The
Starbucks® Momentum
Dear
Associate,
According
to the Associated Press, Starbucks Corporation has seen its
stock price plummet fifty percent in 2006. Citing the decline
in home values and the increase in fuel prices with stiffer
competition from unlikely rivals, Dunkin' Donuts and McDonald's
Corporation, Starbucks will scale back on domestic store openings
while pumping up their international market.
Another
profit concern they have is the rise of copycats. When you
have a winner, everyone wants to copy you. Really. Even 7-11
has gotten into the picture by fine-grinding their beans (making
them darker and stronger) and replacing their cups and lids
that rivals Starbucks' in appearance.
Has
Starbucks suffered?
You
could never tell in my area. There's a Starbucks drive-thru
that seems to average five cars per minute. Then there's the
Starbucks kiosk inside a Von's Supermarket only two hundred
feet away from a Starbucks coffeehouse. The mom-and-pop donut
house in the same center has not recovered since Starbucks
arrived.
Starbucks
is definitely the Big Dog on the block. Because of that, competitors
want to model their success. (Or take a shot at them.) And
even consumers want their identity tied to that of a bonafide
winner.
I'm
downtown one business morning. There are coffee lovers parading
their Starbucks boldly and proudly. They don't drink them
because you don't drink a status symbol.
I
call this getting a Double Buzz. One from showing off their
status symbol. And the other from downing the potent brew.
Get
this: an inside source from 7-11 says she has witnessed people
coming into the store to buy the house coffee using Starbucks
tumblers. How's that for ingenuity? These misguided few want
the world to perceive them as winners so badly they are willing
to cheat. Just to get a buzz.
Everyone
wants to identify with a winner...
Think
of all the knockoff clothing and accessories consumers are
wearing that has a logo or design from high-end fashion designers.
The golf ball with Tiger Woods' signature will outsell the
same balls with the Nike logo. My laptop with the Prancing
Horse logo and Ferrari Red paint cost me six hundred dollars
more than the equivalent one with the company brand name.
It
never fails. We want to identify with winners. It must be
written in our DNA.
Specialty
products increase profits...
Starbucks
developed a product line of grinders, mugs, and even an expresso
machine. It's brilliant. Instead of buying your coffee maker
from outside sources, they're keeping you grounded to their
brand name. They're prospering from this new pipeline because
they know brand identity is so strong, you wouldn't be caught
dead making coffee from a Black and Decker when you have friends
over. It's social suicide.
So
what does this specialty coffee's success mean for you and
me?
If
you want to increase your success, consumers must perceive
you as a winner. Or believe that you possess the winning drive
to go all the way. That's whom people want to identify with.
That's whom consumers want to buy from.
Brand
identity. Associating with a winner. People will buy more,
and more often with you if they know you're a winner.
Warm
regards,
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