Starbucks price increase

2224 Views 36 Replies 18 Participants Last post by atyclb, Nov 4, 2004

MattG

Discussion Starter · Sep 1, 2004

I've been reading the book "Pour Your Heart Into It", by Starbucks CEO Howard Schultz. By an odd twist of fate, last night I came to the part of the book with his account of the skyrocketing coffee bean prices, and how they chose to handle it:

What we tried to do with our customers was to honestly and directly explain that our costs had risen and we had no choice but to pass on a certain amonut to them in order to continue to do business. We were fortunate in that the relationship we had built with our customers and most importantly with our partners gave us license to do what we needed to do. For the most part, they responded by being willing to pay higher prices for coffee they knew was best of class. [p.237]

I'm not trying to suggest this strongly parallels the current Lotus increase. Rather, I'm passing this on to shed some light on why we may be reacting the way we are. Starbucks had built a fantastic relationship with their customers, and Schultz feels that helped them accept the increase in coffee prices. What Lotus has failed to do thus far is to do the same with their customers, and hence our reaction is what it is.

Lotus, we're not just buying a car. We're buying an experience! Keep that in mind, and it'll make your job of creating happy Elise owners much easier (such as in the Starbucks example above).

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Miguel

· #2 · Sep 1, 2004

I haven't bought a starbucks drink for the last two years just because it was a waste of money.

Great product, but cost/value doesn't make it attractive to me no more.

grudkin

· #3 · Sep 1, 2004

I used to buy Starbucks, Coffee Bean, etc every day, sometimes twice a day. Wasted maybe $150 a month on that garbage

It is so offensively overpriced now that I refuse to buy it now, except maybe once a month. Nor will I stand in line for a cuppa Joe

I see the analogy you are trying to make, but Lotus could never become the Evil Empire of Starbucks

NtflBlueLiz

· #4 · Sep 2, 2004

Have any of you visited Dunkin Doughnuts lately? They have nice clean facilities, good coffee, lattes, etc and a lot less expensive than starbucks. Starbucks is overpriced!

Vantage

· #5 · Sep 2, 2004

Haven't seen DD in a long time since I moved to the left coast. Around these parts, you can see two Starbucks at the same time.

For me, it's all about Jamba Juice and stores like that. Get my gourmet coffee and tea at home.

xxxotic

· #6 · Sep 2, 2004

NtflBlueLiz said:
Have any of you visited Dunkin Doughnuts lately? They have nice clean facilities, good coffee, lattes, etc and a lot less expensive than starbucks. Starbucks is overpriced!

Hmmm...Fred was the name of the spokesman for Dunkin Donuts.
NtflBlueLiz used to be called Fred.....No this can't be him

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xxxotic

· #7 · Sep 2, 2004

Krispy Kremes Rule!!!!!

Ok, my boss decided to honor their local grand opening by having a contest to see who can eat the most in 15 minutes.

We even invited Jimmy Buffett, the owner of the local franschise to show up as a guest judge. "Livin on donuts, watchin the machine glaze, all of those donuts covered in oil."

The first 10 employees to eat a dozen qualified. It took me about 6 minutes and i came in 7th, but the #1 guy did in in just over 2 minutes.

Then onto the finals.... 28 donuts in 15 minutes for the winner, I crapped out at 16. Now i know why my cholestrol is over 400 and my triglyerides are over 1300. "Some people claim that theres a glutton to blame, but I know its my own damn fault"

shay2nak

· #8 · Sep 2, 2004

The reason that Starbucks had/has a kickass relationship with their customers is because there is one on every block and they have cool people (95% of time) working there who serve a good product. Lotus on the other hand has, per average, not even one dealer per state! So I would expect the relationship with lotus to increase as more dealers AND the product becomes available.

I drink Starbucks everyday. I used to work there for 3 years. The 2nd best job I ever had behind designing loudspeakers. I don't even spend $30 a month on coffee. If you spend $150, you should maybe try a different drink or size! LOL

CAErven

· #9 · Sep 2, 2004

I've sworn off Starbucks and drink mocha gold dust with milk and chocolate shavings and whipped cream now - it's cheaper and a better value - doesn't tase as good but not getting screwed makes the taste tolerable - and I twinkle when I tinkle

MattG

Discussion Starter · #10 · Sep 2, 2004

Sorry, didn't mean to start a coffee thread here...I was just using this to illustrate the benefit of building a good relationship with your customers.

CAErven

· #11 · Sep 2, 2004

MattG - it gives us something else to think about - we all need a diversion - we can have fun or go crazy. It doesn't matter what the starter is, all threads get hijacked eventually. Thanks for the info though.

MattG

Discussion Starter · #12 · Sep 2, 2004

Ok, well in that case...there is only one brand of coffee to be drunk, and it is roasted by Peet's Coffee in California. Nothing else compares.

I still find Starbucks decent coffee...their espresso is good, what they do with it isn't always. I think of them more like the McDonald's of hamburgers - good decent burgers, can get the same tasting burger anywhere in the world.

MattG

Discussion Starter · #13 · Sep 2, 2004

(I must admit, allowing this thread to be hijacked for coffee discussion is much better than MSRP talk

)

Randy Chase

· #14 · Sep 2, 2004

MattG said:
I still find Starbucks decent coffee...their espresso is good, what they do with it isn't always. I think of them more like the McDonald's of hamburgers - good decent burgers, can get the same tasting burger anywhere in the world.

Yep. People want consistency and the known.

It does not have to be great. Just what they expect and clean. Ray Krok's philosophy.

girlracer

· #15 · Nov 2, 2004

Starbucks coffee tastes burnt!

I wish they'd hurry up an bring Caffe Nero's to America.

smoseley

· #16 · Nov 2, 2004

Caffeine is the new socially acceptable version of Tobacco. Look at all the overpriced caffeine products out there. People are easily sucked into a brand, and will pay a fortune to get their rush if they're loyal to the brand. Sure, you can buy Dunkin Donuts coffee cheaper, or make your own coffee even cheaper, but how many of us ex-smokers bought the off-brand? How many of us yet rolled our own?

This is consumer drug-addiction at its best. I'm glad we have a guy here in our office who brews a killer cup of Lavazza!

girlracer

· #17 · Nov 2, 2004

Matt - I think I saw a Peet's Coffee here in Austin. I will check it out. So far the best coffee I've found here has been Jo's, but that's an independent place and I like to have a favourite chain brand as back up.

I'm a bit disturbed that you class McDonalds burgers as 'decent'. Perhaps they changed the recipe... don't think I've had one in over a decade, but I'm sure it winked at me...

huggy bear

· #18 · Nov 2, 2004 (Edited)

Girlracer,

Peet's is the best IMO. It's right across campus on Guadalupe and 24th. Goodluck finding safe parking. They always give patrons a free cup of coffee when you buy a bag of beans.

ChrisB

· #19 · Nov 2, 2004

girlracer said:
Starbucks coffee tastes burnt!

Some people refer to it as Charbucks

girlracer

· #20 · Nov 2, 2004

huggy bear said:
Girlracer,

Peet's is the best IMO. It's right across campus on Guadalupe and 24th. Goodluck finding safe parking. They always give patrons a free cup of coffee when you buy a bag of beans.

Thanks Huggy, I will check it out. I will probably take the Z cos it has cup holders.

ChrisB - What a relief, I thought it was just me!

No more hijacking, sorry Matt.

1 - 20 of 37 Posts

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