howard schultz

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Starbucks executive chairman Howard Schultz, who does an awful lot right as a business person and brand builder, issued a mea culpa in newspapers across the country today for the racially biased incident in one of his Philadelphia stores this past winter. At great expense, Starbucks will close stores today for a half day and provide sensitivity training to all employees. His letter was heartfelt and nicely coiffed, but right out of the PR play book. (No doubt, we all need to be more sensitive to race, gender and sexual proclivity… and we could all use a little training. It’s the biggest global issue of the day.)

But it’s my belief Mr. Shultz should have used a different tactic to “prove” the company’s commitment to improving race relations and sensitivity.  He could have hired more black people. Put a race sensitivity suggestion box in the stores. Developed a new customer greeting that celebrated inclusion. More inclusive store artwork. Changed a business behavior.

The apology letter is nice but consumers are inured to the tactic. It has become a check box. Training, too, is good but it’s a one-timer.

This is complex shit. But a good coffee is complex and you figured that out. Do Better Mr. Schultz.

Peace.

 

 

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I went to the Starbucks yesterday, one housed in my local Ingles grocery store, and a nice young women in a non-descript polo shirt came to serve me.  I was looking for an Ingles logo on the shirt, but didn’t see one.  Within a minute another woman walked into the Starbucks retail space with a green apron on – she more befitting the brand experience.

I asked her if they were still called baristas. She said yes.  Then I asked her when telling friends what she did for a living if she said “I’m a barista” or “I work at Starbucks,” she admitted the latter.  Howard Schultz are you listening?

When Starbucks began, the barista was fundamental brand thing. They co-opted the word. Now people just work at Starbucks. When Starbucks first got rid of the hand-crated latte and espresso machines in favor of automated brewing, I thought it might be the beginning of brand stasis. Think I was right. The brand can advertise blonde coffee and all the new flavors it likes, but if it doesn’t tighten up the in-store brand experience, it will suffer.

Peace be upon you, children and parents of Parkland, FL.

 

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In the part of my brand strategy presentation where I lay out my framework (1 claim, 3 proof planks), I talk about the many targets a brand must address. With B2B products, the targets tend to be job or function-related. For a healthcare service, as an example, I might want the brand to speak to patients, docs, care-givers and insurance companies. This adds complexity when it comes to finding the claim. On the consumer side of the house, the targets are often consumer segments.

starbucks machiatta

I was reading about a Starbucks barista in Williamsburg Brooklyn this morning and how he is one of group of highly skilled Howard Schultz employees, dialing up the flavor selections of artisanal brews, soon to be released under the “Roastery” name — coffee draughts which may list for as high as $10. The Williamsburg drinkers of this high-end coffee are not the bulk of the Starbucks buyers around the country; they’re not part of the double, double, half hazelnut, half vanilla, two sugars, muffin top set. A group that pays the bills.

So how does one brand cater to both targets with a single Starbucks brand? Without, sorry for the pun, diluting the brew? Well, the brand has to be future proof. It has to have a claim and proof plan array that appeals to all segments. Though I am not privy to the Starbucks brand strategy, I know it’s accommodating. It will handle the Roastery and the mixed coffee drink crowd. Starbucks has a brand strategy that encompasses. That includes. But also focuses. Starbucks has mad blending skills.

Peace.

 

 

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starbucks via

VIA ™ is a new instant coffee product sold by Starbucks and though they probably won’t ever use the word “instant” in its description that’s what it is. You make it by simply adding water – hot or cold. VIA comes in a little beef jerky size packet and it is a horrendously bad idea! If Starbucks doesn’t take VIA off the market soon I’m afraid it will have a long term, devastating effect on the brand. And please don’t write me saying how strong last week’s sales were. Creating an instant Starbucks experience is counter to what the brand stands for. This move is akin to the failed over-exposure of Krispy Kreme… selling old donuts in gas stations.

Most everyone has been to a Starbucks and knows its sounds and smells. Some of the sounds, unfortunately, have been removed thanks to the addition of time-saving espresso machines. Another mistake. (Remember the jarring thump thump the barista made as s/he settled your ground coffee into the metal espresso vessel?)

The store, the cup, the cardboard cup insulator, beans and music — the starched baristas all contribute to the rich coffee experience. Instant Starbucks removes it all. Thousands of consumers will pour the VIA granules into their chipped Dodgers cups tainted by a hints of soap and say “Hmm, tastes like Folgers.” Lose the VIA, Howard Schultz…and fast. Bad experiment. Peace!

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OMG. WTF. WAM (What A Mess. That one’s mine.) 

 

People get sick and it makes them stronger. Companies get sick and it makes them stronger. They look deeply within, understand core competencies, explore those competencies, find truths, tighten up and evolve.   

 

Howard Schultz and his senior marketing people at Starbucks are trying to shoot their way out of this recession with some ill-advised new products: instant coffee and value meals. It’s sad. Someone smart said recently that when Starbucks started to smell more like bacon and eggs than coffee beans the company was in trouble.  Starbucks is not about instant — instant breakfast or instant coffee. It’s about the world’s best coffee. I don’t mind by my Tazo tea every once in a while, so long as it’s being sold by a company that offers the world’s best coffee.

 

What’s the idea with Starbuck? Not sure any more. They need to prove the mission, not dilute it. And the mission is not be about the Benjamins, it’s about the coffee. Peace!

 

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Sorry Joe

 Joe Nocera, a business writer for the New York Times with some serious marketing smarts, wrote Saturday that Starbucks Howard Schultz (who has reclaimed the reigns at Starbucks) doesn’t get it. Mr. Nocera thinks big changes need to be made in order for the ship to be righted. I disagree.

 
The original vision of Starbucks is still strong and so long as the store growth is slowed and properly managed Starbucks will return to a growth stock.
 
What’s so cool about Starbucks today is that kids are really digging the experience. They are making road trips at night to Starbucks and if you happen to frequent Starbucks near a high school, you’ll note that the place is flooded with teens at lunchtime and after the final bell.
 
If Mr. Schultz figures this out, and I’m sure he will, and he caters to this growing segment in an elegant, soft-handed manner, he will kick some serious retail butt. This a “growth” not a “harvest” market segment. 

Mr. Nocera also thinks the Starbucks international growth plans are not a good idea.  Here, too, I disagree. Starbucks is seen as a “cool” American brand. In a world that is increasingly growing tired of the American commercial way, Starbucks remains an icon that holds positive sway.

 

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I love Starbucks. I go there every morning for my grande non-fat latte. Howard Schultz is putting himself back in charge of Starbucks because the business has started to show signs of underperformance. It is seeing its first “dings” after many years of astonishing – Harvard business case — growth. The slowing of sales is generally attributed to overbuilding of stores and McDonalds coffee product (new and planned.)  
 
Starbucks store build out has probably been too fast, (remember Krispy Kreme?) so Mr. Shultz plan to slow store growth is a good one. And cutting underperforming stores is also a smart move. Either the demographics and geographics support the Starbuck’s experience or not. But McDonalds? And its new espresso bar? I think not. The Starbuck’s core customer doesn’t want to smell Egg McMuffins and canola oil potatoes thingies while waiting for their Ethiopian blends. Not a competitor. Please.
 
Starbucks might consider offering a “value” coffee-of-the-day to staunch the migration of people on a weekly budget, but please don’t be worried about Mickey Dees.
 
Mr. Schultz will do just fine. Welcome back.
 

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