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International Marketing and Management Centre for Business History Master Thesis
The STory of STarbuckS
Ea Elisabeth Finn Nielsen
Tina Holm Mortensen
Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS
Table of contents
Part I 1. Preface 2. Problem Area 2.1 Branding as the Root Cause 3. Literature Review 3.1 A Holistic Approach 3.2 Brand Attachment 3.3 A Historical Approach towards Starbucks and their Role in the Market 3.4 A Critical Perspective on Starbucks’ Branding 3.5 Locus as Promoter 3.6 Communication Strategy 3.7 Summary 3.8 Reflections upon the Literature Review 4. Thesis Approach 5. Methodology 5.1 Theoretical Foundation 5.1.1 Cultural Branding 5.1.2 Meaning Transfer 5.1.3 Flock and Flow 126.96.36.199 The Flows 188.8.131.52 The Flocks 5.1.4 Cultural Categories 5.1.5 Flocks and the Social Network of the Brand 5.1.6 Cultural Meaning and Identity Projects 5.1.7 The Consumer Culture 184.108.40.206 The Evolution of the Consumer 220.127.116.11 From Modernity to Hypermodernity 18.104.22.168 The Post-modern Consumer 22.214.171.124 The Character of the Post-modern Consumer 126.96.36.199 Authenticity and Consumption 188.8.131.52 Hypermodernity 184.108.40.206.1 Fear of the Future 220.127.116.11.2 Ethical Responsibility 5.2 Method 5.3 Research Design 5.3.1 Introduction to Starbucks 1 2 3 4 5 7 8 11 12 13 14 14 16 17 17 17 18 19 20 21 21 22 24 24 25 26 26 28 28 30 31 31 32 32 32
Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS
5.5 Part II 6. Introduction to Starbucks 6.1 Description of Starbucks’ Business 7. The Industry in which Starbucks Emerged 7.1 Starbucks Revolutionising the Industry 8. Current Conditions of the Specialty Coffee Industry 8.1 The Specialty Coffee Market and the Competition 8.1.1 The Coffeehouses 8.1.2 Specialty Coffee Going Mainstream? 8.1.3 The Threat of the Fast Food Restaurants 8.1.4 The Evolution of the Specialty Coffee Industry 8.1.5 Starbucks in the Kauffman Continuum Part III 9. Brand Genealogy 9.1 Starbucks’ Branding Strategy 9.1.2 Emotional Branding 10. The Narratives 11. The Narrative of Howard Schultz 11.1 The American Dream 11.2 The Father Figure 11.3 Development of the Narrative of Howard Schultz 12. High Quality 12.1 The Italian Coffee Traditions 12.2 Service 12.3 The Control of the Supply Chain 12.4 Development of the Narrative of Quality 12.5 Development of the Narrative of Service
5.3.2 Starbucks within the Industry and the Competition 5.3.3 Brand Genealogy 5.3.4 The Consumer Culture 18.104.22.168 Meaning Transfer and Identity Projects 22.214.171.124 The Brand’s Social Network Empirical Evidence 5.4.1 The Industry and Competition 5.4.2 Blogs and Fora 126.96.36.199 Who are the Bloggers? 5.4.3 Consumer Culture and Identity Projects 5.4.4 Critique of Data Collection Delimitation
33 33 34 35 36 37 37 38 39 40 41 42 43 44 45 46 48 48 49 49 51 52 53 55 55 55 57 58 58 58 60 62 62 63 64 64 67
1 Implications of the Conclusion 18.1 The Original Identity Projects of Starbucks’ Customers 16.5 Authenticity 16.3 The Disappearance of the Bobos 16.4 The Social Network of the Brand 16.2 Why the Bobos Left the Brand 16.3 Fair Trade 14. Implication for Further Research 19. Conclusion 17. What has Become of the Starbuck Experience? 15. References 20.4 Can You Grow Big and Stay Small? 15.2.2 Efficiency Focus 188.8.131.52 New Meanings Attached to the Starbucks Brand 16. The Narrative of Corporate Social Responsibility 14. The Third Place 13.3. Appendixes 69 71 74 75 77 80 81 83 84 85 87 88 88 90 90 93 93 93 94 95 95 98 103 104 105 107 108 116 .2 Identity Projects 16.1 The Initial Subcultural Consumer of Starbucks’ Coffee 16.2 Starbucks Still Strives to be the Good Place to Work 14.1 The Good Place to Work 14.1 Standardisation and Expansion Strategy 15.1 Is Starbucks Still a Third Place? 14.3 Change in the Meanings 15.2 The Identity Projects of Today 16.5 The Starbucks Consumer and Hyper Modernism 17.4 Development of the Fair Trade Narrative 15.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 13. Consumer Culture 16.
This indicates that the consumer at any given time will select a product on the basis of an objective evaluation upon the good’s utility regardless of any other factors. which operates within another paradigm not explaining consumer choices on the basis of information but on the basis of consumers being surrounded by culture – culture which affects the consumption patterns and that products possess intangible benefits or meanings which can be transferred from the products to the consumer. According to this theory the consumers evaluate products on a rational basis and buy the goods which are assessed to optimise their self-interest. the information model (McCracken. when looking into the specialty coffee1 market it could be argued that the similar cheaper coffee product now supplied by fast food chains such as McDonald’s or Dunkin Donuts. For this Speciality coffee: “Sometimes called “gourmet” or “premium” coffee. would easily substitute a product such as coffee from Starbucks Corporation2? However. Preface As the neo-classic theory. 2005) within advertising is based on the idea of homo economicus – the rational human being or the rational consumer. 1 . But according to specialists the price premium of coffee at Starbucks cannot be justified anymore (Schwaner-Albright. McCracken (2005) explains these irrational choices with the so-called transformation model. 2008) again indicating that something other than pure information is controlling consumers buying decisions. So what triggers the consumer to make these choices? And if the consumers based their consumption on rationality would some luxury goods not battle to survive in the market place? Therefore. 2008) 2 Starbucks Corporation will be referred to as Starbucks in the rest of the thesis. meanings which the consumers need to construct their identity. it seems like the consumers act less rationally than predicted by the neo-classic economic theory and thus base their consumption choices on other factors than for instance price – it is not rational to buy a tall latté in Starbucks when a product with similar product-property can be bought in McDonald’s for less than half the price. which would justify the more expensive purchase. Thus the cultural context surrounding the good is not taken into account when planning a branding strategy. but nevertheless numerous consumers do buy their latte at Starbucks. They tend to feature distinctive flavours. the counterpart of the information model. how does the information model explain that that the consumer’s actions deviate from what is dictated in the theory and hence that the consumer does not always act rational? Consumers buying patterns and decision making seem to be controlled by other factors than rational evaluations and hence the information model appears to face limitations when trying to give explanation to why expensive branded goods are chosen rather than similar goods without brand value – choices. which are shaped by the unique characteristics of the soil that produces them” (SCAA. Then it is arguable that the quality and taste were what differentiated the Starbucks latte from the McDonald’s latte.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 1 Part I 1. which are inherently irrational. However. Specialty Coffees are made from exceptional beans grown only in ideal coffee-producing climates.
These statements are particularly interesting as Starbucks’ growth rate seems to have been slowing down the past year (Starbucks. Starbucks is criticised for this rapid growth and analysts do not seem to doubt that the expansion objective of a total number of 40. 2008b) However.000 stores is to stretch the expansion too far. are the main explanations for Starbucks’ inferior results (Starbucks. which have started offering coffee and the decrease in the American economy. analysts believe that Starbucks have lost focus and track of the Starbucks Experience3 which has always been the cornerstone of the corporation (Nocera. 2008). it cannot be rejected that some of Starbucks’ decline is connected to the US economic slowdown as the tendency is seen across the industry.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 2 reason rational choices are not always made – brands possess intangible meanings which results in consumers making irrational choices based on emotions and feelings and which to some degree may explain the success of the Starbucks until now. Therefore. The coffee shop chain has been growing with more that 20% a year (Bonamici & Fortune. it is seen how Starbucks is not able to meet the expectations of the market. 2008c). Problem Area Investigating the state and direction of Starbucks leaves one with the impression of a very successful company – it is an almost unbelievable success story about the coffee chain and a brand which changed the Americans’ coffee and café culture. 2008) resulting in an almost global omnipresence (Starbucks. Furthermore. from 5.886 in 2002 to 15. the decline may have other explanations. as it is estimated that it might be difficult to maintain a profitable turnover in the long run (Nocera. Starbucks is developing rapidly which is reflected in the fact that the chain until last year opens approximately five new stores a day worldwide. 3 . Although Starbucks is far from economic crisis at this moment. Starbucks has experienced a steeper fall the past year (Factiva. Hence. Starbucks believes that increasing competition from quick-service restaurants. but comparing Starbucks’ stock prices to the overall index. According to the corporation. Thus. Starbucks has attained immense growth results. 2008d). and in the fact that Starbucks struggles to retain the same costumer traffic as before. if continuing this fast.011 in 2007 (Harrer. some analysts expect that the corporation eventually will destroy what they have built up and what have become to be known as their unique characteristics. in the media. the intention is to let this development continue and the plan is to add approximately 6. 2008a). This is referred to as “The Starbucks Experience” which will be elaborated on later as the experience comprises of many different factors. Starbucks strives to provide customers with a special and theatrical experience in a comfortable and inviting environment when buying their coffee beverage. Naturally. 2. 2008). it can be argued that potential crisis are lurking. which is reflected in dropping stock prices in particular. 2004) and in five years the chain almost tripled the number of stores worldwide. 2008). when this success story took its departure. Since 1987.500 stores to the total store count by the end of 2011 (Starbucks. To this.
expressing their negative attitudes towards the corporation. 2006). The point is that if the narratives are not continuously related to the changing cultural context. it can additionally be argued that Starbucks has reached iconic status as they achieved to become a symbol representing the desires of consumer culture when they entered the market. the brand will be in trouble as the narratives lose their trustworthiness (Holt. these brands can be characterised as identity brands. 2004). especially since it has been presumed that the golden days of Starbucks is over (Gilbert in Nocera. 2006). this does not seem to be the case since it is suggested that they do not change in line with the context yet. which will be elaborated on later (Thompson et al. They were able to comply with the subcultural desires of that time. In relation to branding we have come across Holt (2004) and McCracken (1986. seeing that customers apply the meanings of Starbucks’ brand in creating themselves (Thompson et al. exemplified by the “bobo-culture”. 2004). 1997. branding is about creating narratives which correspond with the desired image of the consumers. Holt (2004) and McCracken’s (1986. Thus. and furthermore that the narratives do not correspond with the identity that consumers desire. The growing number of customers dissociating themselves from Starbucks.. Thompson and Arsel. 2006).Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 3 Extending the knowledge of the Starbucks Corporation. it is essential to be aware of the growing tendency of customers deselecting Starbucks deliberately and especially the growing number of customers actually avoiding Starbucks (Thompson et al. cannot be ignored as they can be seen as an expression of Starbucks struggling with the trustworthiness of their brand.. hence the desires of the consumers. 2008). Starbucks’ approach to their branding is questioned. The purpose of the thesis is therefore to investigate how Starbucks has handled their branding and hence narratives. Consumers’ doubt in Starbucks’ trustworthiness indicates conflicts in the image of Starbucks. Therefore. The dissociation from Starbucks can furthermore be understood as an expression of Starbucks not delivering what the consumer of today demands – thereby arguing that the Starbucks brand struggles in corresponding with the cultural desires in society. Based on Holt’s (2004) theory about iconic brands. 2. 2005) theories analyse brands attached with meanings which consumers adopt when they buy the brand. This may leave one with the impression that Starbucks has pioneered in applying a cultural branding strategy. This requires an understanding of the historical and cultural context. . time after time. 2005) who both take a cultural approach to branding and thus focus on the importance of brands relating to the cultural context. In this context. Michelli. we argue that branding can be at the root of the problems Starbucks is facing currently. thereby the brand’s meanings and values are transferred to the consumer’s identity. they intimate that they pursue an emotional branding strategy (Schultz & Yang..1 Branding as the Root Cause Due to the growing dissociation from Starbucks and the questioning of their narratives. 2006. Starbucks is identified to be such an identity brand. there is no doubt that the future is challenging to Starbucks. Thus. However.
Therefore. who include Starbucks in the historical context of the specialty coffee sector’s development. Literature Review The Starbucks corporation has been discussed in various articles. only few articles and books have taken the discussion and analysis about the famous company to an academic level. and more descriptive analyses. as well as their initial novelty value This is furthermore an interesting approach to Starbucks’ decline as it may be the case that Starbucks has difficulty in retaining the same position in the mind of the consumers seeing that the concept of specialty coffee might now be perceived as a mainstream concept. We attempt to identify . The cultural branding approach complies with and overcomes the shortcomings of emotional branding (Holt. there has been identified descriptive literature upon Starbucks’ branding. it appears to be weaker in its argumentation due to the fact that it is not based on thorough research.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 4 McCracken (2006) points out that all trends and concepts emerging as cultural innovations over time will be perceived as an ordinary standard. (2006). In the Literature Review. the following Literature Review will serve as a justifying foundation for applying a cultural branding approach to the understanding of the Starbucks brand. it can be argued that the literature found shows an agreement in that Starbucks’ branding strategy is emotional. In the following review. books. they are represented by Michelli (2007) and Scott Bedbury (2002). Pendergrast (2001) and Luttinger and Dicum (2006). In general. since only a little literature analyses Starbucks on an academic level. though some only imply this implicitly. However. 3. and quite a few of these apply Starbucks as a case example and hence are not focussed on Starbucks alone. hence they lose what made them distinctive and interesting in the beginning. Thompson et al. This is mainly written by Koehn (2001). Thompson and Arsel (2004). We have chosen to include academic research. we will outline the tendencies towards Starbucks’ branding. and TV shows and it seems that a large amount of writers have an opinion about the company which they wish to express in one way or another. consultancy work. We are aware of the fact that in the case of the consultancy literature. (2007). However. among others. Academic research includes. We define consultancy books as literature written with the purpose of giving the business-world’s suggestions on how to go about branding by applying Starbucks as a prime example. Lastly. Rindova in Lerpold et al. consultancy literature is included to give a more comprehensive image of the branding of Starbucks as it is found to provide a useful insight into how Starbucks have gone about their branding – knowledge which can be applied later in the thesis. Lyons (2005). 2004) which will be outlined as the branding strategy of Starbucks in the Literature Review.
and the purpose of his book is not to demonstrate the branding of Starbucks.1 A Holistic Approach Michelli (2007) describes through an internal analysis of the corporation how Starbucks revolutionised the coffee industry. The key to this special experience is to create a connection between the partner4 and the customer and through this connection create a relation that emotionally attaches the customer to the brand. and success worldwide. and thus that the goal is to create an emotional relationship with the customers through the five principles. it can be argued that the strategy Michelli (2007) is describing is an emotional branding strategy as it is evident that emotions are the pivotal point of the strategy. Michelli (2007) does not intend to describe the branding strategy of the company. all texts have been composed before the crisis of Starbucks and therefore it seems logical that Starbucks’ poorer performance has not been investigated. Thereby. the principles should be kept consistent in all the brand activities of the company over time. It is the CEO. Implicitly. Michelli (2007) points out that the company has followed five principles. Nevertheless. As mentioned before. the fact is that only few authors have taken Starbucks’ lack of cultural branding up for evaluation and we will apply knowledge from these authors as foundation for the further research. and that these have lead directly to their success. constitute the branding strategy. we argue that Michelli (2007) through the book. What also seems clear is that the five principles shall not be deviated from. or at least part of it. Hence. The principles are all focused on how the company can differentiate from other coffee shops and. 2006). This indicates a consistency that is in line with the thoughts of emotional branding. focus seems so be shifted from a product benefit-driven approach to an emotional appeal (Roberts. 3.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 5 gaps in the existing literature on which to base our argumentation of choosing a cultural branding approach.. although maybe not consciously describes the branding of Starbucks. which according 4 Partner is a Starbucks term used for employee . Moreover. most of the literature is written with the purpose of explaining Starbucks’ current troubles – therefore the gaps identified should not be seen as a criticism towards the existing literature as it has not been its purpose to analyse Starbucks from a cultural and contextual approach. However. and that the five principles described in sum. the key is to connect with the customer and create a relationship. deliver the five principles and hence the brand to the customer. managers. gained high growth rates. Michelli’s (2007) focus is predominantly internal. Moreover. but to develop a generic framework for success by indicating that any company can gain success applying the five principles. 2004 in Thompson et al. and partners who. create a special coffee experience for the customer. through the principles. from a top-down perspective.
thereby lacking a critical position towards Starbucks. Michelli (2007) may have what by some authors (Schultz et al. Therefore. The book does not only focus on the branding of Starbucks but does in general describe how branding should be carried out. 2002) is described as a holistic approach to the branding of the corporation taking the whole company into consideration when delivering the brand to the consumer. Due to Scott Bedbury playing a large role in Starbuck’s marketing. this approach is not found to be sufficient due to the fact that leaving out the demand side. 2005. it can be assumed that the points of view on branding are highly relevant in regards to the Starbucks branding strategy. the consumers. in this case. The analysis is purely internal and done through various interviews of CEO’s. partners and most important Chris Gorley. Bedbury (2002) has developed. Again.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 6 to Michelli (2007) seems to be done very easily – not taking into consideration the rapid servings and the many different partners. leaders. Due to the book being published in 2007. it can be concluded that the analysis of the brand lacks a more objective perspective. Thus.. The methodology of Michelli (2007) should be questioned as it results in the brand being described only from a positive and at times unrealistic angle. Davis & Dunn. can in fact be very problematic. Like Michelli (2007). Most importantly is that the brand must be relevant to the customer . the holistic approach to the brand is not sufficient to explain the contents of the Starbucks’ brand. However. and Michelli (2007) does not take into consideration that external factors such as the consumers as well as media functioning as co-branding. eight principles as to how a brand can become successful. which is no doubt of high priority. it can be argued that the analysis is one-sided and positive towards Starbucks’ brand due to Starbucks huge involvement in the book. head of Global Brand Communication at Starbucks. 2008) it obviously does not consider the current crisis Starbucks is facing or reflect on the danger the brand could likely be facing with the huge expansion level. This leaves us wondering if it is really possible to connect to every single customer and whether this is the explanation to the success of Starbucks. Scott Bedbury’s book “A New Brand World” was published in 2002. Also the internal view of the brand can be argued to be a problematic way to describe the brand and explain its success criteria. where the company was on their highest opening an average of five shops a day (Rubin. Holt (2004) and McCracken (2005) point out that the context in which the corporation exits cannot be left out of the branding process as it plays an active role in the branding. Only a few times are the five principles questioned which leaves the reader with an extremely positive perception of the brand. This is especially true in the case of the employees delivering the brand to the customers. The former head of marketing in Starbucks. in order to connect emotionally with the customers it is imperative that all parts of the organisation understand how to express the intended narratives and emotions. Furthermore.
However. however mostly in the negative way. for instance by Michelli (2007). Bedbury (2002) mentions that one of the main reasons for Starbucks’ brand success is the way they extend their brand – all extensions are focussed on the main mantra quality. this fact is only mentioned shortly and is not further discussed in relation to Starbucks. the connection is achieved by communication through firstly the employees and also the artefacts in the coffee shop. as everything matters when expressing the wanted brand image. whether this is in music. enabling actions. Holt. Moreover. this statement should in our further research be questioned. This everything matters approach and hence focus on all possible aspects of the company to express the image. the consumers attach to brands when the brand gratifies the consumer by offering aesthetic pleasure. the brand DNA or brand karma. into their consideration and thus fails to keep up with the movements in the contemporary society (McCracken 2005. the customer’s influence on the brand is less ignored than. Later in the review we will get more into how literature has analysed on how the consumer can and have affected the Starbucks brand. and hence consumer demands. this is not the main factor leading the brand to what it is perceived to be. Bedbury (2002) mentions that the customer more than ever has control over the brand. In this same way. just like Michelli (2007).Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 7 and hence the customer’s needs must be understood. In regard to this. reflects Bedbury’s (2002) holistic view upon the branding process that he shares with Michelli (2007). products sold etc. Even though customers are stated to have some influence on the brand image. (2006) take the brand connection to another level and describes how attachment to a brand can be achieved. Also the emotional connection with the brand is underlined and. as cultural brand management theory in particular explains failing brands with brands which do not take changes in culture. Again focus is on the employees and how they connect and create a special experience. 2004). The brand core is to be identified and is not supposed to be changed over time. This is mainly due to the Internet where word of mouth spreads positive as well as negative narratives which in many ways are incontrollable for the company at stake. which is the term Bedbury (2002) uses. such as design. In general. music. and through giving the child a sense of security and trust.2 Brand Attachment Park et al. However. 2006. this statement contradicts Bedbury’s (2002) emphasis on being of relevance to the customer by always living up to their needs – don’t the customers’ needs express the current context in which they interact? Therefore. 3. enriching the consumer by expressing . the quality of the coffee and even down to the number of toilet paper plies. who leaves out this external factor of the branding process completely. is emphasised. extension of coffee menu. and that the customer in many ways is in the driver’s seat. They compare the attachment process to how a parent develops the relationship to its child through gratification of basic needs.
Furthermore. Park et al.. A characteristic shared by them all is that attention is attached to how Starbucks has influenced the history and development of the US coffee market. This aesthetic/hedonic experience is according to Park et al. Koehn (2001) follows Starbucks and their success but lacks to explain. having set the industry standard. (2006) supposed to gratify the self and thus to evoke an emotional connection. The 1980s spurred economic growth resulting in higher disposable incomes which made consumers demand luxury goods and since Starbucks was perceived as an affordable luxury. 3. Moreover. which allow relaxation and self-indulgence. strong tasting coffee with a pleasant aroma) set in a visually and aurally pleasing retail atmosphere that allows for relaxation and self-indulgence.. hot.. Park et al (2006) do not go further into any detail about how Starbucks has gone about their branding strategy and moreover. which is build upon a set of visually and aurally pleasing atmosphere factors. Michelli. 5 Starbucks is a good example of a company applying aesthetic/hedonic elements as it “. why and how the brand in the end of the day differentiates itself from their competitors. Pendergrast (2001). Again we are introduced to a text.3 A Historical Approach towards Starbucks and their Role in the Market Both Koehn (2001). 2007. (2006) do not analyse the Starbucks brand but apply the coffee chain as an example of a brand which creates attachment through mainly aesthetic/hedonic experiences5. hence changes in consumerism. Starbucks became more or less an overnight success..g. how Starbucks has ran into difficulties lately. 2006. both changes in income and lifestyles.. she links Starbucks’ success to socio-economic reasons. (2005) underline that Starbucks is a good example of a brand. Therefore. Thompson et al. differentiate her approach to why Starbucks has become the brand they are today from Michelli (2007) and Bedbury (2002). She argues that Starbucks gained considerable success and set industry standards by introducing a whole new concept at the right time in the American context. Bedbury. and Luttinger and Dicum (2006) have written about the history and development in coffee focusing on the American market. 2002) – here the emotional connection to the brand is evoked by a pleasing retail atmosphere. Again we are introduced to the emotional branding though Park et al. (2006) who have chosen a different term but the concept of aesthetic/hedonic experiences cover the same aspects as the notion of emotional branding introduced by the authors in this literature review (cf. has a positive approach to the firm and apply Starbucks as a prime example of conducting business. the text does not go into detail about how Starbucks creates this attachment to the consumers and the argumentation about possessing a pleasing atmosphere seems rather weak.” (Park et al. Park et al. 2005:204) .Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 8 their actual or desired self – similar to what McCracken (2005) describes as the consumers identity projects.evokes pleasure from multiple sensory modalities (e. Koehn (2001) does however. in the chapter on Starbucks. which even though not focussing on Starbucks. it is important to be aware of the text’s insufficiency in explaining the rise as well as the fall of Starbucks..
Luttinger and Dicum (2006). Starbucks must have already in the late 1990s encountered some opponents who have anti-branded the coffee chain especially due to the fact that the corporation expanded heavily. Apart from the fact that Starbucks was leading the way in introducing the high quality of specialty coffee to the masses. A Third Place is an informal public place between home and work where people can meet and gather – a place which encourages customers to relax and linger (Oldenburg. 2001). thus the role of Starbucks is related to the development of the coffee industry and the American culture. Moreover. They do not. However. experienced any serious threats and was peaking growth by opening two stores a day in the domestic market. and hence also how the brand leads to a sustained competitive advantage (Barney. they also point to the fact that Starbucks emerged at the right time just as Koehn (2001). However. These include qualities such as a clean relaxing place for conversation and/or business where premium coffee is served. as it seems to be generally believed that providing the customers with a Third Place is one explanation for the success of Starbucks. however. 1991). Koehn (2001) describes Starbucks from a predominantly positive angle – Starbucks had yet not. it is also stressed how Starbucks was able to meet a cultural need in society. However. drawing attention to the essential criteria of meeting cultural needs in society to becoming a successful brand. Similar to Koehn (2001). 2004). Therefore. Thompson and Arsel (2004). Luttinger and Dicum (2006) still point out reasons for Starbucks being successful. this is probably due to the text being written ex ante the crisis of Starbucks. and Koehn (2001) are not alone in this viewpoint of labelling Starbucks as a Third Place. according to Koehn (2001). identified as the need for the so called Third Place. and not only what Starbucks intended to express with their brand. Also a reflection on how the context is not only a factor which contributes to a brand’s success but also that a changing context can affect the Starbucks brand negatively if the brand is not capable of adapting to changes in the society (Holt. This one-sidedness leaves one with a very positive perception of Starbucks. which even though being followed in their most successful years also must have encountered some antagonists.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 9 The brand as explained by Koehn (2001) does not consist of something that the rising amount of other competitors does not also posses. Even though the story of Starbucks is only a small part of their description of the history of coffee. belonging and identity etc. Luttinger and Dicum (2006) is much like Koehn (2001) in their way of delineating facts and relate Starbucks to their cultural fit into the context. go as far as Koehn (2001) to connect the success with economic reasons. Luttinger and Dicum (2006) describe the success of Starbucks and hence the specialty coffee industry from a historical perspective. On the other hand. and Thomp- . and hence demarcates the brand to be about social interaction. Koehn (2001) is able to outline how Starbucks is incorporated in the industry and context as they emerge. and thus is supported by Pendergrast (2001). Koehn (2001) lacks to describe how the consumers perceived the brand.
Pendergrast (2001) is critical of how Howard Schultz tries to depict himself as a hero whose main goal is to bring something to the society through fair trade. Hence. but it can be argued that Starbucks has changed during the years and no longer fulfils the criterion of being a Third Place (Oldenburg. the text of Koehn (2001) can be criticised for not critically evaluate the factors leading to the initial success. Therefore. Hence. . which will be discussed later.” (Pendergrast. Pendergrast (2001) argues that one must not be fooled by the branding of Howard Schultz and Starbucks as it is evident that Howard Schultz is not in the business to provide community.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 10 son et al. Koehn (2001) does not seem to follow up on how these factors. In comparison. “He is in it to win. he indicates that Howard Schultz is trying to brand the company by creating a positive and engaging image of himself. portraying him as a fine example of the American Dream come true. they are alert to the fact that the way Starbucks has conducted business is not without side effects. Luttinger and Dicum (2006) point out how the development of Starbucks may have led to a loss of the initiated Third Place. Pendergrast (2001) seems critical of the image of the Starbucks brand and indirectly he alludes to the reality of Starbucks living up to the brand image of Starbucks as a corporate titan circulating about the brand. Indirectly. Starbucks is still referred to as a Third Place as if it is a fact. Pendergrast (2001) gives Howard Schultz credit for his route to success but at the same time he implies that appearances are deceptive. Thus. giving rise to the initiating success of Starbucks developed in line with the development of the company. His criticism is mainly pointed at the father figure of Starbucks. engagement in caring organisations and especially by providing community to the American people through his establishment of the Third Place. (2006). 2001). Still. It appears that Koehn (2001) focuses on conditions which were current at the time of the emergence of Starbucks and leaves out a critical discussion regarding the current presence of these factors. Pendergrast (2001) exemplifies this winning instinct in how Starbucks has used their position of being larger and financially stronger compared to the competitors to force them out of the market. Howard Schultz. 2001:306). there seems to be a tendency to disregard the fact that Starbucks may no longer be the same company as it was when it emerged. However. Like Koehn (2001) and Luttinger and Dicum (2006). they are able to draw attention to some negative consequences of the development Starbucks has gone through. Thus. like Luttinger and Dicum (2001) he pricks a hole in Starbucks’ story of success and tries to point out what is happening beneath the surface of Starbucks. Starbucks has shown a strategy of wiping out competitors by buying them out. Furthermore. or otherwise to employ predatory retail tactics as Pendergrast (2001) calls it to outperform competitors. and that their exploding expansion strategy and product standardisation have challenged Starbucks to preserve the initial soul of the company and the brand. Luttinger and Dicum (2006) criticise Starbucks for having stirred away from their origin and that they have sold out their core essence in order to gain profit. and how the genuineness of the image he is trying to create of himself may be questioned. Pendergrast (2001) acknowledges how revolutionising Starbucks has been to the specialty coffee industry.
Thompson et al. the way to success may not be questioned but instead the future plans and goals of the company. anticonformism. draw this parallel. acknowledge the fact that Starbucks is one of the most evident examples of a successful emotional branding strategy. (2006) point to a mismatch between the identity. This segment is identified as the Bobos. shows criticism towards the way Starbucks is conducting business and hence identifies drawbacks of Starbucks’ branding strategies that initially have led to success.e. where communities against corporations like Starbucks are formed with the purpose of sharing negative opinions and experiences with each other. Thompson et al. This literature. (2006) focus on the drawbacks of emotional branding. Thus. Even though Thompson et al. and antimaterialism”.4 A Critical Perspective on Starbucks’ Branding Luttinger and Dicum (2006) call attention to the fact that Starbucks is loosing their touch of the market. and how this was vital in leading towards success. and material affluence with the bohemian values of creativity. bohemians bourgeois who “attempted to meld the bourgeois values of hard work. However. Thus. i. (2006) argue that the circulating doppelgänger brand image is an expression of the myth no longer being authentic to this . Starbucks’ myth was able to allay the cultural conflicts of appreciating both bohemian and bourgeois values. What is interesting to notice about Thompson et al.. (2006). career success. pricking another hole in the success story of Starbucks.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 11 3. (2006) and Thompson and Arsel (2001). it is not their intention to investigate how emotional branding has led to Starbucks’ success and how the company has succeeded in creating emotional relations to the customers. The essence of the article is thereby that Starbucks is not living up to their brand promises and Thompson et al. they do point out how Starbucks was able to fit into a subculture at the time they emerged. They do so by introducing the term doppelgänger brand image which can be defined as a cultural backlash. on the other hand. (Thompson et al. Myths are a central point to the branding and thus the ability to use storytelling to cater to customers. expressiveness. Instead Thomson et al. Thompson et al. negative narratives told about the brand by the conditions which emerges when a brand is not able to live up to its brand promises. 2006:60). Whereas the earlier mentioned authors only implicitly allude to Starbucks conducting an emotional branding strategy. (2006) point out that Starbucks’ initial success is based upon their ability to deliver the right myth to a specific customer segment at the right time. which characterised the corporate bohemians. which Starbucks wishes to express and how they are actually perceived. the purpose of their article is to illustrate how emotional branding can become a drag to the brand if the brand is not able to live up to its brand promises – using Starbucks as a case example. However. This gap is expressed mainly through the Internet. Thompson et al. and Starbucks then catered to this segment. (2006) take the fact that Starbucks has conducted an emotional branding strategy as their point of departure. being discussed below. with reference to other authors. (2006) is the attitude towards branding and how this must be related to the cultural context to gain success. but they do not directly link Starbucks’ risk of loosing their soul with their emotional branding strategy.
However. Lyons (2005) focuses on how Starbucks has applied product placement in its marketing efforts not only to generate increased brand awareness but also to accommodate harming critique from the media. as Starbucks is no longer able to fulfil the promises of the branding narrative. (2006) opens up the other side of the glamorous success story of Starbucks but on the other hand they leave out that this. coffee experience. the article of Thompson et al. the analysis lacks to explain the anti-Starbucks discourse with a more cultural approach and so does the former analysis (cf. underline that brands and also Starbucks will be imposed to different meanings when introduced to other cultures – what is a hip brand in the US may reflect the opposite in another country. Thompson and Arsel (2004) dig a bit deeper into the reasoning of the two groups and why they are avoiding Starbucks. as a brand’s authenticity is understood as a key to success. Thompson et al. Thompson et al.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 12 customer segment. by the company incontrollable co-branding. does not necessarily have to be negative. Contempt is revealed towards the branding of Starbucks. Additionally. as the imaging of them providing the customers an authentic. for instance. . as global brands take on a variety of localised meanings. However. in a comfortable and homelike environment can be understood as a marketing gambit on the plea of Starbucks’ real identity as a corporate titan. and as Thompson and Arsel (2004) are not trying to map the branding strategy of Starbucks but seek to analyse the different meanings and actions which emerge in a given context. (2006). Thompson and Arsel (2004) do. it can be argued that positive narratives about Starbucks circulate in the popular culture which improves the image of the brand. in a predecessor to the above article. authenticity seems to be a central theme in the article of Thompson et al. different states. In general. Thus. the anti-Starbucks discourse is analysed and two distinct groups of anti-Starbucks café guests are recognised.5 Locus as Promoter Lyons (2005) underlines that Seattle is the core identity of Starbucks marketing and that the city Seattle defines where Starbucks stems from – an origin that imbues the identity of the coffee chain. Thus. Of course the objective of the analysis has to be considered as well. 2006).. emotional branding stories. and to create agreement between brand promises and what is provided. (2006) can be seen as a call for Starbucks to take immediate action on their branding while the doppelgänger brand image still has not destroyed the branding of the company. But also within the national boarders a brand can be perceived differently due to cultural differences in. if the customers feel put upon. 3. Co-narratives could also be positive and serve as brand strengthening narratives. the authenticity of the branding stories is taken away. neither links the anti-Starbucks discourse with a potential change in the American culture. Starbucks is encouraged to create new narratives. Though both analyses seem to consider culture to affect the brand in general. Moreover. Thus. one cannot expect to find all aspects of the Starbucks branding in their article.
it can be questioned whether Seattle takes this central role in Starbucks’ current branding not least due to the large distributions of coffee shops all over the world. However.. their values. This would have made good sense as the communication of the firm. which is highly linked to their branding strategy as well – a strategy which does not only speak to the rational level of the con- . Rindova (in Lerpod et al. It is explained how firms do not only compete on their resources but also how competition is on the perception from the stakeholders. which facilitates engagement of stakeholders on many levels – creating a more elaborate perception of the firm which does not only communicate their rational benefits but also plays on a cognitive and thus on a feeling based level.. 2007) explains how the communication strategy has a decisive role for leadership in the specialty coffee business and exemplifies how Barnies’s Coffee Shop did not keep the leading position in the market. which has not been in focus of other Starbucks brand analyses 3. is a part of the brand which is a resource – an intangible one though. and hence the way the business communicates. what she describes as a multiplex communication strategy. it can be concluded that Lyons (2005) is missing out on other factors regarding Starbucks’ branding. However. 2007) analyses the communication strategies in the specialty coffee industry in the US.. 2007) that the root cause to Starbuck’s success is their application of a multiplex communication strategy. other factors must be included when analysing how Starbucks has branded themselves. But still. according to Rindova (in Lerpold et al. and how Seattle has become a part of Starbucks identity. it may be questioned whether the consumer is aware of Seattle being a part of the corporate identity and a main factor to their branding strategy as Lyons (2005) argues. as to how Rindova (in Lerpold et al. which according to Barney (1991) quite so will lead not only to competitive advantage in the short run but to long-run sustained competitive advantage due to its intangible character and thus its resistance to be imitated by competitors (Barney. to combine four communication strategy modes and develop. (such as for instance a flavoured coffee). Rindova (in Lerpold et al.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 13 Lyons’ (2005) main focus is on how Starbucks has branded themselves through the use of location especially of the first coffee shop at Pike Place. is directly linked to what is perceived as being branding of a firm. where the consumers most likely would not associate Seattle with the same degree as an American would associate with the city with. 2007) describes it.. Therefore. Lyons (2005) addresses a branding factor. it may be concluded from Rindova’s text (in Lerpold et al. These strategies are extremely important for the coffee chains as they present the company.6 Communication Strategy Rindova (in Lerpold et al. even though they were the first to introduce several new concepts before Starbucks did. The key to success is. Barnies’s Coffee was not able to create sustainable competitive advantage when only focussing their communication on the rational communication strategy and product development.. Here we would like to add an argument that the perception. Therefore. 2007). Therefore. 2007) does not link communication strategy and branding strategy together. and hence how the consumers perceive them. Moreover. 1991).
but a communication strategy that appeals to the values and beliefs of the consumer as well. and the changing context as more and more similar concepts have emerged. In other words. Koehn. Hence how customers’ increasing knowledge of Starbucks. In this way Starbucks has differentiated themselves from their competitors who have not applied a multiplex strategy and hence have left the leading role in the speciality coffee business. 2007) though some only imply this implicitly. (2006) point out that the way Starbucks carries out their branding is not optimal for the brand. they indicate that the decline in consumer traffic may be due to Starbucks not being capable of corresponding with the needs of society. there seems to be agreement about Starbucks capabilities to create an emotional connection to the customers.7 Summary To sum up. it is apparent that some literature takes the context into consideration as well (Koehn.8 Reflections upon the Literature Review What has caught our attention in the investigation of the material about Starbucks is in particular the attitude shown by Thompson et al. Both socioeconomic factors (cf. there seems to be a clear consensus in the literature that Starbucks have conducted an emotional branding strategy (Michelli.. Moreover. Luttinger & Dicum. 2001) making it possible for Starbucks to fit into the context at the time they did are touched upon. 2005. However. as mentioned above. Bedbury. which is found to be the key to their success. the contextual part of the explanation for the success) are not thorough enough and could require a more careful investigation. (2006) argue that the Starbucks brand has evolved around one single narrative being the authenticity narrative which we will argue is not broad enough to explain the contents of the Starbucks brand and the reason to why the brand presently is in trouble. the existing academic material on Starbucks seems to lack reflections on how the company gradually has related to its success factors. (2006) and Thompson and Arsel (2004) – this being influence from anti-corporate groups. 2006. Rindova in Lerpold et al. Thompson et al. Furthermore. Thompson et al.. 2002.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 14 sumer and hence their rationale behind preferring Starbucks. At the same time. Additionally. Nevertheless. collectively have changed the conditions for Starbucks throughout the years. Thus. 2001. the arguments for especially the external reasons (i. to Starbucks. the company’s expansion level. Thompson et al. Thus.e. as well as the product in itself and the innovative thoughts and management behind the company. they criticise Starbucks for being stuck in their emotional branding story. are pointed out to be central to the success. 2007. 2006. the emotional branding strategy is argued to be supported by a holistic approach to the brand – meaning that the whole corporation is responsible of delivering the brand through what Karmark (2005) would describe as a “living the brand” strategy. Park et al. 2006) and also external impact on the brand is described by Thompson et al. 3. Lyons. (2006) towards Starbucks and their branding. 3. they imply that Starbucks cur- .
