Premium shopping experience may be on the slow with cutbacks at Starbucks, but there is no sign of slowing in the high-end bakery business. Whether this is because bread is truly a staple good in economic reasoning, always in high demand regardless the price, or whether loyal consumers have come to rely on the same flavoursome, high quality wares at every outlet, premium service at the respectively rounded-up prices, sampling galore and generally happy smiles from the Barista-equivalent Cobbers, remains to be seen.

So far 50 franchises have risen across 3 provinces (most notably in BC where the erstwhile Australian brand was launched in 2003) with a vision to add another 35 baker’s dozens to the map. In the US, where there is currently a single store in WA, the goal is to launch 5000 bakeries – which is an average of 100 per state, or roughly one Cobs to two Starbucks.

That’s a big vision, especially considering that the coffee giant is closing ten times the number of stores that currently even carry the Cobs logo in North America. Now that could be a deal in the making: Starbucks premises sold to Cobs, along with comfy seating and an onsite espresso machine. They clearly already share a target group, why not a common cause? 
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So this is how advertising works:

  1. Half listen to ads on commute radio, trying to dodge early morning traffic jams.
  2. Go about your business, feel like you’ve done a good day’s work, think about taking a break, see a familiar sign and pull over.
  3. Walk towards door, notice new posters in yellows and browns, think “Nice”.
  4. Inside see friendly, calming green being sported by the employees, think “That’s new”.
  5. Scan the blackboard for what’s on offer and see new beverage, think “Hhhm, might try that”.
  6. New beverage arrives in very own branded cup (“made with 45% fewer carbon emissions”).
  7. Put two and two together and realise I’ve been Starbucked.

I don’t really mind, because I believe good marketing deserves its rewards. Rolling out a new product and not supporting it with all you’ve got would be wasting the only opportunity to make a good first impression. Whether the new Vivanno smoothie will fill the gap of hot sandwiches over the lunch hour remains to be seen. Touted as healthy, we all know it contains ingredients far too addictive for that, especially if you add a shot of espresso as I did. On top of which, I’d like to see how they get “one whole banana” in each of these little sample cups grass-skirted baristas were handing out yesterday!

Whoops, there goes another American brand… as the Belgian owners of Stella Artois snatch up Budweiser. Perhaps it’s not such a bad match, as beer critics suggest one brand is pretty much as bland as the other, which would explain why each relies so heavily on big advertising spend to differentiate and create an image of ‘cool’ or ‘premium’ or ‘traditional’ horse-heritage or whatever the current strategy calls for.

 

Joining those other non-US brands like IBM’s PCs (China) and 7-Eleven (Japan), the latest brand to change hands will have to focus on local market share erosion as national pride is likely to dig in its heels. The point is to reassure and sustain mass interest, as there is nothing more powerful than the backlash from alienated loyal consumers.

 

With Starbucks’ marketers coming out in force with traditional media campaigns (radio and press ice-cube ads), online loyalty programs (sign-up and get free stuff) and more sampling than ever, plus a PR campaign that boosted the share price upon the announcement that 600 stores were closing (weird that), you might wonder who is stalking the Mermaid’s lair.

 

One thing is clear, any company tightening its marketing purse-strings in an economic downturn needs to fire its accountancy department. Now, more than ever, is the time to use horse sense with your marketing budget and consistently remind your target audience that you are still out there.

As I was saying, there’s something to be said for the smoke-free environment of Starbucks in Germany, despite Janice Turner’s rather fun-to-read post. While she does have a point about great German coffee, it comes at the price of service without a smile and a fog of cloud and none of those comfy seats.

What I can’t believe about Starbucks is that they’re turning the whole experiential thing into a cheap commodity to vie for some of the lower-end market space. Is there nothing sacred? If I wanted a swig of black I could try any one of a thousand outlets and regret the $1 option.

On the subject of price, it is true that Caffé Nero in the UK offers a stronger brew for less dough, but I’d argue that was to compensate for its nicotine environment, at least until the smoking ban came into effect last year. That’s the real difference between Brits and Germans – never mind that it’s law, a ban on smoking in public places just isn’t taken seriously in Germany, where not even the police are enforcing a penalty if they catch you smoking.

The new season of red products at Starbucks no longer portray both US and Canadian $ prices. Smart move, that. Here’s another move: 

When I saw – for the first time – outdoor advertising for Starbucks last year (seasonal beverages in Vancouver), I was surprised that the marketers at the green mermaid had shifted their mix to pedestrian advertising. At the time I guessed it was a local, cultural thing, and parked it for future reference. Now, however, a blitz of seasonal TV ads is about to hit national screens, initially in the US. Wieden & Kennedy, the agency that transported those other west coast Americana brands Nike and Microsoft around the world, is tasked with developing a global brand message for the red cup parade. As quoted in today’s Advertising Age, Starbucks founder Howard Schultz feels the whole advertising thing is a natural evolution to gain increased leverage. Oh well then. Certainly as the brand reaches maturity, markets saturate, share prices fall and competitors step in to cross the chasm, Starbucks feels the heat to reinvent itself, its offering, or its target audience. Does this herald a mermaid branded burger? 

Personally I feel that Starbucks would be well advised to offer free wifi in its stores. This may not induce users to double up on their caffeine intake, but it would certainly fill the seats and send out the signal to open another Starbucks just over the road.

Arriving at Düsseldorf airport earlier in the week, I was dismayed by the wall of smoke that hit me just beyond customs. The abundance of “no smoking” signs did nothing to keep the lingering clouds from neighbouring smoking areas at bay. A short course in chemistry might have clarified that clean air and smoky vapours are not, actually, immiscible! Little glass ashtrays at every café left me in no doubt – I had to find a Starbucks: surely their world-wide no-smoking policy would find no exception in Germany? Luckily, the tree-top venue of my first Starbucks experience in this marketplace turned out to be a good one. A Doppio to fend off the sleep and a lofty view over the airport comings and goings to set the mood for the rest of the day.

In Hamburg, a few hours later, I was dismayed to find not a single bar or café signed up to the August 2007 non-smoking policy (this wasn’t, after all, Baden-Württemberg or Niedersachsen). Don’t they know that smoke adulterates the coffee aroma, to say nothing of making my eyes water and my clothes stink? They didn’t think my comments funny, so – despite the jet-lag-fatigue grinding me down – I chose not to bother with their wares. Note to self: must carry more chocolate-covered espresso beans for emergencies.