Make Marketing History

The views of a marketing deviant.

Wednesday, August 06, 2008

When Customers Outgrow Your Market.

It's every marketer's dream to educate a new audience and create a category. Starbucks did just that - they introduced a new vocabulary of lattes, mochas and cappuccinos to the world.

But marketers must never forget that education is a continuum. That audience now knows all about lattes, mochas and cappuccinos. They know the difference between a good one and an average one. And that's one reason why Starbucks just posted its first quarterly loss.

Consistency is good. Consistently improving is essential.


Anonymous Graham Brown (mobileYouth) said...

Hi John. Good post. There was a time when Starbucks was the exception - it lead in terms of service and quality.

The category's exception became the norm very quickly and the mass-market became eroded from all sides - niche players like Cafe Nero offering both value - ie the "true Italian experience" as well volume - the cheaper alternatives.

Starbucks' problem is that it once offered leadership and now asks the customer for ideas.

Also bear in mind that Starbucks is not quite a necessity like, say, McD's so will suffer as a result of economic cycles.

9:52 AM, August 06, 2008  
Blogger john dodds said...

Asking the customers for ideas is fine by me - but it reeks of just being a stunt in most cases.

As for economic cycles, I'm very wary of company's offering that as an excuse - yes some businesses will be more adversely affected than others but just watch out for any bad performance being blamed on difficult economic times. These are difficult times relative to the richest time in human histroy. That's all.

McDonald's are doing it in reverse by claiming their meals represent better value in hard times. They've posted remarkably good figures but it alarms me that a £20 Mcmeal is the family's choice of diet these days and says more about perceived conveninece and incipient laziness than much else.

7:24 AM, August 07, 2008  
Blogger Rob @ Cynic said...

Strictly speaking, Starfucks didn't introduce Lattes, Mochas and Cappuccinos to the World, they just heightened their awareness and popularity ...

... however, you mention it is every marketers dream to educate but far too often I find they simply want to get some shitty word/phrase into the venacular because they believe this equates to some increase in brand prestige and value.

What this results in is a bunch of annoying ads placed on high rotation with the real outcome being a word/phrase that is well known but for all the wrong reasons.

1:30 AM, August 11, 2008  
Blogger john dodds said...

Strictly speaking, they did. The majority of the world not being as urbane, cosmopolitan and jet-setting as you.

5:19 AM, August 11, 2008  
Blogger Rob @ Cynic said...

I grew up in Nottingham.

Urbane, cosmpolitan and jet-setting had nothing to do with it, having an Italian mother is another thing.

And I concede the point you pedantic bugger.

[PS: Only 5 years ago I heard an Aussie ask for - I kid you not - a cup of cino ... no Starbucks in her locality obviously]

6:51 AM, August 11, 2008  
Blogger john dodds said...

That was just Lauren and her preformance art.

7:15 AM, August 11, 2008  

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