Building the Starbucks Brand - an Outsider's View

Although I don’t fit the profile of a Starbucks customer, I have always been fascinated by how the company has been able to transform a commodity into a quasi luxury product by sheer marketing prowess. After all, these folks were able to create a business model that allows them to charge $3 for a cup of coffee that costs little over 50 cents (euro) back in Europe.

I don’t know the level of planning that went into creating the Starbucks brand but the end result is certainly admirable. My first reaction to a recent article in Time about Starbucks was try and distill a few practices that may have contributed to the success of the brand. Again, I am in no way associated with Starbucks so as an outsider, here’s what I reckon to be the most salient practices that built the brand:

• Invest in the customer experience (stores, quality of service, product, etc.) rather than on advertisement – Starbucks is about an image and lifestyle (whatever they may be) that are reflected in the layout and décor of the stores, the service provided by the baristas, the music wafting out of the speakers, etc.
• Invest primarily in PR rather than on advertisement – notice how often Starbucks appears in magazine and newspaper articles, how many blog entries it generates and compare that with the number of times you’ve seen an ad for Starbucks
• Manage operations to match the PR image – the consistency of service and the “in-store experience” match the image put out by the PR machine, for example, even though it serves food, Starbucks puts coffee product first and foremost and struggles to avoid being labeled a QSR (quick service restaurant), this may result in slow service and some lost business (generally of less loyal and profitable clients) but reinforces the brand position as a provider of customized beverages.

It's not so much that Starbucks loathes advertisement, but I can't remember them engaging in couponing, discounting or in any other such practice that other retailers routinely pull out of their bag of tricks.