Thompson et al. (2006) cannot be ignored in this thesis as they seem very applicable for further investigation of Starbucks’ cultural branding – especially since Thompson et al.hence. 2005. 2007) arguing that gaps between brand promise . This fact sets the scene for our further investigation. emphasising the cultural and contextual factors. Firstly. as the literature review has opened up to the possibility that Starbucks’ current situation may be related to the lack of cultural branding this approach will still be the pivotal point of this thesis and it will therefore be based upon the following problem statement: To what extent can Starbucks’ current decline be explained by the meanings attached to the brand? Hence. due to Starbucks not corresponding with the culture.. Seeing that Holt (2004) explains a brand’s sustained success with the brand’s ability to correspond to the cultural context. investigating how they have been able to correspond to subcultures’ cultural conflicts to preserve their success throughout their time. 2006). We find this gap very interesting and believe that it may be a valid explanation for Starbucks experiencing decline currently. The essence of Thompson et al. it would have been obvious to make this approach the pivotal point of the thesis. Therefore. In general. Their analysis does not go any further. (2006) imply that Starbucks should handle their branding is very much like the viewpoints of Holt (2004) and McCracken (1986. The findings of Thompson’s et al. only demonstrating its appearance. the purpose of the investigation of the brand revolves around the current decline which Starbucks is facing. we leave out this contextual analysis of the American market. it can be argued that the analysis of the existing literature about Starbucks lacks explanations for the further developments of Starbucks’ success. Thereby. Due to literature (Thompson et al. In this light. it could have been interesting to carry out a similar analysis of how Starbucks has related to the cultural context since their initial success. (2006) point out the cultural conflicts experienced by “the bobos” in the mid 1980s to be the element which secured Starbucks a foothold within the context. This will be based on a research within the scope of cultural branding. Gilmore & Pine. Nevertheless. (2006) is that there is a gap between Starbucks’ brand image and the culture currently. Even though this approach appears very appealing. (2006) do not dig further into the underlying cultural reasons for this mismatch. Thereby. especially with regard to clarify the causes for Starbucks no longer experiencing the same success as before .Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 15 rently lacks a cultural insight. 2006. however. the investigation will be concentrated about Starbucks’ narratives and how Starbucks is able to live up to their brand promises and hence whether they are perceived to be authentic. it may have been outside the scope of our thesis due to the necessary requirements which would have had to be undertaken to fulfil the research required. the reasons for Starbucks’ emotional branding stories not being in line with the brand promises delivered are not investigated. The way Thompson et al. thus.
. and due to authenticity being argued to be essential for competitive advantage in the current context. Thus. branding is found to be one evident explanation for the growing dissociation from Starbucks. 2002:173-176). Section 3). 2002). this will be done with the underlying pre-understanding of branding. which furthermore is supported by the previous investigation and analyses of the company (cf. 2006) implies a cultural approach to the investigation of the brand. However. such as increased competition and changes in the industry structure. Additionally. shifts in the market conditions. The approach in the thesis can also be identified as the pre-understanding on the subject (Gadamer in Gilje & Grimen. when construing literature regarding the subject. the focus of the thesis will be delimited to branding. the status of Starbucks’ brand indicated to be iconic (Holt. and in which direction. The approach is cultural branding due to literature in the Literature Review pointing to the emotional branding strategy which Starbucks has conducted being too consistent and hence not being tenable to a brand like Starbucks. how Starbucks has been perceived by the consumers over time – has there been a development in the perception? 4. . Therefore. for instance the decrease in the American economy. Thompson et al. the investigation will focus on whether the narratives have developed during time. investigation of authenticity or lack thereof is found to be essential to out research. Furthermore. as Holt (2004) points out a continuous assessment of the context as well as a cultural understanding as central for an iconic brand to stay successful. Thesis Approach Several factors may be able to explain Starbucks’ decline.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 16 and brand delivery lead to a lack of authenticity. Literature Review. 2004. Thus. we will have a prejudiced approach to Starbucks and how they should go about their branding in the future and. it is with knowledge about the insufficiency of emotional branding and the potential appropriateness of culture branding for Starbucks that we initiate our investigation. Secondly. Also our general experiences and knowledge will affect our approach to the thesis and how we interpret literature and hence to outcome and our findings (Gilje & Grimen.
and decades will be different from others due to innovation and the general evolution of society. Changes in society leave certain population groups outside this society evolution creating a subgroup. the research and hence the conclusion of the thesis will take its starting point in the following theory. A society will undergo different breaks through time. Moreover. . A myth is a narrative which targets a contradiction in society’s subculture or what Holt (2004) characterises as the populist world. There can be many different populist worlds within the general society and when a brand’s narrative are targeted towards a populist worlds’ anxiety. This approach is based on the idea that the cultural context in which the identity brand is positioned plays a decisive role in the consumers’ demand for the brand. These cannot.1 Theoretical Foundation Firstly. Therefore. Hence. or populist world. Thus. The populist world is defined to be a subculture of community. 2004).1. which represents the moral view of the world which glues a country together and creates a sense of community in a society. the theory chosen is based on the cultural approach. it is essential that firms behind brands have a cultural understanding but also have historical awareness and hence possess an ability to look backwards in the history of the culture in which the brands are interacting – the identity brand is according to cultural branding theory a historical entity. The identity brands are different than other brands as they compete on the so-called myth markets. Methodology 5. What is interesting about these brands is the fact that they are “identity creating” to their customers. when the context changes so must the myths concurrently otherwise there will be a risk of the brand being stuck in their myth. The populist world is in contrast with the national ideology. Thus. the brand will achieve what Holt (2004) identifies as iconic status. and emotional branding models. they are appealing to the customers due to the content of the brand’s myth which enables customers to maintain their wished identity in spite of the conflicts posed by society. 5.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 17 5. 2006). secure sustained branding success contrary to his cultural branding approach. Therefore. the theory will function as an explanatory foundation for Starbucks’ current situation. Hence meanings but must always be dynamic in its existence and relate to the current context (Holt. Not being up-to-date with the current stir in society will consequently lead the brand to failure (Holt. according to Holt (2004). which is constructed and articulated through myths and expressed through icons.1 Cultural Branding Holt (2004) has developed a counterpart to the traditional mindshare-. viral-. The adaptation to historical change is therefore essential for the identity brand to be successful and it must therefore never become consistent in its narratives. we are applying theory within this paradigm. with anxiety regarding their future.
to a greater extend are blurred in today’s society and hence the consumers’ identity are sought through consumption. a national ideology as well as subcultures will not be pointed out. McCracken’s (1986) theory upon meaning transfer of consumer goods will be applied to explain why Starbucks has achieved success but also why they currently are facing difficulties. Therefore. Some of the categories that McCracken (1986) lists to be important when transferring meaning may not be sufficient and comprehensive enough to explain the meaning transfer of a consumer good as Starbucks. hence. and age etc. Considering that the consumer goods sold in Starbucks are perishable food products there may not be the same rituals linked to the product as there would be with non-perishable consumer good. 5. Nonperishable consumer goods may have a stronger exchange ritual for instance where the product are given as presents that both express how the giver want to be perceived through the present and how the giver perceive the receiver match the identity of the present. to whom they have appealed in the past. sexuality. which is filled with meanings which are expressed through extensive storytelling. Starbucks products .Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 18 Holt’s theory (2004) can be problematic to apply considering our problem statement as we do not focus on the whole American culture as such. The meanings attached to the Starbucks brand are essential to clarify due to the argument that the product Starbucks is selling does not differentiate much from the other competing speciality coffee chains in product features. consumption of goods which expresses meanings which the consumer applies to express their identity (McCracken. there must be some other underlying reasons for Starbucks’ being able to reach superior expansion levels they have experienced for the last two decades. it will be analysed whether Starbucks may or may not have changed their narratives to be concurrent with their cultural context. This is important as the cultural categories such as gender. the theory on meaning transfer must be critically evaluated for the purpose of analysing Starbucks’ brand and the meanings associated with the brand. all aspects of the theory will not be applied but the theory will used as an analysis tool to explain the speciality coffee chain’s current myths and whether these have changed over time. Thereby. Starbucks’ coffee is an identity brand. and to whom the myths currently appeal. 1986). Not all products are what can be identified as identity products – meaning products attached with meanings which facilitate identity creation for the consumer. as meanings from the products we consume. are transferred from the product to the consumer (McCracken 1986). However. Hence a clarification of the meanings of the brand might explain how and why Starbucks has obtained more success than the rest of the market for speciality coffee. and whether this has been done deliberately or not.2 Meaning Transfer Consumption of products and goods says something about who you are – one’s identity is developed through consumption. McCracken’s (1986) theory will also be applied in regards to how the brand’s narratives and hence meanings have changed during time from being praised a well-reputed brand to being a brand in decline. Therefore.1.
McCracken (1986) does not mention this gap in his theory. This theory on Flocks and Flows will be applied to Starbucks and. . Advertising is one way of transferring meanings from the culturally constituted world to the product. who apply the meanings to carry out their identity projects. applying a story to the product that cohere with the cultural constituted world or by using celebrity endorsement or opinion leaders. is a part of what McCracken (1986) identifies as being a part of the so-called fashion system.1.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 19 can of course be used in the same way but the period of identity expression of the products has a limited period of time before the products are consumed. in this way. (McCracken. A ritual is defined to be a social action done for the purpose of collective or individual communication and cultural categorisation (McCracken. how then are the meanings being transferred from the good to the consumer? McCracken (1986) identifies symbolic actions or rituals to be powerful tools to get cultural meanings transferred from the good to the consumers’ identity. Therefore. The theory will be combined with Holt’s (2004) brand network theory to more precisely be able to explain why the consumers currently deselect the otherwise so acclaimed and successful brand. which results in the product being associated with the qualities the celebrity stands for. 1986). When the meanings have been transferred from the cultural constituted world to the good the question is. 2006). and again from the products to the consumers. However. Especially the last factor of meaning transfer.3 Flock and Flow In McCracken’s newest book he presents a new perspective on the changes in the market resulting in change in consumer demands (McCracken. as the important point in McCracken’s theory is that meanings are transferred from the culture to the good and then again to the consumer. the rituals will not be further explained. the theory is still found suitable to explain how and which meanings the Starbucks narratives and brand are attached and how the meanings may have changed during time. This transfer could for instance be done through for instance storytelling. These rituals are not important for answering the problem statement and cannot be applied as explaining Starbucks’ brand troubles. McCracken (1986) has developed a model which seeks to explain how meanings are transferred from the cultural constituted world to consumer goods. used to explain the reasons why the speciality coffee chain struggles in the US market. which may lead to a less sufficient explanation of meanings attached to perishable products. Other factors are also linked to the fashion system as being a carrier of meaning such as for instance product placement – displaying products in a certain environment on the cultural constituted world and in this way the product will be associated with the values of these surroundings. celebrity endorsement. 5. 1986).
Thus.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 20 5. adapt the concept and this becomes rigid. Hence. 2006) also explains this evolution of an innovation as creative destruction – if a concept does not re-innovate itself it will at some point be outperformed or destructed by a more innovative or creative concept. products or concepts do not necessarily have to change. a product range or another innovation. hence a restaurant only has a certain time of living before flock 5. The reasons for this is that the trends within the restaurant industry change.1. However. a corporation must consider not only when to enter the continuum or market – when is the market ripe for a concept or a new product line? – But also when to exit – when is the market saturated. Additionally. The change. one can question the adequacy of McCracken’s (2006) theory. rapidly demanding high adaptability and innovative skills of established restaurants to be able sustain a profitable position in the continuum. A product or a concept must therefore at some point reinvent itself over time so it does not end up in the rigid part if the continuum that sooner or later will be outmatched by more creative competitors. in which it is implied that branding is as necessary to reinvent as product features. 2006). or has the environment/culture changed? Figure 1 | Kauffman Continuum Chaos Direction of progress Source: McCracken (2006) Rigidity The trick is to enter the flow at the moment the change begins to create value and get out when value opportunities is being extinguished (McCracken. the restaurant business which includes the speciality coffee sector moves with high velocity down the continuum.1 The Flows Grant McCracken (2006) explains the changes in the market by applying the Kauffman Continuum depicted beneath in figure 1. no product or concept can survive being static and without changing to the demands of the market. when considering Holt’s (2004) approach to branding. to be described below. Therefore. it . However. Eventually. For instance. being a new trend. Only one or few of the innovations will be accepted by the consumers and thereby leave the chaos. in some industries the movement down the continuum is faster than in others. pours into the culture at the chaos end of the continuum and will compete against a myriad of other similar innovations.3. and follow new trends. Schumpeter (in McCracken. but the meanings attached to the product must be adapted to the context. the innovations end up being rigid and leave the culture in the other end of the continuum.
Flock 2 follow Flock 1. Flock 2 is the consumers who will only try something which has been in the market for some time. 1990). This fact may. Flock 5 will according to McCracken (2006) buy the product without having any idea of Flock 1 buying the product earlier that year. and thus it can therefore not be completely rejected that Flock 5 is aware of Flock 1 buying a similar product (McCracken. Still. Flock 1 is the most risk-taken and devoted to an innovation. Flock 3 follow the lead of Flock 2. McCracken (2006) divides flocks into five groups of consumers. 5. and hence the consumers. Flock 1 is the early adopters who quickly embrace a new trend or innovation. McCracken implies in his earlier work that the fashion system communicates meanings of products and hence across all consumer ranges. However. they are willing to take on some risk but not the same deal as flock 1. Hence. firms should not chase the trends and thereby change their brand all the time. Thereby. Figure 2 | Flocks and Flows within the Continuum Chaos < Flock 1 < Flock 2 < Flock 3 < Flock 4 < Flock 5 Rigidity Direction of progress Source: McCracken (2006) 5. Consumers are not locked into one class such as being a worker but declare themselves middle- . however. McCracken (2006) argues that flocks will always follow each other as illustrated in figure 2. This will confuse the consumers and this kind of so-called “cool hunt” will only cause the brand to loose its authenticity and in the end their loyal consumers (McCracken. where products have a certain lifetime before the products become obsolete and new innovations take over. As we move down the continuum the flocks of consumers are more and more risk averse in their behaviour ending up at Flock 5 who is not willing to take any risks at all. it differentiates on at least one very important factor.1. 1999). which is the dynamics of flocks. Moreover. be questioned as we will later argue. They want what is pure new. Flocks represent clusters of consumers who follow a certain flow of innovation.2 The Flocks One may criticise McCracken’s Kauffman Continuum argument to be very similar to a simple PLC curve (cf. Baker & Hart.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 21 is extremely important to be aware of the business in which the company is operating in and how fast trends and thus the surroundings are changing. applying Holt (2004) that consumers are interacting through a social network.3. etc. 2006).1. are not bound to a certain class as they used to be.4 Cultural Categories McCracken (2006) underlines that brands of today must be diverse in their meanings due to the fact that flocks.
1986). 2007) but because the consumer is locked into a social mechanism. 2001. . as the name implicates. The feeders are not truly loyal and often lose interest in the brand quickly and latch on to something more trendy and hip in the market (Holt. followers. but because of the product itself – they believe that the coffee chain has the best coffee that live up to their connoisseural expectation. 2005). on the other hand.5 Flocks and the Social Network of the Brand In the following. a worker cannot necessarily be recognised on the blue Kansas and the husband might. not because of the brand. 5. Starbucks’ coffee.1. In this way the two theories will be combined as we argue that the two theories can complement each other in a constructive way. They will drink the coffee. the insiders are influencing the followers segment to consume the brand too due to the followers wanting to identify themselves with the insiders. However. The insiders are not necessarily the largest group of consumers of. the so-called social network of the brand. but they are those consumers who assign legitimacy to the brand. According to Holt (2004). and often merely use the brand temporarily – this can be as a status symbol or to achieve credit from their surroundings such as friends and colleagues. Only rarely do segments solely belong to one category – but more often they belong to different categories according to the context in which they interact. divides consumers of a brand into three distinct constituencies: insiders.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 22 class. as well as the wife. This mechanism. and feeders who comprise the brand’s social network. the feeders only have a superficial connection to the values of the brand. Therefore. Insiders represent the legitimacy makers of a brand that by consuming a brand leverage some of their personal values and identity to the brand. The feeders. 2004). Moreover. feed on the brand’s narratives but are. while the old declare themselves young (McCracken. be doing the house chores at home – the categories are blurred in the present society (McCracken 2006. They are not risk-averse and are ready to be the first to try a new product or a brand. for instance. the Kauffman Continuum and the flocks apparent in this will be linked to Holt’s (2004) analysis of the brand’s social network. The followers are also seen as the bearer of the identity myth. are not genuinely loyal to the brand. a large segment that the firm needs capture in order to be able to survive economically – these are the real cash cows for a company and hence loosing this segment will be a substantial loss for a firm’s earnings. which determines the overall loyalty of a brand. the followers can be characterised as the segment which finds the greatest value in the brand’s myths which provides them their identity needs and through the brand they obtain a feeling of community with the other followers. Michelli. the customers of an iconic brand are loyal not because they have a one-to-one relationship with the brand as the emotional branding paradigm claims (Gobé. on the other hand. Furthermore. which results in the segments’ need to create their identities through consumption. They.
McCracken (2006). how the consumers perceive the brand. does not make new groundbreaking discoveries with his flock and flow theory. it must be mentioned that McCracken (2006) does not mainly focus on the brand and its movement down the Kauffman Continuum. Added. in this thesis the theory will be applied with focus on the brand. Therefore. which on the contrary is in focus of Holt’s (2004) brand network theory. The figure below illustrates the combination of the two theories: Figure 3 | Flock and Flows and the Social Network of the Brand Chaos < Flock 1 Insiders < Flock 2 Insiders Followers Feeders < Flock 3 Followers Feeders < Flock 4 Followers < Flock 5 Followers Rigidity Direction of progress Source: Holt (2004). Additionally. McCracken argues that after a while the brand will be adapted by other companies copying the brand to meet demands from less risktaking consumers. leave the brand and especially the followers unable to identify with the identity myth. however. The network of the brand would.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 23 In short the flock and flow theory seeks to explain how the context and the evolution of this play a decisive role for the success of a brand or a product. However. as the brand turned more and more rigid. and how the industry has developed during time. McCracken (2006) and of own construction . However. and the same brand. it may be argued that the social network only can exist in the first flock which actually use the brand. In this way. the flock and flow theory has been modified and thus extended with factors from Holt’s (2004) social network of the brand. and how a brand must adapt to the changing context. McCracken’s (2006) view upon the consumers or flocks is very simplistic and does not explain how loyalty plays a role in the brand’s survival. which seems to be an extension on Schumpeter’s (. This generic model assumes that all brands go through the Kauffman Continuum though with different speed regarding the brand’s characteristics. 2005) idea of creative destruction. without being changed and copied by competing companies moves down the continuum. It does not take the underlying reasons of the flocks’ behaviour into consideration. Therefore. the theory has a more general viewpoint on the market place and consumer trends within this. However. Nor would the feeders be able to find a rigid brand sufficient to assert them. the continuum can be seen as including the social network of the brand. we argue that the two theories can complement and support each other when combined. if the idea of the continuum is modified slightly. Moreover. this would signify that the brand lost its values and slowly turned rigid due to the brand not adapting to its surroundings. the theory seems to be relatively one-sided and simplifies the society and the consumers by not taking general consumer behaviour into account.
and the branding approach must be adapted to the current consumer culture stirs to be effective (Holt. Therefore. 2005). Hereafter. the cultural classes being less sharp and divided and hence identity projects preoccupy us on a continual basis and change during different periods of our lives. As the brand gradually becomes rigid and thus the narratives are not appealing to the insiders’ identity projects the insiders will leave the brand and so will the feeders who were feeding on the legitimacy which the insiders attached to the brand. 5. Shortly after. white collar. firms must acknowledge the changes in the context so that meanings of products can be regulated according to the consumers’ identity projects and the context. in their identity projects. and the consumer become knowledgeable about the con- . the feeders who feed on the narratives and meanings do so in order to attempt to gain status. the products are the locus of meaning. The consumers are looking for meanings in the products they can use in their construction of themselves (McCracken. The consumer culture is decisive when branding. 1986). or house wife. The identity of consumers can be manifold and their identity is increasingly sought in products that they buy. the followers follow the insiders’ lead. which express these meanings through for instance storytelling. Thereby. However. The consumers. it is not sufficient to have an identity as being only a blue collar. These projects are getting more important due to. thereby providing a more comprehensive tool for analysing Starbuck’s situation. as before mentioned. which they express and through the products the cultural meanings are made concrete and tangible. 5. Moreover. who are the most risk seeking and the first who discover a new brand. it is important to be aware of the fact that when the context is changing. The idea is to illustrate how flock 1 only consists of the insiders. but meanings that have been ascribed to the products through different marketing tools (McCracken.6 Cultural Meaning and Identity Projects According to McCracken (1986) cultural meaning is carried by products. the argumentation of taking the shifts on consumer culture into consideration is based on the dialectic interaction between consumer cultures and branding as represented by Holt (2002) where he argues that consumer culture and branding can be seen as an elastic band. so will the identity projects of the consumers. 2002). apply meanings to construct their identity thereby implying that the human being does not possess an essential identity but this is created and recreated according to the person’s current identity project – identity is hence socially constructed.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 24 As illustrated in the figure above. Thereby. the meanings are not innate qualities of the products. Currently. the two concepts of Holt (2004) and McCracken (2007) respectively have been combined. and it is only a question of time before these turn their backs on the brand too.1. Now only followers are left.7 The Consumer Culture This section has the purpose of accounting for the change in consumer culture in a broader perspective thereby not only focussing on the American consumer culture but the shift in consumer culture in general. By this it is meant that when the two factors near eachother.1.
2002:80). where the consumer was perceived to be uncritical in reacting on cultural authorities such as marketing. 2000. 2003). but are in constant evolution (Rifkin. a short overview of the consumers’ evolution will be accounted for. 5. Brown. Additionally Rifkin (2000) supports the notion of a continuously changing consumer culture and therefore it also has to be underlined that no sharp lines can be drawn when discussing consumer cultures. 2006). and afterwards the different consumer culture periods will be elaborated on more in-depth. The firm was perceived to be able to. 40 years later.1 Evolution of the Consumer Holt (2002) describes how the consumer has become more critical and how the marketing approach to the consumer has changed drastically over the last decades. 2006. the market power shifted from being marketer hegemony to being a market in which consumers took over the control via consciously taking consumption choices. which form the basis of Holt’s (2002) dialectic thought and hence foundation for his branding approach. for instance. which did not live up to their expectations or needs (Murray and Ozanne. meet and to some degree shape the consumers’ needs (Holt. However. The image made of the modern-. Recently a new school of thoughts has been pioneered by the French philosopher Gilles Libovetsky (2005). Also the thought of labelling the consumer as being segmented within a certain group was broken up with.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 25 ventional branding techniques developed within the culture. In this way. 2002:71). Firstly. especially when considering the size and diversity of. this approach to the consumer was. The marketers were portrayed as cultural engineers shaping the tastes of the consumers on their demand (Holt. 1991 in Holt. post-modern-. 2002:70).1. Thompson et al. This mechanism can serve as an explanation for the change from modernism to post-modernism in the consumer culture. 2002.7. they gradually loses their efficiency and a new branding paradigm will be developed corresponding to the apparent consumer culture (Holt. resulting in a definition of the consumer culture. through classic marketing tools such as “The 4 P’s” (Kotler. This regards the new hyper-consumer who can be seen as an extension of the postmodern consumer and demonstrates that the consumer culture might have changed since the post-modern consumer culture. and the hyper-consumer are all archetypes. Horckheimer and Adorno (in Holt. 2000). the US market. and therefore it cannot be rejected that a society consists of more than one consumer culture as the changes do not happen overnight. 2002). Holt. modified and the consumer was re-defined to be able to decode and reflect on the marketing messages and as a result reject a firm or brand. 2002) possessed this locus classicus marketing approach evolving around a classic stimuli-response idea. making it apparent that the consum- .. This acknowledgement of the critical consumer was not least due to the fact that consumer resistance against brands became more and more apparent as a problem (Klein.
as the consumer will not tolerate the lecturing tone of the post war modernity (Holt. drugs and rock and roll. their neighbours and hence a level of anxiety was present at this time. film. 2002). music and advertising blossomed and it was here the marketers started to use these industries as channels for reaching the consumers. The modern consumer was also described as a more static consumer who was characterised by remaining within a certain category such as being the housewife or worker (Rifkin. Holt (2002) also describes how the American citizen was struck by the urbanisation which resulted in the citizens not knowing their new neighbourhood. “(Holt. 2003) . The revolution was personal and there 6 Pavlovian marketing model developed according to: Attention.1. Interest. This evolution has had an effect on society and hence on the consumer culture and consumer values. the consumer culture can today be defined as: “…the ideological infrastructure that undergirds what and how people consume and sets the ground rules for marketers’ branding activities. was the era in which the mass culture industries such as TV. 5.2 From Modernity to Hypermodernity The economy has changed from being agricultural to industrial and it is argued that we have now entered the service economy (Lund et al.7. which was outplayed within this period. The firms cannot uncritically expose the consumer of today with classic marketing tools based on the idea of for instance the simple AIDA model6. As before mentioned. especially in the 1960s. (Kotler. just after the Second World War. Desire. personal freedom to choose ranked highly.. The modernity is not very relevant for the situation of Starbucks as this period took place before Starbucks entered the market. in this era the marketers used traditional marketing tools and dictated how the consumer should live their lives in a paternal voice as Holt (2002) describes it. 2005). came to an end as the consumers wanted to be able to experience their consumption as a volitional site of personal development – they did not want to be controlled by the marketers and their selling propositions and thereby a transition to the post-modern era in which the consumer did not obey the markets dictations began (Holt. The evolution can be juxtaposed to the modernity. Therefore. expecting behavioural response through consumption. 2002:80). post-modernity and the hypermodernity which will be presented below. The national brands therefore provided a security as they instructed on how to live the good life and acted as social glue which helped bringing these neighbourhoods of strangers together. 2005). 1998). and Action. 5. This was the era of the cultural revolution of sex. Buhl. However. 2002.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 26 er of today possesses the market power and not the firms (Firat and Dholakia. The era of modernity and the branding paradigm. this period.7.3 The Post-modern Consumer The early post-modern consumer was considered as more critical towards marketing than the modern consumer as. 2000: 202).1.
McCracken (2008) emphasises that not only can the consumer have different identities referred to as the new individualism where many different roles are outplayed. McCracken thereby argues that the consumers transform their identity through their whole life and just because one is born into a gender. one will not necessarily have to stay in this category – the consumer is a self-inventor. This fragmentation of the self-approach has been further developed by McCracken’s latest book release in which the transformation process of the individual is analysed. which especially Gilmore and Pine (1999) see as being essential when communicating with the post-modern consumer. Today even gender can be questioned in post-modernity. the consumers viewed consumption more and more like a way to express their identities – they did not lose their interest in the brands they just did not want to be dictated by the marketers and hence wanted to apply the brands in their own identity projects in their own way (Holt. disc’er listening to rock music. The branding paradigm corresponding to this form of consumer was to approach the consumer without being too commercial and to express authenticity (Holt. a consumer can consume price premium products one day and consume according to a lower live standard the next. who has many dramas going on in his life. 2008:280). The brand must be an experience in which the consumer is engaged in a personal and memorable way (Gilmore and Pine. Here. After the 1960s. Rifkin (2000) names the post-modern consumer the protean. Firat and Venkatesh. 2005) precluding the classic use of segmentation in the post-modern society (Buhl. 2002). 2000:12). intensifies the fragmented consumer’s identity by facilitating networking through the Internet where multiple identities can be outplayed (Rifkin. In this way. who is responsible for his own personal transformation(s) (McCracken. 2005. Additionally. 2005). meaning that many different identity projects are carried out during different periods of life. Popcorn. The consumer’s identity is fragmented. Buhl. but the consumer does as well transform himself during time. the most important goal for the post-modern consumers is to reproduce and represent themselves with an image – the buying decision of the consumers is hence driven by a deeply psychological desire to develop and enhance their sense of self as Lewis and Bridger describe it (2000). The post-modern consumers were and are characterised by consumers defining their identities through consumption and those experiences attached to the consumption (McCracken. a social class etc. The choice of identity is not as easy as it was 50 years ago where one for instance could be either hippie. 2005. 1993:235). 1994.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 27 was a great deal of personal experiments. This is how Starbucks has tried to brand their product . and also on a daily basis – this means that many different subcultures in the post-modern consumer culture are apparent. This. the experience and authenticity term gained a footing. an opinion shared with Buhl (2005). 1999:3). Added to this. as Rifkin (2000) describes the post-modern era as an “age of access”. which especially was manifested when David Bowie was playing with the androgynous in the 1970s – the consumers became fragmented and discontinuous in their identities and their identity projects follow that lead leaving the consumer with various identity options and projects (McCracken. 2002). thereby underlining the ever-changing character of the post-modern consumer. In short.
5. Thereby. Holt. Consumer objects are therefore not accurate representations of status but they allow a variety of consumption styles. the concept of authenticity will be further analysed in relation to Starbucks and it will be applied as a principle-explaining factor for Starbucks’ current struggles in the US market. Holt (1998) emphasises that consumption in the US society today is not about structuring social class and status. and also by the way we choose to live in it. 2008). The post-modern era is characterised by a breakdown of the hierarchy distinguishing what is high culture and what is considered low culture. It can be explained as the knowledge. thus. even referring to their concept The Starbucks Experience. 1998). the high class of cultural capital instead seeks authenticity in the products as authenticity expresses a subjectivity. thereby indicating that the café was more than just the average coffee shop. this being consumers transforming or attaching cultural capital to objects.7. Therefore. Thereby. Thereby. the post-modern consumers have been characterised as being individualistic and independent. 1973. Lewis and Bridger. 2005.4 The Character of the Post-Modern Consumer Moreover. which is coursed by accessibility in the sense Rifkin (2000) refers to but also due to the diffusion between what is mass culture and what is haute – all is to some degree accessible for all social strata. Holt (1998) still distinguishes between high and low cultural capital. . where the world is a human construct that we create through stories which we concoct to explain it through. Also the idea of connoisseurship is emphasised as a factor that can produce individual subjectivity in goods for the consumers possessing higher cultural capital. Hence. the consumers demonstrate that they possess extensive knowledge regarding the object. 2000). 2002).7.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 28 and service since the beginning. which is ignored by other consumers.1. 7 Cultural capital (le capital culturel) is a sociological concept that was first articulated by Pierre Bourdieu in Cultural Reproduction and Social Reproduction. 5. not saying that the US consumers do not create their identity through consumption. artisanal and hand crafted goods are preferred by this often upper-well-educated-class to avoid contact with mass culture. 1998).1. what he calls cultural and lived experiences. the level of connoisseurship can be argued to heighten status and create superior identity which differentiates the consumers with higher social capital from the consumers with a lower level of social capital (Holt. or do not need to express individuality – cultural capital7 still becomes objectified in consumption objects (Bourdieau in Holt. Due to this dilution of status. Also Rifkin (2000) underlines that the post-modern era is marked by. which cannot be found in mass-produced products (Holt. Rifkin (2000) shares a social constructivist approach to the post-modern period with the cultural branding approach (McCracken. it is not only about buying the right brands. 2005.5 Authenticity and Consumption In the thesis. experience and/or connections one has had through the course of their life that enables them to succeed more so than someone from a less experienced background. They want to create and express their own style and take their own choices between brands (Buhl.
visiting a museum. In today’s experience economy. as it is extremely generalising in its character. Being perceived as being authentic is therefore one of the primary sources of competitive advantage according to Gilmore and Pine (2007). consumers de- 8 Experiences are defined as: ”…memorable events that engage customers in inherently personal ways like going to a theme park. 2000:19). Seattle where the whole Starbucks adventure started. What the consumer of today wants has to be a real and genuine product from transparent sources and hence everything consumers buy at present is evaluated to make sure that all which is phoney and fake is avoided. Brought to a head. in some way. or engaging in a sporting event. companies must go beyond goods and services and compete on feelings and experiences8. the coffee Mecca. Due to the rise of the experience economy the concept of authenticity has increasingly been used in marketing of consumer goods. one may perceive Starbucks as authentic if sipping on a Frappuchino in Pike Place. The society is changing over time and it can only be concluded that the tendencies in the consumer culture suggest that authenticity in general is more in focus than during modern consumer culture (Gilmore and Pine. 2007). Also the generalisation of the concept authenticity must be questioned as Gilmore and Pine (2007) also mention that authenticity is perceived differently from consumer to consumer – what may be perceived as inherently authentic for one person might be perceived as fake for another and the concept of authenticity is hence socially constructed. According to Gilmore and Pine (2000) it is no longer sufficient to compete on the basis of goods and services. 2005) Gilmore and Pine (2007) have a social constructivist view of the consumer – thereby perceiving the consumer as an individual not born into a predetermined identity but an individual who creates and develops their identity over time through the interaction with other individuals and by consumption of goods which can express the wanted identity. Being real and authentic is apparently paramount for success in the market place of today. innovative and distinctive products and services.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 29 Therefore.” (Gilmore & Pine. The role of authenticity is also emphasised by Lewis and Bridger (2000) and Holt (1998) who all emphasise the role of the authenticity element when the post-modern consumer selects brands. authentic (Bridger and Lewis. However. Bridger and Lewis (2000) generalise when explaining that the consumers reject massproduced and mass-marketed commodities. . Like McCracken (1986. in favour of products and services which claim to be. We have found this assertion problematic. This statement is furthermore supported by the notion that the consumers’ basic needs in the post-modern society are satisfied and therefore the consumers are more concerned about original. we have found it necessary to explain the concept in further detail here. 2000:4). the authenticity concept is constructed within the culture and the consumer and it is very difficult to define what is authentic and what is not as this is based on the consumer’s own reflections and life stages. On the other hand. but it may be perceived inherently inauthentic if located in Milan. Italy. Therefore.
