The economy stinks right now. I know it. You know it. And Starbucks, the high-end coffee retailer, they know it too.
As a result, they’re lowering prices on some beverages in certain markets and raising prices on more “complex” drinks. They’ve also launched breakfast “value pairings.” These signals suggest a “pay less” or “better value” message.
A brand that’s perceived as indulgent can only be in trouble in an economy like this one. Starbucks knows it.
But in a new series of print ads, Starbucks says that it’s worth paying more for its coffee. In the ads, the coffee giant highlights what makes it different with headlines such as “It’s not what you’re buying, it’s what you’re buying into,” and “Beware of a cheaper cup of coffee. It comes with a price.”
Two messages:
- We’re not as expensive as you think
- We’re worth the higher price
You can see all of the print ads on Starbucks’ Ideas in Action Blog.
Is this campaign:
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A brand champ?
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A brand chump?
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Somewhere in between?
Let me know what you think.
A bit overly defensive? Yeah. But then again, Starbucks set the price point bar so high that they have to re-trench, given what’s happening in the economy. They may be reacting (to economic woes in general and McCafe threat in particular) with a defensive tactic here, but from a branding perspective the key factor is that the brand experience at retail remains consistent with what loyalists have come to expect.
The Brand Personality may evolve into one that is more accessible and less exclusive, but if maintained the visceral, tactile, sensory experience that Starbucks is known to deliver will continue to fulfill the emotional drivers of its customers.
Compared to brand life cycles, communications messages like these represent tiny points in time, and are highly adjustable. So I’d have to say “Somewhere in between”, because it’s all still shaking out.
This is not a “Branding” campaign.
Advertising is not branding to begin with.
This particular ad will only address the fight with McDonald’s over coffee price, and will have no effect on the Starbucks brand.
@ ilan… It’s important to distinguish, yes, and this very clearly is an advertising campaign. At the same time, any advertising campaign must speak to and remain true to the brand. We’re talking about an advertising campaign, yes. But it’s also a brand signal to the world.
I like the simplicity of the campaign. These are copywriter’s ads… Simple, hard-hitting, overt statements of what the Starbucks brand is all about. There’s no dancing around it, no overly-cute concepts. Kudos for that.
I find it ironic that one of the best headlines is the title of Howard Shultz’s Book: Pour Your Heart Into It.
Compared to most value-oriented “In these troubled times” campaigns, it’s brilliantly understated. I don’t think they’re chumps at all.
It’s a start to taking action, however, they are missing the boat – and should focus more on CSR model the new-age audience demands: Corporate Social Responsibilty, like Tom’s Shoes. The giants who give back will be the winners in the end – especially a niche product like Starbuck’s.
chump…change…
It’s the battle of the soul-sucking multi-nationals! Actually, I think Starbucks is on to something to bring out the best aspects of their brand. McD can only rely on cheap.
Incidentally, I’ve met people who really enjoyed their employment as an SB barista but no one who like working for McD. I think that counts, too.
Definitely chump!
Did Starbucks ever have a branding strategy? I don’t think so. Even Howard Schultz admitted that “we let others define us”.
Strong branding, supported by advertising, is building upon a strongest and most distinctive authenticator. IMHO, Starbucks never knew it clearly and is even more deviating from such a concept.
When corporations panic, they often start trying to kill their brand. Weird, but true. It seems Starbucks is going to lose against McDonald’s and Dunkin Donuts. And this campaign will do nothing against it.
Full disclosure: I’m pretty much a Starbucks addict. That said, I think the new campaign is good. Not excellent or outstanding, but good. To me, the print ads reinforce that Starbucks claims the high ground in both quality and playing fairly with coffee growers. They address the “risk” of paying a high price for a drink through the reassurance that if it’s not perfect, it will be remade. And the further copy reinforces their commitment to high quality (if not perfection) delivered to every customer.
