Branding

Interesting news today from Top Pot Doughnuts.

The Seattle Times reported that the small chain that's been providing doughnuts to Starbucks company-owned stores in 25 states will go nationwide April 8. All 7,000 of Starbucks company owned stores will now serve doughnuts.

Gee. $1 coffee and doughnuts. Sounds a lot like Dunkin' Donuts to me.

Every where I turned today, people were discussing Starbucks $1 cup test. In case you hadn't heard, Starbucks is testing a $1, 8 oz. cup of coffee (appropriately named "short", but it probably more appropriately defines the amount time in which they'll test it before canning the whole idea), with free refils, in it's Seattle stores.(MSNBC link). I'm sure those who want to soak up the Starbucks atmosphere and do a little social networking will love the idea that they now have a bottomless cup. Yet, will the carmel-mocha-latte crowd like the idea of the average joe swilling coffee and lingering much to long in their coffee haven?

The MSNBC article notes that Starbucks Chairman/CEO Howard "Shultz said he believes the company’s main problem was it lost its
focus on customers in recent years as it concentrated on growth. He has
downplayed the threat from a growing cadre of competitors, saying the
company has always faced tough competition."

That excerpt is pretty telling. Maybe they haven't lost focus on their customers. Maybe they just had the wrong customer. Think about it. Starbucks has built is brand on the carmel-mocha-latte crowd and their willingness to pay just south of $5 for a 16 oz. coffee-flavored drink. Now, in an apparent effort to drive new business and stem losses, they're going to abandon their core audience in and attempt to attract the value-concious coffee drinker who has hours to spare to get full value for their money. I can see it now, Starbuck's locations filled from open-to-close with 75-year-old retirees sipping coffee from the bottomless cup and reading every newspaper in sight. Hmmm. Perhaps aging baby-boomers are the "right" customer for the next 20 years.

This $1 coffee strategy just made coffee a commodity again. If you really want coffee, just coffee, you've been able to get if for around a $1 for some time. Heck, you could even get a 16 oz. coffee in Starbucks for about a buck-fifty (only 50% more cost but 100% more coffee than this great new deal). If you're paying a $1 for coffee in today's culture, you probably don't care about atmosphere or really too much about taste. But to the carmel-mocha-latte crowd, Starbucks and it's coffee drinks represent the elite of coffee lovers. It's a place to get away and relax with friends in a comfortable environment. No, they're not going to like it much when the new crowd shows up and takes their space and drinks $1 coffee. It'll kill the whole experience forthe Starbucks core customer, and it'll likley kill the brand that Starbucks has worked so hard to build.

On second thought, maybe that's realy Shultz's plan. If you put all together, cheap coffee, decent atmoshpere, opportunity to hang out all day sipping coffee, chatting with retired friends and reading the newspapers, it doesn't sound so bad. Denny's does very well with that strategy.

I'm sure you've all read the news about the few bad apples at one leading consulting firm who have cost the jobs and pensions hundreds, if not thousands of people. Both the consulting firm
and its client have lost large numbers of customers, again, because of the actions of these few individuals.

To read some the press reports, we apparently should be surprised by the customer defections,

I just returned from the annual Licensing Show in NYC. Despite the growing interest in licensing by celebrities to generate another revenue stream, I was surprised not to see any living celebrities licensing their names and images on products. The problem is, I suspect, most celebrity agents and managers don't have a clear understanding licensing and view it as something that will negatively impact their client's career. Nothing could be further from the truth. Licensing provides a great means of image control and can boost a career.

Consider that as a licensor, a celebrity could:

Kevin Smith's new movie, Clerks II, will undoubtedly find a cult following like his past movies.  Yet this time around he's trying something new. He's taking advantage of cultural change to promote his movie us a street-team approach. What's in it for his "street-team"?  An appearance in Smith's next movie.

Every time I've gone into Blockbuster the last few months I've been hit up to participate in their monthly rental program as soon as I get to the register. Each time, and it's got to be 10 by now, I tell the clerk I'm not interested in the program. My patience with them on this issue is now almost transparent.

Over the weekend when I was asked the "Has anyone told you about our..." question it was followed by, "You've already rented 50 movies this year, including this one.

Last night, for the second time this week, I've heard from two different salesman from the local Ford dealership--both of whom I'll refer to as, "Bob".

These calls start off with a comment about a need for late model vans in the local market and Bob thought I'd be interested in trading since he could give a good trade in value, and there were some great rebates going on.

"I can tell by your service record you take care of your van," Bob said.

"What?," I asked, "Are you mining the service records for leads?"

It strikes me odd that so many supermarkets have loyalty cards. First of all, nearly every supermarket offers the programs with price-off incentives. In other words, have the card, get a special price. Where's the loyalty in that? Many people (including those in my immediate family) have cards to all the local supermarkets and take advantage of the special pricing on key merchandise at all of the stores. Again, where's the loyalty?