Monday, April 7, 2008

Starbucks Needs to Bring the Old Back

Going along with what we have discussed in class about Starbucks, this article in Time Magazine also shines the spot light on the every so popular coffee shop. The article harps on the mounting complaints from customers, employees and even President Schultz himself. In recent interviews with the billionaire, he believes “the company has strayed too far from its roots.”

On Valentine’s Day, 2007, Schultz wrote to the company's top executives "We have had to make a series of decisions that, in retrospect, have led to the watering down of the Starbucks experience and what some might call the commoditization of our brand. We are doing everything we can to differentiate Starbucks from everyone else that is attempting to be in the coffee business."

Moving forward, Starbucks will once again grind beans in its stores for drip coffee and will give free drip refills, offer latte upgrades and provide two hours of Wi-Fi to anyone with a registered Starbucks stored-value card. Also, there are plans to roll out as new sleek, low-rise espresso machines that will stand out more.

When I first read this article in Time, I had already read Professor Boveda’s blog. I found it interesting that such a popular, well established company would “try to do everything to differentiate Starbucks.” This may sound good at first, but at what point do you begin to do harm to your company by straying too far? I believe this is a perfect example of a risky idea gone badly. Also, after our discussion in class about Starbucks' color choices, would a upgrade in color selection be the key to a new, innovative and fresh look or would it prove to be another flop? Any ideas....?

5 comments:

Jasmine said...

I think that starbucks ahs a long way to get back to what they ar4e supposed to be offering their core customers.

They talk about the decline in the economy and how it is effecting sales. The ;ast thing they want is the see a decline in core customer spending. Starbucks is moving away from the values that made these customers so loyal, and they need to move back in that direction

Tanya Gesmondi said...

I don't really understand how a new sleek, low-rise espresso machine will help them stand out more. No one really goes to a coffee shop to see the machines they use to make the coffee, but rather for the taste of the coffee or for the experience. I do think the free refills will bring new customers. I know I personally like going to Bagelz rather than Dunkin Donutson campus for the free refills. I agree with Jasmine about moving back in the direction that they originally started in. Starbucks has a very strong customer loyalty and they need to acknowledge and appreciate these customers, or else they are going to lose them.

Ben Frechette said...

I am generally not a big Starbucks fan but I feel as if this will be affective in gaining a new customer base, however like jasmine says I think they should also consider they may be getting rid of some loyal customers in doing so and I am looking to see the results and how they do in marketing these ideas.

Malorie Davino said...

To be completely honest, I don't go to coffee shops for the overall experience. I base my visit around convenience and product quality. I go to Starbucks because I think they have great espresso and it keeps me alert a lot longer that other companies' espressos like DD. On days when I am running late, there are two Dunkin Donuts on the way to campus from my house and Starbucks is out of the way based on my everyday route.

However, Starbucks have built a strong reputation as well as a large fanbase for the ultimate Starbucks experience. These particular customers WILL go out of their way just to experience what they are used to. I think that Starbucks needs to focus entirely on their customers because they are the backbone to the company. To agree with what Tanya said, I don't understand how introucing fancy manchines with help their company stand out more.

Starbucks needs to perfect their product quality and customer service in order to maintain the stable relationships they have formed with customers thus far.

Nicole St. Jean said...

In this article, i noticed that Starbucks is going to "offer latte upgrades and provide two hours of wi-fi to anyone with a registered Starbucks stored-value card."

I think that Starbucks might be actually loosing customers because they charge for the internet, or require customers to have a registered Starbucks card in order to get 2 free hours of wi-fi with their new promotion.

I often go to cofee shops to get work done, and I choose to go to Brewed Awakenings over Starbucks because they provide free internet access, they have great quality coffee (for just about the same prices) and a more relaxing atmosphere than Starbucks (more leather couches, fireplace, etc.) Maybe Starbucks should focus more on their atmosphere rather than differentiating their coffee.