• Ad Age, Thursday, March 19, 2009 11 AM

Noting that half of his chain's beverages cost less than $3 and one-third are priced less than $2, Starbucks CEO Howard Schultz admits that his company has been defined by its competitors and suffers from its association with the wastrel ways of the Old Profligacy.

"For whatever reason, Starbucks Coffee Co. has become the poster child for excess, and if you want to be really smart, you should cut out that $4 cup of coffee," he bemoaned to shareholders yesterday.

Well, new advertising will attempt to convince consumers that Starbucks products aren't as expensive as they are perceived to be, Emily Bryson York reports. Forthcoming will be social-media efforts, Internet advertising, and sporadic television ads that Schultz refers to as "brand sparks."

Traditionally a parsimonious TV advertiser, Starbucks has run a number of them since moving its business to BBDO, New York, in October. Schultz said that these buys have generated strong response with consumers.

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