Thereby. if the society in general is changing so will the consumer. where everyone consumes first and foremost for his or her . 5. firstly the importance of being earnest and consistent in the foundation of the company and secondly the importance of being trustworthy and honest in the company’s actions. Figure 4 | The Real/Fake Matrix Is what it says it is Is not what it says it is Real-fake Fake-fake Is not true to itself Real-real Fake-real Is true to itself Source: Gilmore & Pine (2007:97) The X-axis describes the self-directed relationship between the company and its own output. changes in society and consumer culture do not happen overnight and post-modernity will still be apparent and it is argued that the post-modern consumer and the hypermodern consumer currently live side by side. And the third phase of consumption is described as a hyper-consumption. Libovesky (2005) perceives modernity and post-modernity as representatives of different consumption phases in the history of the consumer society. This discussion is especially interesting in regards to Holt (2004) as he argues that a brand must correspond to the culture in which it interacts.1. the post-modern form of society and consumption gradually transform into a hypermodern society characterised by hyper-consumption. 2007:95-97). The model is based on a brand’s ability to live up to the two principles: “Is it what it says it is?” and “Is it true to itself?”. This is illustrated below.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 30 mand real offerings. they have developed a model with the purpose of making the concept of authenticity tangible. as indicated earlier. meaning that brands will appear real to consumers if they are able to deliver what they say they are. 2002).7. and the Y-axis describes the relationship between the company and its customers – is there a correlation between the narratives told and what the brand really is? Thereby. Holt. Gilles Libovetsky (2005). (Gilmore & Pine. According to the French philosopher and professor at University of Grenoble. Therefore. which will have an effect on how brands are perceived (cf. This creates a matrix drawing up and ranking different levels of realness.6 Hypermodernity As of late there has been debate about the successor of the post-modernity where it is discussed whether post-modernity is about to develop into a hypermodern society. hypermodernity and hyper-narcissism. As Gilmore and Pine (2007) argue that authenticity is a social construct. the two principles can be seen as the thought and actions of the company. However. the matrix has a more operational approach to the notion of authenticity.
In the hypermodern society. the resistance towards marketing and advertising and hence also to some extend brands which Klein (2000) indicates seem to have developed to an even more distinctive level. 2005:11) – thereby indicating the difference between the post-modern consumers and the hypermodern consumption patterns. These anxieties have developed due to for instance globalisation. 2005:11). which is attained by possessing and using the good and the motivation for buying is hence less motivated for formatting ones identity (Libovetsky.1. Moreover. which seem to be even more important for the hyper-modern consumer.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 31 own pleasure rather than out of rivalry of status with others (Libovetsky. the post-modern consumer to a high degree consumed to express status and to stage himself. In the hypermodernity. one is focused on the present moment in fear of what will happen in the future.6.2 Ethical Responsibility Being socially responsible has been stirring in society for a while. Thus. For instance consumption of luxury goods was previously argued to be bought to achieve social status and prestige – a phenomenon known as conspicuous consumption (Veblen. consumption of luxury goods are argued to be motivated by the satisfaction. the hypermodern consumer consumes for more personal reasons – the postmodern consumer can be said to be more extrovert in his consumption patterns while the hypermodern consumer is more introvert in his consumption hence goods are not purchased to achieve social distinction but more towards personal satisfaction and amusement. companies must emphasise entertaining values as well as experiences. Consumption is in this society more about creating introvert meaningful individual experiences – the hyper-narcissism. corporate social responsibility and corporate governance have been on the agenda for a while and also before .6.1. terrorism. Nevertheless. which will be of higher importance for the hypermodern consumer – good experiences evoking a sensation of living in the present moment. 2005). 2005:39). 5. Whereas. 5. however.7. The hyper-modern consumer seems to be neutral towards the messages of advertising and the consumer has developed a resistance towards marketing in general. pollution and the technological evolution – factors which force the hypermodern consumer to think and act in the present moment and act selfishly (Libovetsky. Libovetsky (2005) seems to acknowledge that acting ethically correctly is something more emphasised by the hypermodern consumer than for instance the post-modern consumer. This is for instance apparent by being condemning towards materialism but still expressing joy towards consumption. The anxiety for the future is also argued to influence the consumption of experiences. 1994 ).1 Fear of the Future The hypermodern consumer is moreover characterised by something defined as paradoxical individualism.7. as experiences are seen as facilitation to elevate the consumer on an individual basis (Libovetsky. The hypermodern consumer is also characterised by showing anxiety of what the future holds.
Thereby.1 Introduction to Starbucks In order to understand the rise and decline of Starbucks from a cultural branding approach it is found essential to clarify the context and how well Starbucks has fitted into this. The following Methodology has the purpose of outlining how the Research Statement will be investigated. The thesis will hence take its point of departure in the cultural branding theory and empirical evidence will be analysed to support the theory’s suitability to explain Starbucks’ recent difficulties. the approach in the project is deductive reasoning that the argumentation takes its point of departure in cultural branding theory and that conclusions are drawn on the basis of this theory (Andersen. When explaining the methodology of the thesis. it is essential to gain knowledge of the brand and the whole concept of Starbucks.3.2 Method The underlying reason for initiating this cultural branding approach to the investigation of Starbucks are the gaps found in literature which cannot appropriately explain Starbucks’ troubles (cf. before any comparison can be made. The perspective taken in the thesis also affects the data collection. 2005). we will attempt to elucidate and understand Starbucks’ difficulties by interpreting data with the principle that social actors cannot be analysed on the basis of definite “laws” as in natural science but must be interpreted. 2007). we endeavour to interpret assertions from social actors such as the consumers and the media. applying cultural theory. Empirical Evidence. and thereby to deduce why Starbucks brand currently is facing trouble. Libovetsky (2005) argues that the hypermodern consumer to an even larger degree than before witnessed. The analysis will therefore begin with an introduction of Starbucks.. we have a hermeneutical perspective in the thesis. which will be construed and analysed (cf. Therefore. demands that people act ethically and morally responsibly. As the area of research is not of natural scientifically character but about interpreting social actors and their attitudes and perception of the Starbucks brand through time. Thereby. the pivotal points of this thesis are Starbucks’ ability to deliver their brand promises.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 32 Libovetsky (2005) introduced his concept of hypermodernity. delimitations of the research will be carried out during the presentation. Literature Review. this being qualitative. Section 3). Moreover.3 Research Design As mentioned in the Research Statement. 5. 5. the Starbucks concept. and the emergence of the brand.4). and further to investigate how Starbucks’ narratives and attached meanings have changed during time as well as how changes in the consumer culture have made customers relate differently to Starbucks. 5. it is not possible to analyse the problem statement with a positivistic perspective (Saunders et al. Section 5. Additionally. The essence is to gain a historical understanding of the . However. the following will be organised according to the structure of the Thesis.
the brand.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 33 concept of Starbucks.3 Brand Genealogy Empirically.3. the analysis of the competitive environment will focus on the competitors. illustrating how the specialty coffee concept has changed its character from being revolutionising and innovative into a much more common concept. However. This is due to how significant radical changes in the competitive conditions. thereby applying .3. Porter’s full analysis would include several industry factors but the purpose of our analysis is not to make a competitive strategy for Starbucks.2 Starbucks within the Industry and the Competition Even though the focus of this thesis is on branding. The essence of this is that Starbucks’ position within the industry must have changed during its 20 years in business. 2006). and what context they initially introduced the concept in. Furthermore. 5. the industry structure and coffee trends may be to the perception of the Starbucks brand. Porter (2005) suggests a full industry analysis to be carried out to be able to lay down a competitive strategy. In the light of this. Therefore. we are aware of the necessity of a whole industry analysis if wanting to give strategic recommendations regarding a competitive strategy. Changes in the view on the specialty coffee concept as well as changed competition are factors which Starbucks maybe should have taken into account when branding. we approach the analysis from the assumption that Starbucks’ branding revolves around old narratives. giving the reader a sense of the current situation of Starbucks and in which context Starbucks gained their initial success.. it is argued that Starbucks in the early 1990s was able to correspond with cultural contradictions in the American context (Thompson et al. found relevant to include some current market conditions in the analysis. but due to the scope of the thesis the competitive environment will be included only to illustrate Starbucks’ position and their evolution in the market as an explanatory factor for their decline. Thus. 5. the decline and success of Starbucks will be illustrated. thus how it has passed through the continuum. in order to illustrate the strategic position of a company. Therefore. (2006) point to the probability that Starbucks is trapped in their old narratives as an explanation for the company’s struggles in maintaining the same level of success as before. nevertheless. Moreover. McCracken’s (2006) Kauffman Continuum will be included. The reasoning behind taking this historical approach to Starbuck’s rise and fall is due to our application of Holt (2004) who underlines that one must understand the breeding grounds and historical development to explain the success or struggles of any identity brand. clarifying the environment in which Starbucks operates. Thompson et al. Therefore. how Starbucks strategically is positioned within the industry is found relevant to be included in the analysis. Therefore. the primary focus will be on Starbucks’ initial success in the early 1990s compared to their current situation thereby. We will also deduce how consumers take a different position on the concept today than the position when Starbucks first emerged. it is. The narratives filling the brand with meanings will therefore be clarified.
Thereby. we will also analyse how the perception of Starbucks has changed and whether Starbucks lives up to the brand’s narratives and hence if Starbucks is perceived as being authentic. and the narratives analysed in the thesis are those we have interpreted to revolve around the Starbucks brand. Thereby. Additionally it has to be mentioned that Starbucks do not themselves categorise their narratives. Therefore. 2004). the stories told by the external surroundings will be looked into – what stories are told which Starbucks cannot control? Thereby we will seek to conclude whether the narratives have been consistent or not. The analysis of Starbucks’ authenticity will be based on Gilmore and Pine’s (2007) principles and will serve as a supportive explanatory factor to why Starbucks’ brand may have been watered down over time. Due to Thompson et al. Thus. it is found necessary to analyse whether the reason for Starbucks’ difficulties can be deduced to be the narratives and the changes in these (Holt. Gilmore and Pine (2007) and Thompson et al.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 34 the principles of Holt (2004) and McCracken (2005) who underline that storytelling. we will focus on the consumer culture and more specifically on the consumers of Starbucks coffee. However. Investigating the consumer culture is carried out due to the theory implicating that a change in the culture will affect the brand if this does not adjust to the culture (Holt. This is an essential point to the analysis. authenticity may be characterised as a critical success factor and to be what the consumers of today demand. and applying it as a part of the explanation for Starbucks’ current trouble.4 The Consumer Culture The analysis of the consumer culture will be founded on the findings regarding the narratives and their development. as it is assumable that co-branding including contra-narratives take part in the creation of a lack of authenticity of the Starbucks brand (Gilmore & Pine 2007. The analysis of the narratives has been found necessary to be able to clarify whether the meanings which Starbucks intends to attach to the brand correlate with how they are perceived. (2006) and Holt (2004). 5. authenticity is being crucial in order to compete in the market place of today. constitute the brand. analysing whether or not Starbucks appears authentic in the minds of the consumers is a decisive factor when concluding Starbucks’ current situation. Thompson et al. we are aware that the cultural reasons for Starbucks’ success have to be understood in a broader cultural perspective. This is interesting as Gilmore and Pine (2007) argue for the necessity of a brand being perceived as authentic – thus. Furthermore. In order to analyse whether the narratives have developed during time. The narratives intended to be told by Starbucks will found the basis for further research of these and how they have developed during the last two decades. or the brand’s myths.3. 2004). 2004).. hence . extending the earlier analysis which focuses on the industry and competition. 2006). and whether the narratives have been harmed or strengthened by narratives told by media and consumers. Brand genealogy refers to how the brand has changed or developed during time (Holt. (2006) point to the fact that inauthenticity arises when a brand pretends to be something which it is not or when it is not able to live up to its narratives.
the consumer culture will be delimited to focus on the social network of the brand. it can be argued that the analysis will be further complicated as perceptions and demands differ among the different states. Thereby. Thus. it is found essential to touch upon how consumers may or may not use Starbucks in their identity projects – thus.4. thereby clarifying if Starbucks’ brand still appeals to the same type of projects. 5. arguments from the earlier analysis of the “bobo-consumer” will be compared with the consumer of today. considering a country like USA. When clarifying the consumer culture of Starbucks. 1986). Furthermore. some generalisations will be made on the basis of the consumer culture theory (cf. Furthermore. Especially. We find it necessary to delimit the analysis to include the consumer culture. hereunder the consumers’ identity projects. To this. which will then be strengthened with comments from Starbucks’ consumers. some of the consumer characteristics will be founded on theory. we are aware that the argumentation for clarifying whether Starbucks corresponds to any cultural contradictions is weakened.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 35 that an analysis of the consumer culture alone may not explain adequately the cultural reasons for a brand like Starbucks being selected or avoided. this implies a difficulty in revealing cultural anxieties or contradictions within the American context. along with the social network can serve as an explanation for Starbucks’ current brand difficulties. This is furthermore due to the complexity of clarifying an entire culture as it entails several different subcultures and different demand patterns. To illustrate how the consumer culture may have changed. and hence meaning transfer. it seems imperative to account for meaning transfer (McCracken. to which extend consumers perceive Starbuck as a brand which creates the wished identity. the development of the narratives. all focused on the consumers of Starbucks and not coffee consumption in general (McCracken. Nevertheless. 1986) and furthermore whether and how the consumers transfer the meanings of the brand to their self-identity when interacting with the brand. However. it is similarly found to be too difficult to identify potential cultural contradictions. . 2005). as a complete cultural analysis of the US is found too complex to carry out within the scope of the thesis. Moreover. it is found to be satisfactory to focus the cultural analysis on the American consumer culture as an indicator of the cultural tendencies that may affect the perception of Starbucks’ brand. it is found essential to clarify whether the consumers’ identity projects have changed. The analysis will result in a suggestion of how the industry. Section 5.1 Meaning Transfer and Identity Projects As it is argued that consumers use brands and their meanings as a means in the creation of selfidentity (McCracken. Holt (2004) points out the significance of understanding subcultures’ cultural contradictions as a means in the cultural branding.3. Consumer Culture Theory.1. as it is problematic for us to gain knowledge of the American culture in a broader perspective.7).
When analysing the consumers of Starbucks we will also identify whether there has been a change in how the consumers apply the meanings of the brand in their identity projects and hence how the meanings of the brand correspond with the character of the post-modern consumer compared to the bobo-consumer. we will try to demonstrate if this is in fact the case with the Starbucks brand – if the insiders have gradually left the brand due to the meanings in the brand not correlating to their identity projects or that the narratives are not authentic anymore. Therefore. we will strive to outline whether Starbucks are meeting the current demand from the consumers or whether an explanation for difficulties may also be found in the consumers’ demands and perception of Starbucks’ brand. This is especially relevant in the case of the insiders as they are important for Starbucks as a means to legitimise the brand (Holt. The social network of Starbucks’ brand is imperative to analyse as the insiders. 2004). and whether these meanings correspond with the demands of the consumers. 2004) and facilitate attraction of followers and feeders who are responsible for the sale and hence the bottom-line at Starbucks. Libovetsky’s (2005) findings must only be seen as putting the consumer culture into perspective and not as directly affecting the final conclusions.3. Therefore. indicating that the cultural consumption context may have changed and that Starbucks must take this into account too. and feeders imply whether the brand can survive. we will combine McCracken’s Flock and Flow theory (2006) and Holt’s Social Network theory (2004) to serve as explanation for the Starbucks brand’s suffering. This will be done by applying some of the findings from the analysis of the narratives. . 5. Thereby. Thereby. the findings from the Brand Genealogy will be applied in this analysis. Also the identity projects of the bobo-culture will be pointed out to conclude what kind of identity project Starbucks appealed to. as the narratives will tell something about what meanings are currently attached to the brand.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 36 Our findings regarding the consumer culture and its values today will be compared to the consumers’ identity project. We argue that the state of the social network of Starbucks’ brand is tightly associated with the meanings of the brand and hence the narratives.4. we will include Libovetsky’s (2005) findings regarding the hyper-modern consumer.1. Thereby. However.2 The Brand’s Social Network The findings regarding the consumer culture will be applied to analyse Starbucks’ brands’ social network (Holt. Additionally. In the Theory Section 5. we argue that during time the social network of the brand will be weakened if the brand is not correlating with the context and somewhat re-inventing itself. followers.5.
on articles from the following newspapers: Seattle Times. These newspapers and trade journals have first and foremost been selected as they are well reputed and reliable sources of information. Therefore. The Wall Street Journal. and Tea and Coffee Trade Journal. This must be taken into account when evaluating the validity of the conclusions.4. The public media’s coverage of Starbucks’ business can be argued to be enormous. we have found it necessary to sort through the newspaper articles and only focus on specific newspapers. which is not focussed only on the branding of Starbucks. 5. A vast amount of articles have been written about Starbucks as various journalists and private persons seem to have an opinion about Starbucks. articles and customer comments about Starbucks have been found to be suitable data to interpret and analyse in order to be able to answer the problem statement. to make the data collection manageable. and hence base our argumentations. this secondary data is found suitable to deduce Starbucks’ role in the industry over 9 Data collection methods are explained on the basis of the methods outlined in Andersen (2005). it will be explained on what basis we have chosen this kind of empirical data to be applied in the thesis. Moreover. However. Therefore. . we will establish reasoning for the data collection and argue how the secondary data can be justified to serve as basis for our conclusions. In the following. while the trade journals represent expert information upon the subject of specialty coffee.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 37 Figure 5 | Overview of the Thesis Part II Part I Problem Area & Methodology Introduction to Starbucks Industry & Compitition Analysis Consumer Culture Brand Part III Genealogy Are The Meanings of The Brand The Reason for Starbucks’ Trouble? 5.4 Empirical Evidence9 In general. the secondary data applied to answer the research statement has not been conducted with the same purpose as we have in this thesis. the thesis conclusion will draw upon secondary data as it has not been possible to collect primary data.1 The Industry and Competition The analysis regarding the competition and the specialty coffee industry in general is based on qualitative secondary data and mainly newspaper articles. market reports and books written about the industry. We have chosen to pick out. The New York Times. As this is a more general analysis. The Nation’s Restaurant News.
These pages both cover forums for absolute devotees of Starbucks but also forums for absolute opponents whose only intention is to smear Starbucks’ brand. Empirical evidence to support our hypothesis regarding Starbucks’ narratives having undergone changes over time.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 38 time and how the industry has developed in the last three decades. On mystarbucksidea. and to a great extent these can be argued to be more committed customers. This is a forum where consumers of Starbucks coffee. is mainly based on newspaper articles and material found on Starbucks’ own homepage. and the involvement of Starbucks comprising the atmosphere. Furthermore. Of course validating questions answered by. Thus.starbucksgossip.starbucks. however instead statistics from their homepage have been applied as contact with the organisation has not been possible. for instance SCAA (Specialty Coffee Association of America).4.com.com and www. it is essential to keep in mind that not all Starbucks customers choose to post ideas and comments on the Internet. The reason why people make comments on mystarbucksidea. and how these are perceived compared to the original Starbucks are also aired. we have again applied secondary data of qualitative character. the reason for commenting is to bring up new ideas and hence how to improve Starbucks. Although these homepages are a rallying point for meanings about Starbucks.com in which the tone seems very frivolous and harmful.com10.com has to be taken into consideration. as well as opinions about Starbucks’ business and products initiatives. It is only a section of the customers. The comments furthermore give the impression 10 Will from here on be referred to as mystarbucksidea. we have chosen to concentrate the consumer comments to mystarbucksidea. Several homepages about Starbucks can be found on the Internet in which consumers express their attitudes towards Starbucks.com . The comments on these pages are assessed to be more constructive than the case of for instance hateful homepages such as www. as well as the average American. Similar to the large coverage of Starbucks in the news papers where we found ourselves compelled to make the material manageable by focusing on selected newspapers.mystarbucksidea. concrete proposals and ideas are given to Starbucks regarding innovations and changes. However. we also found it necessary to focus on the empirical data from the consumers. even though we argue that it is expressed indirectly. findings are supported by comments made by Starbucks’ consumers on www. It is interesting how Starbucks gives platform to these forums to emerge and consumers seem to be divided in their opinions about Starbucks. the Starbucks Experience. social responsibility and the partners etc.ihatestarbucks. would have been preferable. 5.com.2 Blogs and Fora To account for and analyse Starbucks’ brand development over time. The comments are not made to say whether they like Starbucks or not. they are not all included as empirical data in our investigation about Starbucks. locations. www.com. can comment on Starbucks’ products. service.
(cf. High Quality. Moreover we broaden this assumption by saying that the participants mainly represent followers as the insiders . com. However. however. who we later will argue to have once been the bobos.4. this will be done on the basis of awareness of the meanings being perceived differently from consumer to consumer. Section 5. consume Starbucks coffee due to the authenticity it once possessed with all that it implied of Italianess etc. Authenticity. the comments on mystarbucksidea. They would rather. The reason for not characterising the bloggers as insiders is that the insider most likely would not consume Starbucks due to the brand and hence be unaware of the forum mystarbucksidea. At the same time. Therefore when indicating how for instance the meanings of being Fair Trade is perceived. but also due to some sort of a Veblen Effect making the followers strive to gain the status of the insiders.7. it is extremely difficult to verify the character of the participants on mystarbucksidea. Therefore the deductions will to some degree be based on interpretations and thus the conclusions will not be an absolute illustration of the meaning constructions.5) meanings are a construct and are being made within the consumers. in posing questions in the role of interviewer. We argue that the people writing on a forum such as mystarbucksidea. it cannot be disregarded that conclusions drawn upon empirical data collected from mystarbucksidea.1. This is essential in regards to the discussion about how customers can be characterised as insiders. for instance. interpreted and analysed the comments and applied them being aware of the limitation in the comments. We will base our argumentation on the assumption that being involved on a forum like mystarbucksidea. to a larger degree. Again. this is secondary non-stimuli data which we have had no influence on as.2. we cannot eliminate the possibility that some of the bloggers may represent points of views from insiders.com do not illustrate accurately how the consumers currently perceive Starbucks and their narratives but we have. there may be a lot of less committed customers whose opinions would only be unfolded when directly asked. Section 12). followers and feeders as a difference among these can be argued to depend on their commitment to Starbucks and their concern about changes. or used to be. As we have stressed in the discussion of the aspect of Authenticity (cf. com and blogs.com. The followers on the other hand may represent larger consumer groups who bought into Starbucks following the lead of the insiders.com may be biased seeing that not all types of customers post comments. and hence not only drinking the coffee due to the product attributes. 5.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 39 that the majority of consumers posting ideas and comments are. as many of the comments expresses deeply felt disappointment from long-time loyal consumers. thereby saying that meanings are perceived differently from consumer to consumer.com to some degree are engaged in the brand on a higher level than the common specialty coffee drinker and therefore represent the perspectives of Starbucks’ brand from mainly followers.com requires involvement from the participant and. Hence. loyal customers of Starbucks. Therefore.1 Who are the Bloggers? The consumers of Starbucks are accounted for by analysing the comments on mystarbucksidea.
it has to be mentioned that some of the newspaper articles from which we base our data generalise the consumers of Starbucks by using the terms blue. 2006:56). The way Thompson and Arsel (2004) and Thompson et al. description of bobo and the post-modern consumer of Starbucks in Section 16.4. the followers may start to express their disappointments before turning their back to the brand as well. (2006) characterise these interviewees can be juxtaposed with the characteristics of the bobos and post-modern consumers with high cultural capital. Brooks. as in the case of the bobos where we have had supplementary sources characterising this exact consumer group (Thompson et al.com and newspaper articles serves as an illustration for the consumer of Starbucks today. Therefore. Therefore. (2006) have conducted analyses of the brand image of Starbucks and in this connection they have interviewed a number of consumers who dissociates themselves from Starbucks. For this to have been possible. we would have had to conduct interviews with the consumers in Starbucks in order to have been able to deduce the consumers’ characteristics. 2005). Furthermore. Brooks’s (2000) book regarding the first Starbucks customer is applied together with the general characteristics of the consumer culture to thereby account for the Starbucks consumer when first introducing Starbucks to the US market.1). we will apply the empirical data in our analysis knowing that the findings are not absolute. when these have disappeared due to changes in the brand. 2008) and to the idea of the fragmented consumer (McCracken. Moreover.and white collar. we are aware of stating an identity according to a certain collar is in outright contradiction with the earlier explained transformational approach to the post-modern consumer (McCracken.. Having in mind that the articles are of generalising character and not taking the complex structure of the post-modern consumer and hence the consumer of Starbucks into account. Thompson and Arsel (2004) and Thompson et al. . This weakens the validity of concluding how the Starbucks brand corresponds with the American consumer. Moreover. Also due to the character of the empirical data we will not be able to make the same exact description of the followers and the feeders as we do with the insiders. the term “bobo” is more complex and cannot only be described as white collar (cf. This is due to these interviewees valuing highly personal and “authentically distinctive social and aesthetic experiences” (Thompson et al. their comments can be used to deduce which meanings the bobos attach to Starbucks today and furthermore for which reason they are repelled by the brand.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 40 legitimate the brand and. This is not specifically applied to the American consumer culture but is more of a general character.3 Consumer Culture and Identity Projects The general consumer culture has been accounted for by applying various consumer culture theories. Nevertheless. the general evolution of the consumer together with the comments on mystarbucksidea. 5. generalisation about the American consumer of specialty coffee is based on comments from Starbucks’ customers. However. 2006. 2000). and furthermore that they give the impression of emphasising artisanal products where they can express connoisseural knowledge.
qualitative stimuli interviews with Starbucks’ marketing department would have been preferable to validate our argumentation. Instead. thereby enhancing the validity of the conclusions. Furthermore. Schultz. Bryant Simon.com and starbucksgossip. Especially in the case of in-depth interviews with Starbucks customers would have proved to be ideal.4. 5. it would have been preferable to have had interviews with a sample of the general American population and the Starbucks consumers to draw conclusion on how Starbucks is being perceived and how they have changed according to the general American’s perspective. Thus. which is not possible via the forums. Had we collected primary data in the form of interviews with customers in several Starbucks cafés.4 Critique of Data Collection It would have been preferred to be able to draw conclusions upon primary data tailored to the purpose of this thesis. via direct personal interviews it would have been possible to tailor the questions asked to fit the research statement and furthermore pose more thorough questions to find out more about the customers’ attitudes and feelings towards Starbucks. one must have in mind that the conclusion may not be absolute in their character and further research can be done on our findings. The result of this is a book which will be published next year called “Consuming Starbucks”. “Pour your Heart into it”. where details regarding their perception of the brand could have been clarified. Even though books (cf. as this is situated in the airport.com. . the conference will serve as empirical data together with our own deductions made from the comments on mystarbucksidea. Therefore. it would have been possible to have captured comments from several different kinds of customers than we argue exist through the Internet Starbucks forums. However. He has studied Starbucks the last three years and has spent more than 12 hours a week in studying the consumers at Starbucks and talking with them. the store is operated under a franchise license agreement and does not have any direct contact with the US head quarters. Again the resources for visiting the US market have not been possible and nor has the SCAA been cooperative with divulging details on the American coffee consumer either. 1997) have been written about Starbucks and their intentions and Starbucks. Starbucks have not been interested in a co-operating with us. once again we have not had the chance to travel to the US and conclusions will therefore be made on the basis of the secondary data source. but mostly the followers. We are however aware of the fact that our argumentation and hence findings would have been stronger if primary data had been collected.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 41 The analysis of the identity projects of the Starbucks consumer is mainly based on a conference held by Professor in History at Temple University. to date. Hence data regarding marketing for our purposes was not found to be collectable or suitable from the Danish Starbucks branch.com to some degree covers some narratives. the Danish branch of Starbucks was also contacted but. This is due to the argumentation of these forums not representing the entire social network of Starbucks. However. Through our investigation process.
how Starbucks brands themselves. This is for instance the case for the narrative regarding the “American Dream” and Howard Schultz (cf. Thereby. and especially Starbucks coffee. we will apply our findings on a more general basis not distinguishing between local cultures. has been.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 42 5. how the narratives have developed. American Dream. Section 11. we argue that Starbucks’ brand and perception until recently has been meeting Starbucks’ objective. and hence narratives. we will focus on the consumer culture and on how the consumption of coffee. we are aware of the fact that the US consumers might have different opinions and that consumers from Seattle may interpret Starbucks and the narratives differently than consumers from the San Francisco Bay area.1) a narrative which on overseas markets may not influence the meanings of the brand in the same scale as in the US. we will not map the whole US culture and the related subcultures. and not on how they have been accepted during the whole period of Starbucks’ operation. we have chosen to focus on the culture consisting of the consumers of Starbucks coffee and their perception of the brand. We base this on Starbucks’ huge success and the critique and disappointments manifested in the media today – illustrating or suggesting that something in the brand has changed causing equivocal narratives to be developed. and how the surroundings interpret and perceive Starbucks’ branding attempts from the launch of Starbucks until present time. Having this in mind when analysing Starbucks. also being interpreted differently within the US boarders (McCracken. Focus will at all times be on Starbucks and their narratives and the consumers of Starbucks coffee. Therefore. However. However as the purpose is not to make a comparative analysis of Starbucks compared to the competitors. Due to our problem statement revolving around Starbucks’ current situation. Also. this will not be done however the competition in the . Additionally. 2006). 2005).5 Delimitation Focus in the thesis will be on US market and how Starbucks’ brand is coping on this market. may well result in the brand. Therefore. a comparative analysis of the competitors and market analysis will not be in focus though we are aware of describing the chaos end in the Kauffman Continuum and prepare the ground for a deeper analysis of the competitors. Hence. This will all be delimited to focus on the US market. regarding cultural branding. focus will be on how the narratives are perceived today. is difficult to apply not least as we have had limited access to empirical data about the culture. This is due to the fact that Holt’s theory (2004). The rationale behind focussing on the US market is that it was from this market that the narratives originated and that some of the narratives only can be analysed with a US cultural perspective. we are aware of the fact that the narratives are interpreted differently across geographical boarders due to differing national cultures (Lindstrom.
had the potential of attracting more than only coffee devotees and that a huge demand within other customer segments was yet to be unfolded. The founders and personnel of this store were experts in coffee and sold beans of high quality. they distinguished themselves by educating customers in the different beans’ flavours and aromas and how to make a good cup of coffee. However. . Tea and Spice in Seattle. Howard Schultz was convinced that specialty coffee. Thus. Even though Howard Schultz was not able to convince his bosses at Starbucks Coffee. it will not be analysed how consumers prefer other coffee bars and the underlying reason for these choices. Introduction to Starbucks In the early 1980s. This wish formed the basis of the Starbucks Corporation as we know it today. 2006). Tea and Spice about the potential of expanding business to include serving of specialty coffee like he had seen it in Italy. this chanced combination later turned out to be epoch-making to both Howard Schultz. Koehn. In the US in the 1980s. Part II 6. Together with the discovery of the specialty coffee and a business trip to Italy where he became acquainted with the Italian espresso bar and coffee culture. but rather focus will be on how the meanings of the brand has affected the consumers to select or deselect Starbucks. They did not sell coffee by the cup but instead roasted beans for people to brew at home. 2001. the American and international coffee culture. he did not forget this dream (Luttinger & Dicum. Howard Schultz was so enthusiastic about the way the Italian people met in the espresso bars and how coffee was the rallying point to social life. he wished to broaden the knowledge of specialty coffee and his intention was to re-create the Italian coffee culture in the US and to make it accessible to a much bigger group of the population. 2006. he was hired in the small Seattle coffee retailer.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 43 specialty coffee industry will be outlined as well as how Starbucks differentiated themselves and hence entered the Continuum in the first place. Howard Schultz was amazed by the specialty coffee and immediately realised the unfolded potential of the specialty coffee shop. 2001). and through their great engagement and knowledge of coffee. specialty coffee seemed to be reserved for coffee enthusiasts and devotees who had an interest in coffee and its origins (Koehn. and the Italian way of consuming it. from the moment Howard Schultz stepped into the small specialty coffee retailer Starbucks Coffee. However. Shortly after. Therefore. that he brought back the idea of serving specialty coffee in the US. this culture was soon about to change. Luttinger & Dicum. the majority of Americans only knew of coffee made from an electric percolator or drip coffee machine and coffee was considered a commodity that could only be bought in the supermarkets.
In the big and densely populated cities. today Starbucks also sells juices. Starbucks’ strategy is to be in control in every step of the coffee making. both freshly brewed coffee. Since. during Starbucks 20 years in business. High quality seems to be a central theme in most actions carried out by the company. However. Only in locations such as airports and university campuses where it is not possible to operate with a company-owned store. Starbucks also sells coffee-making equipment. 2008c). 85% of the 2007 revenues came from Starbucks’ company-owned retail stores (Starbucks. the coffee shop has made enormous progress and today covers most of the US with approximately 10. almost on every street corner. Howard Schultz succeeded in opening his own coffee shop. Customers were enthusiastic about the specialty coffee concept and Howard Schultz’s business grew rapidly. and remarks are often passed on how Starbucks’ retail stores dominate the townscape. Schultz. Therefore. 2006). hence they ensure that the beans and coffees sold in the stores are of highest quality and that the employees provide a similar level of high quality service in order to give customers the best experience. Starbucks enters into licence agreements (Schultz. appearing as a copy of an Italian espresso bar.000 in the rest of world (Starbucks. . roasting and distributing coffee. whole beans and cold coffee beverages (Starbucks. In the expansion of the product portfolio. Furthermore. 2008a). the Starbucks retail stores are placed very closely to each other.. he had the opportunity for acquiring the Starbucks Coffee.000 shops and 5. Tea and Spice and hence he was able to have the Starbucks name that was already an established name within high quality coffee. 6. Starbucks distribution predominately relies on company-owned stores – more specifically. coffee grinders and other coffee accessories which can be argued to supplement their core product (Schultz.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 44 In 1985. Starbucks retail stores are mostly placed in high-traffic and high-visibility locations close to workplaces and shopping facilities (Schultz. Il Giornale. Even jokes are made about Starbucks planning to open a new Starbucks in the rest rooms of an existing Starbucks store (Thompson et al. 1997). 1997). food such as pastries and sandwiches. 2006. Starbucks has entered into licence agreements with large corporations such as PepsiCo and Kraft Food Inc (Luttinger & Dicum. mugs. meaning that purchase of whole beans and roasting is integrated activities of the company. Thus. 1997).1 Description of Starbucks’ Business Starbucks is specialised in purchasing. ice-cream and music. more and more products that are not directly associated with coffee are added to the product portfolio. In 1987. Besides selling coffee. In their retail stores. 1997). a wide selection of coffee beverages is sold. 2008c). sodas.
