Starbucks gets a dose of economic reality--and changes its style fast!

[Previously posted on Google's BlogSpot by Keith Murray on August 12, 2009]

The greater economic realities never fail to invite opportunity [during boom times] or impose their discipline [during down-turns] on business and the marketing of products. And the way Starbucks operates is no exemption! For a long time, Starbucks was on a long dreamy ride to success; this largely occurred in a period of affluence, with a menu-board filled with exotic and [some would say] snooty refinements that the average person on the street would find hard to decipher, order, and--of course--pay for!

All of that is about to change. Starbucks--like most other firms in town--has taken a hit with respect to keeping existing customers and attracting new ones--and influencing the buyer behavior of both. Existing customers are increasingly mindful of coffee costs and seeking to diminish their spend-thrift ways; new prospects are farther and fewer between, confused when they get into the store and, thus, not very inclined to venture in, pay a lot of money, be confused and then embarrassed in the process of getting what amounts to just a cup of coffee in the first place!

Well, Starbucks is getting a dose of economic reality and learning the operational and marketing lessons their more "common" competitors have had to pay attention to for much longer. The Wall Street Journal's Julie Jargon describes how this is happening in her August 4, 2009, article. You can see for yourself what changes are being wrought!

Many in business believe in and focus on the elaborate strategies that lead to exotic marketing and operational outcomes--and this POV is not entirely misguided. What is frequently minimized, however, is the role that the greater environment--and the economy in particular--plays in the success of all those exquisite plans. In the last analysis, the economy offers opportunity or imposes it's discipline on all. Starbucks is now needing to learn the second part of that lesson!