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Starbucks' Schultz Appreciates Marketing Effort For McCafe

Although Starbucks revenues fell for the quarter ended June 28, it posted a $151.5 million profit, which was better than analysts expected and far better than its $6.7 million loss during the dark days of last summer, Melissa Allison writes in the Seattle Times.

Emily Bryson York reports that part of the improvement can be traced to the big marketing budget attached to McDonald's launch of its McCafe -- at least in the eyes of CEO Howard Schultz. While naysayers in the media and Wall Street predicted that the McDonald's ad juggernaut would have a negative impact on Stabucks, quite the opposite occurred.

"Various marketing campaigns" -- including Starbucks' own first branding campaign -- have "created unprecedented awareness for the coffee category overall and has actually had a positive result on Starbucks' business," says Schultz.

Starbucks' next big marketing push will be for Via, the instant-coffee product. "We are going to create a very creative campaign that will be different than what we've done to date and will take advantage of the social media that we become very good at as well as traditional levels of media," Schultz says.

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1 comment about "Starbucks' Schultz Appreciates Marketing Effort For McCafe ".
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  1. Ray Weisgerber, July 29, 2009 at 4:45 p.m.

    Schultz's point is not surprising. Ironically, the marketing money that Starbucks spends helps smaller businesses in the espresso business. I make the point in my book, Driven to Espresso: drive-through coffee stands in the Northwest, that contrary to what may seem obvious, small drive-through espresso stands can actually thrive better when located in the same neighborhood as a Starbucks cafe.

    In addition to their national and global advertising, Starbucks' very presence in a neighborhood introduces consumers to specialty coffee products such as espresso drinks. Smaller businesses such as drive-throughs benefit from that introduction and quality level expectation. After a short time, some consumers are bound to look for alternatives for any number of reasons, not the least of which is a smaller, local, personal approach, and finding an alternative in the same area makes it easy to try them.

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