Home -> Law Blog Directory -> International Law Blogs -> Misleading Advertising Law

International Law

: Misleading Advertising Law

Starbucks' Lessons for the Luxury Brand

John Quelch writing at the Harvard Business School blog has a good analysis of what went wrong with Starbucks.

He makes (3) good points:

1. First, the early adopters who valued the club-like atmosphere of relaxing over a quality cup of coffee found themselves in a minority.

2. Second, Starbucks introduced many new products to broaden its appeal.

3. Third, opening new stores and launching a blizzard of new products create only superficial growth.

Good article, read John's entire analysis of Starbucks decline.

For me, I thought that they were in trouble when they could no longer change the language of coffee drinkers.

It is pretty amazing that they were able to get a number of people to say "grande" instead of "large".

And in Canada, where the Tim Horton's mantra "double, double" is ingrained by genetic engineering, it was more impressive.

But, when Starbucks caved and allowed the masses to order their coffee black, by saying "black" instead saying "no room", I knew that the cult had been compromised. All over when the masses regained the language.

John ends with a great observation about premium or luxury brands:

"To continue to be a premium-priced brand while trading as a public company is very challenging. Tiffany faces a similar problem.

That's why many luxury brands like Prada remain family businesses or are controlled by private investors.

They can stay small, exclusive, and premium-priced by limiting their distribution to selected stores in the major international cities."

Related articles by Zemanta

• Investor confidence in Starbucks slides
• Taking Pleasure in Starbucks' Downfall?
• Coffee clash: McDonald's vs. Starbucks
• Whitehorse coffee wars claim downtown shop

Full post as published by Misleading Advertising Law on July 09, 2008 (boomark / email).