Whereas the latter was more focused on the caffeine fix of the coffee rather than the taste of it. Luttinger & Dicum. Luttinger & Dicum. it is essential to the story of Starbucks that the company was introduced at a time where the specialty coffee industry was booming. An explanation for this may be found in the fact that specialty coffee was only a niche product that at this time was not given much public awareness. When Starbucks emerged. roasts and grinds. The poor quality coffee and the homogenisation of the coffee tastes made room for the specialty coffee sector. 2006). Furthermore. making the drinking of coffee an experience. Thus. During the 1970s and 1980s. Attention was only slightly given to the drinking and flavour of the beverage. Attempting to maintain high profit margins. The Industry in which Starbucks Emerged Until recently. the former put time and interest into the preparation and savouring of the coffee. with its many variations in coffee beans. but only enormous success. However. the ordinary coffee drinker can be . in spite of the strong growth of the specialty coffee industry. but larger suppliers. 2001). Coffee was thereby turned into a homogeneous product not varying much in taste. these coffee companies have compromised with the quality of the coffee. coffee was most usually bought in supermarkets like any other staple goods and was generally perceived as a standardised product and commodity (Koehn. it does not seem like Starbucks has met any appreciable troubles during its 20 years in business.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 45 7. This sector was highly focused on high quality coffee and the vast variations of the flavours and aromas of the coffee. thus in annual revenues the industry grew from $45 million in 1969 to $750 million in 1980 (Koehn. Due to efficiency improvements. According to Koehn (2001) the rise of the specialty coffee industry was connected to an increasing interest in natural foods and a growing tendency towards dissociating from mass-produced products. Though it cannot explain the entire success of Starbucks. 2001. 2001. especially amongst urbanites – hence a growing interest in specialty coffee that differed from the traditional filter drip coffee that most Americans associated with coffee. specialty coffee became a strong alternative to the standardised mass-produced coffee from the supermarkets giving rise to an unfolded potential within the specialty coffee sector. Thus. and the awareness of specialty coffee was still rather limited (Koehn. thus traditions of different roasting methods and bean origins giving rise to different flavours were disregarded. it is essential that the general perception of coffee differed a lot between drinkers of specialty coffee and drinkers of ordinary coffee. This view on coffee can be argued to be due to the comprehensive development that the sale and distribution of coffee went through during the 20th century. 2006). the specialty coffee industry experienced enormous growth rates. the specialty coffee segment still only accounted for less than a tenth of the total coffee sales compared to the general coffee industry in the early 1980s. 2001). making price the most obvious difference between the different coffee brands in the supermarkets (Koehn. the structure of the American coffee industry has changed during time resulting in the supply of coffee being concentrated on fewer.
the revolutionary aspect in the emergence of Starbucks was their pioneering approach to coffee and how they took part in the transformation of the perception of coffee (Thompson et al. some smaller roasters had held on to the traditions of the good coffee and the art of coffee-making. Hence. both when it was bought in the supermarket or in a specialty retail store. 2006). According to Luttinger and Dicum (2006) and Bundgaard (2004). 2006). Conventionally. It is worth mentioning that the concept of specialty coffee was not new and innovative as it took off in the 1970s and 1980s. in taste and habits. He introduced the US to dark-roasted coffee and was committed to the flavour and high quality of the coffee (Schultz. the sale of specialty coffee was based on few but loyal customers that could be characterised as coffee connoisseurs and devotees. Thus. 2001). 2006. whereas the drinker of specialty coffee in general searched for new tastes and variations of the coffee (Luttinger & Dicum. Hence. the specialty coffee retail stores did not serve by the cup. and the niche segment did not do much to create awareness of the specialty coffee. and furthermore to educate the customers in making a good cup of coffee at home. quality and taste of the coffee. This was due to specialty coffee’s character of a niche product which had. As Starbucks entered the market. Predominantly. 1997. 2001). Allison & Martinez. the conventional way of consuming coffee was challenged. specialty coffee had always been there if you knew where to look for it (Koehn. One roaster is in particular called attention to when talking about the initiating craze of the specialty coffee. 2007). emphasising the freshness. this is Alfred Peet who managed to open his own specialty coffee retail store in 1966. the specialty coffee segment was specialised in selling a large selection of coffees either grinded or as whole beans. 7. Koehn. Thus. what Howard Schultz did. thus coffee of high-quality beans was accessible in a few. While coffee was generally commercialised through the 19th and 20th century. which did not only revolutionise the American coffee industry but also the culture. was to make the good cup of coffee the rallying point to people. the general perception of coffee as a commodity was challenged by a “decommodified” coffee experience. however (Koehn. 2001). this kind of coffee was still new and innovative to the majority of the population. Hence. smaller retail stores in selected markets. coffee was bought to drink at home. been for the few and those in the know.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 46 argued to see coffee as part of a daily routine that. he served the specialty coffee by the cup – this .1 Starbucks Revolutionising the Industry Even though specialty coffee in itself was not an innovative concept as Starbucks emerged. As the distribution was rather limited at this time. In many ways he was leading the way within the specialty coffee in the US. did not differ much from time to time. However. so too was the general public awareness. the appeal of specialty coffee did not do it alone. Thus. Most awareness of the specialty coffee was thereby created by word of mouth within the circles of people already interested in coffee (Luttinger & Dicum. to a large extent.
In this way. Thompson & Arsel. they were still capable of raising capital and resources for the company to grow rapidly. a Third Place. it is generally believed that the emergence of Starbucks revolutionised the American coffee industry (Luttinger & Dicum. Besides. Starbucks had an incentive and energy that had never been seen before within the industry and Starbucks. Thereby. Therefore. what made Starbucks revolutionary was the combination of serving a good cup of coffee and providing the customers with a Third Place (Thompson & Arsel. the intention of making specialty coffee much more accessible to people was influential for the success of Starbucks. but today it is almost unthinkable that cafés and restaurants do not serve specialty coffee such as cappuccino and café latte as these coffee beverages have become an integrated part of the common coffee culture (Luttinger & Dicum. 2001. Koehn. 2004. Furthermore. 2006). Thompson et al. Starbucks was ground-breaking and . Starbucks’ concept was capable of distancing itself from these diners as they appealed to a different customer type and furthermore that they created a new trend. Starbucks was also revolutionising to the extent that they changed the coffee culture. with Howard Schultz leading the way. had an innovative approach to specialty coffee and the way of delivering it to the customer which was also rather new to the industry. Coffee was not just to be understood as coffee (Koehn. 2001). Koehn. things really started to happen within the industry. Thus. This new thinking can in particular be seen as a new perception of coffee. 2006). It is crucial also to point out that Starbucks not only transformed the American perception of coffee but also influenced the culture of social interaction as Starbucks provided people a place to meet and be social (Luttinger & Dicum. as diners had served drip coffee for years. Due to the new thinking of cafés serving good quality coffee to the common public.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 47 way differentiating from specialty coffee competitors that in general only sold coffee as whole beans for people to brew and drink at home.e. 2006). 2004. Starbucks served as a model to a huge number of cafés emerging in the market during the years. Thompson et al. i. and thus attention was created outside the circles of coffee connoisseurs and devotees. Even though Starbucks was not profitable their first years in business. it can be argued that Starbucks innovated the American coffee culture and at the same time set the industry standards. 2001) – thus Starbucks provided a breeding ground for dissociation from the prevalent perception of the ordinary filter drip coffee. 2006). not only to their own advantage but also to the advantage of the specialty coffee segment in general. extending the knowledge of specialty coffee. 2006. making coffee a social rallying point and the café a space for people to come together and socialise.. a place between home and work for social interaction (Oldenburg. From the time Starbucks entered the market. both to similar coffee chains and smaller independent cafés (Koehn. 2006. Starbucks managed to create awareness. When Starbucks emerged it was not common to find specialty coffee in other places than the small specialty coffee retailers. However. 2006). 1989. He introduced the social element of coffee to the industry. It can be argued that serving coffee by the cup was not a revolutionising concept in the American market per se. Luttinger & Dicum.
As argued for in earlier sections. Starbucks is also in the café and restaurant industry. This has intensified the competition. Seeing that Starbucks predominantly sells their coffee to be consumed away from home and due to the fact that the company focuses on the coffee experience in their retail stores. the general coffee consumption in the US more or less stagnated. Current Conditions of the Specialty Coffee Industry Between the late 1980s and 2000. consumers could have the sense of luxury within an economically reasonable way. Furthermore. it is not remarkable that ever since competitors have tried not only to copy the idea of high quality coffee but also to copy the concept of the Third Place. Characteristic for the market is furthermore that the market can be divided into coffee consumed away from home and coffee consumed at home. Thus. . 2008). as the players are moving across the coffee segments and the structure of the distribution has changed. specialty coffee expressed a sense of style and class and was regarded an affordable luxury – it was a luxury and self-indulgence which most people could afford. Therefore. They put meanings and identity into the coffee beverage emphasising that coffee was not just coffee.e. there has been a clear distinction between specialty coffee. 8. 8. Starting as a niche product in the early 1980s accounting for less than 1% of the coffee market. it is essential also to discuss the competition based on the fact that Starbucks is also in the café. However. in the same period of time the trend toward specialty coffee rose resulting in sales of specialty coffee quadrupling between 1986 and 1997. i. Starbucks started a trend and made it fashionable to drink coffee. this distinction of coffee segments is no longer that clear. 2001). This contrasted other luxury goods which could only be afforded by the few and affluent consumers (Koehn. and the conventional filter or drip coffee and furthermore a distinction between how coffee has been distributed. What is further essential to underline is the awareness and status Starbucks and specialty coffee in general achieved in the public when was introduced to the market. with a growth of only 0. Buying specialty coffee therefore became a means for the consumers to apply in the creation of their self-image. Therefore. specialty coffee had developed into an acknowledged and widespread coffee product accounting for approximately 30% of market sales in 2000 (Encyclopedia of Global Industries.26%.1 The Specialty Coffee Market and the Competition It can be argued that Starbucks’ coffee beverages compete against all other coffees on the market and indirectly against all other kinds of beverages.and restaurant industry.. 2006). Regarding the competition. espresso-based and flavoured coffee.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 48 has achieved iconic status (Thompson et al.
However. the coffee chain Diedrich Coffee now owns the formerly independ- 11 Peet’s Coffee and Tea will also be referred to as Peet’s .6 million. In general. However. All over the US.8 million and Peet’s $249. 2008c. 2008). For instance. Diedrich Coffee. Nevertheless. 2006. 1998. Encyclopedia of Emerging Industries. 2008). 2008a. 8. it must also be said that the strategy of Starbucks has been rather different from the majority of the competitors. Encyclopedia of Emerging Industries. the competitors can largely be characterised as regional brands. Characteristic to these coffeehouses is the specialisation in sourcing. For instance Peet’s has a very strong position in the San Francisco Bay Area and Tim Horton’s in the states of the Northeast of the US (Hirsh.1 The Coffeehouses With the strong demand for specialty coffee. 2008). 2006. 2005). Thus. coffee merchandise and pastries in line with Starbucks (Datamonitor. and in general how they show a dedication to the coffee experience as well as the freshness and flavour of the coffee. increasing from 50 in 1979 to 25. 2008b. smaller specialty coffeehouses and chains were acquired or consolidated in order to stay in the market. Thus. and Coffee Beanery (Hirsh.000 in 2007 (Lingle. Tully’s Coffee. cafés and coffeehouses serving specialty coffee emerged. espresso based beverages. many competitors entered the market during the late 1980s and the 1990s. 2008).1. whole bean coffees. 2007. the coffeehouses offer gourmet coffee. To the list of the largest coffeehouses in the US. whereas in comparison. the following can furthermore be added. Whereas Starbucks has focused on being a national and international brand. Starbucks recorded revenues of $9. whereas Diedrich Coffee had revenues of $36. 2008d).4 billion in 2007. Tim Horton’s. the industry experienced a rapid growth in the number of retail stores. roasting and selling highquality coffee. 2008a. an increasing number of specialty coffeehouses plan to become much more nationally present (Hirsh. in the 1990s.1. during the next few years. Datamonitor. 2008d). In general. the competing coffeehouses have not shown the same level of busyness as Starbucks regarding expansion. Walkup. thus their retail stores are concentrated in selected regions of the US. the second largest coffee shop defined by operating units is Caribou Coffee with almost 500 retail stores in the US (Caribou Coffee. Encyclopedia of Emerging Industries. Seattle’s best Coffee. Starbucks differs from the competitors when comparing the economic scale of the companies. Taub. 2006. Peet’s Coffee and Tea11.000 stores all over the US (Starbucks. Starbucks is still the dominating player in the market of specialty coffee and the company has approximately 10. 2008b. 2008d).Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 49 8. 2008c. 2008). this was especially due to increased competition from larger and more national firms (Schoenholt.4 million during the same period (Starbucks.2 Specialty Coffee Going Mainstream? What is also interesting is that the industry has experienced a trend toward consolidation of smaller specialty coffeehouses. Caribou Coffee $256. Thus.
in Brooklyn. This means that coffeehouses profit from selling their products through other distribution channels such as the Internet and wholesale accounts including restaurants. 2008). not only when buying the coffee in the retail store but also when buying the coffee in the grocery store to brew at home. it is not surprisingly that The Procter & Gamble Company. enlarged the specialty coffee segment. he calls attention to the fact that the tendency is changing the industry. In 2003. Christopher P. Nestlé. Therefore. enhancing Starbucks’ portfolio with the brands Seattle’s Best Coffee and Torrefazione Italia Coffee (Datamonitor. 2006). the fact that the consumer has become aware of the high-quality coffee available in coffeehouses and retail stores has in turn created a more “coffee educated” coffee consumer who demands higher quality coffee.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 50 ent coffeehouses Gloria Jean’s and Coffee People (Datamonitor. Kraft Foods Inc.e. Thus. in 2005. Kraft Foods Inc. Thus. Furthermore. 2008a). In spite of the strong growth of the specialty coffee segment and the growth of consumers consuming coffee away from home. the Americans consumed more than 300 million cups of coffee per day of which 75% were brewed at home (Encyclopedia of Emerging Industries.. and Sara Lee have seen the chance of getting a share in the growing specialty coffee segment. dairy products and household products. Mottern. which intensifies the competition. it is nevertheless still a fact that most coffee is still consumed at home. 2006). Thus. the conventional and mass produced coffee (Luttinger & Dicum. office coffee service and grocery stores (Encyclopedia of Emerging Industries. 2008). 2008d). 1999). Even though Schoenholt12 (1998) only indirectly criticises the tendency towards the specialty coffee industry being characterised by larger chains. i. during the 1990s producers of conventional coffee have expanded their coffee assortment to include specialty coffee products to brew at home (Luttinger & Dicum. led by The Procter & Gamble Company. 12 . This has increased the competition and. These conglomerates. Nestlé. He argues that the specialty coffee industry is moving away from specialty towards commercialisation. New York (Schoenholt. It can be argued that sale of roasted coffee or whole beans through the grocery channel makes the coffee products more accessible to consumers nationwide.. and have entered the specialty coffee segment due to the large unfolded potential of the industry. This argument is further strengthened by the fact that big corporations diversified into other product segments such as tobacco. Gillies Coffee Co. the distribution of the specialty coffee segment is no longer only covered by the coffeehouses and retail stores which originally characterised the industry segment. It is furthermore seen how coffeehouses such as Peet’s Coffee and Tea and Diedrich Coffee benefit from not only being coffeehouses selling coffee by the cup but also from being roasters and wholesalers. in addition. Donald Schoenholt is the founder of the Specialty Coffee Association of America and the president of coffee roaster. have dominated the market shares of supermarket coffee for years. Starbucks chose to acquire Seattle Coffee. and Sara Lee.
customers are attracted by places where they can have both their breakfast and their beverage. 2008). It is seen how the specialty coffee served at the fast food chains appeal to the customers and that the number of customers buying coffee at fast food chains is growing rapidly. brown liquid masquerading as coffee” (Adamy. Before McDonald’s introduced their specialty coffee. Mottern argues that the large focus on the grocery channel is due to the tendency of consumers buying more and more specialty coffee through the supermarkets (Peters.. now selling specialty coffee as well. However. Therefore. Starbucks considered the coffee of. This is the case at least in the competition of the breakfast segment it can be argued (Thompson et al. Hence. It is also the case that Peet’s generates 80% of their revenues through wholesale. the fast food chain has dominated the quick service breakfast market (Jennings. for instance. due to the fact that most coffee in the US is still brewed at home (Allison & Marinez. Earlier on Starbucks did not consider the fast food chains as competitors as they are argued to have had a different approach to coffee.3 The Threat of the Fast Food Restaurants During the recent years. by the end of 2007 every eleventh customer buys a coffee drink during a fast food chain visit (Walkup & Martin. It is within this grocery sector that the growth of the specialty coffee is. marketing. menu. Since the early 1970s when McDonald’s introduced breakfast items to their menu. Furthermore. However. and quality and also the need for a comfortable meeting place draw a distinction line in the comparison of the specialty coffee retail stores and the fast food chains (Kowalski. 2006. 2008). McDonald’s a “hot.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 51 Peet’s president and chief executive. 2008). Adamy. in 2007 specialty coffee accounted for 27% of the grocery coffee sales. though this only accounts for 20% of their sales (Stepankowsky. . 2008). not only the fast food chains’ increasing initiatives on specialty coffee pose a threat to Starbucks and other specialty coffeehouses. the fast food chains have upgraded their offerings of coffee. 2006). 2007). which was an increase of 15% (Peet’s Tea & Coffee. 2008). 2001). seeing that the breakfast market is characterised by customers under time-pressure (Walkup. Burger King and Dunkin’ Donuts. 2006). Therefore. Thus. and will be heading.1. it is seen that 70% of Starbucks’ customers are having their coffee as a take-away option which implies that the need for a comfortable meeting place is less essential. 8. Thus. The competition between Starbucks and the fast food chains revolves mainly around the breakfast market. especially McDonald’s. they cater to a lot of Starbucks’ customers. customers bought their breakfast at McDonald’s and then went to other places to buy their beverages. speed and convenience is central. says that the strategy for Peet’s is to make their coffee products more accessible to the consumers. the different approaches to service. Instead. the competition within specialty coffee has taken a new turn which is due to the increased competition from the fast food chains. Convenience is pointed out to be a dominating factor in the competition of customers between Starbucks and the fast food chains. Furthermore. not only through company owned retail stores but in particular through the grocery stores.
Hence. seem to negatively effect on the Starbucks brand in the long run. which has made them take some decisions which may have seemed rational to correspond to the competition in the short term. it seems as if the increasing competition from the fast food segment has shocked Starbucks in a way. Furthermore in tests undertaken. Starbucks has made a countermove to the fast food chains’ specialty coffee initiatives. we argue. 2007). but at the same time weakens Starbucks’ competitive advantage of the Third Place. Thus. 2008). 2007. Jennings. However. Thus. the company has been criticised for losing focus (Berta. 2006. on average. costs $1 less than the coffee at Starbucks. and seem to have been ignored in the decision-making (Appendix 1). The drive-through service is a success to McDonald’s and accounts for two-thirds of their sale (Adamy. This furthermore implies the need for Starbucks to differentiate on their brand image. it can still be argued that some players within the specialty coffee segment 13 Commoditising the specialty coffee can be understood as the product being viewed as a mass-consumer-product instead of referring to the experienced based café where specialty coffee typically was consumed before the fast food chains entered the market. there is no doubt that the fast food segment poses a threat to Starbucks and the other specialty coffeehouses. additionally poses a threat to Starbucks seeing that the fast food chain is offering an equally or better than tasting product at a lower price and thus are in a strong competitive position (Jennings. which indicates that the fast food chain is gaining on to Starbucks’ differentiated coffee products (Seattle Times. 2008). In order to lure and maintain the customers. Despite the threat of the fast food chains. This further stresses speed and convenience as competitive factors. 1998). Perhaps most importantly. 2007).Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 52 2007). Starbucks introduced breakfast food items in their retail stores and furthermore opened drive-through services in many outlets. It can be argued that the emergence of the fast food sector as a serious competitor to the specialty coffeehouses has resulted in an evolution of the market. 8. The fact that coffee in the fast food restaurants. 2006. these decisions. Nocera. It is argued that Starbucks may be facing the risk of their brand being damaged seeing that the company has chosen to meet the competition at the expense of their core competences and the Starbucks Experience by focussing on increased efficiency and competing in the breakfast market (Kowalski. McDonald’s coffee has beaten Starbucks coffee in the category of taste. 2008). The distinction of the specialty coffee sector and the fast food sector is getting blurred as they are nearing each other with the danger of commoditising13 the specialty coffee (Walkup. The initiative of the drive-through has turned into a market trend seeing that more and more specialty coffeehouses include drive-through’s to their stores. 2008).4 The Evolution of the Specialty Coffee Industry Despite the clear threat of the fast food chains. Hence. Schoenholt. this is a trend that is embraced by customers (Encyclopedia of Emerging Industries. . the way Starbucks has reacted to the competition is questioned.1.
Starbucks will slide even faster down the continuum – also a movement fortified by the fact that the restaurant industry in general moves faster down the continuum than other industries on average (McCracken. Kowalski (2006) further implies that Starbucks is distancing themselves from the specialty coffee segment which the company initially evolved. seeing that the fast food chains may appeal to the average American and not to the higher class American (Bosman. 8. flavour and quality of the coffee (Stepankowsky. 2006). a category of larger coffee chains which have adopted the fast food segment’s level of customer attention and efficiency. As Starbucks can be argued to approach the fast food segment. where focus was on the coffee experience and not just to be served quickly. These are the coffeehouses keeping focus on their core competences of offering customers high-quality coffee in comfortable and coffee-focused environments. Thus. They still manually control their roasting process emphasising the freshness. It has developed into a common concept to the Americans as the numbers of Americans consuming specialty coffee on a daily basis is increasing. which Starbucks can be argued to be losing. 2008. 2006). it can be argued that they are moving towards a more mainstream concept of the specialty coffee and away from the segment in which they originally were placed. 2006). is an example of a coffeehouse. Hirsh. and that the competition has created a new category of coffeehouses placed between the fast food chains and the traditional coffeehouses. on the other hand. As Starbucks dilutes their brand values by taking on initiatives similar to the characteristics of fast food chains. a distinction line is appearing between these coffeehouses and those which have retained their specialty coffeehouse focus treating coffee as a rare commodity. Furthermore. Kowalski (2006) argues that due to the competition from the fast food chains and the fact that Starbucks and other specialty coffee chains such as Tully’s Coffee and Tim Horton’s may have commoditised their businesses in order to correspond to this competition. In general the specialty coffee industry is predicted to continue growing. Looking at the specialty coffee industry in the light of Kauffman’s Continuum it can therefore be argued that specialty coffee has moved down the Kauffman Continuum towards rigidity due to similar concepts catering to the same segments as Starbucks have entered the market. it can be argued that customers who are not interested in the mainstream concept to a lesser extend will perceive Starbucks as an alternative. Peet’s is still perceived to represent the values of the traditional coffeehouses. Specialty coffee is no longer a niche product in the coffee industry.5 Starbucks in the Kauffman Continuum It has been outlined that specialty coffee as a concept has gone through an evolution since it emerged and since Starbucks introduced it to the masses. Thus. Peet’s. It can be argued that to some extent the specialty coffee of the fast food segment does not target the same customer segment as the traditional coffeehouses. which has not compromised with their core values and competences in order to increase sales and correspond to the new competition. the competition is even more intensified.1.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 53 suffer less from the new competition. .
Furthermore. As Starbucks makes . Thus. a Third Place. Thus. as argued in the previous section. even in the supermarkets. This indicates that the brand is threatened to be associated with coffee from fast food chains. as other chains operating in the fast food industry have made an entrance on the gourmet coffee market by initiating sale of gourmet coffee. This and the fact that specialty coffee is available all places serving coffee today. Starbucks has been pushed further and faster down the Kauffman Continuum. It is losing its distinct character. the structure of the industry has changed dividing the operator of the specialty coffee into two underlying categories. can be argued to be a reason for the concept of specialty coffee moving towards rigidity. Starbucks delivered something to the American consumers which they did not have access to before and therefore Starbucks has been argued to have been teaching the Americans to drink good coffee (Bundgaard. the fact that Starbucks provided the consumers with a social element to the coffee.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 54 Figure 6 | Starbucks in the Kauffman Continuum Chaos Starbucks 1985 Direction of progress Source: McCracken (2006) and of own construction Rigidity Starbucks 2008 As illustrated in the figure above. a distance is created between the larger chains competing on the conditions of the fast food segment and the smaller chains and the independent local shops. 2004). Thus. Consumers have also begun to see Starbucks’ coffee as being substitutable with coffee from fast food outlets like McDonald’s. It was a new way of perceiving and drinking coffee which contrasted with the conventional drip coffee consumed mainly at home. such as Peet’s. cannot be ignored as the American culture seemed to lack social rallying points before Starbucks emerged. Starbucks entered the market when it was ripe for the concept of Starbucks. but during time the market has gradually developed. but also from the drip coffee served at the diners. will slide slower down the continuum than others seeing that they are able to hold on to the original feeling of the coffee shop not following the mainstream tendency suit. Additionally. They pioneered the industry. From this perspective it can be argued the smaller operators. providing a Third Place with the specialty coffee as the centre of the experience has been a factor distinguishing Starbucks from the alternatives in the market. A lot of coffeehouses have entered the market and consumers at all levels of society and all ages have embraced the idea of drinking good coffee. However. the specialty coffee concept led by Starbucks became a strong alternative to the otherwise standardised coffee in the market. the concept of specialty coffee no longer has the same distinct character as identified it in the early days. Thus.
Part III 9. 1997) and not through advertising. 2006). The narratives have intentionally been communicated by Starbucks on their homepage and in books such as Pour Your Heart into It (Schultz & Yang. and thereby whether the consumers apply these meanings in their identity projects. In the following we will account for the Starbucks Experience as we see it as a constitution of narratives creating and attaching the Starbucks brand with values and meanings. Gobé . The emotional branding strategy at Starbucks has manifested itself via extensive focus on customer loyalty obtained through customer connection between partner and consumer – creating a special connection between the two parties. extensive success (Michelli.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 55 initiatives similar to the fast food chains in order to comply with the intensified competition. Most marketing has been done through word of mouth where consumers have been spreading the word of the coffee chain and in this way creating an emotional relation to Starbucks (Luttinger & Dicum. The experience at Starbucks is argued to be the reason why Starbucks has been able to differentiate from the competitors and to gain their. In the following we will account for whether the narratives have changed during time. 1997). indicating that storytelling plays a decisive role in their marketing. 2001:xxiii). In fact Starbucks has followed a marketing strategy not built on traditional advertising and with a considerably lower marketing budget than other restaurant chains of that size (Kang et al. This has been a very unusual way of going about branding and given Schultz’s own statements we argue that the strategy chosen is deliberately done to maintain a feeling of Starbucks being a small neighbouring coffee shop and in general attach the brand with a feeling of being small and familiar (Schultz & Yang. 2006). 2007). Brand Genealogy 9. The findings will later be applied in the consumer analysis with the purpose of clarifying whether the initial consumers of Starbucks coffee find it difficult to apply the current meanings of the Starbucks brand in their identity projects.1 Starbucks’ Branding Strategy Buying coffee at Starbucks has been characterised by Starbucks themselves as being an Experience – the Starbucks Experience.. it can be argued that Starbucks is moving away from providing a distinct concept and thus becomes more mainstream.2 Emotional Branding Emotional branding is about creating a personal dialogue with consumers and to know them individually and intimately (Gobé. 9. hence.1. until now.
2001). billboards and in radio spots as they started to do last year. one should also keep in mind that having an emotional branding strategy trying to connect with the customer on an emotional level may become more and more difficult for Starbucks as they grow – it might even be argued that the emotional branding strategy which Starbucks has used until now is by its very nature in contradiction to a corporation as Starbucks. 2007). Section 3) but it may also be very difficult to carry out with the current expansion pace – at least the part of their strategy which is about the close connection with the customers. about delighting and surprising people. Connecting with the customers like they used to may be difficult on such a large scale and moreover the emotional feeling towards a brand which expresses their ubiquity through national advertising may be very difficult to sustain. 1997). may not be contradicting with what Starbucks in reality is (Kang et al. These events are.. A “Surprise and Delight” event worth mentioning is when Starbucks rented whole cinemas and surprised cinemagoers with free tickets from Starbucks (Lomax. Another way in which Starbucks has carried out their emotional strategy is through the smells in the stores. The Third Place Section 13 and Quality and Service. or tries to conduct. However the advertising strategy is a whole new way of branding Starbucks which it could be argued contradicts the emotional branding strategy evolving around the idea of the small neighbouring coffee shop (cf. 2001). The tool for spreading the word of mouth has been the event-like initiatives such as for instance “Surprise and Delight”. These unexpected delights are also identified as being a typical way of conducting an emotional branding strategy (Gobé. .. Section 12). Therefore starting to advertise Starbucks on national television. Nevertheless. Literature Review. as the name implies. this because knowing consumers on an individual basis will be practically impossible taking into account the size and omnipresence of Starbucks. A connection could consist of the shop assistant knowing the name of the consumer thereby interacting with the consumer in a personal way (Gobé. Therefore.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 56 (2001) also emphasises that an emotional branding strategy’s core is about this connection to the consumer which will result in a deep and lasting loyal connection. may not only be insufficient as branding strategy for Starbucks’ sustained competitive advantage (cf. Moreover. Gobé (2001) suggests that smells are a very powerful tool to create emotions towards a brand. The way Starbucks has emphasised the smell of freshly ground coffee is a way to make the consumers connect with the brand. 2005). the emotional branding strategy which Starbucks is conducting. 2007). At that time Starbucks possessed fewer stores than today where they in fact are ubiquitous. Starbucks has expressed that using word of mouth communication supports their emotional branding strategy and help sustain the emotional connection between brand and consumer (Kang et al. as Starbucks has grown and changed so has the way of branding and hence also the marketing of the brand. However. Howard Schultz has stated that national advertising by its very nature fuels fear about ubiquity and he underlined in his book in 1997 that a strong brand is not built on advertising campaigns (Schultz & Yang.
Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS
From the above it is evident that Starbucks has been focusing on an emotional branding strategy in order to succeed. However, as indicated in the beginning of the thesis, the underlying reasons for Starbucks’ success may be another. According to Holt’s (2004) theory it can be argued that the initial success can be explained by Starbucks applying cultural branding. This is a result of Starbucks’ ability to target a subculture in the American Society getting the bobos attracted to the messages in the brand and thus initially legitimising the brand. It does not seem as though Starbucks was aware of the fact that they targeted this subculture and that this was the reason for success and the brand achieving iconic status. Thus it can be argued that Starbucks’ cultural branding was not done deliberately. Thereby the cultural branding approach has not been followed through during the years and hence the emotional branding strategy has been perceived by Starbucks as the key to their success.
10. The Narratives
As consumption plays a great part in constructing the self (McCracken, 1986) and the fact that Starbucks’ coffee can be considered an identity product it can be argued that the meanings attached to the Starbucks brand are used in the consumers’ construction of their identity. The meanings are developed through the narratives told by Starbucks. However it has also been stated that the consumers and the surroundings can co-brand a company – a co-branding incontrollable to the company (Holt, 2002; McCracken, 2005). Therefore, the surroundings may also tell contra-narratives about Starbucks which can harm the brand’s credibility. Thompson et al. (2006) and Klein (2000) indicate that there has been a tendency towards large corporations with strong brands experiencing negative consequences when stepping out of line and not living up to what was promised in their narratives – the external environment quickly responds and co-brands the brand with meanings which are not always flattering for the corporation (cf. Holt, 2002, Klein, 2000). In the following we will therefore account for the narratives firstly as Starbucks has intentionally tried to tell them and secondly how these have changed during time due to co-branding from the surroundings – this being consumers and media. Afterwards we will look at how Starbucks has counteracted criticism thereby trying to maintain the positive meanings in the narratives. Through word of mouth the company has succeeded in building a strong brand attached with meaningful narratives. Moreover the influence of the narratives communicated by the surroundings can be seen as a proof of the consumers possessing power as to which meanings are associated with the Starbucks brand – a power also mentioned as being characteristic for the post-modern consumer (cf. The Post-Modern Consumer, Section 184.108.40.206). In the following we will look into the development of Starbucks’ narratives including how the surroundings have co-developed them. The narratives analysed are the following: The narrative of Howard Schultz, the Third Place, the Quality and Service, and the Social Responsibility.
Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS
11. The Narrative of Howard Schultz
When saying Starbucks you also say Howard Schultz. The founder and CEO of Starbucks has achieved to become deeply associated with the company and this, we argue, is not a coincidence but a story carefully constructed by Starbucks over many years. The narrative about Howard Schultz evolves around the idea of the American Dream and around being the embracing father figure of Starbucks.
11.1 The American Dream
Howard Schultz is an example of how the American Dream can come true to anyone who pursues it. This is the story about Howard Schultz whose parents were part of the working-poor in Brooklyn, New York City which they later left for a housing project (Marketing Magazine, 2004). The father had different low society jobs such as taxi driver, diaper-service truck driver and factory labourer while the mother Elaine was a non-working housewife (Koehn, 2001; Serwer & Bonomici, 2004). The story about the family which had to go through an awful lot is further emphasised when the father breaks his ankle and cannot afford the hospital bill and on top of that looses his job (Bundgaard, 2004; Serwer & Bonomici, 2004). Schultz started working early in his life doing different odd jobs and gave some of the earnings to his mother as he knew that they were short of money at home. If it was not for the football scholarship Howard Schultz probably would not have attended college but he got it and got into University of Northern Michigan. The narrative also includes how Howard had different jobs but because of being curious about why a certain Starbucks Coffee, Tea, and Spice bought so many plastic cone filters from his current job at Hammerplast he visited the place to see what it was. He immediately fell in love with the shop and the coffee – he saw that it had potential: “I felt as though I had discovered a whole new continent […] By comparison, I realized the coffee I had been drinking was swill” (Koehn, 2001:219). The rest of the story we know – Starbucks becomes a success in the US and overseas and is the symbol of a real success story of how Schultz’ social circumstances does not stop him from chasing his goals, and he becomes a strong example of the American Dream.
11.2 The Father Figure
From discovering the specialty coffee potential in an American market ripe for a quality product Schultz’s story goes on with how his passion for specialty coffee and the coffee bar concept all started with a trip to Milan in 1983 where he tasted his first latte. Schultz described the first coffee experience as a revelation something he had to share with the rest of US (Daehne, 1994; Bundgaard, 2004); almost as though Howard Schultz was a symbol of the father of the US who wanted to share his positive experiences with the rest of his country. Also the way he regards his employees as being partners who can have a say in daily operational decisions expresses the caring
Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS
Schultz (Schultz & Yang, 1997; Michelli, 2006). The caring for the employees is emphasised again and again. One example is how Schultz has introduced health insurance not only to the partners but also to their cohabiting partner no matter the sex (Bundgaard, 2004; Lindstrøm, 2003, cf. The Good Place to Work, Section 14.1). Schultz also acts as the omni controller of Starbucks by not letting the concept be franchised, which can also be argued to facilitate the “small feeling” of Starbucks – one can put a face on the owner and hence the company may not feel as corporate. Being one man directed can be seen as a way to keep control in the hands of the company but it is also sending a strong signal to the outside world supporting the narrative of the compassionate CEO who will not let anyone in on his territories. However Schultz steps down from his CEO position between 2000-2008 (Starbucks, 2008h). During that period Starbucks began to suffer and as the situation looked its worst Howard Schultz came to Starbucks’ rescue. One can see this just as a way of getting the company back on track but it can also be a carefully thought through marketing strategy supporting the narrative about the caring father of Starbucks who will not passively be a witness to his company and personal dream suffering. In addition a memo sent to the partners regarding how the company had to go back to the roots and how the experience had become inauthentic got out (cf. Appendix 1). This way all Americans were able to read Howard Schultz’s deepest concerns and how he was willing to fight for his company in cooperation with his partners. Of course this memo was also made to create a sense of internal unity but we argue that it was just as much released to tell the story about the caring CEO coming back to save the company and do what has to be done. A quote such as: “I’m glad Howard is back at the helm. Starbucks is his heart. I have every confidence he will turn the company around…” (Stone, 2008:3), illustrates how one stockbroker characterises Howard Schultz as an owner whose company is close to his heart and where customers and employees even just call him by first name. The connection between Starbucks and Howard Schultz is constructed to be emotional and informal. Without accusing Schultz of not being genuine in his story telling one should also not be naïve and think that the narratives have not been well thought through. There is no doubt that the strong association between Howard Schultz and Starbucks is based on the narrative regarding the way he got the idea for Starbucks and how he managed to build a strong coffee empire but it takes up a lot of space when telling the story of Starbucks. This is also fortified by the books written about Starbucks, such as Michelli’s (2006) “Five Principles for Turning Ordinary into Extraordinary” (cf. Literature Review, section 3) but not least due to Schultz’s staging himself in a book such as “Pour Your Heart into It – how Howard Schultz Build a Company one Cup at a Time” from 1997. Here the development and struggles of the company is made public and again relates Schultz to the American Dream. How he is passionate about sharing good coffee with the Americans, how he built the company up from scratch and how he cares for Starbucks including his partners. Fur-
The purpose of the communication is to explain to the partners and the surroundings the underlying reasons why the media has attacked Starbucks and what the solution is to re-create the emotional connection with the customers (cf. 11. Schultz underlines the values of unity – the partners must all stick together to overcome critique. Being a symbol of the American Dream which the common American citizen believes in just like the Danish believe in the welfare state (P1. This is mostly done through communication from Howard to the employees using emails and news letters. . Thus he puts himself on level with the employees encouraging two-way communication. It can be argued that buying the coffee at Starbucks is like buying a little piece of success – success which can be transferred to the consumer’s identity. But this communication from Schultz can also be interpreted as a way to strengthen the narrative about Starbucks not being a corporate titan but a company with a visible leader who cares. Section 14). (2004). It can be argued that this narrative targets lower social strata as the American Dream appeals to the feelings of success and opportunities to crawl up the social ladder. Appendix 3-5). 2008) has attached the brand with meanings which the Americans are very likely proud to identify with and buy. Social Responsibility. 14 This model is applied as marketing tool in Fog et al. The narratives also tell the story about Schultz as the caring CEO who wants the best for his fellow Americans not only by serving good coffee but also by supporting different social projects (cf. The stories fill up the brand with meanings about Starbucks being a corporation where a common hard working American man set the strategies. Together with the story of the American Dream which came true for Schultz they support the development of a corporation which does not only want to achieve profit – a message which is hard for the average American not to sympathise with.3 Development of the Narrative of Howard Schultz In general Howard Schultz tries to counter-attack the criticism the coffee chain experiences from the media. Howard Schultz’s communication is very personal and friendly which can be argued to be intentional to distance him from being a hierarchic leader of a large corporation. strengthening the mutual feeling among the employees and motivating them to engage in the customers (cf. At the same time this story of Howard Schultz is staged as a fairytale where Howard Schultz in the role of the hero has to go through an awful lot before he achieves his dream – granting the Americans with Starbucks.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 60 thermore in Pour Your Heart into It emphasis is on how Howard Schultz was able to open the eyes of the Americans to the need of specialty coffee – a need they did not know they had – and in this way he acts the role of sender according to the classic actant model14. The stories told about Howard Schultz in the media and by himself all tell something about the brand. It seems as if he tries to create an atmosphere and a feeling of community. These very personal letters sent out to the partners support the narrative of the caring founder of the corporation. Appendix 4). By “putting a face” on the corporation it can be argued that Starbucks tries to avoid being seen as the big and ugly.
that Schultz cares about the Starbucks Experience of being a café where quality and service are still paramount factors it can be argued that the narrative of the caring founder is still being supported today (Appendix 1). Donald the new CEO never made his own decisions without consulting Schultz but he also argues that Howard Schultz is driven by growth and numbers much more than he is driven by his heart. Summarising on the above it seems as though the narrative of Howard Schultz has developed through the years as criticisms of Starbucks had made . This picture of Howard Schultz is also supported by Pendergrast (2001) who underlines Howard Schultz’s winner instinct.4). Nocera (2008) points out that Schultz is pushing growth at all costs.” Wall Street was calling it. Moreover it also illustrates the close connection between the brand and Schultz and the way one stockholder again sees Howard Schultz as the hero coming to the rescue of Starbucks: “The day after the announcement. The following quote also shows the influence on the stocks illustrating how Howard Schultz’s significance for the company did not disappear over the years.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 61 When Howard Schultz decided to regain his position as CEO earlier this year a strong signal was sent to the surroundings – a signal that the founder of the company still had faith in Starbucks and that he still cared for the company and his employees.” (Nocera. Nocera (2008) thereby paints a much less romantic picture of Howard Schultz.com. 2008) By expressing in the memo that Starbucks has to go back to what it was before. Thereby it is indicated that the book Pour Your Heart into It is also a part of their marketing instead of just being a sincere Schultz leveraging his American Dream story to his fellow Americans. In his column in The New York Times Nocera (2008) points out that not only is Howard Schultz a bad manager who never really gave up his position as CEO in 2000 and that Mr. Section 14. he is a businessman pursuing profit. the price of Starbucks’ shares rose over 8 percent — “the Howard rally. Development of Social Responsibility. Pendergrast (2001) does not imply that Howard Schultz is not sincerely passionate about coffee and that this is a cover for the real purpose of profit but one should not be fooled by Howard Schultz’s painting a rose-colored image of himself as the hero and his intentions. Closing down shops in the US to get back to the authentic Starbucks Experience does not work if the strategy is not carried out all the way which Nocera (2008) indicates it is not – Schultz’s goal is still to expand on potential foreign markets a strategy which collides with the narrative of the founder who wants to save his company and get back to its roots. At Starbucksgossip. “I have faith in Howard.” wrote one. However Joe Nocera an American journalist and author exposes a different picture of the CEO which weakens the narrative of Howard Schultz. Starbucks employees weighed in ecstatically. Another downside to Howard Schultz being strongly identified with Starbucks is that when Starbucks takes a wrong step it can be argued that it rubs of on the narrative of Howard Schultz causing negative associations towards the CEO hence affecting the narratives’ credibility (cf.
