Marketing guru misses mark on Starbucks
I call it the Starbucks effect.
It has become fashionable, whenever we business types gather for a conference, to get insights on various topics from marketing gurus. And it is just about impossible to attend a conference these days without someone bringing up the lessons of Starbucks.
Former Ikea executive Steen Kanter was the latest business guru to do just that. He did so at our recent Leadership Conference, held at the Ritz-Carlton in Naples, Fla., on the sparkling waters of the Gulf of Mexico.
Kanter, now CEO and chief business consultant for Kanter International, a consulting firm, took an approach on Starbucks that I’ve heard before: The success of Starbucks has nothing to do with the coffee. Instead, Kanter said, it’s all about the clean, hip stores where customers can find a happy home away from home as they savor “the experience” of Starbucks.
Kanter dismissed the key product of Starbucks as “bitter brown water at great margins.”
Now I’m not as smart as Steen Kanter, but I think he has gotten carried away a bit here. It seems to me that the success of Starbucks does have something to do with the coffee – and with the teas, of which I am a big fan. For starters, the caffeine in coffee and tea is a basic starter fuel for millions of us each day. It is, dare I say, an addiction for many. And a business built on addiction has a powerful force going for it.
There is no doubt that the warm, comfy nature of Starbucks stores is an important ingredient in their success. I love to find a table in Starbucks and dash off a letter or two, enjoying the upbeat music that the retailer dispenses along with its brews. But I’m also sipping a Chai tea, flavored with eggnog during this holiday season. My Starbucks experience is about the friendly store, the fun music, and the hot tea. Oh, and it’s also about the friends I am likely to encounter.
I don’t know coffee, but I have a hard time believing that the coffees at Starbucks have nothing to offer in their own right. Surely Kanter is off the mark here, isn’t he?
He made several intriguing points in his presentation, and he is clearly a master marketer. A brochure promoting his business has the wonderfully catchy title: “A brief, yet helpful guide to total world domination.” See Kanter for the details.
But he obviously hasn’t found his Starbucks elixir of happiness. Steen, try the Chai tea latte.
coffee addict commented:
Starbucks coffee is really good. I try to patronize the locally owned, independent shops - some with wonderful decor and furnishings too - but Starbucks joe is still tops. What most folks don't realize is that each store MUST have a very expensive water filtration system (they all have the same one) so they start out with EXACTLY the same water so you get exactly the same coffee at each store location. Not a secret in franchising (a Big Mac tastes the same no matter what McDess you go to). So yes, he missed the point. Good call Bedding Man.
Paul commented:
Dear David, Enjoy your column. Sitting through a Starbucks case study these days is about as stimulating as a traditional cup of American Joe - which I believe happens to be the penetrating insight underpinning Starbuck''''s Brand success. Namely that a bland (but superior) tasting coffee product was leveraged by Starbucks to convey the potent, but quite generic benefits of the ''''real'''' coffee drinking experience. Terms like ''''spontaneous moment of renewal'''' and ‘catalyst for energizing social connections'''' (think free internet) have been used for a long time used by coffee marketers worldwide to promote the both intrinsic/extrinsic benefits of savoring drinkable coffee. Starbucks essentially attached a value to the American coffee drinking moment (brave given coffee was seen as a stop gap… ''''your order is on its way'''' beverage, served for free in a dodgy diner environment). They were savvy and bold enough to never make this about the beverage but the whole extrinsic experience and tree hugging values. I’m quite sure most of us have had our fill of sitting through presentations highlighting how a bona-fide experience can lever the value of a product or business. A bitter taste emerges when you consider Starbuck’s phenomenal success appears largely due to them making the consumer comfortable in an furniture dressed environment while the caffeine does it’s work. Until this becomes the impetus for us furniture folk to reclaim what is essentially a furniture proposition of comfort and relaxation, perhaps we are condemned to sit, drink and ponder Starbucks case studies!
