Last quarter Starbucks reported a loss of U.S. profits (in store traffic). There could be any number of reasons, from the economy to branding issues, and an increase in competition. With a Starbucks on every corner and products in every grocery store and office building, what makes it special and drives in-store sales?
Yesterday, Starbucks closed for three hours for employee training to improve coffee quality and revive the chain, prompting numerous news stories and blog posts about the closing. Even competitor Dunkin’ Donuts got in on the buzz by offering 99 cent coffee during the time that Starbucks was closed.
Was this a brilliant PR and marketing move by Starbucks? Was it designed with the customers and media in mind? Has Starbucks already reached its “bubble,” and is now experiencing an inevitable down cycle? (Picture credit: Huffington Post)
Starbucks understands the need to promote their core brand promise as a key to maintaining customer loyalty. For Starbucks, that promise included quality, luxury products, a comfortable environment, helpful service and knowledgeable staff.
Since premium coffee is not as luxurious as it once was, with everyone from McDonald’s to Dunkin’ Donuts offering premium coffee drinks, Starbucks sees the need to further strengthen the other portions of its brand promise.
Right now, we see Starbucks focusing on creating a “cool” environment by partnering with iTunes and independent music labels. Their latest announcement shows their renewed focus on quality. Of course, it also doesn’t hurt to send the message that the company is willing to shut down stores, losing profit in the process to educate more effective employees.
That’s just good PR.
I don’t know about that though. I was never much of a Starbucks fan until they started offering drive-thru service. I guess with two kids and no time to spare I don’t have time for iTunes and luxury. But I do love my Chai Latte.