But still it has to be noticed that the tight association between Schultz and Starbucks may be moderated as the company grows. 2001. doppio etc. Also the names of the coffees such as cappuccino. Daehne. The Italians’ coffee culture is filled with meanings of tradition. Telling the story about how Schultz got the idea to open up a coffee shop based on the Italian coffee culture can be seen as a way for Starbucks to be associated with the Italian coffee culture. 1997. Pendergrast. To be sure that the best cup of coffee is brewed selection of the coffee is important and carrying out a distinct selection process of beans serves as a means to emphasise the quality narrative of Starbucks. grande. He is however still presented as the passionate founder of Starbucks and a symbol of the American Dream. Pascucci. 12. 2004. Bundgaard. Illycaffé. They carefully select and buy the beans from different places in the world as the . 1994.1 The Italian Coffee Traditions In Italy coffee was not the same as the brown liquid which the Americans were used to consume but a drink made with dedication and a special precision combined with a place where people could chat or read the newspaper all wrapped up in an authentic European café milieu. quality and authenticity and the Italians are famous for their coffee roastings such as Lavazza. and venti to indicate the size of the coffee. Luttinger & Dicum. 12. which is the Italian word for bar man and they use Italian coffee expressions such as tall.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 62 the narrative of Howard Schultz less glamorous and hence credible. 2007). However. 2006). 2005 Euromonitor. until recently the American Dream narrative has been intact hence the meanings of being a symbol of success can to some degree still bee justified. caffe latte. However Starbucks’ recent struggles may have caused the American Dream narrative to fade slightly and the success story is threatened by a less happy ending where Starbucks must close down several shops and rethink their strategies. High Quality The quality of Starbucks coffee and how Howard Schultz taught the Americans to drink good coffee based on the Italian espresso bar idea is emphasised in almost any written paper about the corporation (Serwer & Bonamici. Starbucks uses Italian words such as barista. 2004. To communicate the meanings of being a café based on the Italian coffee traditions. and Segafredo Zanetti and also known for their traditional hand made espresso machines such as La Marzocco and Pascucci used at home and in cafés all over Europe (Euromonitor. Schultz & Yang. tazza. the service and how Starbucks controls the supply chain. You buy a little of that dream when you buy coffee at Starbucks and the fact that the company has grown surpassing all expectations is only supporting the American Dream narrative. are taken from the Italian coffee vocabulary all to attach Starbucks with Italian coffee culture implying legitimacy of being authentic Italian. The high quality narrative is comprised by three factors: the Italian coffee traditions.
traditions. 2006). quality and authenticity. buying Starbucks coffee in the beginning may also have sent a signal of being trendy adapting to this specialty coffee as the first Flock.com one can also read how to taste coffee. the history of coffee. Therefore. This implies that an Italian café milieu with the meanings of traditions. At the emergence of Starbucks the Italianess had a strong association with something exotic and different due to the concept being unknown in the US at that time. Thereby. 2003. The Green Apron Book is one of . The traditions of quality.2 Service The quality of the coffee is also assured by the extensive training of the baristas resulting in a narrative regarding a high level of service. – all sending a signal about Starbuck being a coffee connoisseur who shares their knowledge with the customers (Starbucks. the meanings from this culture are transferred to Starbucks and thereby Starbucks may be associated with the Italians’ coffee culture with all of what that implies of intellectuality. Lindstrøm. Section 7). Especially in the early days of the specialty coffee craze it can be argued that these meanings of quality and the Italian origin had a strong value as this differed a lot from what was already known in the US market (cf. Therefore. Building the Starbucks brand around the Italian authentic café culture can be argued to have appealed to a certain customer group with higher cultural capital.4. All this supports the narrative about the corporation’s knowledge about coffee and high level of quality. The Industry. 2007. According to Simon (Appendix 2) the Italian café culture encourages intellectual conversations. Working at Starbucks is not only about pouring coffee but the barista must possess knowledge and show enthusiasm towards the job. reflections and to linger. how to make the perfect cup of coffee at home with a lot of specialist knowledge etc. Furthermore.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 63 location and seasons have an influence on the coffee flavour. quality. This will be further elaborated on in the section. by emphasising that Starbucks is founded on the basis of the Italian coffee culture. they signalled that they knew of the coffee traditions. Michelli. what quality was and how to consume coffee. Section 16. The Social Network of the Starbucks Brand. intellectuality and connoisseurship attached were a part of what the customers bought. 2008f). 12. connoisseurship and authenticity were transferred to the customers enhancing their self-image as well as sending a signal of possessing status and high cultural capital to their surroundings. As a contrast to the coffee culture at that time in the US. On Starbucks. The education of the partners also includes that the partners gain insight in the company philosophy regarding the importance of interacting with the customers. all partners go through an at least 28-hour long coffee course including everything from company philosophy to extensive coffee tastings assuring that the partners can guide their customers if they should be in doubt of what to choose from the broad coffee menu (Locascio. the history of roasting. Starbucks as a re-creation of the Italian coffeehouse came to illustrate a bohemian lifestyle (Appendix 2).
Burman & Zeplin. Therefore.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 64 the appurtenances to teach the partners the importance of communication and interaction with the customers. but the consistently exceptional quality proved to be worth the price. Starbucks has built their own roasting plants and the coffee stores are companyowned (Appendix 2). and that the product is premium made with care. Things have changed over the years and the pattern I’ve experienced follows: from always a great latte.4 Development of the Narrative of Quality “I have been drinking Starbucks grande lattes for about 16-17 years. 2005. Starbucks cannot get away from the fact that they are a large corporation which distances them from the small feeling values they try to express. 12. 1997).3 The Control of the Supply Chain To ensure high quality of the coffee. Starbucks has additionally found it necessary to have high quality in all the activities in the supply chain as well (Schultz & Yang. Thus. the price was a shocker for a cup of coffee. 2006). to every now and then an ok latte. then usually an ok latte. to . this quality approach distinguishes Starbucks from the mass produced coffee products where a low price can be argued to be one very decisive factor in the decision making. avoiding influence from external suppliers signals financial superiority and independence resulting in an image of Starbucks being a large and corporate company. However. and that this quality control will be reduced if the activities are outsourced (Schultz & Yang. In this book the principles of Starbucks are listed together with success stories especially regarding how the partners have made the customers’ Starbucks Experience special and how the customers have shown their gratitude by contacting Starbucks’ head office thanking Starbucks for being the way they are (Michelli. This can be seen as a way for Starbucks to assure that also the partners show loyalty and dedication towards their job resulting in a “living the brand” or brand citizenship behaviour where the partners show extraordinary commitment to the brand which will be leveraged to the customers’ experience (Karmark. Thus. 1997). Howard Schultz argues that quality control is essential when you are dealing with a product like coffee as it is imperative to the final coffee product that the beans are fresh and that they are roasted and brewed the right way. as interaction is to create loyalty towards the brand. Furthermore. the sourcing of the beans and the roasting process are integrated activities in Starbucks. Starbucks seems very determined on not to compromise with the quality control. it can still be argued to take part in creating an image of the company which above all wish to express quality. he finds it difficult to keep the company culture intact if the stores are franchised. Even though it may have the greatest significance for internal matters that Starbucks value the control of their supply chain. the selection of coffee farmers. Then it would be difficult to make sure that the Starbucks service level is the same in every store and thereby that the customer has the quality experience they are to expect. 2005). 12. I remember that initially.
2008). 2008. it is underlined that there is a lack of consistency in quality but also a lack of consistency from shop to shop. If the barista is clueless about what good espresso is. Some of the cappuccinos that I have purchased from certain Starbucks stores have been close to undrinkable (great use of $3.” (OC Mark. it can be argued that customers feel that Starbucks has reduced their quality by introducing automation: “Ever since Starbucks went to the automatic machines (similar to McDonald’s) the quality of the drinks have suffered. 2008. please…” (Miclin. Bring back the consistent quality. Moreover. The shots of espresso have been thin tasting. Quality of the beans has in general been lowered due to the large batches of coffee beans purchased – a demand which the suppliers find difficult to meet as the suppliers find it difficult to keep up with the pace of Starbucks’ expansion level (Batsell. But also the La Marcocco espresso machines were replaced with the automated Swiss-made Mastrena machine and should according to Howard Schultz replace La Marcocco in three-fourths of the Starbucks in 2010 (Stone 2008) resulting in some customers preferring smaller coffee shops such as Peet’s Coffee and Tea which handmakes the coffee and thereby also emphasises the Italianess to a larger degree and therefore is perceived more authentic than Starbucks. 2008). Peet’s is where the quality is because of this. Melody. 2008). they will have no idea of when there is a quality problem. BII. maintenance.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 65 presently every now and then a great latte. and of poor quality. from manual and semi-manual machines with properly trained employees. 2008) . This will be through the right equipment. Most critique refers to the introduction of the Clover machine this year. which is why Peet’s uses manual machines for “hand crafted” drinks. The shift has gone from quality to quantity and you have lost the magic along the way. This can be argued to be caused by the baristas being increasingly under time pressure as the chain has grown but also that the chain has grown so big that it is difficult to control and maintain the quality in every Starbucks (Hellow. 2008) As one can read from the quote above the trustworthiness of the quality narrative seems to have suffered.50). or more often. There seem to be a general consensus on mystarbucksidea. Jayded. Top quality espresso can only be made from properly calibrated automatic machines. The training aspect should include instruction on what makes good espresso and what it tastes like so quality control can be maintained. Verum. Fans of espresso know this. 2008.com that coffee brewing should rather take the time it does instead of rushing the brewing process to keep queues and waiting time down (Hb123. 2008a. As handcrafted coffee is associated with quality. as does Peet’s Coffee. bitter. The Clover brews one cup of coffee from beans the barista selects on the automated machine (Schwaner-Albright. Starbucks will only thrive if it can get the quality back in its espresso. and training of employees. 2004).
sit down and actually be a part of my community. You used to teach baristas about the timing of shots. Also the meanings of Italianess attached to Starbucks are threatened when replacing the Italian espresso machines with automated machines as this diminishes the Baristas’ otherwise central role of the Italian coffee shop. Starbucks has also entered other businesses such as the book and music businesses. Coffee brewing on these machines does not call for extensive training sessions and therefore making the coffee will have less character of handcraft resulting in the baristas showing less passion and pride and hence interest in their jobs. You are losing me and TONS of other customers simply because of these automatic machines.5 or 6 years ago it was like: “yes.. 2008).an artefact which most customers have valued highly (Appendix 1). they don’t know anything about pulling a good shot. 2008) Like entering the food business. which supports the lack of quality in relation to the automated coffee machines: “…I have spent thousands of dollars at Starbucks.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 66 Another comment. The fact that Starbucks is no longer concentrated around the coffee experience but has diversified into other areas confuses the perception of Starbucks as a coffee shop of the Italian traditions. One barista points out that he left the company to another coffeehouse as he could not vouch for the quality of Starbucks’ coffee anymore (BII. finally a place where I can get great coffee. 2008). Hence.” (Trevor H. the smell of coffee has been overruled by the smell of food – a problem many have underlined on mystarbucksidea.” (Millim. humidity and air pressure. 2008) It is not only that the new coffee machines brew coffee of poorer quality it is also the theatrical experience of watching the barista making the coffee which is argued to be gone when the barista only pushes a button.. Now. books and music are sold in the coffee shops. it’s just like every other American establishment: poor quality. and have no idea what you’re talking about when you tell them the shot tastes like water. there’s always Italy. seeing that the smell of coffee always has been a part of the coffee experience at Starbucks . the new machines and especially Clover machines have been criticised for being too tall not allowing the barista to communicate with the customer rendering the important interaction in the shops impossible and also hiding the barista’s coffee-making (Stone.” Now. They have no idea what can be done except give you a coupon. By doing that. The smells as well as the fact that the baristas have become less educated are underlined in the following comment: “…Starbucks has been dumped down to a McDonald’s level. Moreover. The quality feeling of Starbucks has also been diluted when introducing sandwiches and breakfast items. the authentic meanings of the Italianess are weakened and make room for meanings of Starbucks as profit pursuing to emerge. Therefore.com and by Howard Schultz himself. bad smells and baristas that have little to no idea of how to make a good espresso…Oh well. .
this being 7. 2008. 12. Starbucks was according to Schultz. this connection has not been possible between all customers and partners.m. Thereby. Thereby. Thus. some customers still express that their local Starbucks provide good service and they praise the partners: “The politeness and responsiveness of Starbucks employees is legendary and unequalled in business.” (Mza. going back to their roots (Grynbaum. 2008. I have had ONE negative experience with a Starbucks employee in 23 years. a fact also validated by the media (Smale. it can be argued that the lowering of quality within service has resulted in customers showing less loyalty towards the Starbucks brand. It is viewpoints like these which demonstrate that some of the principles of connection between the customer and the partner. and then the re-education camp was launched with instruction in espresso making – how the espresso shot should be made in glasses so every shot’s colour could be checked and how milk was supposed to be steamed in a way that the right sweetness was obtained. Appendix 1) and secondly a nationwide training session was organised to revive the intimate.. 2008. which Michelli (2006) is referring to as one of Starbucks’ critical success factors. However. 2008). 2008. Schultz announced that the chain would get rid of odoriferous breakfast sandwiches so that the customers could smell the coffee again.100 shops at precisely 5:30 p.com regarding the quality of Starbucks’ coffee display very connoisseural knowledge about coffee and go into details about how long the brewing process should be. All Starbucks coffee shops were closed down for three hours. Stone. However. 2008).5 Development of the Narrative of Service The quality of the service level also seems to have changed over the years. 2008). 2008) and “My local Starbucks is in Denville. All of our Baristas ROCK! Most of them know my favourite Latte and some even have it ready when I get up to the counter!” (Sadie. One of the initiatives to try and maintain the narrative of quality and to counteract the recent criticism of Starbucks lowering their quality. As Starbucks has grown it may also have been more difficult to control that all stores have the same level of service and the right people behind the counters than it used to. how warm the milk should be and how the baristas should pack the beans the proper way. friendly feel of a neighbourhood coffee shop. 2008). NJ (Union Hill Mall) and anyone who wants good customer service should come to this store. Grynbaum. is still apparent today. CustIdea. Superman. . Moreover. This has resulted in less of the important connection between the partners and the customers as the environment is too busy for small talking and the customers are so manifold that it is not possible to remember what the regulars usually drink (Yum2me.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 67 It also has to be mentioned that the participants of the discussion on mystarbucksidea. Schultz implies the wish to re-establish the original meanings of the brand. was firstly the memo sent out to all the partners explaining how Starbucks had to go back to its roots (cf. As the chain has grown the partners have been under severe stress to keep up with the demand for Starbucks coffee.. they validate their arguments about the lower quality.
This was the kind of employee Starbucks initially focused on employing (Schultz & Yang. However. The strategy has resulted in lower quality and service and loyal customers who show disappointment causing some to deselect Starbucks in favor of competing coffee shops such as Peet’s Coffee and Tea. meanings of standardisation and a less intimate service are created – meanings similar to those of the fast food chains. It comes from within. the image of being a re-creation of the Italian coffee shop has been damaged resulting in the meanings of the Italian traditions and all which this implies disappearing as well. Thereby. It is also pointed out that while expanding aggressively the demand for partners to fill vacancies in newly opened stores is high. This signals that the meanings of quality and service are still closely attached to Starbucks – at least some customers perceive it like this. Therefore. CustIdea. One blogger at mystarbucksidea puts it like this: “The desire to be truly customer service oriented is not generally something that can be trained into a person.com (Dalahest. Further expansion will not facilitate the neighbouring feeling of Starbucks coffee shops. not least due to the price premium of the coffee. the meanings have been damaged as Starbucks is not able to live up to these meanings. 2008) – decisions which do not correlate with the desire to go back to the roots and hence focus on the initial quality/service narrative. 2008). It seems like the workforce is characterised by a large amount of students who understandably do not engage 100% in being a part of the Starbucks mindset resulting in a lower service level – a problem which is also mentioned several times on mystarbucksidea. we argue that the initial narratives of quality and service have developed during the years. It is a personality trait…” (Cafegirl. As written previously the machines reduce the importance of the interaction with the customer and may give a feeling of rush and less service. Thus. 2008). Therefore. and the need for speed coming into focus. This results in the surroundings telling another story causing the original meanings to have lost their values. The distinct and exotic character of Starbucks has been removed and buying the brand it can be argued no longer creates the bohemian identity of being . 2008. the surroundings perceive Starbucks as slacking on the quality. managers cannot afford to select the so-called “people people” – employees who like to interact and small talk with customers and who are knowledgeable about coffee. Due to the fact that the company has made some strategic expansion decisions. There seems to be disappointment in the majority of the comments on mystarbucksidea.com regarding the quality and service level as the customers’ expectation to Starbucks still remains the same despite the development of Starbucks. introducing automated coffee machines also witness about the stores being busier. Expansion is still a pivotal point for Starbucks and the company has turned its focus to expansion in foreign markets instead of expanding in the US (Nocera. and the strategy of Starbucks has not permitted Starbucks to be true to the initial narrative of quality. 1997:245). The customers still expect to get the same good service and quality.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 68 However. Does the Quality and Service Narrative Hold? Starbucks keeps telling the narrative of them being a service minded quality brand.
I don’t like these ridiculous names of coffees. our stores offer a quiet moment to gather your thoughts and centre yourself. The Third Place The profiling of Starbucks as a Third Place is estimated to be one reason for Starbucks’ success and a concept which Starbucks has adopted (Luttinger & Dicum. and they can be really long. I just need some caffeine. Koehn. the fact that Starbucks still holds on to the story of the Italian traditions by for instance calling their beverages Italian names questions the brand’s credibility and the Italian elements left today in the Starbucks brand appear comic and misplaced. He has focused on everything surrounding the coffee. and the French and Viennese cafés – all with the common denominator of providing the neighbourhood citizens an informal public place to gather and converse (Oldenburg.. Starbucks people smile at you..3).7. This idea of a Third Place is widely recognised for instance as the German beer gardens.Is it truly a name or just something that the branding guru made up because it sounds cool and Italian?” (Laura in Thompson & Arsel. And I think that’s why I feel so upset because it’s just like my necessities are so basic. the identity constructing meanings of the brand have disappeared.] I just need this. don’t harass you. 2001). Post-Modern Consumer Theory.1. When reading comments from Howard Schultz. “In an increasingly fractured society. individual and focused on connoisseurship also characterising the post-modern consumer with a high level of cultural capital (cf. I just need a place to rest and drink my coffee.. 2001).Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 69 intellectual. serve you quickly. Howard Schultz’s vision has been to enhance the purchase of coffee to be more than just a cup of Joe. What he discovered on his trip to Italy was how coffee was a social rallying point to people and how cafés provided citizens a place to meet and hang out – a place between home and work. the elements creating the coffee experience. Section 5. Toning down the Italian elements of the coffee experience by for instance putting less emphasis on the role of the barista both in the coffee making and the connection with customers makes Starbucks seem less authentic Italian. Therefore. the English pubs. 2006.. A visit . They’re just like these crazy made-up names. I just need a coffee. 2004:637) This interviewee is one example of customers perceiving Starbucks as commoditised and hence a coffee shop which fulfils a basic need for caffeine and a not place to carry out identity projects. As Starbucks has standardised the quality and service in all the coffee shops making procedures for how to address the customers. 13. Instead the brand has been commoditised and has become just a common coffee shop. which can be argued to repel the customers who bought into the Italian coffee culture and the identity creating meanings: “I feel like [. there is no doubt that he consciously tries to create an image of Starbucks as a Third Place and that he plays on the emotional benefits customers gain from buying coffee in a Starbucks coffee shop.
It is a place where people feel that they belong – an extension of the front porch – and they have a personal connection to the place. 1997). there seems to be consensus about the fact that Starbucks can be associated with a Third Place (Pendergrast. The idea of the Third Place has been mainstay in the appearance of Starbucks’ coffeehouses and it has provided the breeding ground for the narrative of Starbucks as a Third Place.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 70 to Starbucks can be a small escape during a day when so many other things are beating you down. This means that the company has been very aware of creating the right atmosphere in the coffeehouse to make people linger and hang out.. Starbucks could be a great experience. Bundgaard. comfortable. In his book about Third Places. and especially for them to perceive their local Starbucks coffeehouse as a place they wish to spend time in and return to. The coffee menu is also seen as a means to create a sense of belonging. neighborhood gathering place. Recreating this feeling of a social stamping ground has become the pivotal point in the creation and branding of Starbucks. Locascio. 1997:52). When you know how to order your personalised specialty coffee and the order is easily understood by the barista. If we could re-create in America the authentic Italian coffee bar culture. We’ve become a breath of fresh air. 2004. Being a rallying point to people is attached with meanings. Howard Schultz is not alone in his postulation of Starbucks as a Third Place. Howard Schultz realised that the American citizens were without these kinds of gathering places in the early 1980s and that there therefore was a social need for them. 2001. 2001. And he continued: ”People didn’t know they needed a café. He felt that customers were searching for romance and community.” (Schultz & Yang. It gives the customers a feeling of community and intimacy which they are not able to find in a fast food restaurant where the purpose partly is to receive your commodity and to fulfil needs for eating.” (Schultz & Yang. But when we gave it to them. 2006. It is carefully calibrated in a way that only the people being a part of the Starbucks community know how to order the specialty coffee. the fervor of their response overwhelmed us. Thompson et al. In general. Koehn. the narrative of the Third Place is one of the strongest and most repeated narratives in the public profiling of the company. you belong to the Starbucks community (Appendix 2). 2006). Oldenburg (2001) . 1997:122). and not just a great retail store. They didn’t know they would like Italian espresso drinks.” (Schultz & Yang. 2004. fuelling the need for a Third Place in the US (Schultz & Yang. it might resonate with other Americans the way it did with me. He expressed it like this: “Serving espresso drinks the Italian way could be the differentiating factor for Starbucks. Luttinger & Dicum. When searching for information about Starbucks in literature and the media. 1997:119) However.
Therefore. large armchairs and soft sofas.1 Is Starbucks Still a Third Place? During the years. the baristas were friendly. the employees are trained in and encouraged to be obliging. 1997. It makes me sad.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 71 emphasises that what. 2006). and that Starbucks has lost their identity of a Third Place: “I remember going into Starbucks when I was younger. Section 12). knowledgeable and always seemed to have a good time. smiling. an atmosphere of homely comfort and a feeling of belonging are created. Therefore. Hence. (2006) point to the fact that the decor of Starbucks expressed creativity. Quality Coffee and Service.. The stores are furnished with comfortable seating places. Due to the regulars’ acquaintance with other regulars and the employees. Furthermore. Howard Schultz has felt that the employees’ involvement in the customers plays a decisive role for the atmosphere of the coffee shop and for the customer to feel comfortable (cf. Thompson et al. which makes the customers want to linger (Schultz & Yang. the interior and atmosphere in the design of the stores can be argued to be artefacts which have the purpose of supporting the narrative of the Third Place.. 13. even at my own store. 1997). it gave Starbucks a personality which appealed to a more creative audience which also appreciated the intellectual meanings of a place for substantial conversations.] and the interaction between barista and customer isn’t personal or casual anymore. The great majority feel that the atmosphere is no longer the same. and the entire store smelled of coffee. Starbucks has deliberately created the physical setting with the intention of recalling the right atmosphere and thus invite customers to return. and the baristas (not all. Thus. Now. It all comes down to the emotional connection created between the barista and the customer (Schultz & Yang. makes a Third Place is the fact that the customers to some extent are regulars. Appendix 2) – at least this is how the shops appeared originally. there were lots of couches and comfortable chairs for people to gather on. we have tiny tables and hard chairs. lighting and background music are used to create the right atmosphere. Starbucks has been very conscious about the employees’ significance for the customer experience and feeling of belonging. but most) have horrible attitudes [. the coffee menu and aroma are no longer existing..its mechanical and robotic.. Starbucks seems to be very aware of creating connections to the customers and that loyalty is a key to create and legitimise the myth of Starbucks as a Third Place. conversation and a source of creativity for the consumers to find inspiration. amongst others. From this it can be argued that Starbucks set the scene for absorption. and small-talking with the customers for them to feel at home (Michelli. these consumers bought into the meanings of a creative and intellectual community which gave them a sense of status and value to belong to. Thereby. Therefore. 2008) . the idea of Starbucks as a Third Place has been impaired which in the following will be argued to be due to the development of the company. I walk in and I smell a mix of breakfast sandwiches and chemicals.” (Mom_of_3.. Besides.
2008).. Sbx_eluk. a place the customer feels that he belongs to. noise. it may be easier to keep the neighbourhood citizens. OldDays.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 72 “Does anyone have the long memories of what it once was? You could leisurely chat with a barista about coffee. which can be argued to be more equal to the characteristics of the fast food segment.” (Melody. Do customers seek elsewhere to hang out and meet friends? Nevertheless. 2008b) Increasing customer traffic.com it is obvious that a large number of customers feel repelled by the development of Starbucks and that they still wish for Starbucks to be their Third Place (Deanphil. Give your employees the labour needed to learn about coffee. the lack of obliging baristas. You’ve GOT to pull through this. In the residential areas. However. What cannot be ignored in the questioning of the Third Place narrative is furthermore the fact that more and more customers take their coffee to go. it can be argued that the stores lose the feeling of neighbourhood. Hence. it can be argued that the strategy of Starbucks. The idea of a Third Place is to be an extension of the front porch. Remember when there used to be a beautiful whole bean coffee menu? That’s when things really deteriorated when that menu came down and a big picture of a breakfast sandwich went in its place. Return to all things coffee. This could indicate that customers who buy Starbucks’ products today have other demands of the coffee shops. However. The store smelled of coffee. 1997). In fact. on mystarbucksidea. Please don’t make me cry. but seeing that most Starbucks stores are located in areas where a high number of different customers are passing through. and where the employees know the names of the regulars (Oldenburg. and the fact that Starbucks has added food items to the menu are some of the common issues customers have against Starbucks and in general what they feel diminishes the feeling of belonging and relaxation. This tendency of customers having their coffee to go is also manifested in the fact that as well Starbucks as the entire industry are experiencing growing sales in their drive-through services and that more coffee kiosks not providing seating are opened. 2001). This raises the question whether the customers no longer perceive Starbucks as a Third Place or if the need for a Third Place has diminished. goes against the idea of the Third Place as it may be difficult to maintain the local spirit and atmosphere of neighbourhood in these areas. 2006). 2008. Thus. the lack of comfortable seating. the large number of customers rushing in and out the stores grabbing their coffee to go diminishes the atmosphere of relaxation for those customers hanging out in the coffee shop. “coffee to go”-customers account for approximately 70% of the total number of customers (Thompson et al. Hire baristas who actually drink coffee and want to engage in coffee tastings. . it seems that the customers come for the coffee but that the majority does not use Starbucks’ coffee shops to hang out in. it indicates that efficiency and speed of the service have taken over the agenda in Starbucks and that the social element of the coffee shop as a stamping ground has receded into the background. 2008. which has been to locate most Starbucks stores in busy areas such as close to shopping facilities and workplaces (Schultz & Yang.
(2006) analysis express that they dissociate themselves from Starbucks due to the impersonal feeling which Starbucks has come to represent. The staff seems unmotivated. many customers feel that the comfortable seating has been replaced with hard wooden chairs similar to interior of the fast food chains..I have witnessed a drastic decline in the atmosphere at Starbucks. “. 2008) Furthermore. I believe Starbucks has lost its way... 2006). . This implies that the interviewees feel that the personal connection diminishes in line with the growth of the coffee shop and that the informal feeling of belonging is more difficult to maintain in a busy coffee shop environment (Thompson et al. and delivers an experience too close to that of fast food. Furthermore. Some customers feel that Starbucks is no longer a place to linger and relax because they feel treated like line items as if Starbucks was a fast food store. the interviewees state that they find it difficult to associate a national chain with personality and intimacy as a standardised servicescape does not invite for personal interaction.. If Starbucks is trying to deliver a fast food experience. These meanings. which does not provide comfortable seating to sit for longer periods (Joejunki. 2008). coffee house style and relaxing place to hang – it has become loud [. 2008. Many customers also complain about a too high noise level in the stores due to too loud music and the increased customer traffic (Lindo. 2008.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 73 “Sadly. can be argued to have disappeared and the question regarding the customers no longer wanting to be associated with the meanings of the brand – these being the standardised corporate concept – can be posed.] cold and not conducive to hanging out for long periods of time. it can be argued that the strategic choices of Starbucks to focus more on speed than efficiency is undermining the narrative of Starbucks as a Third Place. Once a warm. Please go back to fireplaces and that warm inviting place to take a break or catch up with friends. They prefer the local coffee shops indicating that these fulfil the role of a Third Place providing the intimate atmosphere and personal connection between employees and customers. Jimbogpa.. Besides. Moreover.” (Otcem. and interesting experience. Several interviewees in Thompson’s et al. No longer is it a cool. 2008). engaging. The criticism of Starbucks’ development all point to the fact that Starbucks no longer fulfil the same need of a Third Place. disinterested. I have taken to drinking my coffee in the car – not what I am paying a premium for!” (Pinkie. it seems that customers choose not to use Starbucks as a Third Place exactly because Starbucks has moved towards a fast food chain and thus that the atmosphere does not invite for a Third Place. then they have exceeded. the quotes above may illustrate the views from disappointed customers who appreciated the meanings of community and belonging. however. 2008) Thus. Mom_of_3.
Thus. Kowalski. Appendix 1. 14. not only for the company but also for society in general. everything points to the fact that Starbucks is no longer a Third Place. 2008c). they are argued to conflict. Kowalski. This points to the fact that Starbucks due to their development and size has moved away from the characteristics of a Third Place. Seeing that these two missions require two different approaches to the serving of coffee and the design of the coffeehouse. Furthermore. The Narrative of Corporate Social Responsibility Corporate Social Responsibility is a central theme in Starbucks’ business model and identity. he describes the best Third Places as smaller. He argues that popular chains often claim to be Third Places when they. it can be argued that Starbucks led by Howard Schultz still brands and communicates Starbucks as a Third Place and holds on to this narrative (Appendix 1. Oldenburg (2001) thinks that large chains’ overshadowing focus on profit and their impersonal atmosphere and fast pace destroy the essence of the Third Place. This is furthermore the same experience. Thus. it can be argued that is has been too difficult for Starbucks to embrace the narrative of the Third Place at the same time as they wish to cater to the customer segment which requires efficiency and speed of services. (2006) have of a Third Place – that this is apparent in the small local coffee shops where there is room for personal interaction with the employees. Therefore. it seems obvious to include the originator of the term “Third Place”. according to him. Mom_of_3.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 74 In line with the questioning of Starbucks as a Third Place. Thereby. 2006). 2008). he implies that large chains have wrecked havoc upon the term and the real Third Places. are not. Furthermore. Ray Oldenburg (2001). 2006. This responsibility manifests itself in a commitment to the environments and communities in which . However. Hence. also indicating that Starbucks tries to characterise themselves as something they are not able to fulfil. Luttinger and Dicum (2006) also imply that the narrative of Starbucks as a Third Place does not hold good anymore and they call Starbucks a “Plastic Place” in stead. 2008. The way they have chosen to conduct their business reflects that being a responsible company takes up a greater part of the agenda. the idea of the Third Place is strongly connected to the brand as Starbucks in literature and articles is almost always referred to as a Third Place. However. Instead. and where the barista cared about the coffee making and hence did not treat orders like line items (Hopetobegreat. which the interviewees of Thompson et al. it can be argued that Starbucks has exhausted the meanings as a Third Place in order to comply with the grab to go segment (Appendix 1. the feeling of belonging to a local Third Place has disappeared to some extent. Therefore. Starbucks. customers talk about Starbucks which used to have the status of a Third Place and they wish for them to go back to being a Third Place where baristas spend time having a personal conversations across the counter. locally-owned and independent places which can be characterised as “neighbourhood” restaurants. 2006). Starbucks cannot live up to being a Third Place leaving the narrative of being a Third Place less trustworthy today (Luttinger & Dicum. Starbucks tries to maintain that they are. even today.
] If people relate to the company they work for. economic and environmental manners. In general. the story told about the socially responsible company also contributes to creating a beneficial image of Starbucks as a caring and responsible company. Thus.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 75 Starbucks operates. 14. environmental and economic development. Therefore. 1997). 2001). 2001). 2008e). and to minimise the company’s environmental impact (Starbucks. if they form an emotional tie to it and buy into its dreams. but as a powerful energizer that can grow the enterprise into something far greater than one leader could envision [. Starbucks is conscious about establishing sustainable and economically secure working conditions for the farmers.1 The Good Place to Work When reading about Starbucks and their concept one cannot ignore the constant story told about how good a place Starbucks is to work at. Starbucks’ social responsibility towards the partners is closely related to Howard Schultz’s caring character and is one of the predominant reasons for Starbucks being The Good Place to Work.. Schultz & Yang. Howard Schultz is very conscious about the conditions of the employees as he is aware of the fact that ensuring the well being of the employees and to make employees feel a sense of identity with Starbucks will be in the advantageous for the company: “Treating employees benevolently shouldn’t be viewed as an added cost that cut into profits.. They want companies to care about the environment and to take action in matters they can improve (Starbucks.” (Schultz & Yang. which is constantly emphasised and Starbucks is open to making new and environmentally friendly initiatives in their product development (Michelli. Thus. and Eartwatch (Starbucks. . 1997:6) Therefore. 2006. Starbucks sees their socially responsible actions as investments (Starbucks. Contributing to better conditions whether this being employee working conditions or environmental sustainability. Not only does it provide more engaged and motivated employees and more sustainable and secure supply conditions. It is a narrative. 2008e). Furthermore. meaning that Starbucks through the way they conduct their business wants to contribute to a positive social. providing employees a great working place. Starbucks is engaged in several organisations such as Saving the Children. CARE. Starbucks acknowledges the benefits of being a socially responsible company as it can be worth it to care about social. Starbucks states that consumers demand more from a producer today than just to provide products. they will pour their heart into making it better. it can be argued to be a threshold of today to be socially responsible. it gives the company something valuable in return.
