brow coffee shops peddling pricey lattes, cappuccino, espresso and all manner of caffeinated concoctions.”

His post continues by declaring pretentious coffee is out and affordable coffee is in. Right on, I agree with his point given today’s dismal economy.

The comments to his post are lively and run wild. Definitely worth reading.

In the comments, Ted mentions how “Eight O'Clock beat out Starbucks. Go figure.” This triggered a long-dormant thought that is no longer dormant. Read below for my comment to Ted on this.


Ted … I gotta chime in again. You mentioned how 8 o’Clock Coffee beat Starbucks Coffee on taste. True. And Dunkin’ Donuts is touting the taste of its coffee is preferred over Starbucks. Yep. Got it.

Starbucks has never fared well in taste tests. That’s because the taste of Starbucks coffee is too polarizing. Many people say Starbucks coffee tastes too bitter, too burnt, too bold. Starbucks has always had a strong point-of-view about what coffee should taste like. That strong point-of-view about coffee has helped to build its brand.

In the book PURPLE COW, Seth Godin smartly writes … “In almost every market, the boring slot is filled. The product designed to appeal to the largest possible audience already exists, and displacing it is awfully difficult. The real growth comes with products that annoy, offend, don't appeal, are too expensive, too cheap, too heavy, too complicated, too simple — too something."

8 o’Clock Coffee makes boring coffee. Boring coffee is not going to annoy, nor will it offend people. Conversely, non-boring coffee will annoy and offend people. 8 o’Clock Coffee has never been a growth brand. Starbucks, with its non-boring taste profile, has been a growth brand. HAS BEEN, being emphasized.

I offer up that Starbucks has been slouching towards boring coffee for years. The biggest coffee push from the company recently has been behind Pike Place Roast. This is a mild coffee meant to appeal to the masses, which means it’s meant to be boring. Problem is, the Starbucks brand was built on strong, polarizing coffee … not boring coffee.

As Starbucks has grown to over 16,000 locations worldwide, it has tried to tone down its strong point-of-view on coffee in order to appeal to even more people. In my opinion, that’s hurt more than it has helped.

The company has abandoned its strong point-of-view about how “good” coffee should taste. This abandonment has wrecked havoc on its brand. In its attempt to appeal to everyone, Starbucks has lost those someones who enjoyed a coffee taste profile that isn’t watered down to a milder, more palatable and less offending taste.

Back in the day, the coffee Starbucks served earned an opinion from people because it wasn’t boring. These days, the company serves boring coffee (Pike Place Roast) and it no longer has a strong point of view about how good coffee should taste.

It’s my take … focusing on boring coffee has, more than the dismal economy, positioned Starbucks for the steep decline its experiencing.

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Comments

Hi John -- Starbucks has also been as much about the experience as well as the.. uh..."decisive" coffee. So do you think Starbucks has gotten boring, as you say, because other brands (Peet's), are increasingly challenging them in their markets? When there's a fresher, hipper, bolder shop in town... and Starbucks appears increasingly corporate... what else can they do?

(I seriously don't know whether this is valid -- O Starbucks Swami. Just asking.)

Ann ... I've said a lot over the years about Starbucks. Can't rehash everything in a blog post. As I mentioned early in the riff, I've had this "boring coffee" bent simmering inside me for years and had to set it free.

As for what Starbucks can do given its boring coffee and staid in-store experiences... the best collection of thoughts identifying and solving Starbucks problems that has run on this blog can be READ HERE. (Keep in mind, that advice was written in March 2007.)

I agree with Starbucks serving boring coffee. In Norway (where I live) the coffeeshops has not been hurt by the economic downturn and I believe the reason being that they don't appeal to the masses and stick to their hardcore coffee regime.
When things gets tough around us we need to find comfort in small oasis of that little extra, were we can indulge our need for that little extra. If a brand does not give us that possibility it becomes routine. Routine is not a good selling point.

I think it comes down to overly aggressive expansion. There used to be one Starbucks in our area - two towns over. Now we have three of our own. I'm not sure that the coffee has changed all that much and I don't find the experience all that different. I think they over-saturated the market and lost their Purple Cowness.

When you see Purple Cows everywhere they become ordinary.

I have to take issue with McDonald's campaign against "high-brow coffee shops" and their billboards that say "4 Bucks is Dumb". The cost of a medium Caramel Mocha at McDonald's -$3.50.

i enjoy everything the the McDonald's McCafe coffees except the goofy name

Great article. The loss of focus of Starbucks can be witnessed on many dimensions, not just the product site. Take service. To cater to the mass-market, many Starbucks shops have become fast-paced, to-go places, not different from the Dunkin Donuts from across the street, with doors opening every other second and baristas becoming stressed out in rush hours.

For me, it appears as if this move contributed to attracting customers that should actually be left to go to Dunkin Donuts or Pete's. If the doors of the stores keep opening every other second, and if stressed out customers rush in and out to get a quick cup of coffee, Starbucks jeopardizes everything that makes it strong: the loyal customers that come there every day to enjoy this notion of the “third place”.

Very often when doing the calculations in such cases, a decrease in customer lifetime value of the loyal base might mean a much higher loss of profitability than to let go of one coffee drinking segment. And when this customer group does not fit Starbucks’ brand mantra anyway, the long-term viability needs to be ensured at all cost.

Francesco Wesel
Integrated Marketing Communication
www.francescowesel.com
www.brandnewtimes.blogspot.com

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