The Long Tail of Coffee Adds To Starbucks’ Identity Crisis

Over the past year we’ve noticed experimentation in Starbucks’ marketing, a reflection of an identity crisis in the industry as “mass-market powerhouses” McDonald’s and Dunkin’ Donuts use the recession to rise from below. On the opposite front gourmet coffee startups are beginning to present the premium quality Starbucks once used as its primary selling point.

Over the past year we’ve noticed a lot of interesting experimentation in Starbucks’ marketing efforts:  a Twitter strategy, a Japanese concept shop, and a stealth café. All reflect shifts which point to an identity crisis in the industry as “mass-market powerhouses” McDonald’s and Dunkin’ Donuts use the recession to rise from below. On the opposite front, gourmet coffee startups are beginning to present the premium quality Starbucks once used as its primary selling point.

Caribou, Utopian, and Citizen Bean all use the web to offer personalized Netflix-like subscription services. On a monthly basis, Fair Trade organic beans are delivered directly to customers’ doorsteps. While both Dunkin’ Donuts and Starbucks have similar offerings, the personalities of these startups bring with them the feeling of a close-knit community, often supported using social media. It’s the creation of the digital café.

While the terrain continues to change, Starbucks is finding itself stuck in the middle. Its first of three off-brand cafes, 15th Ave. Coffee and Tea, is seen by analysts as a key element of the company’s future success.

Portfolio likens the “dual strategy” to that of Colgate-Palmotive’s

On the supermarket shelves, he points out, “Colgate keeps its [traditional, chemical-laden] toothpaste far away from [all-natural] Tom’s.” Robert Passikoff, founder and president of the New York City consulting firm Brand Keys, likens the effort to “a new line extension.”

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