“Starbucks won’t slug it out in ad wars”One of the questions I have in the aggressive campaign between McDonald’s and Starbucks is if Starbucks’ countering efforts are enough to change the widespread perception of Starbucks, “the home of the $4 cup of coffee.” The Seattle-based company is trying to tell customers that the average price of a Starbucks beverage is less than $3, and that 90% of Starbucks drinks cost under $4 but, that is not enough to correct the misperceptions that are already widespread out in the fast food market.Starbucks marketing strategy has to be re-translated in the perspective of counter-effect of McDonald’s advertising and billboard campaign. Their advertisement strategy has to be about repositioning Starbucks to alter its perception in the market. During the financial crisis, customers visited less frequently and spent less money when they did and it really has been hobbled by the housing-led financial crisis. Americans who have been enjoyed the morning coffeebucks menu. Starbucks brand reminds me nothing but a cup of coffee. Coffee is not an essential ingredient in American life like McDonald’s hamburger does as a substitute of breakfast or lunch. The cheap hamburger can be the essential menu for breakfast or dinner in this busy and fast changing world.If the economy dives more deep down under the current crisis, middle income class folks will totally shut their wallet to non-essential activity including sipping a cup of coffee, dining at luxurious restaurant or weekend family trip to San Diego Zoo.Before the aggressive cost-cutting efforts that hopefully would put Starbucks back on a growth track once the economy rebounds as analysts expect, Starbucks has to have the question on why customers visit less frequently lately. Adding more stores is not going to help to maximize their profit at all if they could not resolve this question. If someone asks me the question in the perspective of survival strategy as Starbucks CEO, the answers will ts might actually give coffee zealots less reason to choose Starbuck over McDonald’s because at some point, it seems too much of a value elements might tarnish Starbucks brand differentiated from its rivals in the first place.We however, are living in the age of hybrid. A hybrid is the combination of two or more different things, aimed at achieving efficiency from combined activities. Everything we encounter in our daily life is being combined each other for the purpose of convenience such as one stop shopping at WalMart or Target. Even the shopping mall can be seen as sort of hybrid because it is a congregation of different stores to give shoppers the easy way of access to shop around and meet their needs. It is getting more difficult to differentiate and identify to connect company brand with certain product because of diversified products they are making to attain wide range of customers regardless of their culture, age or sex. From the perspective mentioned above, Starbucks actuallnald’s customers from them by introducing $4 breakfast-coffee combo meals as an attempt to compete with McDonald’s roll out of espresso coffee drinks in its restaurants.The question of what are the new needs or desires of customers as we go more into deep economic recession comes next in the matter of repositioning Starbucks. Starbucks and the other Coffee houses aren’t doing so well these days. The International Coffee Organization released a report in February on the “World Economic Crisis and the Coffee Sector”:“Early reports show that food sales are holding up better than those of non-foodproducts. It seems that big chains are competing by cutting prices rather than losing market share or seeing the volume of sales decrease, even at the expense of profits.In the developed country markets of North America, Europe and Japan, which account for approximately 58% of world consumption, coffee is a staple good that represents only a small fraction of consumer spending. The information ava 2008.”Almost every Americans have debt problem no matter how bad the economy is. The best way to begin getting their debt under control is to reduce their monthly spending. If economy is going to sour, they will find a significant amount of money is being spend on unnecessary items and luxuries. For example, having a cup of coffee for 4$ at work each day eats up $80.00 a month. It is a significant part to spending on non-necessities from $300 to $800 such as dry cleaning, eating out at restaurants, cable/internet bills, etc. It is not that difficult for them to discover the unnecessary spending if they track their monthly expenditures. In addition, there are two types of expenses they face each month. They are fixed and variable expenses. Fixed expenses are mortgage, housing payment, car loans and anything else that we cannot eliminate easily. Otherwise, variable expenses such as food, clothing, entertainment, utilities can be changed or eliminated.People will find the way to start tonus.