2001) and that the health plan makes a huge difference in attitude of the partners – as Schultz argues. and with no medical insurance his family was in deep financial trouble (cf. Being medically insured is not the norm in contemporary American corporate culture. 2008g. Section 11): “I will never forget that episode”. especially after his father broke his ankle disabling him from working. treating the partners with medical insurance make more dedicated employees who make better coffee resulting in happier customers as well as Starbucks benefit from more loyal customers and lower employee turnover. 2004.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 76 In Starbucks the employees are referred to as partners. Their hard work would have a direct influence on the stock value and hence link shareholder value with long-term rewards for the employees encouraging them to devote themselves to Starbucks (Schultz & Yang. 2003. 1997:173). which provides opportunity to advance. changing their title from employee to partner. but to engage in their role. Also the extensive training programme. where all partners must undergo a 28-hour course in coffee history. All the benefit initiatives seem to have a positive spill over effect on employee turnover. making the employees feel as an important part of the company and the experience delivered to the customers (Schultz & Yang. Locascio. books. 1997). Howard Schultz. and Starbucks’ own homepage (Starbucks.” (Schultz & Yang. firm philosophy and coffee making. Social security is provided when working more than 20 hours a week also for the cohabitating partner no matter sex. it encourages the employees to not just perceive their job at Starbucks as just another job. Schultz wanted the employees to feel the success of the corporation too and the Bean Stock enabled the employees to set the value of the company themselves. Marques (2008) refers to Starbucks as a company which demonstrates spiritual behaviour. Starbucks is certified as age friendly signifying that partners above the age of 50 can have special retirement positions where their age is taken into account. and the opportunity to have a saying in decision making seems to be a recurring motif in articles. The narrative about how Starbucks cares for the employees is intimately connected with the narrative regarding Howard Schultz and that the partners have benefited from Schultz’s difficult circumstances when he grew up. Also the minimum wage is higher than the industry average (Schultz & Yang. 1997). 2008). 2004). Bundgaard. Additionally. employees show a more positive outlook in everything they do. 2006. Furthermore. Lindstrøm. Howard Schultz did not want the partners and their families to suffer like he did when he was young. “When a company shows generosity toward them [the partners]. which is far lower than the fast food industry in general (Pendergrast. Michelli. 2004) – meaning that they create win-win situations for both suppliers. says . 1997). which is broadly defined as a company which mixes capitalism with social responsibility (Serwer & Bonamici. where usually only the full-time workers are eligible for this type of incentive (Marques. For instance. This is also why Schultz in October 1990 introduced the Bean Stock to all employees. Starbucks offers the partners a career. Daehne 1994. partners and customers.
] But I know. The way Howard Schultz perceives and treats his employees depicts him as a helper15 wanting to give them better conditions than what was the threshold of the American labour market in the early 1990s and furthermore that the partners should not be exposed to the same difficulties in life as his family experienced. Section 14. and we’ve lost the game. 2004:4).. but that they are willing to spend a little extra to secure a good working environment – this attaches meanings to the brand. “I never want that to happen to our employees. 2008) can be argued to be very unusual for the industry as Starbucks is the only one within the industry to be ranked..2 Starbucks Still Strives to be the Good Place to Work Starbucks tries to maintain the narrative of being the Good Place to Work by keeping focus on the conditions of the employees and thus distancing themselves from similar workplaces by introducing initiatives as mentioned above (cf. hence branding the company to attract new partners. This shows that employee commitment and care is still high on the agenda. it strongly supports and strengthens the narrative about being The Good Place to Work. 2004 . if we treat people as a line item under expenses. However. we’re not living up to our goals and our values. The fact that Starbucks’ caring approach to the employees has resulted in the company achieving a rank as the seventh best place to work by Fortune in 2008 (Fortune.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 77 Schultz.1). Howard Schultz acknowledges that it has not always been easy to comply with the intention of treating employees with dignity and as individuals. 1997:138) 15 Fog et al. This caring approach to the employees depicts Starbucks as a company which does not care about profit at all costs. Howard Schultz is not blind to the vulnerability of this narrative and how challenging it is to make all employees feel respected and appreciated. Lose it. He is furthermore aware of how damaging it can be to lose the dedication of the employees: “Sometimes we lose sight of that [the passionate devotion of our employees] at Starbucks [. 14. in my heart. The narrative of The Good Place to Work also has the purpose of increasing commitment internally in the organisation..” (Schultz & Yang. The Good Place to Work. Especially the expansion of the company is posing a challenge as the increased size of the company creates a distance between the management and the employees. It may be difficult to deduce exactly how people apply the meanings of Starbucks genuinely caring about their employees but it can be assumed that the meanings contribute to create an overall positive image of Starbucks which consumers want to buy into and support. Furthermore.” That’s why thousands of part-time workers have full medical benefits” (Serwer & Bonamici. Their [the employees’] passion and devotion is our number-one competitive advantage.
Thus. it seems that Starbucks’ intention of attracting employees who are devoted to coffee and Starbucks has been more difficult to fulfil during the years seeing that the wage attracts less qualified and less devoted employees. 2008). Starbucks was sentenced to pay back their partners who were entitled to $18 million for overtime work (Ringkøbing. Sherri Miller and Kevin Knox. They feel deceived. 2001). One story which has earned a lot of press coverage in 2008 weakening the narrative of being a Good Place to Work has been the trial regarding Starbucks paying the supervisors with tips earned by the baristas. Other criticism evolves in particular around Starbucks’ underpayment of the employees. 2002). As many customers imply . However.” (Pendergrast. The wage may be above the quick service industry standards but it is still categorised as low and many employees state that it is hard to make a living on this wage (Milan. which can be argued to be due to a high level of satisfaction among the employees. Despite the many benefits Starbucks ensure their employees. Fidm22. 2008. to the former employees.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 78 However. Sherri Miller puts it like this: “There’s a lot of talk about treating employees with ‘dignity’ at Starbucks. the fact that the employees do not feel that they are paid what their job is worth may result in an increasing employee turnover which may be harmful for the overall Starbucks Experience. Thus. These stories and a consensus about the partners being paid too low wages weaken the narrative of Starbucks being the Good Place to Work. This further fuels the narrative of Starbucks as a corporate giant using predatory business practises striving for profit. which Starbucks intent to and tell in their narrative is not passed unnoticed. One barista sued Starbucks for giving the supervisors the tips which were predestined the baristas. The superior court in San Diego estimated that Starbucks should pay back the baristas $86 million plus interests and thus the court favoured the barista (BBC. Thus. Sherri Miller and Kevin Knox criticise Starbucks for focusing on profit and the bottom line at the expense of the people employed. the employee turnover is likely to increase and hence Starbucks may attract less qualified candidates. as Starbucks are not able to satisfy their employees. 2001:304). Also in a trial in 2002. For instance former employees who used to be devoted to Starbucks and the visions of Howard Schultz indicate that the development has changed Starbucks’ attitudes towards the employees. Starbucks’ commitment to the employees is perceived as a marketing gambit (Pendergrast. UrbanVoy. the fact that employees are not always treated with the respect and dignity. The less qualified employees furthermore distance Starbucks from the meanings of quality of the service. Starbucks has not been able to avoid negative publicity in the media and criticism from their own employees – telling a different story of being a Starbucks employee and staining the initial narratives developed by Starbucks. 2008). Starbucks has previously had a very low employee turnover compared to the industry. Howard Schultz has stated that Starbucks’ low employee turnover ensured the high quality and the Third Place – as regulars are more likely to appreciate the ambience if the employees are not constantly replaced (Schultz & Yang. Weca. but the reality often isn’t there. 2008. 2008. which in the end affects the Starbucks Experience. They point out that there is no soul in Starbucks’ narrative about people being the most important in the company (Pendergrast. 1997). 2001).
Furthermore. while he was sick. Not only did they treat him with respect and as a valued employee even though he could not work. I am proud indeed that as a company we made at least one aspect of that tragedy a little bit easier. Thereby.com a mom of a former barista expresses how grateful she is for all what Starbucks did to her son. As a father of two myself. 2008) Thus. Starbucks takes the time to reply to the mom’s message: “Like the others on this post I am sorry to hear of your loss. 2008). Though no organization is perfect. com which underlines the fact that many employees like to work at Starbucks (Miss_Paris.com it is possible to argue that many employees feel that Starbucks is a good place to work despite narratives telling another story as well. 2008). Runfar1. the fact that Starbucks has been ranked on the top ten best places to work by Fortune in 2008 does in particular fuel the narrative of Starbucks as a good place to work (Fortune. the breeding ground for the narrative to be trustworthy is still intact. due to this statement and a lot of others on mystarbucksidea. .” (Mariel. Despite the criticism it is possible to find examples of satisfied employees on mystarbucksidea. I can only begin to imagine what that might have been like. We do it because we love it. 2008) The personal reply from the head office and that Starbucks in general replies comments posted on mystarbucksidea. Starbucks also kept paying him while he was hospitalised and took care of all medical costs.. We really don’t make that much [.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 79 that the employees seem unknowledgeable. Furthermore. Starbucks only replies to comments when they feel it is necessary to meet critique and establish what they stand for. This attitude towards the employees emphasises Starbucks’ caring approach and hence illustrates that it can be worth it for Starbucks to do something extra for the employees.. Examples of Starbucks doing something extra for the employees are also given. I do not see that philosophy changing. However. young and not committed. 2008. meanings associated with a lower service level are created – lower quality and lesser emphasis on the experience surrounding the purchase.] I work at Starbucks because I love what I do. It’s actually pretty simple.” (Sbx_MATT. Even though the narrative about being the Good Place to Work can be argued to have suffered from the recent trial and the criticism of the low wage.com send a signal of an attending and caring company. some stories told on mystarbucksidea still emphasise that Starbucks is a good place to work: “There is a whole side to this company customers don’t see. I can tell you that genuine concern for our partners is emphasized in a more real and tangible way than at any other company I’ve ever worked at. For instance on mystarbucksidea.
Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS
Publicly, Starbucks has created the image that they are a company for which the conditions of the employees are very important. Furthermore, Howard Schultz gives the impression that employees are listened to and involved in the actions of the company (Schultz & Yang, 1997). This all portray Starbucks as a good place to work, but the reality of discontent employees and the media’s increasing attention towards issues where Starbucks does not live up to the image, prick a hole in the narrative. However, it can be argued that the narrative still circulates but that bad publicity and unsatisfied employees create contra-narratives as well.
14.3 Fair Trade
Another narrative which seems to be emphasised when reading about Starbucks’ social responsibility, is the story of Fair Trade and how Starbucks set the industry standards in that area of business conduction. Starbucks began purchasing Fair Trade certified coffee in 2000. This certificate secures that farmers receive a guaranteed minimum price for their coffee, a price that is higher than in the conventional coffee market (Allison, 2006). It has even been stated that Starbucks pays even higher prices to the farmers than the Fair Trade certificate requires (Hansen, 2001). It is recognised that the majority of the farmers who produce coffee in the Third World countries live in poverty and that their living standards are low. As a company like Starbucks decides to buy Fair Trade certificated coffee, they signal that they try to fight this poverty. Furthermore, Starbucks portrays themselves as a company, which does not pursue low coffee prices at the expense of the farmers’ living standards. Thus, they care about the social and economic consequences of buying coffee in these communities. The fact that Starbucks shows this responsibility towards the farmers and communities can be argued to distance them from the mainstream and the image of Starbucks as a corporate titan. It brands Starbucks as a company, which will not let the farmers live in poverty while they benefit from it. It can be argued that the fact that Starbucks is a socially responsible company is not only about caring for the conditions for the farmers. It is just as much about the fact that it sells products to show this social responsibility towards the communities. Today, there is a tendency towards many customers valuing the fact that they consume products which have been produced and traded under orderly conditions and that companies show a business model which is not only about making profit (Benjc32, 2008; Twen_01, 2008). Thereby, as Starbucks engage in securing the farmers a good and secure working environment, meanings of social responsibility are created. Thus, they create meanings of not wanting to conduct business at the expense of the farmers in order to gain the highest possible profit. The fact that Starbucks carefully selects the farmers and the beans they use in their coffee furthermore distances them from an image of being a mainstream concept of mass produced coffee. This supports the meanings of the small feeling of the brand and may apply a luxury feeling as well.
Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS
Simon (Appendix 2) states that after 9/11, it was obvious that some people did not like the Americans that much – a fact that the Americans did not like – and some of the wanting to disassociate from the American culture was related to the issue of globalisation. So by buying fairly traded products, the American consumer could signal that he or she was a person who cared about what was going on, and that he or she was involved in global issues. By putting the Fair Trade coffee right at the entrance, Starbucks is sending a message about global involvement, which the consumers can apply in their projects of acting politically correct (Appendix 2). Additionally, acting politically correctly by consuming Starbucks can also be done on a micro level. Starbucks seems to have understood that the Americans feel bad about their racists past and had for instance formed a joint venture with former Los Angeles Lakers star Magic Johnson to open stores in lower-income, more diverse communities around the US (The Wall Street Journal, 2007). Moreover, Starbucks have opened up shops in largely African American and Latino neighbourhoods such as Harlem. Simon (Appendix 2) argues that these initiatives are done to allow whites to dissociate from racism: “If you buy a product from a company that pursuit diversity […] you are washed from the sins of racism, you’re innocent by association.” (Appendix 2:3). This also signals that Starbucks is open to diversity within social class and race. In the early days of Starbucks being a socially responsible company differentiated them from the coffee industry. Therefore, at that time when buying Starbucks’ coffee, the customers transferred the meanings of being engaged in others than themselves and furthermore that they were broader minded and enlightened about what was going on in the world – thereby indicating that the consumers applying the Fair Trade meanings in their identity projects brand may have belonged to a higher level of society. This was especially apparent in the early days of Starbucks where Fair Trade was a new concept and Starbucks was pioneering in this area. Moreover, being Fair Trade expressed that the consumers had taken a stand on how Starbucks conducted business which contrasted the mass produced products where the underlying business procedures were not a part of the selling proposition and hence not based on individual stands. In comparison Starbucks came to appear as a differentiated concept not only focused on the product but also the supply chain. Therefore, buying Starbucks represented consumers making an individual choice breaking with the conventional norms of conducting business and drinking coffee. It can be argued that these meanings of individuality and taking a stand have appealed to a higher educated consumer equalling the post-modern consumer.
14.4 Development of the Fair Trade Narrative
The Fair Trade narrative has fallen victim to substantial critique. It is debatable whether the critique has been righteous or not. Nevertheless, especially co-branding from the media has harmed the trustworthiness of Starbucks’ “Social Responsible” narrative.
Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS
In 2001 the prices of raw coffee declined drastically threatening the livelihood of the farmers in the Third World countries. During three years the price of raw coffee beans declined from DKK8 to 3,50 a pound and the farmers were producing with deficit. Concurrently, the consumers expected lower coffee prices in the supermarkets and the coffee shops, but this did not happen. Instead Starbucks, and other coffee shops, prospered from the low raw products and in 2001 Starbucks’ profits increased with 41% due to the low coffee bean prices (Hougaard, 2001; Hansen, 2001). Being a big company and at the same time expanding rapidly as well – a growth facilitated among others by the low coffee prices – resulted in strong reactions from NGOs who condemned Starbucks for making profits at the expense of the poor farmers in the Third World. The critique of Starbucks harmed the narrative of being a Fair Trade company. Even though Starbucks in fact paid their suppliers more than the average and the fact that they did not have a chance to control the coffee prices, Starbucks got exposed as being the big greedy corporation who gained success at the expense of the impoverished (Schultz & Yang, 1997; Hansen, 2001, Ringkøbing, 2002). Another narrative harming the Fair Trade image tells how Starbucks tried to block the Ethiopian coffee producers to trademark three types of coffee, resulting in lower prices and exclusive trading with Starbucks – this is at least what Oxfam claims. NCA [National Coffee Assosciation] has rejected the claim. However, the consumer has been left in doubt about Starbucks’ good intentions (BBC, 2006). What is furthermore contradicting with the narrative of Social Responsibility is that the coffee chain has been criticised for not buying enough Fair Trade Coffee. Only 6% of Starbucks’ total coffee purchase is based on Fair Trade coffee (Ringkøbing, 2001; Appendix 2). Hence, complaints about Starbucks not buying enough Fair Trade coffee circulate and are expressed several times on the mystarbucksidea.com where customers ask of Starbucks to be more socially responsible within this area: “I was shocked to find out that only about 6% of your coffee is actually fair trade. You have made an entire corporate image around what a “good guy” you are in the world. It’s time you walked the talk and improved that percentage. Otherwise, you’re starting to smell a lot less like fresh brewed and more like the stagnated burnt corporate coffee guys.” (Dulanie, 2008) In general, customers do not like Starbucks oppressing the farmers and they expect of a big company as Starbucks to act socially responsibly and thus provide the farmers orderly conditions (Cmrced, 2008; Benjc32, 2008; Twen_01, 2008). The danger which Starbucks is facing is to be perceived as corporate titan who exaggerates the image of them trading fairly. Thus, many customers feel deceived and that Starbucks uses their low percentage of Fair Traded coffee as a marketing gambit to make customers perceive them as socially responsible. This makes Starbucks’ narrative of being conscious about the farmers’ conditions less trustworthy.
Thereby. thus that most coffee shops trade fairly traded coffee. is that these narratives still seem to be told by Starbucks. Therefore the meanings attached to the brand may not be the same anymore. it seems as though Starbucks more or less has stood by their original narratives. Choosing Starbucks is not based on an individual choice as the meanings of being Fair Trade are embedded in the competing concepts as well. This intention has not changed through the years and the Starbucks Experience still appears to be the central theme in Starbucks narratives. 2006. Quality. From the beginning it seems like Starbucks’ storytelling is formed around the Starbucks Experience. 2006). the reality is that Starbucks is one of the largest buyers of Fair Trade coffee in the US (Michelli. when this was strongly attached to Starbucks alone. The Fair Trade narrative can therefore be argued to move towards rigidity. To keep the Starbucks Experience intact. though it may be the case that social responsibility is highly placed on Starbucks agenda. it can be argued that everything Starbucks does is intended to ensure the customer having a nice and comfortable experience while buying a high quality coffee beverage. before when the Fair Trade concept was not that widespread it can be argued that it expressed that the consumer took an individual stand when consuming it. identified with it. the many comments from customers. 15. In line with this it is assumable that the people originally buying into the Fair Trade narrative. However. Additionally. and the customers who bought into the values of the Social Responsible firm. and the media give the feeling that the Starbucks Experience is not that intact after all – a feeling which Starbucks is not shy to admit themselves. Howard Schultz expresses it like this: . the attacks on the Fair Trade narrative have damaged the initial narrative of Starbucks being a socially responsible company. the narratives of the American Dream. Thus. and applied it in their identity project. the Socially Responsible Company and the Third Place all together have been told to strengthen the Starbucks Experience. This is further strengthened by the increasing untrustworthiness of the narrative due to the contra-narratives pointing to the Fair Trade narrative being blown up to something it can not fulfil. employees. the perception amongst customers of Starbucks not doing enough to deserve the “socially responsible”-label may overshadow the reality and make the narrative be less glamorous. Thus. may not find it as useful and trustworthy as before. However. What has Become of the Starbuck Experience? What has become conspicuous to us through the investigation of the narratives. Seeing that being socially responsible during the years has become industry standards. to a lesser degree find the meanings of Fair Trade applicable to their identity projects seeing that the concept has become a standard and hence mainstream. Thus. which Starbucks has intentionally tried to communicate during their 20 years in business. the meanings of Fair Trade are not reserved for Starbucks making them distinct and more responsible than the competitors.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 83 Despite the criticism. the enlightened class does not want to put op with something it perceives as fake. Watson.
Due to high revenues and the Americans’ enormous interest in specialty coffee.000). Whereas competitors like Peet’s in the late 1980s and early 1990s seemed content to be a regional brand. Nocera. This aggressive expansion has changed the character of Starbucks during the years because running a business of less than 100 shops. Starbucks’ intention has been to become a national brand and to make specialty coffee accessible to all American customers (Luttinger & Dicum. Howard Schultz opens up to what may be the root cause for the brand’s problems.000 stores and beyond. and scale necessary to go from less than 1. However. Furthermore. it can be argued that the Starbucks Experience has suffered from the aggressive expansion and the standardisation across the shops . the perception of the brand. we have had to make a series of decisions that. 2008).000 which they do today. in retrospect. And the Starbucks concept has been standardised to ensure customers always to have the same experience in every Starbucks coffee shop. in order to achieve the growth.000 stores to 13. and. 1997:204). Thereby. the narratives tell a story of Starbucks which the brand no longer delivers and hence a gap between the narratives and what is delivered has emerged. which they did in the late 1980s. With the high number of shops and a much higher number of employees (170. increasing the number of coffee shops rapidly across the US. it can be argued that Starbucks has not developed the narratives in line with the development of the company.1 Standardisation and Expansion Strategy Starbucks’ strategy has been to grow rapidly in order to capture the market (Schultz & Yang. Starbucks has made some strategic decisions during the years which may have seemed right at the time they were made but which in the long run have been harmful to the value of the brand and thereby the Starbucks Experience – at least when arguing that these decisions have been made at the expense of the brand’s value and thereby without regards for the meanings of the narratives. Starbucks has been able to achieve this goal. is rather different to running more than 11. development. it has been necessary to introduce systems and processes to secure that the standards are kept the same in all coffee shops across the country (Appendix 5.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 84 “Over the past ten years. 15. and how they have provided a breeding ground for contra narratives to be created. Schultz & Yang. shop design and service. Thus. 2006). 1997. As we argue that Starbucks’ pursuit of growth and the wish of being the dominating coffee brand within the industry conflicts with the narratives they tell. the following will illustrate how Starbucks’ strategic choices have influenced the narratives. This has resulted in a high level of standardisation regarding uniformity in product range. it can be questioned whether the initial customer of Starbucks is appreciating this uniformity. what some might call the commoditization of our brand. have lead to the watering down of the Starbucks experience.” (Appendix 1) In this statement.
lost vision. Smale. Chadbb26. thus. The fact that Starbucks originally has been able to live up to the small-business atmosphere is not called into question.” (Prosen. Susie C. Potrerohillman. Besides the high level of standardisation. and becoming the most recognised coffee brand has resulted in the surroundings questioning the genuineness of the brand’s narratives. This has created a negative picture of Starbucks and they are criticised for being an ”evil empire”. Schultz indicates that a risk of the decisions they have made during the years is that Starbucks has become mainstream and commoditised in the minds of the customers (Appendix 1). 15. 2008. and became a chain that was not what they used to be. 2008. many have perceived Starbucks’ narratives as a marketing gambit intended to cover up Starbucks real identity as a corporate titan (Thompson et al. Starbucks has focused on making their business and operations effective. 2006. However the fact is that Starbucks has tried to maintain this feeling while focusing on growth. 2008.. Hence. around which they have intended to build their brand and narratives. Ensenadajim. 2008.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 85 due to the fact that the narratives Starbucks tell are created to picture Starbucks as a company built on small-business values which are difficult to comply with considering the size and behaviour of a large company. many feel that the atmosphere in Starbucks’ coffee shops has turned into a fast food atmosphere. less committed employees and an increased focus on efficiency can be argued to be reasons for Starbucks being perceived as a chain store concept. as it seems that Starbucks has . Mathguy. 2008). The aggressive expansion and high level of standardisation can furthermore be argued to have distanced Starbucks from the small-business atmosphere. 2008. Thus. 2008). Furthermore. created different drinks and foods. 2008. which questions the intentions of Starbucks of maintaining the small-feeling atmosphere while growing so aggressively. 2004. Otcem. From the employees. Thompon & Arsel. to the cleanliness and even the quality of the drinks/food. 2008).2 Efficiency Focus As the competition has been intensified by fast food chains introducing specialty coffee. Thus. it can be argued that a contra narrative to Starbucks’ narratives has been created – a narrative. The consequence has been that many customers feel that the level of service has declined. Mathguy. Some customers feel that the streamlining of the concept has taken the soul out the Starbucks brand and many criticise Starbucks for moving towards becoming “just another chain” (Krissibd. He is now aware of how the perception of Starbucks is changing and how customers to a larger extent perceive Starbucks as a chain store concept in line with fast food stores (Appendix 1. 2008). 2008) Now when the situation looks grave Howard Schultz seem to have opened his eyes for what is going on with his business. This is indicated below: “They [Starbucks] expanded rapidly. Starbucks has lost touch with their market and the consumer has paid. that they have lost their way (OldDays. 2006. Nocera.
Customers have always valued the handmade espresso. The purpose of these coffee machines is to make the coffee-making effective. However. 1997:245). Mathguy. 2008. as Starbucks has grown and become widespread. hence. PJDubs. The criticism of Starbucks is focussed on the fact that the emotional connection between customer and barista more or less has disappeared both because the barista no longer has the time to small-talk but also because the barista no longer possesses the engagement and commitment to get involved with the customers. . 2008). Both media and customers have criticised Starbucks for hiring less committed employees as they feel that it has diminished the Starbucks Experience that Starbucks has loosened the control of the training and hiring of employees (Nocera. the fact that the importance of the barista has diminished due to efficiency has damaged Starbucks’ emotional connection with customers. customers become line items and it is not without reason that a narrative of Starbucks as a mainstream fast food chain is created (Otcem. 1997. A consequence of the introduction of the automated coffee machines is furthermore that the role of the barista has decreased – the barista who usually has been a cornerstone in the Starbucks Experience. this can be argued to question the narratives of quality and authenticity as the Starbucks Experience is built on enthusiastic baristas willing to engage in the customers. UKCoffe. which can be argued to be the power of the Starbucks brand (Schultz & Yang. The distance between Starbucks and the fast food restaurants diminishes. Therefore. to have customers move faster through the line. 2008. Thus. Howard Schultz has always emphasised that the people employed in Starbucks was the competitive advantage of the company (Schultz & Yang. To a larger extent. Thus. which Starbucks introduced to the Americans and Starbucks has always made a virtue of making the perfect cup of coffee. Starbucks has focused on hiring the right people who are passionate about coffee. The decision of automating the coffee making has probably been made to meet the competition from the fast food chains but in turn it has been harmful to genuineness of the brand. Thus. However. he has pointed out that good service and obliging employees who can professionally guide the customers in their coffee purchases has been the factor creating the emotional connection with the customers. Appendix 1). 2008).Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 86 shifted focus from the experience of the customer to an enhanced speed of the service. 2008. but at the same time the automation can be argued to puncture the original narrative of quality and the authentic Italian feeling. customers find it difficult to see how this focus on speed harmonises with Starbucks’ narrative of being a Third Place and that the brand is build around quality and customer experience. This takes away the meanings attached to being served by a real barista who would be enthusiastic about coffee and his job. it has been difficult to maintain the same level of control of the employees ensuring that people who are hired are dedicated to providing customers with the Starbucks Experience. Thereby. it can be argued to have confused the perception of Starbucks and what they try to be. which is further strengthened by Starbucks’ introduction of automated coffee machines.
Koehn. Italian traditions. Furthermore. that the specialty coffee concept and Starbucks in particular was regarded a luxury good in the early 1990s – thus. exclusive and revolutionising. meanings of Starbucks being a corporate titan are created as the consumers who valued the original meanings may perceive these as a cover for what Starbucks really is. with their narratives and ”word of mouth” approach to marketing. From their emergence. they have tried to hold on to despite their growth. being something distinct. Starbucks’ narratives and history imply one thing whereas their actions imply another. This feeling. mainstream and mass produced coffee brands and thus to provide customers an alternative approach to coffee (Luttinger & Dicum. It is assumable that initially the narratives included meanings of possessing connoisseurship. This can be argued to have rubbed of on Starbucks’ meanings.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 87 15. it can be argued to be a way of expressing class and cultural insight to drink Starbucks coffee. Starbucks’ intention seems to have been to create an alternative to the large. it has become evident that a lot of customers feel aggravated by an uncertainty of what Starbucks stands for. as Starbucks has tried to appear as a small neighbouring coffee shop while actually acting opposingly. 2001. The meanings of the Starbucks brand have lost their distinct character. When investigating Starbucks one gets the impression that Starbucks used to be a brand which the customers wanted to be associated with due to the meanings embodied in the brand. 1997). having passion for the coffee. However.3 Change in the Meanings Through the analysis of the narratives. Italian atmosphere. as Starbucks hold on to their old narratives. Therefore. Hence. has resulted in the brand losing its credibility and provided a breeding ground for contra-narratives to emerge. It was mentioned earlier. Starbucks entered the American culture as an identity brand which meant that the brand represented more than just being the commodity coffee – they created a new concept and a new way of consuming coffee attaching coffee with meanings. Starbucks has tried to create a feeling of authenticity as a neighbourhood coffee shop through small-business values (Schultz & Yang. It was a distinct product differentiating strongly from the conventional coffee known at that time. In contrast the meanings today can be summarised to include more standardised meanings resulting in a commoditisation of the Starbucks brand. 2006. . Schultz & Yang. For instance the fact that a lot of players have entered the industry and that specialty coffee and specialty coffeehouses are common concepts in the American culture today are arguments for Starbucks losing the distinct meaning of being revolutionising and bringing the Americans something new. the development of the narratives and thereby the meanings point to the fact that the Starbucks brand no longer has the same status in the minds of the consumers. 1997). Hence Starbucks coffee was not solely bought because of the coffee as a mere necessity but as well due to the identity the consumer was transferred in the purchase. It was earlier mentioned that the specialty coffee industry has undergone changes since the concept was first introduced and it has thus become more rigid.
the paradox of Howard Schultz’s wish to make specialty coffee accessible to all Americans. Pour Your Heart Into It. it can be argued that they ask for the Starbucks which was authentic and which was able to deliver what was promised through the narratives. the danger of selling out to become big.4 Can You Grow Big and Stay Small? Considering the strategy which Starbucks conducts.com give an impression of customers wishing for Starbucks to keep to their core competences. However. 1997). which they cannot deliver. 1997:197) This quote indicates the vulnerability of the brand – the complex of staying small together with the wish of increasing profit. the brand loses authenticity. 15. Thus. hence. And another picture has also been drawn of Howard Schultz who is not only driven by emotional care for his company but just as much to gain shareholder value. It seems like Starbucks has not truly recognised the challenge of bringing the narratives into line with the business strategy. Analysing the image of Starbucks today it seems as if Starbucks to a large extent has fallen into the trap of becoming a large company at the expense of the values of the brand even though Howard Schultz was so focused to avoid it.5 Authenticity The great majority of the customers expressing their opinions about Starbucks publicly ask for Starbucks to go back to the original Starbucks. Howard Schultz argues that it is possible to combine the two just that it takes a lot of effort. He further states that Starbucks is up against the perception which most people have of large companies perceiving these as capitalists only focused on profit (Schultz & Yang. This is also the case for Starbucks. They say they are something. . Howard Schultz poses the question himself how to balance the values of the brand with the wish of growing: “Can a company double and even triple in size but stay true to its values? How far can you extend a brand before you dilute it?” (Schultz & Yang. is it possible to grow big while trying to stay small? In his book. it can be questioned whether this can really be carried out. When customers sense this discrepancy and conflict between the narratives and what is delivered. Starbucks has undertaken a lot of new initiatives which have changed the concept. It has damaged the identity of being something distinct – an identity the customers may have bought into originally. the comments on mystarbucksidea. the high quality coffee and the Starbucks Experience. Thereby the meanings are no longer the same as when Starbucks emerged and the chain is neither a part of that buzz it used to be due to the brand becoming mainstream. 15. Even though many customers have embraced these initiatives. such as Starbucks providing access to Internet in the coffee shops. Starbucks’ narratives picture the brand as one thing whereas the strategy pictures them as another.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 88 Additionally. In other words. is that it has resulted in that the specialty coffee concept has become a common property for the American consumer.
Furthermore. we deduce that Starbucks has been able to make the Italian foundation of a coffee shop American and hence their own. it can be argued that Starbucks started moving away from being authentic Italian. hence that Starbucks must be able to live up to what they say they are to be perceived authentic. This makes the brand untrustworthy. and was very true to the appearance of an Italian coffee shop (Koehn. exists when a brand is able to deliver what it says it is and promises to deliver and in the case of Starbucks through the narratives (cf. the idea of Starbucks was to re-create the atmosphere and coffee of the Italian coffee culture. founded by an American. For instance. Authenticity. However. Starbucks is not authentic in the Italian sense but they became Starbucks Authentic – meaning that they became an authentic American coffee shop.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 89 According to the theory. Still. the coffee shop had the Italian name. it can be argued that until recently Starbucks has been true to the concept they have created – a concept which to a large extent has pioneered the American coffee culture.1. it can be questioned whether Starbucks is authentic Italian. Section 5. 2001). the Italian authenticity has constantly played a decisive role in the storytelling of Starbucks. Schultz & Yang. authenticity. However. Even though the foundation of Starbucks is to be found in Italy. Thus. . Starbucks diversified into other business areas selling books and CDs in the coffee shops which is not authentic Italian either (Koehn. On the contrary. From this.5). customers and media seem very certain that what Starbucks used to be equalled authenticity. 2001. even before Howards Schultz’s coffee shops had the name Starbucks. the intention was to re-create a coffee shop designed to replicate an Italian coffee shop as closely as possible and to be true to the authentic Italian espresso bar experience. hence the brand was able to deliver what was promised. Starbucks started compromising with the Italian espresso beverages by introducing lowfat milk although Italian espresso beverages were only made of whole milk but also that they started to extend the coffee menu to include a vast variety of coffee drinks which was far from the Italian coffee concept – such as flavoured coffees and the Frappuchino. Starbucks is built on Howard Schultz’s experiences with the Italian coffee culture. 1997). authenticity seems to be very important. it can be questioned whether Starbucks has ever been able to live up to what they say they are.7. The fact that Starbucks has made decisions which question their ability to answer for what they tell through the narratives. Starbucks introduced a new approach to coffee to the Americans and even though it is not true to the Italian coffee culture. In the early days of Starbucks. However. It can be reasoned that Starbucks never was an Italian coffee shop and hence Starbucks was not what they said they were – being a re-creation located in the US. thus. In other words. Il Giornale. can therefore impair their authenticity. amongst other things. as soon as the coffee shops changed the name to Starbucks and Howard Schultz started compromising the spirit of the Italian coffee to comply with the demands of the American consumers.
the first years of Starbucks can be plotted into the Real/fake Matrix being “Fake-real”. and went to church. 16. Meanwhile. Consumer Culture 16. Deduced from the assessment of the narratives and their development caused by Starbucks being forced to take strategic decisions based on optimising efficiency and creating standardisation. Thereby it is seen how Starbucks may have changed from being to some degree real but during time they have moved away from their narratives while still trying to convince the consumers of the meanings being the same – a fact that the consumers have not bought into causing some to turn their backs on the Starbucks brand. (2006) Starbucks did. Brooks (2000) describes how the old categories of consumers did no longer make sense – throughout the modern period. They lived in suburbs. Thereby. it had been easy to distinguish between who was bourgeoisie and hence was a part of the capitalist world and the bohemian counterculture characterised by creativity.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 90 Figure 7 | The Real/Fake Matrix Is what it says it is Is not what it says it is Real-fake Starbucks 2008 Fake-fake Is not true to itself Real-real Starbucks 1985 Fake-real Is true to itself Source: Gilmore & Pine (2007:97) and of own construction Applying Gilmore and Pine’s (2007) Real/Fake Matrix. it can be argued that Starbucks may have lost some of their Starbucks authenticity as well. worked for corporations. By plotting Starbucks into to the matrix the otherwise fluffy and subjective concept of authenticity is getting more tangible and manageable. a mix between the bourgeois and the bohemian culture. target the higher middle class characterised by Brooks (2000) as the bobos. it can be argued that consumers find it hard to see Starbucks being true to their concept and what they used to deliver.1 The Initial Subcultural Consumer of Starbucks’ Coffee According to Thompson et al. Starbucks can be argued to have moved away from being true to themselves. the bohemi- . which was typical for that time. Thereby saying that Starbucks was not able to live up to being Italian authentic although they tried to re-create the Italian coffee atmosphere but that Starbucks was able to be true to their own Starbucks concept located in the US. hence achieved status as an iconic brand. maybe not deliberately. The bourgeoisies were the square and practical ones who defended tradition and middle-class values. Thus. They do not carry out the promises told in the narratives and hence they have moved to become inherently fake and hence inauthentic.
and events. 2008). the bourgeois expressed the values of the enterprising yuppies of the 1980s (Brooks. to explain the relationship between personal values and how these created matching patterns of outer behaviour. 2000:10-12) – a well educated upper-middle class whose. trends. also a new kind of consumer was plotted in. Section 5. The VALS categorisation system was based on the changing lifestyles in the US during the 1970s where seven different value patterns were outlined. and the endless request of new experiences. 1991) names them the new petite bourgeoisies. by the SCAA. appearance. the intellectuals – the hippies (Brooks. Also Arnold Mitchell (1983) reflected upon the new values within the American consumers and developed an extension of Maslow’s hierarchy of needs. 1979 in Rifkin. lifestyle. They were the artists. before seen. The gourmet coffee consumer has. the general gourmet coffee drinker has been identified to be more affluent than the general US consumer and that he or she lives or works in big cities. 1991:45) who stood for all the values of freedom and experimentalism of the 1960s (Holt. Others have also described this new consumer. 2000:10).Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 91 ans were the free spirits who flouted the traditions. Brooks (2000) explains this as a cultural consequence of the information age in which the intangible world of information merges with the material world of money creating new phenomenon such as “intellectual capital” and “the Culture Industry”. and could be argued to possess a high level of cultural capital entailing emphasis on authenticity and connoisseurship (cf. Lash. Consumer Culture Theory. In the 1990s. rational pursuit of gaining had become a search for pleasure and pursuit for self-interest (Brooks. 2000). presentation.7). They were not only represented by the intellectuals but the petite bourgeoisie transmitted the intellectual lifestyle to a larger audience and did somehow open up the inner circle of the bourgeoisie and were determined to be cultural intermediaries. the integrated are well educated. the integrated. . Additionally. heavily Caucasian (Mitchell. it has been established that gourmet coffee consumption rises with the drinker’s educational level. 2000:15. who are fascinated by identity.” (Encyclopedia of Emerging Industries. Featherstone. 1983). On the other hand. Those who have finished college buy in average 49% more gourmet coffee and those with some postgraduate education buy 71% more. as Holt (2000) states that higher education leads to a higher level of cultural capital. these two groups of society somehow started to melt together and people seemed to have combined the countercultural 1960s with the achieving 1980s into one social ethos making it impossible to tell an espresso-sipping artist from a latte-drinking banker. whose values are somewhat similar to those of the bobos. been described as: “an educated urban resident with the disposable income to spend on fine coffee. One subculture of this era was the bobos. VALS (Values and Lifestyles). For instance.1. These values being a mixture of the so-called achievers. Here. Additionally. Moreover. 2000:10. a new kind of hybrid personage who had one foot in the bohemian world of creativity and the other grounded in the bourgeoisie world of ambitions and upper-class (Brooks. 2002). Bourdieu (in Feathersome. and the socially conscious type who is concerned about societal issues. who are the highly educated money centred stereotype of the wealthy American.
