There is a better way…to adapt to changes
This morning two of my caffeine-crazed friends sent me an email with the exact same link inviting me to try out the new Starbucks VIA Ready Brew. It might sound like a spam generated email, but both emails were clearly written by my very human, independent-minded friends. Talene mentioned that she found out about this promotion via Twitter and sure enough, @Starbucks promoting VIA on Twitter and, apparently on Facebook:
Anyway, I’m going to set aside my incredulousness at the fact that two of my friends are completely promoting Starbucks without any provocation – “People are your Partners” indeed. Instead I’ll focus on the actual product: Starbucks VIA Ready Brew, instant coffee packed in individual packets retailing at less than a dollar.
At first I was a bit surprised by the move and wondered how it fit into Starbucks’ carefully constructed and consistent image. Within their position as coffee experts aren’t they worried that instant coffee is considered just…not that good? Moreover, isn’t having a $1 a cup offering essentially aligning with all the value-menu fast-food offerings out there?
Truth is, the instant coffee offering probably is not as good as a brewed cup of coffee. The low price point probably is meant to appeal to mass markets especially considering it will also be sold at Target and Costco. But Howard Schultz is facing the realities of the current frugal consumer and providing an offering that aligns with external environments. He is directly addressing declining Starbucks sales, attributing them to the more penny conscious consumer and finding a new solution that is not merely about cutting jobs and closing stores (although that already happened).
I’m curious to find out if this new product will appeal to consumers who sacrificed their daily cup of Starbucks for a cheaper alternative or if it will draw in new consumers, craving a little bit of affordable luxury. For now, it definitely drew in my friends, who are fans of Starbucks and of free stuff.
Interesting observation.
I was also wondering what would happen to starbucks next, a dollar menu?
I guess so, with the $1 instant coffee.
Very curious to wait and see if this is a start of a new begining or an end of a luxury brand.
My guess is that this will generate more revenue no doubt, but it would also negatively affect the regular starbucks consumers giving them an option of having a cheap coffee. Options are good, but not when you position yourself as a luxury coffee brand.
Diana, the rage continues…
Last night my girlfriend went to some party promoting Starbucks. Howard Schultz was there. So now I’ve got samples of Via (and a mug too!) on my desk. Find me and we’ll do a taste test.
@Neon, does luxury have to equal cheap? I’m thinking about the really “mass” side of the mass luxury, like Target. Or maybe H&M? It’s a tricky line to walk, to be sure — balancing a high quality brand with a cheaper price point. But maybe Starbucks can be the ones to do it?
At the end of the day, though, the recession being what it is, I think every single CEO in the country has to have some plan in their heads to work the idea of value into how they sell themselves. They’d be foolish not to.
So at the end of the day, maybe Starbucks will win out. Maybe consumers will just be deliriously happy to have a quality cup of joe from the coffee maker they trust at a price they can afford.
For me, it’ll boil down to the taste of the coffee. If it’s even half-way decent, then my bet is Starbucks wins.
@Pak
I agree, the quality, aka the taste will be one of the key determinants of the sucess or more radically speaking the brand’s survival.
Selling instant coffee in packaging that resembles the take away mcdonalds ketchup together with traditional higher end coffee is somewhat of a brand deterioration in my opinion, but thats ok, just an opinion:)
You may argue, that ppl mostly buy the tranditional starbucks coffee cups to sit in the shop, while the VIA Ready brand is more for those that want to take it to the office/aptmnt. Well, a lot of people still take cups to the office/aptmnts and that is when the power of options comes in.
Also, most offices/appartments of those that drink coffee have instant coffee anyway(+jars are cheaper).
Are they aiming at people that buy instant coffee to drink it later, when they are not sure that they can find some around? Well, thats a tiny segment, i am sure.
So, lets say you do like how that instant coffee tastes and it beats all the other instant coffees that are around, hence you take it to your next destination. That gives you an option to buy the cheaper, yet great tasting, instant coffee from a brand you can trust to your next destination instead of the expensive cup. Thats great for us, but is it good for Starbucks? Would they be able to draw in enough people to offset every $3 that the consumers save by choosing the ketchup version?