Canadian Marketing Blog

A memo from Starbucks

In a recent memo from Starbucks, Starbucks Chairman Howard Schultz wrote to CEO Jim Donald about his concerns with watering down the Starbucks "experience".

When your organization grows at an incredibly rapid rate, it is very difficult to match the brand experience that is credited for the growth in the first place.

We all see it in our businesses from time to time. We come up with "more efficient" ways of providing our service only to realize that we didn't take the time to see the impact on the brand.

For Starbucks, Howard Schultz realized that the reason Customers originally came into his stores was for the ultimate coffee experience. The smells, tastes, sights, sounds was what differentiated this buying experience from other places that sold coffee. Customers were willing to wait longer, and take their time to enjoy a mini coffee vacation - ok maybe I'm going too far with the vacation thing :)

Commercialization has its price. By taking away the experience, or the thing that differentiates you with others, you are left with the basics. Fast service, good prices, happy service people, clean stores etc etc. insert McDonalds, WalMart or any other mass chain retailer/service provider.

Starbucks, by losing the experience part of their offering, are competing with those that invented the commercialization of restaurants. Unfortunately they are finding it harder to compete at this level. McDonalds was rated a better cup of coffee than Starbucks in a recent Consumer Reports study.

In order to protect and grow our brands, it's important to always remember the question "our Customers buy from us because.......". In the case of Starbucks, it wasn't as much the coffee as it was the overall love of the experience.

Howard Schultz is committed to getting that differentiation back.

Despite Howard Schultz's promise to keep it about coffee I think it's more a question of Starbucks trying to leverage it's massive store network into a media distribution network. Recently, Starbucks "Hear The Music" label signed Paul McCartney after 43 years at Capital Records as its inaugural artist. I'm not against Paul McCartney but with McCarthy on board look for artists of all shapes and colours to sign on to this new venture doing to music what Starbucks has done to a decent cup of coffee.

We've all seen what a massive distribution network like Wal-Mart has done for manufacturers by forcing them to tailor their product and trade marketing and I fear that this move by Starbucks will turn us into a mindless bunch of caffeine swilling soft-rock sycphants.