“Will that be a breakfast sandwich or a roll with your coffee?” These are the words that Starbucks has recently added to their vocabulary as a way to keep their premium coffee company afloat. For decades Starbucks has spent an enormous amount of time and energy building and developing its luxury brand image, which has become more of a lifestyle for many. However, as our economy continues to decline they are having to reconsider this position by rebranding themselves as an "affordable luxury." The now recession-friendly coffeehouse is promoting their new $4.00 cup of coffee by adding value meals to their menu to cater to the downward spin of this economy. This puts Starbucks in direct competion with fast food chains, which leads me to wonder, will they lose their position as a luxury lifestyle brand when the economy starts striking up again?
Sales at Starbucks have taken a hit in the last couple months, leading its luxury empire to endure some speculation that they may be losing their hold on the coffee industry. In the past few months Starbucks has been closing hundreds of stores, cutting jobs, and have been partaking in fewer store expansions. Just like most businesses in this economy, you either weather the storm by rethinking your PR strategies or you simply become a statistic. With consumers now gravitating towards the low cost substitutes, such as a $1 cup of coffee from McDonalds, it was in Starbucks best interest to find new ways to capture that budget-friendly audience.
Personally I am loving the great value deals they are now offering, but that’s exactly what this is.. a cost effective tactic to keep up with competition. Granted, Starbucks is trying to keep their high end image by promoting that they use high quality ingredients such as Gouda Cheese and hand shaped rolls, but will this be enough to sustain them once the economy turns around? We'd love to know what you think: Will Starbucks' new branding eventually cost them their premium image in the long run?
Photo Credit: Fox News
Tags: Luxury Lifestyle PR
Posted by Angela Slowik on March 24, 2009 4:51 PM
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