Hot Top Home Roaster WAY BETTER THAN STARBUCKS BUMP!
Posted on 07/06/2008 1:49:17 PM PDT by buccaneer81
Starbucks' success cools under dollop of overkill Sunday, July 6, 2008 By James Bernstein NEWSDAY
Patrons sit inside a Boston Starbucks store. Starbucks will close 600 stores in the United States, the first major downturn for the coffee-shop chain. The chain marketed its coffee brand as a lifestyle and moved away from the qualities that made it successful, experts suggest.
Men play chess over a cup of Starbucks coffee in Alameda, Calif. Starbucks has fallen behind Dunkin' Donuts and McDonald's, according to a market survey conducted by Brand Keys Inc. Ben Margot | Associated Press
Men play chess over a cup of Starbucks coffee in Alameda, Calif. Starbucks has fallen behind Dunkin' Donuts and McDonald's, according to a market survey conducted by Brand Keys Inc. MELVILLE, N.Y. -- Starbucks' announcement that it is shutting 600 stores marks an end to what seemed to be the company's continual upward climb and invincibility in the retail coffee-shop industry. Two market-research experts spoke recently about the world-famous company.
Q: What happened to Starbucks?
A: Several things, said the analysts. For years, Starbucks had been exceptionally profitable and was a darling of Wall Street. But it expanded too rapidly: "You can expand so much," said Robert K. Passikoff, founder and president of the market-research firm Brand Keys Inc. in Manhattan.
Q: Did the excitement wear off?
A: Pretty much, said Harry Balzer, a vice president of NDP Group Inc., a market research company in Port Washington, N.Y. Starbucks "certainly had a nice run," Balzer said. "I've been doing this for 30 years, and I don't think I've seen anybody do it better. But there's nothing like success to bring on competition. Nobody says you can have the whole market forever."
Q: What else went wrong?
A: Passikoff said Starbucks tried to make its coffee brand into a lifestyle brand. "They came out with the movies and the books in the stores. There's nothing wrong with that aspiration. But as part of this, they essentially took a step away from the core quality of the brand, which was the coffeehouse experience, which they imported from Europe and turned into an American experience. For a while, no one was grinding beans. The place didn't sound like the coffeehouse and didn't smell like the coffeehouse anymore," Passikoff said.
Q: Bad marketing decisions?
A: Yes. The experts said their stores were getting too crowded with furniture, said Passikoff. The couches went. "What essentially they did overall was re-engineer the experience right out of the stores. So customers were standing on line, and there was no experience anymore. They were too much like everyone else," Passikoff said.
Q: They still looked a little different, right?
A: Yes, but for a while, they were offering breakfast sandwiches. If you close your eyes and order coffee and someone offers you a breakfast sandwich, where are you? You could be anywhere, said Passikoff; people even complained about it.
Q: How much of Starbucks' decline is related to the economy?
A: Passikoff argues not that much, that Starbucks' market share began to decline a year ago. "In our tests last year, they came out No. 2 to Dunkin' Donuts. This year, Dunkin' is No. 1, McDonald's is No. 2 and Starbucks No. 3 in our market surveys." But Balzer said the entire restaurant industry has been negatively affected by the bad economy.
Q: Should Starbucks have stuck with its original strategy of being just a coffeehouse?
A: Yes, said Passikoff. "You don't walk away from a successful brand strategy, not when you're making money."
Q: Can Starbucks come back to what it was?
A: Passikoff doubts it. "Customer values have shifted so dramatically. They are what they are." Balzer said Starbucks still has a lot of marketing power left, however. "They have got to do new things," he said.
“Krispy Kremes” is another one I suspect of over reaching and overbuilding....
Nothing like an SB post to bring out the defenders...
Dunkin’ Donut’s coffee is much better at half the price.
But even better than that at a fraction of the cost is good old “Eight-O-Clock” whole bean (home ground) in a basic Mr. Coffee drip machine or a Thermos® French press with a splash of store brand H & H. Some of us are easy to please.
Confusing advice. Toward the end he says that their big mistake was to move away from their original plan of being a coffee house. Then he says they have to fix it be trying something new.
Well, which is it?
In my opinion, the problem is that you pay big bucks for lousy coffee. Starbucks is supposed to be great coffee, but the coffee is lousy. So, what’s the attraction?
The coffee at Dunkin’ Donuts is much better, and only costs half as much, last I looked.
I’m a ‘two-pot-a-day-er’ and I think that Starbucks coffee is down-right disgusting! Basically burnt, acrid and bitter flavored hot water. Both Dunkin’ and Micky D’s blow them away in the taste category. However, its just an opinion ... :)
Krispy Kreme, if I remember correctly, had serious “ethical” problems in properly accounting. My read of SBUX is that they are scrupulous in their accounting. I’d buy them, probably good timing. I think they should pay out a nominal honesty fee — by that I mean a dividend out of profit.
Ten years ago there were at least 30 KKs in my area. Now there are none.
SB offered a pose for posuers. Pretty much and SUV in a cup. With high gas prices, people are finding posing to be too expensive.
I hate dark-roasted coffee, and that’s all you can get at Starbucks.
Brew up a pot, I will be right over!
Well, I buy my coffee from Starbucks. I’ve tried other brands of the same coffee and Starbucks brand is by far better.
I seem to recall reading about McDonalds' coffee beating Starbucks' in a blind taste test. I don't drink coffee - it all tastes like burnt water to me.
The takeaway on Starbucks is this:
They acted decisively and rationally to close 600 stores. That’s what shareholders expect from a mature company.
Good on them.
One of the many problems KK had was as they grew nationally, they implemented supply chain management in areas that should have been regionally or locally controlled, like coffee. Yes, coffee.
Coffee consumption is very different in all parts of the country, what passes as a good cup of joe in Florida would be considered a cruel joke in Seattle
KK dropped all their local coffee suppliers and went with a one coffee for all approach, which was a disaster. Just try and sell something other than Community Coffee in New Orleans, won't happen.
Of course people who buy donuts also buy coffee, if you don't get your local favorite coffee why stop and buy a donut.
All companies in recent memory over reach. Greed has no boundary!
I don’t drink designer coffee and probably have never had more than 3 cups of Starbucks coffee. Their base house coffee tastes bitter to me. I rarely pay more than a buck for coffee on the road and usually only drink 1-2 cups per day at home or work.
Hot Top Home Roaster WAY BETTER THAN STARBUCKS BUMP!
I went into my first real coffee shop in 1985 San Francisco. It was laid back, friendly and affordable. I would set at a table and enjoy a fancy coffee and good conversation.
I checked out my first Starbucks around the mid 90s - it was more of a fast food joint. I did not get the impression that lingering over a cup of coffee was welcome - everything was served in styrofoam cups to go, and (in my opinion) over priced.
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