However. Therefore. Furthermore. and possessing an authentic ambience of the Italian coffeehouse (Koehn. Thereby they identified with Starbucks in the 1980s where the narratives of being a gourmet coffee shop was still trustworthy. and recognises the value of connoisseurship. posses a more creative side to its personality. (2006) have argued that the bobo type. 2004) This quote. The perception of Starbucks has changed and made the narratives untrustworthy. The bobos’ identity has had a spill over effect. they have applied the meanings attached to the Starbucks brand in their identity projects hence expressing their identity through the consumption of Starbucks coffee. As Starbucks has been identified as a luxury brand emphasising high quality. this transformation process can currently be questioned and we argue that the bobos have left Starbucks due to the narratives and hence the brand not being true to itself anymore causing the original meanings to be less prevalent. Thompson et al. McCracken. the bobos have been participating in changing the perception of coffee being more than just a mass-market product. to some degree we juxtapose the bobo with the characteristics of the post-modern consumer possessing higher cultural capital. reflecting one person’s image of a Starbucks customer. and get on all the guest lists […] Those people look all the same too. Without being aware of the significance of the bobos. this is done being aware of Holt (1998) who rejects the notion of social strata in the contemporary society. we deduce that the way trendy and animal right’s advocate is correlated may express the bobo who possesses a dual personality of hippie and hip. connoisseurship and intellectuality. However. where the coffee shop was still associated with the neighbouring café. well-educated intellectual personage who appreciates authenticity. causing the bobos to seek towards other more authentic coffee grounds. . until recently. experiences. and where the atmosphere had character of the European intellectual café traditions. is in a blog described like this: “I always feel like those people are the kind of people who go to all the openings in town. The bobos also reflect values from the bohemian culture. is of course very opinionated.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 92 The type initially drinking coffee at Starbucks. Now they’re “grown up” and far more inward looking. sometimes they would call reflective” (Simon Jones. Starbucks has been dependent on them and their attendance in the stores. has given the Starbucks brand its legitimacy. They’re the IKEA types who’ve graduated from the animal rights and environmental action groups. hence. However. This will be the pivotal point for analysis in the following section. individuality. We will in the following refer to the bobo character as an upper-middle class. 2001). the bobo character has been attracted by the brand. 1986). 2004. transferring meanings from the bobo to the brand granting the brand with legitimacy (Holt. Hence. being their Third Place.
in the early days. to survive appeal to these characteristics of the post-modern consumer. Moreover. the background music. 2001). Additionally. is still existing. Consumers bought into this when consuming Starbucks coffee. leaving one to suggest that the identity of Starbucks as a place for the intellectuals. their characteristics of being distinctive. Consumer Culture Theory.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 93 16. 16. critical towards marketing. that the consumers’ identities are fragmented and identity creation is done through choices of consumption. Artefacts such as interior. Simon (Appendix 2) calls it to stage a performance. Thereby.2 The Identity Projects of Today Simon (Appendix 2) indicates that customers still use Starbucks in their pursuit of creating an identity of being intellectual. Simon (Appendix 2) supports that Starbucks’ brand consists of meanings and that one of the reasons why people go to Starbucks is because of the meanings from the brand getting transferred to the consumer of the product.2 Identity Projects Due to the time in which Starbucks emerged the approach to the Starbucks consumer is that he or she fundamentally possesses the basic characteristics of the post-modern consumer thereby defining this consumer of Starbucks as involved. the art on the walls and newspapers lying on the café tables are supposed to strengthen the bohemian image of Starbucks. individualistic. appreciating personal freedom and authenticity (cf. well-informed. The products tell something about the consumer. The brand must.2. Section 5. Simon (Appendix 2) argues. Simon (Appendix 2) underlines that Americans are obsessed with trading their identity by buying into luxury goods showing that they can afford them. The artefacts in the shops as well as the quality narratives support the luxury of the brand. intellectual and their pursuit of unique authentic experiences were transferred to Starbucks. brands are important but the consumer can see through marketing affectation hence demands more from the marketers’ branding initiatives.1 The Original Identity Projects of Starbucks’ Customers It can be argued that Starbucks has been what Klein (2000) calls meaning brokers instead of plain product producers. one can act rich by consuming Starbucks coffee. branding the coffee shop as a way to achieve a bohemian lifestyle and furthermore made Starbucks juxtaposed with a brand of high class and luxury. hence include meanings in the brand which the consumers can use in their identity projects (McCracken. was attached with meanings of something classy and hip – especially due to the bobos attaching meanings to the brand. which was legitimised by the bobos.7). He argues that Starbucks is . signifying that customers buying Starbucks’ products not only buy them due to the product features but also due to meanings and identity attached to the brand. Thus. Buhl. the consumer’s values and by consuming the product the consumer send a signal to the surroundings about who he is.2. consuming Starbucks. 16. 2005. 2005).1. This is further stressed by the prevalent perception of Starbucks as a luxury good (Koehn.
Additionally. Thus. the fact that Starbucks has expanded and grown into a large corporation conflicts with the meanings of the narratives. creating an identity of them as connoisseurs. The bobos do not want to identify with mass culture which Starbucks can be argued to have come to represent during the years. Therefore. the bobos can be argued to have been the insiders of the brand’s network – the ones who adapted and identified with the brand when it first was introduced. The narratives have changed due to strategies based on heavy expansion and hence the brand’s narratives may not correlate with the external perception or image. The dissociation the bobos show for Starbucks is very equal to the post-modern consumer with high cultural capital. among other things. they pursue an authenticity which they cannot find in the mass-produced products and commercialised experiences. there have been some changes in the perception of Starbucks. it can be stated that since Bryant Simon carried out his investigation or observations of Starbucks and its customers in 2006.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 94 trying to buy in and lend themselves in to the traditional European café. Like for instance the ceiling in glass and wood which is supposed to give an urban hip feeling. This has resulted in the bobos having difficulties in applying the current meanings in their identity projects as the meanings are no longer the same which Thompson et al. by visiting Starbucks. However. the meanings of Starbucks as a luxury brand for the intellectuals. The bobos could be seen as a part of the before described “petit bourgeois” with high cultural capital and hence focused on. hip and creative were applicable for the bobos at that time. 16. there is a risk of appearing untrustworthy to the consumers and not least to the bobos. the intellectual café by for instance having little quotes on their cups and thematize the milieu of the cafés as the European with big comfortable chairs. By the narratives which Starbucks initially told. and corners where readings and conversation can take place. By not being true to the brand and deviating from their brand promise. the identity projects of the average Starbucks consumer may have changed. (2006) also indicate. Moreover. expressing subjectivity. they were able to create meanings which the bobos could use in their identity projects. They want what is real and individual. which has had an effect on the narratives and how they are perceived.3 The Disappearance of the Bobos Previously it has been established that Starbucks has watered down their brand by heavy expansion and standardisation. Also the design of the cafés is underlining the bohemian feeling to them. In this way. following Rifkin’s (2000) argument that culture changes continuously. who will react by turning their backs on the brand as they no longer are able to apply the meanings of Starbucks’ brand in their identity projects. consumers can get some of that intellectual life and can present themselves as someone who cares about ideas but also as taking part of the bohemian culture (Appendix 2). and thus they were the first Flock. Other stories are being told in the environment surrounding Starbucks harming the trustworthiness of Starbucks’ brand. connoisseurship and the values of both the intellectuals and the bohemian culture. However. .
In contrast to the students. Kevin. It is difficult to say whether the students use Starbucks as a part of their identity projects as it more seems like the premises offer them a good environment to carry out their studies without being at home alone or at the library – Starbucks offers them a pleasing environment where also other students are working (Jason. 2008.” (ZEE123. 2008. Harden. However. 2008) This statement shows how the assumable insider perceives Starbucks as having lost the authenticity and that the whole experience of going to Starbucks have been damaged by yelling and not well educated teenage baristas (Simms.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 95 16. the meanings attached to being a student may be transferred to the brand – for instance that students have low economic resources with contrast the luxury feeling which Starbucks tries to express but also that they represent a younger segment which may posses other values than the intellectual bobos – two aspects contradicting with what Starbucks has tried to express through their narratives. 2007) and the narrative of high Quality and Service has been stained. one employee was screaming at the other to come out of the back room and start making the bar drinks! […] I am confused. 2008). hence not living . I see fruit flies. On the other hand. It makes me sad because I actually bought stock in the company a few years ago after I read the book because I believed in the company. 2008). Olan. grab a coffee to go. fruit flies etc. your service and experience has become awful and it correlates with your stock price. Captain. or just to be able to be “alone” among people. Florian. I have been drinking Starbucks forever and I remember drinking Starbucks in your first stores in Vancouver. maybe realising that investing in the students now may result in loyalty in the long run. One student even suggests that she would appreciate if she could book a table to study at in her local Starbucks (Mylanta.2 Why the Bobos Left the Brand “I am generally not a complainer.3. screaming employees. 2007). 16. The perception of Starbucks being dirty and baristas being inattentive teenagers is shared by many Starbucks customers (Kitkat11. Rather than being an Italian coffee house experience. 2005). business meetings held at Starbucks also seem to be popular (Sarah. 2008). Lawrence and El Camino. Now. In the last few years in New York.1 New Meanings Attached to the Starbucks Brand In general. these are more affluent customers who create a more serious atmosphere raising the image of being an upper-middle class brand. 2008.3. it seems like various consumers are visiting Starbucks from all social strata of society to socialise. it can be questioned whether targeting the students is an optimal strategy. Various articles determine that students find Starbucks’ premises useful for carrying out their studies when not having anywhere else to do this (Smale. I read the book ‘pour your heart into it’ and how the coffee experience was supposed to be authentic and best in class. it raises my level of anxiety in the morning! Today by Grand Central. It also seems like Starbucks has chosen to meet the demands of the students by setting up study rooms in at least one location. as students account for a large part of Starbucks’ customers. empty cups being given out and bad milk. However.
High Quality and Service. the bobos represent an authority to assess the authenticity of the brand and to see whether Starbucks is sponging on the values of the populist world to make a profit. cheese and even vinegar from the making of sandwiches. Some express with disgust how the cafés smell of burnt toast. As insiders and representatives for the populist world on which Starbucks build their narratives. Section 12). be social or just to be alone amongst people.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 96 up to the post-modern consumer’s demand for the company to posses connoisseural knowledge about the coffee (cf. they feel that the coffee shop appeal to a corporate clientele. Sections 13 and 12). Prexec. This is largely due to the development of Starbucks. they take away the legitimacy of the brand. the defection of the insiders. can be argued to be due to the standardisation and streamlining of Starbucks and their corporate image of wanting to target a mass audience. However. 2008). the bobos. 2008. they dissociate themselves from Starbucks seeing that they are commercialising these values of the populist world. the way Starbucks appear today the bobos perceive Starbucks as a conservative. the coffee shop appeared as a Third Place where consumers could meet. 2008. 2004). standardised and uniform place which no longer invites for creativity and time for reflection. They find Starbucks being more and more sterile in its décor resulting in too identical shops compared to for instance Peet’s and Caribou Coffee which do not have the same industrial feeling to the concept.” (Lilmis84. and cf. Thus. The automatic espresso machines just don’t taste the same as a hand brewed shot of espresso. Thompson et al. Also the clover automatic espresso machines are being centre of critique in many of the bloggers’ opinion (Bbella. Thus. 2008) Also the diminishing of the coffee smell in the cafés seems to have scared the insiders off. Thus. Third Place and High Quality. 2008. that they have standardised the concept across the . And that these smells dominate the smell of freshly grounded coffee that they appreciated so much from Starbucks before – it was a part of the whole experience (Mike Clemmer. “I used to love Starbucks because of the quality of the coffee and my drink. Etties. In a general perspective. as a new concept and innovation to the American culture. In the early days of Starbucks. (2006) argue that the bobos were drawn by Starbucks as the coffee shop in its appearance encouraged to creativity in an environment which stimulated the consumers in a way to unfold both their professional and bohemian lifestyles. Therefore. until the Italia was brought in. I feel strongly that Starbucks should return to the La Marzocco or another hand brewed espresso machine – it made the Baristas unique and the experience unforgettable. Starbucks invited for and expressed accept for alternative lifestyles which may have attracted individuals whose positions and lifestyles were marginal and who did not feel like belonging to the mainstream society (Thompson & Arsel. Another factor exposed to critique from the bloggers is the loss of Italienness and central European ambience.
For instance. Thus. 2006:56). and the feeling of dedication behind the coffee shop. Instead they feel that Starbucks’ sterile and uniform decor dominantly attract the bourgeoisies (Sandra in Thompson et al. Therefore. the fact that they have diversified and entered into business agreements with large corporations. They probably interviewed a thousand people.” (Kate in Thompson & Arsel. then. They appreciate the feeling of small. right? I’m sorry. here’s how we’re going to design the cafe of the. which used to encourage all kinds of people to mingle and interact. ‘90s. and furthermore that Starbucks has become mainstream (Thompson & Arsel. They’re doing marketing research. The gaining after authenticity can neither be achieved through commercialised experiences like the experience which Starbucks provides it is argued (Thompson & Arsel. 2004:636). They want the authentic feeling.. they feel that the authentic feeling is diluted as Starbucks looks the same no matter which Starbucks coffee shop you enter. In general. This identity cannot be achieved through mainstream and standardised experiences. What is clear from the statements of the bobos is that they are not indifferent towards Starbucks: They no longer feel attracted by Starbucks and do not feel that they can apply meanings from the Starbucks brand in their identity projects but they still have an opinion about the coffee . Scott in Thompson et al.. 2004). personality and authenticity which they feel can be achieved only through unique customer experiences. meanings of Starbucks as a calculating corporate giant are created – meanings which the bobos as well as the post-modern consumer with a high level of cultural capital find difficult to apply in their identity projects as they do not want to be associated with a mainstream concept created deliberately to target the average American. as they see the streamligning of the furnishing as a sign of Starbucks’ lack of authentic feeling. the bobos perceive Starbucks as a large corporation pursuing profit. One interviewee perceives Starbucks as calculating and analytic: “Some major metropolitan area design team has come in [at Starbucks] and “okay. 2006:58.” (Patrick in Thompson & Arsel. 2004. Thompson et al. These comments imply that these customers perceive Starbucks as a corporation which consciously shapes and designs their coffee shops the way they think the majority of customers want it to look like. individuality. hence it is the same experience to expect always. they try to show their distinctiveness and sophistication by purchases and consumption of authentic brands as a means to create their self-image. Additionally.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 97 coffee shops making the experience of visiting Starbucks less personal and individually marked. that just doesn’t work for me. Due to the standardisation of Starbucks. The bobos furthermore express that Starbucks has lost their bohemian character. the interviewees dissociates themselves from the decor of Starbucks’ coffee shops. Thus they feel that what ever Starbucks does is to please the customers and to make profit and is not done from a genuine dedication for the coffee and the authentic feeling. the bobos seem repelled by standardisation. This feeling is supported by Kate: “I walk in [at Starbucks] and get this feeling that this is how they think people want a coffee shop to be. 2004:637). and their movement towards mainstream. 2006).
. the surroundings . They perceive Starbucks as a wrong place. Starbucks has tried to cling on to the original meanings and narratives while trying to cater to the mass-market at the same time. They are very conscious about brand image and the fact that Starbucks has become mainstream and that the brand is accessible to all Americans does not seem to attract the bobos. thus. consuming Starbucks does not seem to be socially acceptable..] if I want to go to Starbucks and carry something out. 2006:636) This signals that the bobos in general attach negative meanings to the Starbucks brand. This is negative in the eyes of the bobos as being accessible to everybody takes out the unique and the distinct of the brand. expressing conformism – values which the bobos do not want to identify with.4 The Social Network of the Brand Even though losing customers on an overall sense. Thus in the circles of the bobos. 2008). this implies that Starbucks is sponging on the values of the populist world represented by the bobos. 16. Furthermore.. Sandra even calls it tabooed to frequent Starbucks. As Starbucks has turned into a common coffee shop not as distinct in its character as when it emerged.. authentic and creating unique experiences. This has created meanings of Starbucks as a brand for the masses. the bobos find it difficult to attach meanings to Starbucks as being distinct. expressing materialistic objects and as a widespread chain concept they have become standardised and uniform.” (Sandra in Thompson et al. They are corporate. This can be interpreted as if Howard Schultz has realised that the insiders who have legitimated the brand have disappeared effecting other customers’ perception of the brand. I will bring my own cup so I can walk around without having a Starbucks cup in my hand in public. authentic and genuine. Howard Schultz has recognised the problem of losing what he calls the right customers these being the ones who were drawn in by the whole theatrical experience of coffee making (Schultz in Simms. they have left the brand. Therefore.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 98 shop. 2007).] So I go there anyway and hope that nobody sees me walking out of there who will think less of me for being there. [. although she actually likes their coffee: “For a long time I wouldn’t go to Starbucks because in my circle of friends it’s not socially acceptable to go to Starbucks because it is just a big corporate and that it destroys all the local coffee shops [. diluting their own self-image if they are seen consuming Starbucks because the brand for the bobos is attached with meanings which do not correspond with the image the bobos want to create of themselves. One explanation can be that while the meanings of the narratives have developed. they do not feel at home anymore in Starbucks’ mass concept shops (Smale. the way Starbucks is perceived by the consumers seems to have affected who consumes Starbucks and how the brand fulfils the customers’ identity projects. They want what is small. what is expressing anti-conformism and anti-materialism but Starbucks has come to represent the antithesis to this.. As Starbucks cannot live up to what the post-modern consumer with high cultural capital and thus the bobos want. Furthermore.
Schultz also mentions this fact. As the bobos have been argued to posses high cultural capital. Thereby. 2008). 1997:119). which the less affluent part of society can afford. Therefore the following conclusions will be based on the overall impression of the bloggers after . and this luxury feeling attached to the brand can according to McCracken (1986) be transferred to the less affluent customer’s identity when consuming the product and hanging out in the café. It is difficult to draw a complete picture of Starbucks’ social network regarding followers and feeders on the basis of the empirical data available in this thesis. which Starbucks represents. Smale (2008) moreover. paying a price premium to give themselves a treat – to somehow self-gift themselves. indicating that buying a latte can express the same sense of luxury as the Mercedes just in an affordable way. the blue-collar man may not afford the Mercedes the surgeon just drove up in but he can order the same $2 latte (Schultz. Starbucks has gradually gained a greater reliance on less-affluent consumers and the customer base is now predominantly the middle and lower wealth classes (Palmer. This results in the surroundings co-branding Starbucks with contra-narratives – diluting the brand and making it less trustworthy.4 regarding our empirical evidence. Most likely. supports this by stating that it previously was white collars. we deduce that the customers participating in the blog on mystarbucksidea. The blue collars go to Dunkin Donuts and McDonald’s – thereby indicating that fewer consumers are really left for Starbucks. it can be deduced that a Veblen effect may have been another reason for the lower class being more willing to pay the price premium to obtain some of the status of the bobos. This is due to Holt’s theory (2004) about the insiders’ significance for attracting other customers to the brand. Customers with lower cultural capital. Simon (Appendix 2) extends this meaning transfer by explaining that people among other things go to Starbucks. who went to Starbucks. 2008). the customers striving to gain status may to a lesser degree have the incentive to buy the more expensive Starbucks alternative and cannot justify the purchase. It is that little luxury.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 99 have perceived Starbucks’ contradicting actions as a marketing affectation from which the postmodern customers dissociate themselves. These are now visiting smaller chains such as Peet’s Coffee & Tea and local coffee and independent coffee shops which posses the meanings which Starbucks used to have.com are followers as we see that they illustrate the behaviour of followers due to Holt (2004). As we argued in section 5. and hence a lower ability to be trendsetting. have adopted the values of the bobos by buying coffee the same place as them. Since the bobos have left the brand. The bobos have very likely attracted a larger group of consumers with less cultural capital and thus a less intellectual crowd to the Starbucks brand. this is due to the less affluent consumers choosing cheaper alternatives – a tendency which might be intensified by the fact that the meanings attached to the brand has been blurred and that it is harder to justify to buy a more expensive product which seems to have the same taste and quality as coffee at McDonald’s (Schwaner-Albright.
2008c. express a more risk-averse approach. it seems more difficult for the followers to give up on Starbucks. Many customers point out how significant Starbucks is to their everyday life and how they feel that Starbucks is losing the soul and dedication of providing the customers the right experience. . Tlb4222. that Starbucks create a feeling of belonging (e. It is also expressed in the customer comments. seeking other coffee grounds. which can be seen as characteristic for the follower in a brand’s social network (Holt.g. 2008. They identify strongly with Starbucks and the meanings attached to the brand are vital for fulfilling their identity projects. 2008. In other words it can be deduced that they rely strongly on the meanings of the brand. Quad3spl. the bloggers on mystarbucksidea. As Starbucks was not able to live up to the meanings which the bobos originally attached to the brand. The customers like to be a part of the Starbucks universe and to be initiated in for instance the Starbucks language when ordering their custom-made beverages – a language which may be difficult for an outsider to take part in (Appendix 2).g. who know each other and even the employees from the head office of Starbucks engage in these discussions and know the regulars by their usernames (e. Thereby. 2004). Starbucks have lost their legitimising spokesmen for the brand and as the brand no longer have opinion leaders to influence the rest of the social network.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 100 having visited mystarbucksidea. this is likely to disintegrate. Sbx_nric. These customers show a sympathy and support to Starbucks but at the same time they show a contempt and fear of the development of Starbucks currently. Tsthomson. Melody. Scraig29. Furthermore. Melody. Whereas the brand’s untrustworthiness and lack of ability to fulfil the meanings attached to the brand has resulted in the bobos turning their backs on the brand. 2008.com. The customer comments can also be interpreted as a fear for Starbucks developing into a concept which will damage the values put into the brand. 2008d. the bobos have lost credibility in the brand as they feel that the brand has sold out. These bloggers express their dedication to Starbucks and many comments picture the customers as devotees of the brand because they are so eager to make proposals for improvements of Starbucks. they show a strong loyalty towards Starbucks indicating that the brand has to step out of line really badly before they leave the brand for real. Missyjkl.com. Brodave.g. Sue1660). The many customer comments can be seen as disappointments and an expression for the customers buying into the original Starbucks’ meanings and that they wish to point out to Starbucks that they want for them to seek back to their roots (e.g. 2008). hence followers. 2008). This is further underlined by some bloggers who discuss with each other. Furthermore is seems like the brand is elevated and hence the follower seem to look up to the Starbucks brand as a kind of a lifestyle leader (e. 2008). 2008. Compared to the bobos. they seem to stick to the brand for a longer time and to fight for maintaining the identity which up to now has attached to the brand. Whereas the insiders are more risk-seeking.
Due to the fact that Starbucks has turned mainstream and standardised. If the followers do not feel that the Starbucks identity is untenable they may also turn their backs on the brand. and come up with suggestions on how to improve it (e. Thus.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 101 In Thompson et al. these customers. They know Starbucks and what to expect and as they are not keen on new and unknown experiences they value the standardised experience where they can feel at home and as a part of the community (Ellen in Thompson et al. 2008. Thereby. 2006:57). This is due to the feeders not being alert to the identity which Starbucks contains. it is argued that a lot of Starbucks’ customers have not bought into the brands narratives for instance as rallying point to people who had a need of a social gathering point for those who represent lifestyles on the edge of society. they do not buy into Starbucks’ meanings to create an identity in the same way as the insiders and the followers use Starbucks to create their own self-image. The narratives and the meanings which the insiders legitimise are very important to the followers. This also pictures the followers as the second and third Flock in the Kauffman Continuum. It is furthermore essential to point out that it is due to this legitimacy of the insiders that the followers are attracted to the brand. other characteristics are given of the customers frequenting Starbucks – these customers may be characterised as followers – and furthermore reasons for them to stick to the brand despite the disappearance of the bobos are given. but because they are brand magnets and risk-averse they stick to the brand for a longer time compared to the insiders.. the brand has naturally attracted a lot of customers who attracted by the status symbol Starbucks has represented and furthermore the social cohesiveness of using the brand. believe in it. They create their identity on the basis of what is in and by this they have created an identity of being a part of the group. This furthermore stresses the risk-averse characteristic of the followers not wanting to take the risk of stepping out of line trying something new and untried. the Starbucks Experience has also become standardised which creates safety for some customers. That the followers are sticking longer to the Starbucks brand is also apparent through the comments on mystarbucksidea. Miclin. the followers may also gradually leave the brand. it is stated that they do not seek the same authenticity as the insiders. 2008). Sbx_eluk. They have fed on others’ identity creation. Seeing that the insiders leave the brand giving the impression that Starbucks sponges on the bohemian/bourgeois identity to make a profit.g. Hb123. who do not buy the brand until it has been legitimised by the early adapters of the first Flock. Compared to the followers and the insiders. They are carrier of the meanings. Due to the large popularity of Starbucks and the status which has been attached to drinking Starbucks coffee. 2008. (2006). the feeders are not attracted by the myth of Starbucks. In other words. Due to the specialty coffee concept becoming more and more common to the American citizens it has been argued that Starbucks is moving down the Kauffman Continuum towards rigidity all causing bobos to leave the brand which in the end will cause the brand’s network to gradually . Instead they are stuck to Starbucks due to a feeling of safety.com where the bloggers express their disappointment towards the brand but still stick to the brand.
thus representing the first Flock. Section 8. and not least the demand for authenticity described in the Theory Section 5. But now with so many concepts like SB there is no different meanings put into the brand than in any other of the competitors’ shops. The bobos were the most risk-taking and the ones to set the trend. The bobos have gradually left the brand and there is no personified evidence of the brand such as the intellectual bobo sitting in a corner drinking the coffee or walking on the street with the branded cup in his hand – thereby leaving Starbucks without legitimacy of the brand. lacking their competitive advantage as they have become more equal to the competitors. the bobos. Thus. because they no longer attach meanings which are applicable in their identity projects to Starbucks.7.5). They do not have any thorough commitment to Starbucks and do not live of the meanings attached to the brand. They will not give up on the meanings of the brand. Starbucks is argued to move faster down the funnel than the smaller specialty coffee shops which have been able to preserve their core competences of coffee and hold on to the authentic values of a coffee shop.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 102 disintegrate (Kafmann Continuum. Starbucks has moved down the Continuum losing their legitimising customers. Additionally.1. As the most heart-feeling customers it can be argued that the followers are the customer group which will stick to Starbucks the longest. the coffee experience at Starbucks no longer appears as the same unique experience as it used to be: “Customers [at Starbucks] felt like connoisseurs because the coffee quality was at the heart of the brand – they were proud to be associated with SB. This first Flock provided the Starbucks brand with legitimacy causing followers and feeders to identify with the meanings of the brand as well. . it can be deduced that the feeders will defect gradually seeing that they seek towards the brands which are popular giving status.1. it was earlier established that Starbucks has undertaken some meanings which normally are connected with the fast food restaurants which all things considered has taken part in eroding the initial meanings of Starbucks as the meanings of the fast food restaurants do not meet the demand for individuality. and made them follow the lead of the first Flock after a short while. In line with Starbucks losing their distinct identity. Thereby. 2008:3) This quotation shows what may have happened to the brand due to changes in the industry. Due to Starbucks compromising with their foundation in order to correspond with the intensified competition from the fast food restaurants. The result may have been seen in the huge growth potential Starbucks had during the 1990s where many Americans adapted the concept maybe resulting in the second and third Flock buying into the specialty coffee culture.” (Smale.5.
Starbucks may not only face difficulties being inauthentic. as a lot of focus has been on social responsibility. The Starbucks Experience being less trustworthy can be a hindrance for Starbucks considering the new consumer type. by following an emotional branding strategy but still they seem to have targeted some of the post-modern consumers’ demands. However. Therefore. 16.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 103 Figure 8 | The Starbucks’ Brand Social Network Starbucks 1985 Chaos < Flock 1 Bobos < Flock 2 Bobos Followers Feeders Starbucks 2008 < Flock 3 < Flock 4 Followers Followers Feeders < Flock 5 Followers Rigidity Direction of progress Source: Holt (2004). with their initial narratives to live up to the hypermodern consumers demand for ethical business execution. this narrative has been stained by stirs in society telling another more negative side of Starbucks. This culture is less focussed on status. This is due to experiences being able to satisfy their needs for self- . 2000) and hence also post-modern consumerism is gradually changing – changing into what Libovetsky (2005) identifies as the hypermodern consumption. However. According to Holt (2002. Therefore. according to theory consumer culture is undergoing continuously change (Rifkin. This dissolution of the social network is what is happening in Starbucks. they also face a whole new consumer group with different demands patterns than seen before. 2004) it is necessary for Starbucks to take the consumer culture into account when branding.5 The Starbucks Consumer and Hyper Modernism The theory of Gilles Libovetsky (2005) concerning the coming of the hypermodern consumer may to some extend help to explain Starbucks’ recent difficulties. Not being focussed on social status may be a problem as Starbucks coffee earlier described has been attached to the sense of luxury and a way to express that you can afford to buy your coffee at Starbucks. which likely does not appeal to a hypermodern consumer. It is difficult to point out exactly where Starbucks is situated currently in the figure above but the bobos have left and Starbuck is approaching rigidity leaving us to believe that Starbucks is somewhere between Flock 4 and 5. as the bobos leave the rest of the network will follow suit eventually and the customer loyalty will be diluted. McCracken (2006) and of own construction The consequence of the social network dissolving is that the social network is closely connected with customer loyalty of Starbucks – meaning that the different customer types are interlocked. as the hypermodern consumer values experiences to a larger degree than before seen. On the other hand Starbucks seems to. They may not have done that in the first place.
Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS
fulfilment and enjoyment (Libovetsky, 2005). However, as earlier mentioned the consumer culture only changes gradually and is affected by the current culture. Therefore, it is difficult to conclude how large the concentration of the hypermodern consumer is in the US, if the post-modern consumer may already contain some of the hypermodern values, or whether this discussion about the new consumer type is still only apparent in France where the discussion currently is being carried out. Consequently, we are not able to come with a final conclusion on whether he American society is influenced by hypermodernity but Starbucks must take this new tendency and its impact on coffee demands into consideration when telling their stories and branding Starbucks.
The purpose of this thesis has been to investigate whether Starbucks’ current decline can be explained by the meanings attached to the brand, and hence, to what extent Starbucks lives up to their brand promises. During the investigation of the narratives and the meanings attached to Starbucks, it was unfolded that Starbucks deliberately has made use of storytelling in their branding focussing on creating emotional connections with the customers. Thus, meanings have intentionally been put into the brand making the purchase of coffee more than just coffee. Starbucks has created the Starbucks Experience containing the meanings of Italian coffee traditions, intellectuality, Starbucks as a Third Place encouraging to creativity and conversations, social responsibility, the American Dream and high quality coffee. Seeing that Starbucks is an identity brand, these meanings have been identified to be a means in the customers’ identity projects; thus, the meanings attached to Starbucks have been transferred to the customer when consuming Starbucks to create the customer’s self-image. The meanings can be concluded to be legitimised by the bobos; a subculture melting bohemian and bourgeois values and furthermore a representative of the post-modern consumers with high cultural capital. Thus as an authentic neighbouring coffee shop encouraging to lingering and conversations, Starbucks managed to cater to this high cultural subculture when they entered the market. This has provided a breeding ground for later Flocks to embrace the brand as well ensuring the success of Starbucks. Starbucks lead by the visions of Howard Schultz revolutionised the coffee industry and the perception of coffee when introducing their specialty coffee concept and since then Starbucks has set industry standards. However, it can be concluded that the fact that specialty coffee in general has become widely accessible and common to the American consumers has pushed specialty coffee towards rigidity. Furthermore, it can be concluded that strategic decisions made by Starbucks have made the brand more rigid compared to smaller, local and independent competitors. This rigidity and the strategic decisions such as aggressive expansions and attempts to comply with the intensified competition from the fast food segment have created contra-narratives about the brand and attached less flattering meanings to Starbucks. Thus,
Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS
it is deduced that Starbucks by some is perceived as a mainstream and standardised brand, which no longer possesses a distinct character of a neighbouring coffee shop. In an overall perspective it can be concluded that Starbucks has lost their authenticity; customers and media perceive that Starbucks is not living up to their brand promises seeing that they communicate narratives of themselves which they are not able to deliver. Thus, the fact that Starbucks tries to portray the brand as an authentic coffee shop is to some degree perceived as a marketing affectation to cover the real identity of Starbucks as a corporate titan who has commoditised the concept to target the mass-audience. From this it can be concluded that Starbucks has become inherently fake and no longer is true to themselves. Therefore it can be concluded that consumers has lost trust in Starbucks as the brand has not been able to live up to its brand promises. The Starbucks Experience and the brand have been diluted. The consequences of no longer being perceived as real are vital as Starbucks has lost their legitimacy due to the bobos who are deduced to be the insiders of Starbucks have turned their backs on the brand. This will eventually disintegrate the social network of Starbucks. Starbucks appearing commoditised and mainstream opposes the values of the bobos who appreciate authentic brands, unique experiences and personality. The meanings attached to Starbucks portray the brand as an antithesis to this. The inauthenticity and less flattering meanings furthermore result in customers not wanting to apply the meanings in their identity projects and it can be concluded that consumers deselect the brand due to this. Therefore, it can finally be concluded that Starbucks’ decline can be explained by Starbuck sticking to their original narratives while the context fills the brand with conflicting meanings resulting in the consumers not finding the meanings applicable in their identity projects.
