Thursday, March 15, 2007

I thought the guys at The Economist were supposed to be smart

They have a brief item on the trouble at Starbucks.

Trouble brewing
The Starbucks chairman seems to have a clear idea about the brand and why its position has eroded. Starbucks has always been about more than a cup of expensive coffee. It was a comfortable place to hang out while drinking that coffee.

The Economist mentions that McDonald's coffee won a taste test conducted by Consumer Reports. Big Deal. That does not meant that Mickey D's is a threat to Starbucks because the rest of the package is just not there.

Starbucks has comfortable chairs. McDonald's seating is designed to be uncomfortable so that customers eat fast and leave. Besides, who wants to linger over a cup of coffee surrounded by screaming kids with their Happy Meals and by surly stoner/slackers. (Those are McDonald's core markets.)

The Economist also trots out that favorite of business journalists-- the quotable consultant.

Now both companies are at risk from a growing sense that their products are indeed just commodities, says Robert Passikoff, founder of Brand Keys, a brand consultancy.


Of course he would say that. You could ask him about any one of a thousand companies and he would mention commoditization. That is what he does; his livelihood depends on highlighting those dangers.

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