Be careful! Starbucks: Maybe it's tempting you to make mistakes

Starbucks is facing a huge challenge, it must continue to grow rapidly while maintaining a smooth operation and retaining loyal customers. Moreover, as a listed company, Starbucks must continue to expand its scale to meet expectations from Wall Street.

Warren Buffett once regarded cigarettes as the perfect product: "The cost of cigarettes is only one penny, but it is sold for a dollar. It is also addictive."

The current coffee business is very similar to cigarettes. No matter how expensive the coffee is (the price of Starbucks latte varies depending on the location, but it is about US$3.5), its raw material is just a glass of water, a small amount of milk, a tablespoon of coffee beans, and then it takes 30 seconds. Processed. Starbucks has used the consumer's love for coffee to earn 6.4 billion U.S. dollars in annual revenue. The company has nearly 6,000 cafes. Currently, there are an average of 5 new stores opening every day. As a result, many other coffee sellers are eyeing the high market share that Starbucks has captured.

In the past few years, the Duncan Donuts chain has expanded its business by continuously launching new types of coffee. Recently, the Wall Street Journal published an article stating that Dunkin Donuts is launching new types of food supplies and renovating some of its stores into cafe styles. Coffees sold in the store include coffee smoothies and the recently launched TurboHot, which is topped with Espresso (a espresso). Suzanne Nowitz, a spokeswoman for the chain, said that these changes, together with new advertising campaigns aimed at telling consumers, “We don’t have comfortable sofas and wireless internet access in our stores, but we sell food superstores. Value is quick and easy."

Although Duncan Donuts' intention to strike Starbucks is known to Sima Zhao's heart, Nowitz insists that the purpose of these changes is not to snatch Starbucks' customers. She said, "We are just sticking to the usual practice of attracting outspoken and serious old customers."

McDonald's also began selling new fine coffees in stores and co-marketing with Newman Foods. Even the 7-Eleven has started selling cappuccinos and promoting its own soy content in its drinks.

But Wharton marketing experts warn that these moves may make these companies astray. Some companies are distracted by Starbucks' sweeping momentum, or fear that their customers will be taken away by Starbucks, so they may give up a market segment where they can earn profits only if they stick to their positions. Out of the envy of the Starbucks business, some companies may give up their original loyal customers. Peter Feder, a professor of marketing, said, “Any mature market has a lot of focus on the price options of many fast food restaurants. Take the Duncan Donuts Chain Store as an example. The shop sells cookies and fried cakes, and also sells coffee. And donuts.If it is not selling jam-filled doughnuts at the same time as selling good-looking coffee, customers will visit other fast food restaurants. Once customers leave, they may not return.

Custom-made coffee

Bill Cody, Wharton executive director of retail projects at Jay Baker, believes that many smaller companies, such as Starbucks and Bitter Coffee, and Kerryber Coffee, are aware that consumers’ awareness of coffee is now Robbie Price. Sri Lanka said that as a fixed purchase of goods, coffee can also promote the sale of other goods. Price is the chief marketing officer of a chain convenience store in Pennsylvania and he is an adjunct professor at Wharton. “Coffee always seems to be sold together with morning papers, donuts, or breakfast sandwiches.” People buy coffee on an average of five to seven days a week, and they often buy in the same store. The most favored business is such loyal customers.

The popularity of coffee culture allows more people to leave coffee all day, which means that businesses like dolls can sell more coffee. Price points out, "Quality coffee has actually gone to the public.

More words can be found on the company’s website about the company’s “start a war, fight back on high prices, wait for a long time, and dazzled the size of the cup”. "Everyone who has ever bothered to read the Starbucks menu knows that Starbucks calls the average-sized coffee cup as tall, the middle cup as grande, and the largest cup as venti (although many customers still keep small when ordering.) The cup is called small, the medium cup is medium, and the big cup is called large.” The Duncan Donuts also claimed that their “Italian espresso revolution provides customers with genuine and authentic daily enjoyment at a popular price”.

However, Starbucks itself does not take any of these cynicism. Its spokeswoman May Cusol wrote in an e-mail that Starbucks is very proud of being able to create today's characteristic coffee industry that has made many cafes prosperous. But what helps us to stand out in the market is unique and original. The original Starbucks experience, our expertise in coffee and our relentless pursuit of quality coffee."

Fide and several other colleagues at Wharton think Duncan donuts and other coffee brands are competing with customers and selling goods that are different from Starbucks. In other words, the so-called "unique and authentic Starbucks experience" in Coushal's e-mail is just a fancy language for promotion. David Rubinstein, a professor of marketing, said that Starbucks is selling coffee, and other drinks, as well as wonderful music, comfortable sofas, and free wireless Internet access. Customers buying expensive coffee are actually paying for these enjoyment experiences.