17.1 Implications of the Conclusion
Starbucks lead by Howard Schultz has realised that the brand has lost its credibility and now faces difficulties in maintaining the customer traffic, which have resulted in the coffee chain closing down a lot of coffee shops across the US. Furthermore, Howard Schultz has recognised that the brand must go back to its roots. However, Starbucks does not seem to be aware of the root cause for their current decline as the future strategy of the brand is to expand further on the international markets and initiations such as introducing the automated coffee machines are still carried through (Nocera, 2008; Starbucks, 2008c). Therefore, the strategy of Starbucks conflicts with the intention of going back to the roots. The question is moreover if going back to what Starbucks originally was is the optimal solution for overcoming the current difficulties of the Starbucks brand. This is due to the meanings of the original Starbucks being legitimised by the subculture, the bobos, providing a breeding ground for Starbucks’ social network to develop. However, whether this subculture is still apparent in the US and whether Starbucks would still attract it again is questionable. Therefore, it can be seen as a failure to pursue the old success, as the conditions for this may not be apparent no more. Furthermore, the development of the company has to be taken
Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS
into account, as this can be a hindrance for going back to their roots. This is due to the fact that going back to the roots implies to go back to narratives evolved around the neighbouring coffee shop, the Third Place where the visitors are acquainted with each other, and where there is time to interact with every single customer. This conflicts with the expansion level and hence the size of the company. Therefore we instead suggest that Starbucks should go about their branding in another way if wanting to be re-vitalised. They must target a new sub-culture in the US society. This is easier said than done and we do not have the exact suggestion to who this subculture could consist of. However, it could be a culture with some characteristics of the hyper-modern consumer. As this hypermodernity is argued to be a successor to the post-modernity which gradually will gain a footing in the consumer culture, it could be a suggestion that Starbucks re-invent themselves to be able to target the anxieties of the hyper-modern consumers. They are anxious about what the future brings, they do not consume to obtain personal status but to feel inner pleasure about their choices, and they are concerned about the environment. Moreover it can be imagined that the anxieties are further accelerated by the fact that US has been a target for terrorism and political critique under the Bush government. However, it is not suggested that Starbucks ignore all their initial values and meanings to pursue new grounds to address a new segment. Due to the brand’s status as an iconic brand it can, according to Holt (2004), be deduced that Starbucks can take advantage of their historic ability to target a subculture’s identity desires. Thus, through the nation’s memory of Starbucks’ previous myth and what this myth provided for people using it, Starbucks has earned the authority to tell the same type of myths and to target a similar and current subculture’s identity projects. Starbucks was able to create a Starbucks Authentic concept and maybe that is what Starbucks should re-emphasise, thus be true to what they really are and acknowledge what they have become. Therefore the myth to be told should be based on what they have become and not focus on being the small neighbouring coffee shop and instead find their authenticity in being their own concept – an American coffee concept inspired by the Italian coffee traditions where the customer can have their beverage in a comfortable and relaxing setting. Moreover, Starbucks must be realistic, and consider whether it is possible to go back to their roots at all and therefore consider whether it is possible to target a culture that value the small neighbouring coffee shop as Starbucks has grown apart from his concept. However to meet the demand of being more individual and express distinctiveness instead of being the omnipresent titan it is suggested that Starbucks on individual coffee shop basis adapt to the local environment. This could be done by letting the local coffee shop managers get more authority to take independent decisions. Moreover, local managers should be encouraged to set their own mark on their shop. Thereby leaving their own local mark and facilitate diversity in the Starbucks concept – the ambiences would be different from Starbucks but still keep the overall focus on quality. Also a suggestion to meet the raising problem
Additionally. if focus is laid upon some specific narratives. Hence different cultural principles can be argued to be apparent in the Japanese market. until recently. 2005) brands should face difficulties if not corresponding to national culture. as according to the theory different rationale for applying the narratives’ meanings must be apparent on overseas markets. One suggestion is to have separate shops where it is not possible to order coffee to go in the Starbucks Cafés and vice versa. Also Lindstrom (2005) underlines that a brand cannot expect to be accepted and gain success if not adapting to local cultures. Therefore. Nonetheless this is what Starbucks has done since 1995. 2008i). Starbucks have during the last 13 (Starbucks. we suggest that further research can be carried out regarding the underlying reasons for the Starbucks brand appearing to have success with a global branding strategy regardless of national culture. 18. 2008i) years expanded heavily in overseas markets too and have also. Implication for Further Research The research of Starbucks’ brand has indicated that the meanings attached to the brand are playing a decisive role for the sustained success on the US market. where they experienced huge success (Starbucks. we find the underlying reasons for success very interesting. Hence what the success criteria have been in the Japan and the US respectively. an analysis of the identity projects and hence how the Starbucks brand is being “used” in a Japanese context could bear witness to the reason for Starbucks success. However. achieved success on these markets. How come the brand has success in Tokyo with a standardised concept hence telling the same narratives and in a market. . Thereby the study cannot avoid possessing some character of a comparative study between the US consumer and the Japanese consumer comparing what the difference in brand perception is between the two cultures. Thus the Japanese consumer may apply the brand in their identity projects in a different way than the American consumer and the projects may as well give an idea of the underlying reason for the Japanese consumer taking the Starbucks brand to heart. Such as whether it really are the same narratives that Starbucks tells in the Japanese market. The research could be demarcated to focus on analysing the Japanese market – the first overseas market of Starbucks. and whether the narratives are perceived in the same way. For instance it could be proposed that a narrative evolving around the American Dream is ineffective in a Japanese context due to the narrative’s tight connection to the US culture. McCracken. 2008i). which make the research of the narratives and meanings even more interesting. Howard Schultz comments the cross-boarder success with “… that our passion transcends language and culture” (Starbucks. where the culture could not be more unlike the American? Especially an analysis of the narratives and the perception of these could be interesting. 2002. considering that the same branding strategy is followed in all markets. hence a global and standardised brand strategy cannot be applied to local markets.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 107 of busyness caused by the to-go customers is to somehow separate the coffee to-go segment with the sitting café guests. as according to theory (Holt.
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appendix 1 .
but please be assured that we will treat all departing and remaining partners with respect and dignity. Howard Schultz. Although I. but a restructuring of our organization that will eliminate some positions. we have created one of the most recognized and respected brands in the world.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS | Appendix 1 1 Starbucks Continues to Implement Transformation Plan. 2008 To: Starbucks Partners From: Howard Schultz Re: A message from Howard---Building a stronger company for the future Dear Partners. CEO and chairman. Announces Organizational Changes to Support Long-term Growth As part of its ongoing transformation. which we announced earlier this month. But I strongly believe that. together. president. But let me assure you that there has been a relentless focus on making the decisions necessary to put us all in a position to win. some of the decisions will result in not only store closures. profitable growth. I fully understand the seriousness of these actions and the concerns you may have. I feel that they rest with me. July 30. created our . together. I. made the hard choices to close stores and reduce the number of positions. ultimately. both in elevating the customer experience and in the significant actions the company has taken to structure the business for long-term. we will create an even stronger company for the future. I want to acknowledge from the outset some of the difficulty that many of you may be experiencing given the tough operating environment we are facing. will provide an update on the progress the company has made. along with the leadership team. In the early days of building our company. along with the senior leadership team. And now. which will result in loss of jobs. We have been a public company for more than 16 years and. the naysayers didn’t believe in us or that our company would even survive. Additionally. we can hear those drumbeats once again from people who think that our best days are behind us. Starbucks communicated organizational changes today including a realignment of its executive leadership team. Schultz sent the following email to all Starbucks partners earlier today: July 29. while also providing our shareholders with significant long-term value. on the Q3 earnings call on Wednesday. In January 2008. Unfortunately.
which is quite strong. it became increasingly more evident that a razor-sharp. thoughtful and thorough examination of all parts of our business. and making decisions and investments to benefit the long-term growth of the business. hopefully.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS | Appendix 1 2 transformation agenda and simultaneously. the closure of 61 stores in the Australia market. and the realignment of the executive leadership team (July 29). posted the complete list of the 600 U. while pursuing innovation. Starbucks Coffee International and Consumer Products Group. market.com (July 17). with 23 remaining open (July 29). unrelenting focus on our business is vital to our success. As I have stated in previous communications. with approximately 70 percent of partners in the first 50 closed stores successfully transferred to positions in other stores (July 1). that these are the right strategies for us to execute in order to make the necessary changes that will enhance the experience for our customers and partners. store closure decision was one of the most angst-ridden choices that we have made in my more than 25 years with Starbucks. As we have continued to execute our strategy. store closures on starbucks. We strongly believe that our decisions to close underperforming stores and reduce our partner workforce will help support Starbucks continued growth. I understand this is a non-negotiable requirement and concluded that I need a direct line of sight into our businesses and functions. we announced and/or have begun implementing the following business strategies: the closure of approximately 600 underperforming company-operated stores in the U. We framed our transformation around three key strategies: strengthening our core business— our coffee and our partners. Business.S. We are well into the implementation phase of transforming Starbucks. a reduction in our workforce of both the number of positions and partners across the company by almost 1000 (July 29). Although it is not easy. Our challenges in Australia are unique. and it in no way reflects the state of Starbucks business in countries outside of the United States. the U. we realize that part of transforming Starbucks is our ability to look forward. we initiated an ongoing. elevating the customer experience. which has included many new initiatives and corrections to our business. and there are no other international markets that need to be addressed in this manner. without a doubt.S. I believe.S. with a concentration on the U.S. Our decision to close underperforming stores in the Australia market was just as difficult. This month. . As ceo.
Please join me in congratulating Martin. Global Strategy -. With sincere gratitude and thanks for your commitment to Starbucks. Starbucks Coffee International. Michelle. Michelle’s unique experience in both strategy and marketing will provide the organization with a clear focus in this area. I am personally grateful to Jim for his numerous contributions to Starbucks during his 11-year tenure and we wish him continued success as he enters the next chapter of his life. and Peter Gibbons. general manager of Communications and Public Relations for Microsoft Platforms Services Division. We are excited about Martin’s return to our International business at a time of tremendous opportunity. assume the role of president.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS | Appendix 1 3 With this in mind. Global Supply Chain Operations. Dorothy. I ask that we all resolve to stay the course and remain strong as we move forward.Office of the CEO. who is leaving the company. which includes Food and Beverage. Global Strategy – Office of the CEO. process and strategic implementation. I have asked Martin Coles. We have experienced a lot of change since we embarked on our journey to transform the company. executive vice president. who led manufacturing operations. and customer experience. Vivek Varma. Dorothy Kim. a business that achieved great success under his previous leadership. Michelle Gass. And I know that the difficult and emotional nature of our decisions has weighed heavily on every partner in the company. chief operating officer (coo). which is the most distressing part of our current business state. Global Supply Chain Operations. In order to effectively integrate our marketing. which will be utilized extensively in her new role as executive vice president. He will assume his new position on September 8. Concurrent with this. senior vice president. Peter and Vivek on their new roles. has demonstrated an expert understanding of our supply chain operations. has assumed the leadership of the newly redefined marketing and category team as senior vice president. we have eliminated the coo position. innovation. I would also like to take this opportunity to thank Jim Alling. to once again. . senior vice president of Global Manufacturing Operations. Marketing and Category. has been named senior vice president for Starbucks Public Affairs. has been promoted to executive vice president.
as well as further our attachment with our customers.starbucks. Howard Source: www. which we will share with all partners upon our return to our respective work locations.com.com/aboutus/transform/Howard%20communications%20July%2029. and I am very excited about our upcoming Leadership Conference in New Orleans in October. the Starbucks Card Rewards Program. We are also looking forward to unveiling our fall. holiday and FY ’09. we will enhance and take our Starbucks Card Rewards program to the next level of increased value in the fall. I know we will leave the conference energized and aligned around the goals and objectives for fall. pdf [assessed 27/09/08] . which I believe is the best work we have done in years. introduction of innovative brewing equipment with MastrenaTM espresso machine and Clover® brewing system. when our leaders come together---over 10. Based on the responses received from over 1 million newly registered Starbucks card holders since we launched the program in April. holiday and FY ’09 product and promotion calendar.S. We have not had a Leadership Conference in two years.000 strong---to share our plans to build our company for the future.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS | Appendix 1 4 And please do not forget that we have had many successes that we can be proud of such as: our nationwide Art of Espresso training in the U. We will also participate in community service projects that will give us an opportunity to give back and help improve the lives of the citizens of New Orleans. As in the past. This will continue to demonstrate our sensitivity to current economic conditions.. We are also receiving recognition for listening to our customers during these tough economic times. This is another defining moment for our company and we will succeed! Respectfully. As I have said many times and sincerely believe. the best days for Starbucks are ahead. engagement with our customers through mystarbucksidea. and introduction of our health and wellness platform with VivannoTM Nourishing Blends and Sorbetto beverages.
appendix 2 .
So why are people paying the premium? . And quickly that was bled out.000 stores they employ 100. And my son the other day asked another kid what that kids dad did and the kid said his a banker and my son said that I work at Starbucks.000 Starbucks around the world in about 30 countries. I mean just a sort of look at the phenomenon itself I mean again. you know and this is just a kind of Starbucks is everywhere – [showing photos on slides] this is Paris. What these 44 million people are doing a week. 15/06/06 “Thanks. that’s a lot of hits. I love this one.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS | Appendix 2 1 Bryant Simon at Taste3 Conference – Wine. and those choices again tell us something about who we are. A lot of them are repeat customer obviously. you know not a bold prediction here. and Art. We make choices with the money that we have. I listen to more Alanis Morisette than any person should have to in their life and in acoustic no less. this isn’t the store it’s a kind of whole earth kind of entity. First thing here as you know the coffee is not cheap it’s not wildly expensive but it’s not cheap and so one of the thing I want to propose and want us to think about is something I think about is why people pay the premium? Not long ago I was at a Starbucks at 18th and Broadway and I don’t know if any of you have ever been to the store but it’s a really long store and the line was literally out the door. luckily I have ten years. And so what I study in many ways is a mass phenomenon. But part of what is going on here. and you’ll see. But again 13.000 this is in China in the Forbidden City [showing photos on slides]. and I don’t want to push this too far. but most importantly to me 44 million people a week go to Starbucks. there is 13. But most importantly to me. and people do different things at Starbucks and I want to talk a little bit about the meaning here. I can’t wait one terminal to get to a Starbucks. As Chris said I’m a historian but I’m not really anymore. And I really have spend around 12 hours a week there and looking and watching what people are doing and talking to people about Starbucks and it’s sometime a painful experience. And now there is 13. And that we in many ways that consumption a kind of a democratic form. so in all seriousness I started this book project with a kind of single proposition and that was: “That what we drink has meaning”. Food. Starbucks started out. But. it’s great to be here. in 1971. But most importantly to me is. with some counterculture to it. So again I want us to think about why people are willing to pay the premium and here’s the story about. And that’s what I’m interested in.000 people they open a store every six hours. observing Starbucks mostly. apropos of yesterday right and what was going on – there’s a guy in line complaining about the price of gasoline and then I pays 24 dollar for a gallon tall latte. But over the last few years I have been involved in a kind of ethnography – observing. It says something about who we are. But I was facing out of the 18th street and there was a little cart selling “gourmet coffee” for 15 cents – there was nobody there.
They are trying to form a community of belonging corporately sponsored and they coach their baristas and it’s in the manuals and it says in that. We talked about you know the consistency of for instance fast wine yesterday [referring to a Taste3 seminar carried out the day before].whatever. many of you might live in suburbs. So that’s the functional part. and Starbucks. you can say whatever you want about caffeine but people are addicted to caffeine. I think. I talk to people all the time and I ask them why they go to Starbucks. But I would say that a third form of emotional connection that people have developed to Starbucks is a desire for predictability. That part is the emotional part of it. Another kind of emotional sort of aspect of Starbucks ehm. Sorry I don’t mean to be talking down to you. we live in a world. what could we learn from the purchases we make? I would suggest that there is a kind of three ways to think about this about this consumption. But I would suggest in other words there is a functional sort of aspect to this. And so many people are desperate for predictability. And that Starbucks wouldn’t work. There is also an emotional part to it. I don’t have a slide for this and I know it’s a kind of criminal in such situation. And. I had a hard week so I go on Fridays to treat myself for the week. and what people will say is. you know I had a test so I bought myself a treat. legalised right. It’s a caramel something that cost a lot of money. you could be conspiratorial here and think like cigarette companies that they try to hook people early but that will be for you to think about. So in the functional terms they’re a caffeine delivery service. it’s a cheap form of self-gifting but it’s a form of self-gifting and then again I talk to people all the time we talked about Starbucks and self-gifting. The emotional part of Starbucks and a part of why it’s working is that’s a form of self-gifting and it gets repeated again and again and again and this is something you know. And not only do they sell highly caffeinated coffee they sell it in mass amounts. one would be emotional and the third would be expressive. No these are not all things that have to work for everybody and I think this is important some work for some people sometimes. and you know. And you can tell than I’m a teacher. but. where we are desperate for belonging if you saw the movie Crash the opening line of Crash actually talks about how we are so desperate for a touch that we bang into each other. One would be functional. By emotions it means that you feel better about yourself simple as that. you know. it basically tells people to remember names all of this to form a connection in a world where we are desperate for connection.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS | Appendix 2 2 And again. you’ll have to have a list of three so that people can take notes. if it weren’t an addictive product. I mean. that people need to serve their addictions. ehm. They want that predictability people tell me all the time when you’re in an airport . I think. And I just wanna kind of run through these categories. Starbucks is I think not by accident the most caffeinated coffee on the market: a cup of Starbucks has twice the amount of caffeine as a cup of Folgers. Starbucks offers that language is carefully calibrated in it’s carefully calibrated you have to master it and one you’ve mastered it you belong.. 20 ounces of highly caffeinated coffee is enough to addle anyone’s brain. But part of it is functional: this is the molecule for caffeine. all right well. I don’t want to push this too far. why would you buy that drink – I think that’s a caramel mocc. Now. Not just to everyone.
Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS | Appendix 2 3 you want something predictable. But what does jazz say? As a vocabulary it says a certain urban sophistication the play it because you can imagine yourself and you can present yourself to someone else as sophisticated and urbane. And that’s the form of branding that you buy something because you want to tell something about yourself to the people that are looking at you. These. I would not think about Starbucks in terms of. I think the strongest and what I’m most interested in right now is what I would call the expressive branding. Americans travelling abroad go to Starbucks for the predictability. I don’t think. Boy that’s a crappy slide. Cause if you take too big a risk you’ll alienate people. In other words it a performance. you know there is something go- . Now. checking out every coffee shop you go to the one which is predictably ok. We are a nation currently obsessed with trading up. And they. eehm. Ehm. You know why do they put that there? In a sense I think what they are saying is they’re artistic. and let’s just think about the interiors now for a minute. Starbucks puts quote on its cups. but it’s supposed to look there is ??? there is no sharp ??? right. You know Miles might have been the hippest person ever to live but they’re picking a very distinct form of Miles Davis and that was the early fifties blue-note stuff. and Starbucks is staging these performances. This was actually Starbucks really first kind of musical collaboration and it was Miles Davis. and I’ll come back to this in just a second ??? it’s an attempt to a kind of reinvest the brand with hip. but then again it works on an emotional level for many people. A consumption is a form of performance. which is something I’ll come back to as well. But the art again is carefully calibrated to a sort of fifties a kind of pop-art stuff. I don’t want to put them on the couch. It’s deliberately calibrated with stuff that looks expensive to a kind of mass audience. and you present yourself to the people looking at you as someone who can afford luxury. And so if you like look at the basic Starbucks you know first thing you supposed to notice is. Now you prove it by acting rich. It used to be that you proved your middle-class values through ??? and thrift your ability to safe. They are not pushing you to that point. I would think about it like a multimedia corporation in the way it’s staging performances and make you the customer the centre of that performance. And it’s a kind of a crazy thing and they a kind of hide them as well. it’s not McDonalds. Starbucks offers a way to present yourself as somebody who can afford to a sort of trade up. when you go to a new town you don’t want to invest in what economists call discovery costs. they’re artistic and you get to be artistic by going there. A little of it bleeds of and shades into you. For some of you that may see it as some form of a thin way of travel. those chairs you can buy online it’s supposed to sort of look like luxury and the reason is that luxury is a part of performance it says “I can afford this”. Remember this is a mass-audience. As I said to Chris before this is not bitches brew. I mean it’s reassuring too in its naturalness and all that. So let us talk a little about the art for instance. this is the art speaks to one other thing about Starbucks there’s an attempt to engage with hip but it can’t be too hip. there is a reassuring sense that people you know. is now an attempt to tap into 20 something market. Dave Matthews.
This is a cup that says wildly political proposition of a man who wishes he haven’t been living in a closet all his life. And Starbucks places it one step further they’re the largest consumers of fair trade coffee in the world yet it represent only about 3% of their total buy. to dissociate from our nations racial past – it’s an ugly and difficult past. that that store was . They are trying to buy in and lend themselves into the traditional European café. And you then represent yourself as a kind of part of a bohemian culture. If you take the natural wood. I don’t know if you know anything about the science of selling. Starbucks in it’s architecture if you think about it is a design nightmare. It’s pastiche in some ways and I mean maybe pastiche is in. and particularly in university towns. is what I would call innocence by association. We’ve learned that globalisation is a really dicy proposition filled with exploitation. white America probably feel worse about racial issues than anything else. It’s not. You present yourself as someone who cares about ideas. pottery barn thing of the furniture and the ceilings are always like urban loft hip. Starbucks as you know sell fairtrade coffee. I’m involved in the global world and I’m innocent of any crime or any wrongdoing. And. meant to stimulate the conversation that we have in cafes. I’m not sure that fair trade coffee can solve for instance the problems of Rwanda where they now are buying fair trade coffee. well you might not know. I mean erhm. But go into a Starbucks and they almost always. ehm. you know expressive branding the comfortable chair. the natural floors the kind of. And you then get some of that intellectual life. they’re very clear about this. And I think Starbucks understands that and they form deals with Magic Johnson to open up Starbucks stores in underserved neighbourhoods around America. and I went to the Starbucks in Harlem and it was the crappiest store I have ever been to. To the intellectual life in the café. In the wake of 9/11 we learned that people around the world didn’t like us that much – some people. Steel professor at Stanford called “White Guilt”. the cups are actually. but that’s not a selling place that’s a message place. This cup interestingly enough. And what fair trade coffee in a sense does is it allows you to say look. and they put the fair trade coffee right by the door. like. But I would suggest here. the consumer with the intellectual culture and present yourself as a member of it. Ehm. but it’s not consistent. and let me just talk about this for a second. Ehm. Another. And we work very hard in this country. but. They’re planting the idea because it makes people feel good about themselves. But what I think they really are selling here. because you can’t have too much conversation. the administration of Bailors University complained they pulled the cups. we I don’t mean to exclude anyone. but they do sell fair-trade coffee. according to Starbucks. there’s a new book by S. But that pastiche of the ceiling is the boho part of it. filled with inadequacies and frankly we don’t feel very good about it. And when students at Bay…ehm. I talk specifically about the white middle class. We probably feel. Something we haven’t actually talked about at all. You present a version of yourself through it. I want to talk now a little bit about politics.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS | Appendix 2 4 ing on here. But again the idea is to link you. but that’s what it is. I mean.
It’s become such an important kinda marker that even by not going you’re marking who you think you are – a form of expressive branding. speaking about globalisation and Starbucks. this is Delocator it’s a webpage where you can plot in the address of the Starbucks and you can get all the independent coffee shops nearby and it’s one of the hottest websites in America. I’m not that kind of person. And last and sort of iconic but disturbing image is. So this is erh. And I think none of these works for everyone they work for some people. And this is a kind of disturbing image of America. And just a couple of anti-starbucks propositions. This is a woman from San Francisco that Starbucks sued. There’s lot of like jamming. Let alone taking over a lot of street corners. errr. breeds like rats. Source: http://www. If you buy a product from a company that pursuit diversity. This is. It was more about allowing whites to dissociate from racism.08] . in a kind of meaning. this is the battle of Seattle from the late 1990’ies and Starbucks actually changed its policies in the wake of it.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS | Appendix 2 5 more about Westchester than it was about Harlem. I go.youtube. you run the risk of people not liking you. but represent playing around with it. and it’s just if you load your brand with all these meanings you run the risk of people really not liking you.06. Here’s the boycott you know by not consuming you’re staying who you are. you express something about yourself. that have stores in largely African American and latino neighbourhoods you are washed from the sins of racism you’re innocent by association. Let me end just quick.com/watch?v=Fxpfx8W8C20 [assessed 18. And one of the interesting things is the way in which Starbucks has not only become a way that people express their values by identifying with the firm but the also express their values by not going. re-working the erhh logo. well this is not it. I wont speak their language. People tell me all the time I don’t go to Starbucks. Thanks for listening and having me here. The woman who threw the cash register through the window was only there by accident. by talking about one kinda last thing.
appendix 3 .
we focused every ounce of our beings on creativity and innovation. If we take an honest look at Starbucks today. We are fortunate. Working with an exceptional group of people and summoning all the courage we could muster. Given this. business: by giving our store partners better training and . Rather. I walked into Starbucks first store in Seattle’s Pike Place Market. we had 119 stores. January 7. an environment that didn’t look like any other store. 2008 Letter To: All Partners From: Howard Schultz Twenty-five years ago. and his contribution to our company cannot be overstated. in addition to my existing role as chairman. To do this. I want to pay tribute to Jim’s leadership. we know what needs to be done to ensure our longterm future success around the world.000 stores and a significant and growing presence in 43 countries. And our reality is exciting because there is so much opportunity ahead for Starbucks. Although necessary. Transforming the Starbucks Experience The Board decided that I should lead this transformation. These customers have placed their trust in us. Jim Donald is leaving the Company. and from that day forward we have taken the road less traveled. serving 50 million customers a week. Because of this. Looking ahead. He was a passionate and tireless advocate for Starbucks. We will now shift our emphasis back onto customer-facing initiatives. it led to bureaucracy. and hiring people who were fanatically passionate about coffee and celebrated their interaction with customers. I have returned as chief executive officer for the long-term. Our new transformation agenda includes: . effective immediately.Improving the current state of the U. that the challenge we face is one of our own making. then we know that we are emerging from a period in which we invested in infrastructure ahead of the growth curve. our success will come in the rigorous execution of several new strategic initiatives – that capitalize on our heritage to drive our successful future. It’s challenging because there are no overnight fixes. and for them and for each other we need to ensure that our future is as exciting as our past. though. together we have built one of the most recognized and respected brands in the world. Over the years. We now have more than 15. When we went public in June 1992.S.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS | Appendix 3 1 Howard Schultz Transformation Agenda Communication #1 SEATTLE. the reality we face is both challenging and exciting. we created a new kind of place – one that served the kind of coffee that most people had never tasted. better aligning our back-end costs with our business model.
providing health care and Bean Stock for all of our eligible full. by building a profitable business outside the U. I will be meeting with the leadership of the Company in the near future to discuss our transformation agenda. By focusing again on the Starbucks Experience. . Though we have 5. these initiatives will help drive our enduring success.S.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 2 tools. we will slow the pace of our U. we will create a renewed level of meaningful differentiation and separation in the market between us and others who are attempting to sell coffee. as well as a series of actions to reduce costs and reallocate resources to customer-focused initiatives. and our commitment to our community efforts. and in the coming weeks we will communicate these details with you. But even as we execute this transformation. we are just at the beginning. among other enhancements to the Starbucks Experience. We will redeploy a portion of the capital originally earmarked for U. And they will come with changes in our organization…some big and some small. and capitalizing on the enormous. Specifically. I can tell you they will include a realignment of our leadership structure. I want to thank you for your dedication to Starbucks and for your commitment . Unlike many other places that sell coffee.from back-end IT systems to store operations -. untapped potential for our brand. In the meantime. I will be decisive in making them. Attached is a brief Question and Answer document that answers some of them. Taken together.Building for the long term.S. Stay Tuned I know that you may have a number of questions. and our stores. Right now. .Expanding our presence around the world.Re-igniting our emotional attachment with our customers by restoring the connection our customers have with you. These include our commitment to treating each other with respect and dignity. there are certain integral aspects of our company that will not change at all. And you have my commitment that there will be more information to come over the next few weeks and I will keep you informed. which has two distinct pieces: re-aligning Starbucks organization and streamlining the management of the organization to better support customer-focused initiatives by ensuring our support and planning functions -. . This will help us to make smarter decisions about new products and initiatives and bring them to market more quickly than ever in our past.000 international stores today.and part-time partners. so we can renew our attention on store-level unit economics and be laser-focused on flawless execution. our brand. It comes to life every day in the relationship our people have with our customers.are most effectively dedicated to the customer experience. At the same time. launching new products – some of which will have an impact as significant as Frappuccino® products and the Starbucks Card – and introducing new concepts in store design. our coffee.. Starbucks built the equity of our brand through the Starbucks Experience. store growth to the international business. store openings and close a number of underperforming locations. including your role in it.S. our ethical sourcing practices and encouraging our coffee suppliers to participate in our CAFE practices program in our origin countries.
We know what we need to do to win. and we will do it. Howard . Onward. Our success is up to us.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 3 to earning the trust of our customers every day.
we are going to play to our strengths – to what has made Starbucks and the Starbucks experience so unique. Going forward. effective today. this is Howard Schultz.To improve the current state of the U. I’m grateful and I thank him for his significant contributions and I wish him nothing but the best in the future. This is not an interim role for me. it has lead to bureaucracy that has both slowed us down and cost us money. although necessary. and the smart. We are emerging from a period in which we have invested heavily in infrastructure ahead of the growth of the company and. I think recently we have become victims of our own tremendous success. The success of Starbucks rests on the emotional connection we have with each other and with our customers. in the coming months you will be seeing internal changes and exciting new developments at Starbucks. We now shift our emphasis back to consumer facing initiatives. To this end. business . the relentless focus on our customers.To re-ignite the Starbucks experience through driving improvement and change in all areas that .S. we will be refocusing our entire organization on the Starbucks Experience. We’ll share the specifics as soon as we can.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS 4 Voicemail To: All Partners From: Howard Schultz Hello partners. in addition to serving as chairman. Today. I’m in it for the long-term and I promise to be decisive and do all I can to lead Starbucks to new heights. the Starbucks Board of Directors has asked me to return as your chief executive officer. ethically sourcing and roasting the highest quality coffee in the world. Jim Donald will be leaving the Company and let me just pay special tribute to Jim who has been a passionate and tireless advocate of the company. In refocusing our Company. innovation and creativity that are the hallmarks of our company. But in general. by going back to our heritage and what made us so successful in the first place. putting the customer back at the center of everything we do. and international opportunities.S. He’s been a business partner and a dear friend and I’m sorry to see him leave and I think it’s clear to say that his contribution to our Company cannot be overstated. Starbucks is announcing a series of strategic initiatives to increase shareholder value and capitalize on our significant U. betting aligning our back end costs with our business model. I can tell you that our transformational agenda will have three objectives: . entrepreneurial risk-taking. The execute this transformation. It also rests on how we implement our strategy and innovate to stay ahead in a competitive marketplace and tough economic environment. the trust we have built with our people.
Thank you very much.Accelerate our International success story and growth even further In closing. I’m here to help every one of you succeed and to restore the company to the greatness it has been. Every partner plays a critical role. this has two distinct pieces. Thanks for all you do and all you have done and for contributing so much to Starbucks and to all those people who work so hard and tirelessly behind the scenes who contribute to so much. I am sincerely excited and energized by the challenges and the opportunities we have. and . but all of you and all of us. All the best. But our success is up to you. I am here for the long term.To build for the long term. let me say that we are truly in this together. I am asking that each of us focus on carrying out our responsibilities in the best way possible. and help to create welcoming and distinctive places that are truly a “third place” for customers and the communities that we serve. . Howard appendix 4 Source: http://www.starbucks.Realign our organization and streamline the management of the organization to support customer focused intitiaves and .com/aboutus/pressdesc. We know what we need to do to win and we will do so.asp?id=814 [accessed 10/10.“touch the customer”. Let me just say to everyone who is listening. not only me. 2008] .
Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS | Appendix 4 1 .
as we always have. 2008 What I Know to be True Dear partners. brewed my favorite way – in a French press.. and today there is not a coffee company on earth providing higher quality coffee to their customers than we are. as well as stopping by to see what our competitors are doing as well. You are the Starbucks brand. As I sit down to write this note (6:30 a. I also thank you for all your ideas and suggestions .Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS | Appendix 4 2 Howard Schultz Transformation Agenda Communication #4 Howard Schultz Partner Update: What I Know to be True February 4. I have heard from so many of you. keep them coming. What does that mean? It means you make the difference. in fact. Sunday morning) I am enjoying a spectacular cup of Sumatra. No one knows our business and our customers better than you.. enduring company. I have visited with you in many of your stores. but I wanted to share with you what I know to be true: • Since 1971.m. During this time. I assure you that when all is said and done. Period! • We are in the people business and always have been. Our stores have become the Third Place in our communities . guiding principles and culture of our company and bringing it to life one customer at a time. We have made much progress as we begin to transform and innovate and there is much more to come. But this is not a sprint – it is a marathon – it always has been. I have received more than 2. we have been ethically sourcing and roasting the highest quality Arabica coffee in the world. succeed at our highest potential. I can feel your passion and commitment to the company. It’s been just a few days since my last communications to you. It has been three weeks since I returned to my role as ceo of the company I love.000 emails. We will not be deterred from our course – we are and will be a great. known for inspiring and nurturing the human spirit. we will.a destination where human connec- . We succeed in the marketplace and distinguish ourselves by each and every partner embracing the values. to our customers and to one another.
We have returned to our core to reaffirm our coffee authority and we will have some fun doing it. Master the fundamentals. but I need your help and support every step of the way. Please feel free to reach out to me. Experience Starbucks Source: http://www.what we know to be true. 2008] . We will be steadfast in our approach and in our commitment to the Starbucks Experience . There is no other place I would rather be than with you right here. this is about us and our customers. As I said. but higher of myself. Trust the coffee and trust one another. appendix 5 Onward . your wins. we will exceed the expectation of our customers. all of whom will have an opinion and a point of view. Howard P. My expectations of you are high. I am proud to be your partner. • There will be cynics and critics along the way. However. I have been flooded with emails. although we must humbly respect the changing landscape and the many choices facing every consumer.. we will be curious. but believe me. This is not about them or our competitors. bold and innovative in our actions and. and how we can collectively continue to improve. Everything that we do. I know this to be true.starbucks.asp?id=825 [accessed 10/10. right now! • We have a renewed clarity of purpose and we are laser-focused on the customer experience. I am reading and responding to all of them. matters.tions happen tens of thousands of times a day. • I will lead us back to the place where we belong. You are the best people serving the best coffee and I am proud to be your partner. We are in control of our destiny. We are not in the coffee business serving people. We are in the people business serving coffee. I want to hear about your ideas.. Instead.com/aboutus/pressdesc. in doing so. • I want to hear from you. We are not going to embrace the status quo.S. your concerns. from this point on (from the most simple and basic).
push for innovation and reject the status quo. we will begin to elevate the Starbucks Experience for our customers. We are the worldwide leader of specialty coffee. We are the coffee that brings people together every day around the world to foster conversation and community. 2008 To: All Partners From: Howard Schultz Re: As we embark on Espresso Excellence Training Aged Sumatra … that’s what I’m drinking as I write you this note. Thank you in advance for embracing tomorrow night in the spirit in which it is intended. Have fun. there is another perhaps equally important reason why we have scheduled this training. company-operated stores to teach. We will overcome the difficult and humbling challenges we face. and the art of espresso. And we will revisit our standards of quality that are the foundation for the trust that our customers have in our coffee and in all of us. we are just getting started. and roasted to perfection. Celebrate our coffee. We uphold our guiding principles by demonstrating respect and dignity for one another. Tomorrow evening. but also make it matter. Learn. The result is a stunning cup of coffee. We are at our best when we are entrepreneurial and courageous.S. and will be stronger for it. We are Bean Stock. And in doing so. We will close all of our U. as I think about it. Howard Source: http://www. It’s rare. Aged for three to five years in a warehouse in Singapore. We are passionate about our coffee. one another.com/aboutus/pressdesc. it’s my favorite coffee. We should be incredibly proud of what we have built. the full-body of one of our classic Indonesian coffees. We are the third place in the lives of millions of our customers. More than 170. Hands down. and the subtle but ever-present earthiness and spiciness brought to life by our proprietary aging process. believe me when I tell you. We are Starbucks. then shipped as green coffee to our plant in Kent. it’s exotic. As Starbucks partners. and we are also the Cup Fund. We are leaders not followers--we leave that for others. we are bound together by the passion we have for our coffee and the customer experience. Onward. and share with your fellow partners.000 of us stand for quality and an uncompromising ethical standard. 2008] . But. And. and the respect we have for our customers. You have my word on that.starbucks. teach.asp?id=833 [accessed 10/10. educate and share our love of coffee. we will come together in an unprecedented event in our company’s storied history. and it’s ours. It’s to celebrate who we are. What a gift … and we get to share it with one another and with our customers. we are Healthcare. The velvety mouthful. February 25.Ea Elisabeth Finn Nielsen & Tina Holm Mortensen | The STory of STarbuckS | Appendix 5 1 Howard Schultz Transformation Agenda Communication #8 Seattle. Washington. and for our customers.
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