REPUTATION CHECK: Starbucks reviews its direction

PRWeek research finds a sizeable minority of consumers deserting the controversial coffee chain.

Starbucks' decision last month to sack CEO Jim Donald and bring back his predecessor Howard Schultz reflected a growing sense of malaise at the chain that originally defined its sector.

Although profits are healthy, US transactions per store fell by one per cent during the third quarter of last year. There is a widespread sense that the company has opened too many branches too quickly and the runaway growth has dented the brand's original spirit. Schultz has already banned the sale of hot breakfast food, which was masking the smell of roasting coffee.

In Europe the brand has inherited McDonald's role as an ambassador for reducing the effects of globalisation. It is in the process of recruiting a head of comms and CSR to tackle this issue in the UK and recently brought in Fishburn Hedges to work on boosting the company's corporate reputation.

PRWeek commissioned research to discover the extent to which the brand has become tarnished among British consumers. Our poll found that Starbucks' most loyal fanbase is the 16- to 24-year-olds - 44.6 per cent of them opt for the brand over its rivals.

Starbucks still attracts more consumers than its three major rivals (see chart, right), but it is also actively avoided by 16.3 per cent of people (with 25- to 34-year-olds most likely to do this).

Twenty-three per cent of consumers consider it to have become less fashionable over the past two years, while 46 per cent find it appealing. But Costa is winning in the fashion stakes as 54 per cent have noticed an improvement, and only nine per cent feel it is losing its allure.

The poll also confirmed the feeling that consumers are weary of coffee shops taking over their high streets - 93 per cent think there are now 'enough'.

PRWeek asked two commentators how Starbucks' comms team should proceed. Jenny Packer is associate director at Ketchum and handled Starbucks' corporate PR from 2003 to 2005. Ellee Seym-our is a political PR consultant and blog-ger who has conversed with Starbucks' European president, Cliff Burrows.

ELLEE SEYMOUR, PR CONSULTANT AND BLOGGER
How many presidents of global organisations find the time to write to complete strangers? And to respond in a warm and genuine way? That was certainly my experience after emailing Cliff Burrows, president of Starbucks for Europe, the Middle East and Africa.

I forwarded him a link to my blog post describing how my son's first request on waking up after an operation was for a Starbucks Java chip coffee-based Frappuccino, as I thought he might find it amusing.

I admitted my ignorance at the coffee names and he said he would educate me. Shortly after I received a box of goodies, including a coffee maker, chocolate bars, mugs and a £20 Starbucks voucher for my son.

I am delighted to see that conversations on blogosphere are being monitored and that organisations are responding.

Organisations should respond to all comments, even negative ones. It would be great if Starbucks provided internet access to a corporate blog on all its premises for customers to express their views. What a great way - and an inexpensive one - for it to get valuable feedback.

Should I email Cliff about this idea?

JENNY PACKER, ASSOCIATE DIRECTOR, KETCHUM
Starbucks has always been a 'Marmite' brand - but after a shaky entry to the UK which saw it labelled as an aggressive American behemoth, it subsequently did a great job of being accepted as part of the fabric of the British high street. Key to this was communicating its values as a responsible company, particularly through its commitment to ethical coffee sourcing.

Today, though, it is a victim of its success. The very rapid growth turns many people off. It is losing its competitive advantage on a number of fronts. A tall skinny latte is now available everywhere, from McDonald's to the BP garage. While it undoubtedly remains the leader in sound coffee purchasing practices, everyone now claims to sell 'ethical' coffee.

Starbucks has to re-connect with people and stand for something meaningful to make itself relevant again. It should apply its rigorous ethical approach not just to sourcing coffee but to everything it does, positioning itself as the coffee shop with a complete ethical offering - organic milk, free range meat and eggs and locally sourced produce. I believe this would put the heart back into the Starbucks brand.

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