So I came across this article on this woman’s blog (who is apparently well known and on TV) and it just irritated me. You can find the link right here. She is completely bias to her viewpoint and she doesn’t make any sense in regards to business and marketing AT ALL. She’s trying to say that Starbucks is making a huge mistake by introducing their own in-house taste test for their new instant coffee. Read that article before you read this post, it’s short and mine won’t make sense unless you do. I can’t believe this woman is valued on TV for her work. I went to write a response to her blog but the comments were closed. If I could sit down with this woman I would have a ball telling her this; but alas, I can’t. So, dear Laura Ries, read this response from yours truly:
As an avid Starbucks lover, coffee drinker (yes, both at home AND in the retail store) I would like to chime in and say that this post makes absolutely no sense. Before my credibility is shot, and I’m deemed as somebody who just likes to reply to blogs with no understanding of the content, i do have degrees in business, marketing, as well as finance, so I do understand what you are trying to say. Although I feel like your post is slightly bias and tailored to your personal view of the coffee shop. I understand this is a post about evaluating their brand and marketing strategy, but clearly this post demonstrates that you are just someone who likes to talk about the Starbucks brand and not necessarily dive into the business strategy and finance behind it from an outside view.
Just because a company is going against the norm and choosing to do an in-house test, as opposed to a competitor test, it does not mean that they are “shooting themselves in the cup.” Only a company who has a strong brand image, strong credibility, and a high consumer base would be able to pull this off without playing benedict arnold. The face that they want their consumers to see that their instant coffee has the same delicious taste as their brewed coffee is NOT a horrible move, as you might suggest so strongly. It’s not “insane” that they are doing trying this. What Starbucks is trying to demonstrate is that consumers are getting a great deal by being able to take Starbucks into their house/workplace with them and brew it instantly, as opposed to waiting for their coffee maker to brew a regular pot. The beans being used are probably the same, no? The only difference is that it’s instant. How is their credibility being shot when they are demonstrating that their company and connections are so strong that they can bring you the SAME taste via a venue that is normally thought of as a low-end way to drink coffee (instant coffee)?
You say in your post,
“Today, Starbucks is using a taste test that could lead to another disaster. If a cheaper, instant coffee can be easily made at home or work and it tastes as good as the real thing, why waste time and money going to a retail store?”
… that is false.
If you truly knew the in’s and out’s of the Starbucks brand, you would know that the majority of their consumer base loves to go into the retail store. It’s practically a ritual that won’t change, no matter where else they may grab coffee throughout the day. I myself have their coffee to brew at home, yet I also look forward to walking into their retail store, ordering my “tall white mocha latte”, sitting with someone or by myself with my laptop and just enjoying it. Starbucks is not only just a coffee, it’s a lifestyle; providing a new product to grab another market is not going to change that.
What about that small market of people who dislike going into the retail store due to lack of time? Or simply because they enjoy the coffee but don’t enjoy sitting in a coffee shop? How many of those people will stop going to Starbucks eventually? Probably a lot. Now how many of these people refuse to go to Starbucks, work all day, crave that delicious coffee, only to find that their workplace is cutting costs and providing really terrible instant coffee? Probably a lot. Being able to take Starbucks instant coffee to work with you is a gold mine for those who hate going into the retail store. What is that called? Oh yes, a market that was on the verge of being lost that is now renewed by way of a new product. A company should always be looking to retain their current market as well as look to potential new markets. I would say Starbucks new strategy is effective and efficient.
When you say what I previously quoted, it makes your argument weak. ….really? how transparent can you be? Another paragraph that makes it painfully obvious that you are trying to paint a specific bias picture to your readers. What about the flip side? In my opinion (yes, I do value starbucks, but clearly I have the ability to analyze this from a business and marketing standpoint, something you are lacking in most of your posts) by having Starbucks demonstrate that amount of confidence in their instant coffee, it shows that they have taken the time, money and research to bring the convenience of instant coffee up to par with the standards of their brewed coffee. Something that no other company has taken the time to do. Instant coffee has always been viewed as a “poor man’s coffee”; does that mean it can’t ever be brought up to higher standards? In your eyes, yes, because you say that Starbucks is killing their image by showing their brewed and instant coffee taste alike. In my eyes? No. They’re showing that their instant coffee is great enough to be up to par with the retail store coffee. They are being innovative. They just put a new face AND quality to instant coffee.
“But there is no potential for one brand to do two strategies at once and succeed.”
… False again. You are right by saying a company can either go with a cost cutting strategy, or a quality strategy… they are mutually exclusive, however, a company bringing a “cost cutting product” up to a quality product at a normal price is not having conducted two strategies at once. So can Starbucks do this? Yes it can. If you are such a strategist, you would understand what it is they are trying to do. Go back to business school.
One last thing…
“A high-end brand needs to stay focused no matter what. Introducing cheaper versions of expensive products damage the credibility and power of the core brand.”
They ARE staying focused. They are not introducing cheaper versions of their expensive products. They are changing a product that was CONSIDERED a cheaper product and showing it can be made high quality and still provide convenience. Can a company keep their products the same without being innovative? Can a company operate low risk without changing their strategy? No. A successful company has the ability to adapt and change, see things other companies are missing. They need to stay focused… on the future. Clearly that point has escaped you.
PS: I couldn’t help but notice that you LOVE (L-O-V-E) to use strong adjectives for any sort of negative word in your article. You very rarely use positive adjectives. Maybe that’s why I have such a strong dislike for your post? It screams negativity.