“Who will save your soul, if you can’t save your own,” are popular lines from one of the songs by singer and songwriter Jem. The Starbucks strategy in the past has created effects that have commoditized the brand. The Starbucks strategy is based on experiential marketing. The company indulges in story telling to achieve its goals of higher sales. At the end of the “Saving Starbucks’ Soul” case study the question that’s raised is, “Are you paying $4. 50 for a caffeine jolt and caramel topping?
Or have you simply been dazzled by Howard Schultz’ storytelling magic? ”(2007) Starbucks manages to create a story that dazzles which is sometimes told in a fabricated manner but nevertheless it will help Starbucks’ to save its soul. To sell anything you must believe in it first. The same idea is reverberated in the case study when Schultz decides to go back to its roots to develop a story behind its new Dulche-de-Leche latte. Lately according to Schultz’s email to his co-workers highlighted areas where Starbucks had been straying away from its main goal.
He said that it was now time to “push for innovation and do the things necessary to once again differentiate Starbucks from all others…and triple annual sales, to $23. 3 billion. ” (Marketing – Saving Starbucks’ Soul, 2007) The company took steps to telling a story by geographically flavor its coffee. Starbucks has continuously innovated in the coffee business and that’s why it’s still amongst the top members today. It is able to justify its high price by giving the customer something they’ll always remember. Picture Dairy Queen, a competitor of Starbucks.
Imagine you go into a Dairy Queen to order coffee or a knock off Starbucks frappaccino because it costs less. What do you loose in the process? First of all the environment is bland, there are no soft couches around. When you’re handed a coffee no one writes your specifics on it because there are no specific ways of customizing your coffee. Even the coffee cups are bland and the flavors are easy to forget. The entire strength of Starbucks lies around creating a memorable experience. They are able to beat competitors and have a huge base of loyal customers because of the way they operate. Their recent ship gone adrift needed a fix.
To tell a story about their new latte they went all the way to South America. “The mission was to find products that would evoke an authentic vibe in the U. S. That’s harder than it sounds. ” (Marketing – Saving Starbucks’ Soul, 2007) They brought in ceramic mugs painted with floral patterns, paintings of South American coffee farmers and posters of a grandmotherly figure making coffee on the stove. The funny thing about these authentic claims is that when you flip over the mug it says “Made in China”, the South American farmers are painted by an American, and the grandmotherly figure is an American model. Marketing – Saving Starbucks’ Soul, 2007) “Each poster will feature the tagline “I am Starbucks. ””( Marketing – Saving Starbucks’ Soul, 2007)
What’s confusing is what Starbucks is really trying to tell us. Is Starbucks really a South American Farmer or a grandmother who cooks coffee? Funny, I thought it was hooking Americans onto a product by charging way too much for a cup of coffee by telling America a supposedly authentic story. The strengths of Starbucks’ though are in a good supply chain. The posters of South American farmers reveal that they have links with people who will tell their story.
They don’t just make connections with any farmers; they make it with the farmers in their geographical marketing strategy. They know that Americans don’t want simply American anymore. There are enough all American McDonald’s every 5 streets. Starbucks is successfully competing with these all American brands by penetrating with culture that is non America. If McD’s is located every 5 streets then Starbucks is located every two streets. Extreme penetration has led Starbucks’ to reach all of its customers although the aspect of cannibalization is debatable. . The company…plans to have 40,000 stores worldwide, up from 13,500 today. (Marketing – Saving Starbucks’ Soul, 2007)
With each new Starbucks’ the company is able to reach out and compete effectively by supplying what the customer is demanding. The goal of a business is to profit. The Starbucks Stock has been down recently and was unstable in the recent past. To revive his company in the stock market and to grow financially Howard Schultz wanted to re connect with its soul but the Starbucks case study sheds come light on the real purpose of telling a story. The research-and-development department routinely tackles 70 beverage projects a year, with 8 of them leading to new drinks.
A drink must not only appeal to a broad swath of coffee drinkers but also be easy for a barista to make quickly so as to maximize sales per store (hello, Wall Street). “The store . . . is a little manufacturing plant,” says Gass, and yet it must seem as though the drink is being handcrafted specially for the customer (hello, Howard Schultz). (2007) Howard Schultz has figured out the key to being successful. He knows how to market his product, have the right management policies, strategize effectively and in retrospect aims to make his financial position stronger than ever.
To sell something you must be a true believer. A true believer in selling an idea and not necessarily telling a story that is all that authentic. But storytelling has been the key to success to many American brands. Disney World is the land based on story telling and it is one of the most successful businesses in America. Schultz is a fantastic story teller too, he knows how to authentically market his supposedly authentic stories. It has been the formula for success ever since Starbucks opened and has been the key to get the company out of any nightmare turning it into a fairytale.