George S. May Business Blog

Starbucks throws a counter-punch with new advertising scheme; will it get people back through the doors?

Starbucks launched an integrated marketing campaign that fights back against McDonald’s, Dunkin’ Donuts, and the rest of the companies that complain the coffee maker is overpriced. The multi-million dollar campaign focuses on the quality and value of Starbucks coffee, the unique experience, and the values (such as sustainability and fair trade practices) that have “built the brand from the beginning.”

The campaign will be made up almost entirely of print ads that either applaud the Starbucks quality or deride the quality of is competitors. Here are a few of the ads:

“Beware of a cheaper cup of coffee. It comes with a price”

“If your coffee isn’t perfect, we’ll make it over. If it’s still not perfect, make sure you’re in a Starbucks”

“This is what coffee tastes like when you pour your heart into it”

All bear the advertising tagline: “It’s not just coffee. It’s Starbucks,” and an image of a Starbucks cup.

The marketing will span both traditional and non-traditional channels supporting all of the brand’s distribution points, take a “long-term, story telling” approach and build over time, Starbucks SVP, Marketing Terry Davenport reports in his blog, MyStarbucksIdea.

Executive Vice President of foodservice strategies for retail and foodservice consulting firm WD Partners, Dennis Lombardi, notes that ads with copy longer than “a sound bite” risk lowering readership, and that it will be interesting to see if consumers view the ads as educational or somewhat obvious.

I personally think that the ads are hopeless. People know the “quality” of Starbucks and won’t be swayed advertisements that try to remind them of that. The fact is that people don’t have money to spend on designer coffee. At this point, Starbucks is a name that most everyone knows. So advertisements that basically stress what they have always stressed: (quality, at a price) aren’t going to spark any major change is people walking through the door. I say, if they are going to advertise, advertise some kind of change that will get people back in there, like a less expensive coffee. Obviously I don’t know what is viable and what is not for that company, financially, but I do know that if people haven’t been choosing your product, advertising about basically being the same as always, won’t help.

The company reported a 77% loss in profit for the quarter to $25 million, sales declined by 7.6%, to $2.3 billion. The company closed 600 stores last year, and in January announced 300 more closings and layoffs of 6,700 employees.

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