Friday, August 1, 2008

Starbucks On The Way Out

There is a lot to be learned about modern marketing from the Starbucks saga, pay attention. Image and packaging, it's what all cult classics are about, Obama is just the latest incarnation.

Personally, I never saw the need, never been in one of their stores. Never missed out. The iPod of coffee. This tale written by Bryant Simon tells it best
Bad news has been pouring down on Starbucks for a year. The price of the company's stock has been cut in half – and then some. Fewer people come through store doors and those who do buy less.

The company thrived throughout the past 15 years by giving middle-class Americans exactly what they thought they wanted – and this wasn't really about coffee. It was about creating a product that allowed doctors and lawyers, IT specialists and travel writers, and then their imitators, to portray themselves as they wanted to be seen. That's how products work in the world we live in. We buy things to announce something about ourselves.

For the most part, the products that sell the best are the ones that communicate most effectively. That's what Starbucks did with their coffee.

Really, then, they sold not coffee but elevated status. Just by buying the coffee and speaking the company's made-up lingua franca, you became a cup-carrying member of the upper class. And that made Starbucks, overpriced as it was, an affordable form of statusmaking.

It was, after all, cheaper than a BMW, a Kate Spade bag, an Armani suit, or a Colorado ski vacation, but it projected "upscale" in the same way. That's why it was valuable, maybe even a bargain at $4 a cup.
Some buy things to announce something about ourselves, others buy things the need and use. Dunkin has far better coffee and cheaper as well.

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