starbucks: a marketer's perspective...

I know a thing or two about the coffee business and I know that it can become a little too big. As Andy Resnick once said, Starbucks is a 300 pound gorilla. Starbucks has created something that was once luxury and now mass market luxury and slowly deteriorating to nothing more than mass market. Why? Well there is really nothing special about the Starbuck's experience. It frustrates me because I love the coffee business. Here are a few key points that need attention:

Customer Service: Those consumers that are the least price-sensitive (continuing to buy high priced lattes with rising oil costs) are those with higher salaries. Often these people have risen in their positios because of their ability to manage things such as time. They think strategically. Why stop at Starbucks for a meeting, lunch on the fly or for a quick cup of Joe if you must wait in line for more than 5 minutes? That's not reasonable. Let's look at it from a ROI perspective. A person who makes $75,000 per year USD makes about 60 cents a minute (based on 40 hour workweek). If it costs $3 to stand in line for 5 minutes for a $3 coffee-concoction amounts to $6. An article on Market Watch indicates that Starbucks has cited competition from McDonald's and Dunkin' Donuts. When you compare the value of time versus the value of a good cup of Joe versus the value of time its easy to see how some might pass up the value of quality. Noting the above equation it person making a salary of $125,000 a year would have a cost of about $9.

Quality: When I lived in Los Angeles I frequently visited Starbucks. I love my coffee and I visited Starbucks more than any other places by virtue of the fact they are more of them. I have recently moved to Paris (and have visted in several occassions before moving). Although the consistency of beverages seems to be better in Paris - it is lacking on both sides of the Atlantic. I know that you can go to three Starbucks in the same neighborhood and get beverages of varying taste and temperature. If consumers have to decide between a consistently prepared $2 doubleshot Starbucks from 7-Eleven, and higher priced consistenly prepared beverages from the store itself- what is the payoff? Warmth?

Customer Service: Have you ever been to a Starbucks and been asked "What?" when you ordre a large? Have you met arguments when after waiting an extended period of time for a $4 concoction that did not meet your quality expectations - been argued with? Have you ever been treated rudely? Have you ever, after finally getting your beverage found that milk, sugar or other condiments have been depleted? Have ever arrived in a Starbucks for a simple filter-drip coffee, paid for the beverage and been told that you'll have to wait for it to finish brewing? (And occassionally been served a coffee before the pot finished brewing to have an "oddly" different tasting cup? Have you ever had a cup of filter-drip or espresso-based beverages that were lukewarm or extremely weak in comparison to your usual drink? Yes to all.

Environment: Something I can give McDonald's credit for on both sides of the continent is its ability to keep restaurants clean on both sides of the counter. When I visit McDonald's it is mostly from a brand management research perspective, I will admit. I find that consistentlytheir restaurants are clean. I cannot say the same for Starbucks. On both sides of the counter, often times it seems everything from the condiment stand, the espresso machine, the pastry case, the tables and the bathroom - everything is out of sorts. Have you visited a high-end luxury or mass-market luxury store and found it out of sorts?

A little aside: When I first visited Paris in 2005 I was astonished at the increase in quality and food selection in Parisian Starbucks. Offerings seemed to mimic the Parisian desire for smaller and healthier portions. Perhaps the product managers did most of the researh in times when tourism was at its peak - because by my arrival in summer 2007 it seemed that the offerings mirrored American preferences. The quality is still higher but with Boulangerie's next door - what's to stop someone from buying a quick good from a Parisian baker to bring to Starbucks?

Starbucks needs to look back on their history and reflect on their roots. They once had the ability to provide high-end quality (luxury) coffee beverages conveniently to the leisurely and those on the go. What's so special about mediocracy?