Being a coffee drinker and a fan of Starbucks coffee, its been dishearting to watch the profits of this great company in slow decline. But what could be even more alarming is that in the recent "Brandz" top 100 global brands, Starbucks reached an impressive ranking of 56, with a brand value of $12,011 million, beating other high profile brands such as Samsung (Rank 58), Yahoo! (62), T-Mobile (83), amongst others. The cause for alarm is due to the fact that "Starbucks" brand value has dropped 25% since 2007 (the only brand value to fall further than this was Motorola which dropped 30% of its brand value).But why is Starbucks struggling so much? The answer is two-fold, first the slow down in the economy is leaving very little for consumers to spend money on high-value coffee products and the second reason is that other retailers and fast food outlets have jumped onto the coffee bandwagon and started to offer similar gormet coffee (although in my opinion no where near the quality of the Starbucks offerings), at a much cheaper price. A third reason could be that the "Friends" generation, who popularised coffee houses and grew up with the cast enjoying coffee at "Central Perk" have now forgotten or abandoned the coffee house in favour of the alternatives.
What can be done to turn Starbucks back around? One idea I had was that in Howard Schultz (CEO of Starbucks), book he suggested that Starbucks coffee houses be thought of as the "third place", between a persons work environment and their living room at home (hence the reason for the sofas found in most large Starbuck outlets). In order to accomodate students and the computer connected workers, they introduced wireless networks to allow people to use mobile and laptop devices whilst being able to enjoying their coffee and meet with colleagues, friends and family in a relaxed atmosphere, however in order to take advantage of the wireless connection, this came at a price in the form of a subscription based service.
Connecting to the internet wirelessly can done by most people in the comfort of their own home for next-to-free. My idea is that if Starbucks were to offer a voucher, which when entered into a holding page when users connect to the wireless service for the first time, offered hours free web connection for up to an hour in return for purchasing a drink, it could lure more people in and provide a place for people to work remotely in an environment similar to their home and increase the amount of coffee sold and strengthen the value of the Starbucks brand.
1 comments:
great idea - free web time with a coffee! I reckon it wont be long before that becomes a reality. Although there are a couple more reasons why starbucks' popularity is waining.
1) 10 years ago no one gave a crap about corporate responsibility/global warming/fair trade etc... now every one is jumping on the bandwagon. To make a difference? To ease their conscience? No...to be seen as a company that cares - "buy our product and you care too.." The only thing worse than not doing anything at all is doing the least possible to promote a "responsible" "caring" "compassionate" image. Starbucks have a few fairtrade products but on the whole the countries they trade with support child labour and the mark-up they make per coffee bean does not "filter" (excuse the pun) back to the underpaid bean pickers. As I said ununtil a decade ago no one would have noticed or cared...now they do!
2) Again, since the turn of the millenium, the western world has changed and our priorise are focus more on 30 mins exercise/yoga class and 5 fruit&veg a day rather than 20 Marlborough lighs a large coffee, 2 pints of larger and a packet of crisps. As we grow more aware of the planet and the strain we put on foreign nations we also see the damage we are doing closer to home. The wheat grass innocent smoothy is replacing the grande mocha choca full fat caramel latte with cream and 2 sugars. A quick guide: caffine content (mg) - cup of tea 47mg, Pepsi 69mg, Red Bull 80mg, Starbucks Grande Coffee 330mg!
Wowza
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