Tuesday, October 06, 2009

Is Starbucks Really this Crazy?

At 2pm today, I'll have the opposing viewpoint. This is from my email last week:

Starbucks Marketing Via Taste Tests: Crazy Like A Fox

Commentary by Bob Phibbs, The Retail Doctor

(Last) week Starbucks' Via instant coffee arrived and the chain is expecting 10 million consumers to visit its 7,500 company-run cafes to participate in a taste test this weekend.

Howard Schultz, the CEO of Starbucks said, "I've been fooling people for almost a year now. This is not your grandmother's instant coffee. The quality of Via is a mirror image of the quality and taste of Starbucks brewed coffee."

What makes Starbucks' launch so interesting is that I can't think of one other brand trying to get you to try their cheaper version and then proudly saying you can't tell the difference. It's like RL POLO or Coach telling people their outlet stores had the exact same merchandise.

This is not like GAP owning Old Navy but defying someone to tell the difference. GAP realizes they are covering two distinct markets that have some overlap and my guess is so does Starbucks. But Starbucks is crazy like a fox.

Now I have to confess to RetailWire readers, when this was first announced I chimed in with, "This thing is struggling to keep the wheels on. They already ceded to McDonald's earlier this week with their 'value' menu.'" I've changed my mind.

Do they expect the Starbucks customer will switch to instant? Probably not but it gave them the opportunity to come back to the market with lots of press and offers to their 4 million Facebook Fans. What was the hook?

You have to come in to the stores to taste it.

Starbucks is expecting a lot of customers Friday through Monday. And while they're there they also may become reacquainted with their addictive habit of their morning coffee.

The first thing that went during the recession for some were the indulgences of specialty coffee; a weekly habit can cost $1000 a year. It's not a secret that their traffic counts are down; this may just be the gimmick to bring those who have built Starbucks into one of the most easily recognized brands in the world back to the cup.

Sure, Via is a product that is targeted to the 21 billion international fast food and vending machine markets but who wouldn't choose a Starbucks out of a vending machine at your mechanic's over the swill that had been sitting on a burner for two days?

Pundits are still puzzling why Starbucks would "push instant" at the expense of their premium brand. Crazy like a fox.

Notice they could have just as easily sent packets in the mail for you to try or bundled it with your morning newspaper. But they knew the goal of their event: to get people to come back to the store and rebuild a brand sorely in need of a jolt.

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