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Starbucks: from passive to aggressive marketer

September 10, 2009

Starbucks is a brand that grew from the ground up and always flirted with marketing in a a way that it never felt comfortable with.

However, given a year of declining comp store sales and an erosion of the brand, marketing appears to be firmly back on the agenda.

At a recent Goldman Sachs conference, the CFO of Starbucks talked repeatedly about marketing initiatives that are doing to be driving the company forward.

There’s a big focus on pricing, the company is trying to bring real science to its strategy here. Doing lots of consumer research to understand sensitivities by region and digging deep to understand what it costs to make a drink by store.

In addition, there are big moves on new products, with Via- an instant coffee, becoming a huge priority nationally, but the brand also has global aspirations. Watch out Nestle! There’s also expected to be more development of Starbucks branded business as it looks for high margin opportunities outside of the store.

Inside the store, there’s a renewed focus on bringing product and service excellence to customers. There was a feeling its competitors had caught up and now was the time for the brand to re-establish itself in this area. Satisfaction studies seemed to show that these efforts have been working.

There was little talk about the much lauded entertainment properties, record deals with the likes of Sir Paul, might be put on the back burner, while the company gets the basics right.

One clear signal that was sent out by the CFO was a willingness to be heard and noticed in communication, the brand wants to take the fight to McDonald’s and it’s looking at an arsenal of tools including traditional and social media to do this. The brand’s status as the the no1 Facebook brand, in terms of fans, was mentioned.

The other striking thing about the new strategy, is how conservative it is, the company is not expecting the economy to turn around any time soon and is using this opportunity to re-tool for a new normality.

The strategic efforts to re-tool the brand seem disciplined, focused and appear to be paying back in the short-term. However, this is a very different Starbucks from the company that 2 years ago was on a rapid fire expansion drive for global domination.

Posted by Ed Cotton

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