Why haven't Starbuck's competitors done more damage?

[twacowfca]

The competitors haven't been able to emulate the product well enough.  Like Coke, Pepsi and generic soft drink makers. 

 

You said you don't drink coffee, so you probably won't be able to taste the difference, but Starbucks coffee and their constant desire to improve the product, is still unmatched by its competitors.  You have the big chains that offer perhaps one type of premium coffee, and then you have the smaller snobby shops that eschew the giant...yet the quality of Starbucks coffee overall is still better than their competitors.  Thus you develop a powerful brand based on the quality of what you are purchasing and how accessible it is.

 

Then you have the store model and systems like McDonalds...albeit significantly higher end.  You go to a Starbucks in Vancouver, Seattle, New York, Dubai or Sydney, and you will get the same quality coffee, specialty drink, etc, at each of those stores.  Why?  Because the training and systems the baristas go through, not unlike the food prep lines at McDonalds.  Their advertising is also very specialized, especially to their customers through their "Rewards" program, and email, online and print advertising. 

 

Finally, while they slowly expand the line of products offered at a Starbucks store, the main focus is always around the core...coffee and food.  And the prices around those items are aimed directly at the more premium market, not down market, so their margins are always steady.  Cheers! 

 

Yup! You hit the nail in the head.  It's all about a great experience and maintaining and reinforcing that culture.  It was only a few years ago that some thought Starbucks was losing their way.  Harold Schultz came out of the back seat into the driver's seat and got them straightened out.

 

The leaders of all great companies that deal with the public have to keep preaching the core values or things will slip.  Starbucks is no exception to that rule .

[Guest ajc]

 

An article on how Starbucks are turning tweens into customers with secret menu items.

 

http://www.ft.com/cms/s/2/14417f3e-f742-11e3-8ed6-00144feabdc0.html#axzz356RHJ56n

 

 

 

[rkbabang]

 

An article on how Starbucks are turning tweens into customers with secret menu items.

 

http://www.ft.com/cms/s/2/14417f3e-f742-11e3-8ed6-00144feabdc0.html#axzz356RHJ56n

 

This is the first I've heard of secret menu items, but they have always had the undocumented "short" drink size.  With a "tall" latte you need to order a double or else it is pretty much all milk. But you have always been able to order a "short" latte which is cheaper and comes in a smaller cup giving a single shot latte a higher espresso to milk ratio (which of course can be increased further by ordering a "short double latte").  Not sure why the short size has never been on the menu even though it has always been available.

 

[HJ]

From a totally different angle, Panera Bread.  I noticed that some of my friends in New Jersey have started to use Panera for weekend afternoon get togethers, when before it was invariably a Starbucks.  No, Panera is not a coffee chain, and will never compete with Starbucks for real.  In fact they have shied away from big cities all together.  Their motto is the "suburban cafe".  But it's interesting to see different type of establishments that attempt to emulate the "Vibe".

 

[yseric]

I drink coffee and I like Starbucks..I also dont mind going to Peets Coffee... For me, they are both about the same..

 

I was skimming through a book written by Schultz the other day.. He talked about the stock price quite often... I got the impression that his action might be somehow influenced by what the Street thinks.. But I could be wrong...

[Guest ajc]

This is the first I've heard of secret menu items, but they have always had the undocumented "short" drink size.  With a "tall" latte you need to order a double or else it is pretty much all milk. But you have always been able to order a "short" latte which is cheaper and comes in a smaller cup giving a single shot latte a higher espresso to milk ratio (which of course can be increased further by ordering a "short double latte").  Not sure why the short size has never been on the menu even though it has always been available.

 

I think what the article is mainly getting at is just that Starbucks are capitalizing smartly on the teen and pre-teen need to have a private existence which is completely independent from their parents.

By offering them Cotton Candy and Rolo Frappuccino's on an unprinted, private and customizable menu (passed around between friends on various social media) it allows them the ability to have access to something that no-one else knows about as well as having the power to match their orders to their individual preferences.

 

Whereas before they were maybe passengers on the trip to Starbucks, now they're bigger insiders than the parents are.

I suppose it's a bit like they've unlocked a secret level on a video game and only they know the password.

The vast majority of us probably enjoyed that kind of stuff growing up and now Starbucks are incorporating it into their business model.

That's a reasonably insightful thing for them to do, especially when you consider that most places just have a comparatively patronizing kids menu printed off in a corner somewhere.

 

As for the short/tall thing, I couldn't say for sure.

My reaction to it is to think that it drives substantially higher spend among adult buyers, like not having a glass of water on the menu at restaurants presumably does.

Unfortunately for Starbucks and restaurants, shit happens and bargain-hunters/value investors exist.

That'd be my take on it anyway.

 

 

[randomep]

I think most coffee drinkers and Starbucks customers will tell you that Starbucks is NOT their favorite brand of coffee.

 

I think what brings people back is the consistency. Consistency of the quality, service, look and feel, etc. They have done a great job at maintaining their brand's quality and image while growing rapidly  throughout the world. Often times, brands that expand that quickly falter in quality, but Starbucks has  done a good job of maintaining consistency throughout their empire.

 

In addition to that, their rewards programs and use of technology is one of the best I've seen in retail. They have a great, simple phone app and they figured out a good balance of rewarding their most valued customers while still doing a great job of servicing their less frequent customers.

 

I don't really like starbucks coffee either but their service is great. Their bathroom is clean so you can count on them when you need to go on long trips. And they have consistent WIFI.

 

When I go to the supermarket though, I always buy Peetes, never starbucks beans.

 

 

[Kraven]

I think most coffee drinkers and Starbucks customers will tell you that Starbucks is NOT their favorite brand of coffee.

 

I think what brings people back is the consistency. Consistency of the quality, service, look and feel, etc. They have done a great job at maintaining their brand's quality and image while growing rapidly  throughout the world. Often times, brands that expand that quickly falter in quality, but Starbucks has  done a good job of maintaining consistency throughout their empire.

 

In addition to that, their rewards programs and use of technology is one of the best I've seen in retail. They have a great, simple phone app and they figured out a good balance of rewarding their most valued customers while still doing a great job of servicing their less frequent customers.

 

I don't really like starbucks coffee either but their service is great. Their bathroom is clean so you can count on them when you need to go on long trips. And they have consistent WIFI.

 

When I go to the supermarket though, I always buy Peetes, never starbucks beans.

 

I never understand the appeal of Starbucks coffee itself (as distinct from the stores, which I agree are perfectly nice).  I would rather get coffee from Dunkin' Donuts, McDonald's or 7-11.  It's a fraction of the price and tastes much better.  At 7-11 you can serve yourself too.