The video follows a pretty standard approach, using the founder/CEO, beginning in their first store and moving to a new one, and engaging with associates on the new campaign. All this reinforces brand heritage and history,the brands’ work to remain progressive and current, and to engage and value the contributions of associates (We’re all in this together…).
In these hard times they are not afraid to address value: it’s about the quality of the product and the quality of the experience, the customer interface. And you don’t have to spend four dollars to experience it.
Overall, a good response that reflects thought and thoughtful execution.
David, terrific looking blog, and great post about Starbucks.
Economic periods like this one tend to highlight the sensitive points of both brands and people. The more pressure applied the easier it is to identify weak points or perceived weak points in the brand. And one of the ways this often seems to play out in the market ecosystem is through this re-examination of price point and brand imaging.
There is a great illustration of this from the depression era. Cadillac and Studebaker (for those of us under 60, the Studebaker was a competitive luxury brand automobile that competed with the Cadillac and Lincoln way back when. Studebaker decided to go down market with its brand and pricing model whereas Cadillac maintained its luxury positioning, price and brand. The rest, as they say is history, Cadillac went on (at least until recently) to enjoy a long and mostly profitable 80 or 90 years while Studebaker faded into the collective memories of a generation.
In this instance I suppose the first question to ask is, if Starbucks is a luxury brand or perhaps even, is coffee a lifestyle or commodity product? Probably a bit of both, for the vast majority of coffee drinkers I’m sure Dunkin Donuts or, in Canada, Tim Horton’s is probably the coffee of choice sitting nicely at some intersection point on graph where a measure of quality / taste meet at some price point. For some Starbucks is a lifestyle brand or even a conspicuous consumption product.
This campaign looks like its trying to touch both audiences, for the lifestyle luxury drinker, Starbucks is maintaining its premium brand positioning and price points, for the commodity drinkers it looks like they are trying to compete with a basic comparable drink.
It will be interesting to see if the ad campaign can satisfy these two goals.
Steve, thanks for weighing in. I like the Studebaker/Cadillac example. And, you’re so right. Starbucks appears to be targeting both audiences, retaining its exclusivity, yet promoting its accessibility. While these two objectives do seem at odds, I have to applaud Starbucks for its willingness to go that route.
The big question now is whether “McCafe” will catch on. Certainly, it’s going to take some market share away.
On the other hand, it may help grow the category, which could benefit Starbucks in the long run. McDonald’s may be able to compete on price, but they will have a tough time competing on taste. Not to mention that hard core Starbucks fans are never going to pull in to a McDonald’s drive thru…
Thanks to everyone for weighing in on Starbucks’ new ad campaign. The result, based on the discussion here and on discussion boards, seems to be somewhere in between, leaning strongly to CHUMP.
My view: Starbucks had the courage in a tough economy to talk about price. They do seem to talk out of both sides of their mouth with two different messages.
In this case, I think Starbucks has got it right. Defending your brand position means very little if consumers aren’t spending. Look, Starbucks has to survive, right? Branding in a way that positions their products as premium and affordable makes perfect sense. It’s the economy, stupid.
Starbucks also knows that its core base is not going to McCafe their days anytime soon. That’s not to downplay the threat from McDonald’s. They are a formidable competitor and no doubt will take share away. However, Starbucks is well positioned to compete. McDonald’s, at this point, can only compete on price. Starbucks rules on taste.
Yes, Starbucks has its problems. They may be one of the many brands that grew too big too quickly. They may need to scale down. They may need to reset expectations as they navigate the tough economy and manage increased competition. But I just don’t see any harm to the brand from this ad campaign. I think it can only help.
Thanks to all for contributing, and I’d like to draw your attention to the next brand champ or chump. This week: Honda’s two minute animation on being a “doer” for the environment. Is this piece a winner for Honda? Brand champ, chump or somewhere in between?
http://onbrands.wordpress.com/2009/05/10/hondas-doer-film-brand-champ-or-chump/