Ducati996

Starbucks' announcement that it is shuttering 600 stores marks the end of what seemed to be the company's continual upward climb and invincibility in the retail coffee shop industry. Robert K. Passikoff, founder and president of Brand Keys Inc., a Manhattan-based market-research firm, spoke Wednesday about the world-famous company with Newsday Staff Writer James Bernstein.

What happened to Starbucks?

There were a few things. They had been really profitable, and they were the darlings of Wall Street, and they wanted to continue to be profitable. But you can expand so much.

What else went wrong?

They tried to migrate the coffee brand into a lifestyle brand. They came out with the movies and the books in the stores. There's nothing wrong with that aspiration. But as part of this, they essentially took a step away from the core quality of the brand, which was the coffee house experience, which they imported from Europe and turned into an American experience. For awhile, no one was grinding beans. The place didn't sound like the coffee house and didn't smell like the coffee house anymore.

So, some bad marketing decisions?

Yes. They also said their places were getting too crowded with furniture. So in a lot of them, they took out the couches. What essentially they did overall was re-engineer the experience right out of the stores. So customers were standing on line, and there was no experience anymore. They were too much like everyone else.

They still look a little different, right?

Yes, but for awhile, they were offering breakfast sandwiches. If you close your eyes and order coffee and someone offers you a breakfast sandwich, where are you? You could be anywhere. People even complained about it. (Founder and chief executive Howard) Schultz even said Starbucks traded away its brand for vacuum-packed beans.

How much of Starbucks' decline is related to the economy?

Not that much, because coffee is near and dear to people. Over a year ago, we saw erosion in loyalty. In our tests last year, they came out No. 2 to Dunkin' Donuts. We thought we would see the effect in the marketplace, and lo and behold, we have. This year, Dunkin' is No. 1, McDonald's is No. 2 and Starbucks No. 3 in our market surveys.

What has McDonald's done right?

Well, they had sold salads, but they were crappy. But not anymore. They started a better coffee program six or seven years ago. It took them that long to get it right. Now, their premium coffee is top-notch. And it's 99 cents, a third of the price of Starbucks' lattes.

Should Starbucks have stuck with its original strategy of being just a coffee house?

I think so. You don't walk away from a successful brand strategy, not when you're making money.

Can Starbucks come back to what it was?

No, I don't think so. Customer values have shifted so dramatically. They are what they are.


Pretty much sums it up nicely

Dougster

I can't really argue with this. All I want is the best tasting coffee around and I can't seem to get it at Starbucks anymore. But that being said, I also think that my local Starbucks has got to be one of the very worst I've ever visited.

Dougster™

Edster

That IMHO should move it to the top of the Shut Down List!!!!!!

Dougster

I know old Edster. It's sad for me to say that since the next nearest one is 16.6 miles away, but it's true. The coffee that comes out of there (i.e., the local one) really, really sux lately. And I've already told you about those awful sandwiches.

Dougster™

PaulChristenson

Duc...Now your job is to create a new Dunkin Donuts emoticon for Doug...

Paul in VT

I used to own an ant farm but had to give it up. I couldn't find tractors small enough to fit it.
-- Steven Wright

Dougster

Oh, I don't think that's necessary. Double-D makes good, no-nonsense, highly drinkable, everyday coffee... no question about it... but it has nothing whatsoever to do with why I started using the Starbucks cup icon in the first place.

You may recall that it became my personal symbol of my goal of untold business success in the ditch digging game... so much so that I could actually afford to drink Starbucks coffee again every morning... just as I had in the latter stages of my "early-terminated" engineering career.

A "D-D" cup would have no symbolic or practical meaning... other than the fact that it is my fast, hot and cheap coffee of choice while out snowplowing... a dubious distinction at best.

Dougster™

Mickey

Since I don't like coffee, personally I couldn't care less what happens to Starbucks. Have always thought of it as a Yuppie joint. They rode the wave longer than Co's like Krespy Kreme, never been to one of their stores either, and then there is Boston Market, another place I never frequented.

All it take is time and somewhat hard times for some to acknowledge these kind of places really weren't offering stuff a lot better than the competition. Just charging more for the brand.

Well, that my take on it even though I'm likely the lone ranger on these kind of businesses.

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Dougster

Now Mickey... seriously now... Do I seem like a Yuppie to you? Lots of reasonably normal people enjoy a cup of gourmet coffee!

And I'm not getting the inclusion of Boston Market in with the coffee & breakfast pastry purveyors. I remember I used to be quite happy when I was off on a field assignment stationed near a Boston Market. That's about the best "fast food" around that I can think of... at least for lunch or dinner.

Dougster™

Chris2520

Mickey , i am with you , I never liked coffee and i dont drink it.
Look what it did to Dougy.......

as for starbucks...... no one should pay that much
just to stay awake............... if you need caffine
go to Micky D's....

I think thay should close them all tomorrow....

Chris....

John Deere 2520 , R4's , 200CX loader with 61 inch bucket and JD Tooth Bar. And Markham 7 tooth. Tooth bar. 46 Backhoe with 16 inch bucket. with Custom made Street Flip pads off a 448 hoe. Foward work lights. Dual rear work lights. Heavy duty Alternator. I-Match , Ballast Box , Frontier BB2060 box blade , Frontier pallet Forks , JD 3 point reciever hitch. and soon A lot more.. and for grass cutting , John Deere GX 255 with 48 inch deck.

Dougster

Now it looks to me like you've got a lot more Starbucks locations (and, therefore, Starbucks coffee drinkers) down there in and around Marietta, GA than in any 10 suburban towns around me. I can only come to the conclusion that you are the exception to the rule down there!

But then again, why am I not too surprised at that!

Dougster™