The book entitled Starbucked: A Double Tall Tale of Caffeine, Commerce
and Culture" by Taylor Clark looks at what made Starbucks an
international success. The world's largest coffee-shop chain, Starbucks
Corporation had $7.8 billion in sales in 2006, 40 million customers, and
more than 13,000 stores around the world.
According to Clark, Starbucks "took a commodity that Americans could
get for a quarter … reshaped it into a luxury product, convinced customers
to buy it at hugely inflated prices, and built stores only a few blocks
apart in every major city."
Well, small businesses may not have the resources to duplicate Starbucks'
winning strategy of opening a store at every corner, but there are some
factors that small businesses can do to emulate the success of Starbucks.
Here are the key elements essential to the appeal and success of Starbucks.
- Offer consumers what they love = Starbucks has shown that consumers
love sugary drinks. People love sugar, and Starbucks offer them in heaps.
Thus, you have flavors such as Java Chip Frappuccino served with chocolate
chunks, whipped cream and a drizzle of chocolate on top; or Toffee Nut Latte
with toffee nut syrup, whipped cream and crunchy toffee sprinkles; or
Caramel Macchiato with gooey, yummy caramel sauce drizzled on top. Their
drinks may not be healthy, but Starbucks has shown that consumers love their
desserts, even in their coffee drinks.
- Consistency = Consumers want to know that they are getting their
favorite cup of coffee whether they are in Seattle, New York or Tokyo.
Starbucks' coffee may not be the best coffee out there, but customers want
to be assured that they are getting the same taste, same quality, same
experience when buying coffee. Reliability is key to Starbucks. As the
author writes, "To the coffee drinker in unfamiliar territory,
Starbucks looks like an oasis in the horizon…"
- Focus on capturing consumer's attention = While demand for Starbucks
was initially attributed to the yearning for a "pure European coffee
experience", the company's ability to offer "beverage
entertainment" has allowed them to capture customer's hearts and
pockets. Starbucks offer coffee combinations with flavors and products you
never expected before each season, all in an effort to provide that
"sophisticated coffee indulgence." Hence, you have flavors such as
Banana Coconut Frappuchino, Pumpkin Spice Latte, Eggnogg Latte, Rasperry
Mocha Chip Frappuchino, and many others. It is beverage entertainment, at
its best that keeps people interested and coming back for more.
- Understand the economics of your business = Starbucks does not just
want to sell coffee - it's too cheap. Instead, they offer more of the
milkier and sweeter varieties that have healthier margins.
- Ability to think outside the box = Nowadays, Starbucks is not just
about coffee. It has become a place where you can buy regular old CDs, or
burn your own personalized CD with song selections of your choice. The
company even has a record label, with Hear Music's inaugural CD release from
none other than music legend Paul McCartney. They even provide free Internet
access in their stores - all in the hope of making you stay at the store
more so they can sell more coffee.
And of course, the best lesson of Starbucks is to first have a product in
demand. They are at the forefront of a trend that changed the way coffee is
viewed and purchased. Starbucks stumbled on a great business plan by
offering a pricey product that a wide number of consumers will want again -
and again (everyday if possible). As the author pointed out, coffee is the
second most traded commodity in the world, and four out of five Americans
drink the beverage regularly. With such a huge demand for the coffee
beverage, you can be assured of a wide customer base.
And let's face it, coffee is physically addictive, so it is no surprise
to find people lining up at Starbucks every day (even several times a day)
to get their caffeine fix. Starbucks succeeded in selling a lifestyle dream
of affluence and comfort wrapped around a steaming cup of coffee accessible
from every block in your neighborhood.