Do you want a bagel with that? How about a 500 calorie slice of iced lemon bread? Starbucks plans to add value meals to their menu. “At attractive prices.” -Howard Schultz, Starbucks CEO.
Can we have a big “errrgh!” buzzer sound here. The ‘that is not the way out of your financial mess buzzer’.
Lets get honest here. There is nothing value-worthy of a $5 latte. But that’s not the point. Starbucks customers are not seeking a cheap coffee. They are seeking a sophisticated experience. An escape from their hectic, stressful and unpredictable day. Starbucks is not a “must have” food. It is a personal luxury. A treat. Like say, Pinkberry.
The smartest move Starbucks has mad in the past few quarters is the Starbucks Gold card. It allows Starbucks regulars to get a significant discount of their purchases, 10%. And in the long run, the savings really add up. Perhaps Starbucks should increase this percentage to 15% from time to time and reward its ‘regulars’. instead of catering to the ‘value menu crowd’.
I frequently purchase a chai latte and a bagel on the side. If this was say “the number three” on the value menu and I saved fifteen cents of so…I would feel kinda cheap! If I want to order off a value meal (which I really don’t) I would go to McDonald’s.
…..Lets face it. There is nothing value-worthy of a $5 latte. But that’s not the point. Starbucks customers are not seeking a cheap coffee. They are seeking a sophisticated experience. An escape from their hectic, stressful and unpredictable day. Starbucks is not a “must have” food. It is a personal luxury. A treat. Like Pinkberry or another fro-yo place. You don’t see Pinkberry coming out with a “value meal”. Buy two smalls with two toppings for %7.22! “It’s number two on our value menu!”
…could you imagine? Yuk.
Value menu at Starbucks? Not a fan. Bigger discounts for regulars? Fan.
Kathy, you are absolutely correct. Starbucks can’t win on value alone, not going up against McDonald’s. What they need to do is convince us that we can still afford SB (by having a brew instead of a maxed-out latte or by buying beans for home-brew) and that SB is one of life’s little affordable luxuries. Something like: in these tough economic times, when you’ve already given up so much in an effort to cut expenses, doesn’t it feel great to know that you can still indulge in a premium coffee experience without breaking the bank? A stronger loyalty program would be greatly appreciated.
I think in addition to the economy angle, Starbucks is also trying to drive the uptake of their food, hence the package value meal. They keep offering new food and I don’t see many people buying it when I’m there…hence a package deal that promotes both value and the food makes sense.
I think Starbucks is just trying to get in on the marketing/PR blitz that so many companies are doing….i.e. appealing to consumers in an economic downturn. Kinda like what Hyundai did with their cars (you buy one, but if you lose your job you can return it)….since so many people are looking for ways to save, this is just a way for them to “market” themselves as affordable….since so many people go there. Understand your logic that SB customers look for a sophisticated exp. but I think SB wants to appeal to more than just their standard customer base since so many of them can’t afford a five dollar latte anymore…haha, sorry for writing so much!
Thanks for the great comments guys. I totally agree that Starbucks is jumping on the “economic downturn” marketing blitz. It’s the trendy thing to do right now. And quite frankly it doesn’t make me want to shun Starbucks. But I do find myself heading to places like Le Pain Quotidien and such when I want to feel like I am getting an experience worth paying for.
…I wonder what would happen if Starbucks “Grey Poupon-ed it”. AKA…really stepped up their elite game and said things like:
“$1 for a cup of coffee? Well folks, you get what you pay for.”
But I do think it is interesting that both Pinkberry and Apple companies aren’t doing any sort of ‘economic downturn’ marketing. For Starbucks to simply jump on the “we are cheap” bandwagon, feels a bit unimaginative.
Keep commenting! 🙂
Kathy
I think in addition to the economy angle, Starbucks is also trying to drive the uptake of their food, hence the package value meal. They keep offering new food and I don’t see many people buying it when I’m there…hence a package deal that promotes both value and the food makes sense.
Kathy, you are absolutely correct. Starbucks can’t win on value alone, not going up against McDonald’s. What they need to do is convince us that we can still afford SB (by having a brew instead of a maxed-out latte or by buying beans for home-brew) and that SB is one of life’s little affordable luxuries. Something like: in these tough economic times, when you’ve already given up so much in an effort to cut expenses, doesn’t it feel great to know that you can still indulge in a premium coffee experience without breaking the bank?
A stronger loyalty program would be greatly appreciated.
I think Starbucks is just trying to get in on the marketing/PR blitz that so many companies are doing….i.e. appealing to consumers in an economic downturn. Kinda like what Hyundai did with their cars (you buy one, but if you lose your job you can return it)….since so many people are looking for ways to save, this is just a way for them to “market” themselves as affordable….since so many people go there. Understand your logic that SB customers look for a sophisticated exp. but I think SB wants to appeal to more than just their standard customer base since so many of them can’t afford a five dollar latte anymore…haha, sorry for writing so much!
Thanks for the great comments guys. I totally agree that Starbucks is jumping on the “economic downturn” marketing blitz. It’s the trendy thing to do right now. And quite frankly it doesn’t make me want to shun Starbucks. But I do find myself heading to places like Le Pain Quotidien and such when I want to feel like I am getting an experience worth paying for.
…I wonder what would happen if Starbucks “Grey Poupon-ed it”. AKA…really stepped up their elite game and said things like:
“$1 for a cup of coffee? Well folks, you get what you pay for.”
But I do think it is interesting that both Pinkberry and Apple companies aren’t doing any sort of ‘economic downturn’ marketing. For Starbucks to simply jump on the “we are cheap” bandwagon, feels a bit unimaginative.
Keep commenting! 🙂
Kathy