Leading the Starbucks Way by Joseph Michelli

Author:Joseph Michelli [Michelli, Joseph]
Language: eng
Format: epub
Publisher: McGraw-Hill Education
Published: 2014-12-11T05:00:00+00:00

HOW FAR CAN YOU GO?

The localized food and beverage items discussed thus far involve either new market-specific product innovations or adjustments of important but not core products. While those changes are guided by consumer research, certainly some products, like the recipe for Starbucks lattes or Starbucks® Espresso Roast, can’t possibly be changed, even if local consumer sentiment favors a modification. Or can they?

Kris Engskov, managing director, Starbucks UK and Ireland, addresses a rather historic change in lattes in his region: “People drink Starbucks lattes throughout the world, and it’s our top-selling beverage. Historically, we’ve held to the notion that our latte, like all of our core coffee offerings, should be the same everywhere all the time.” Despite that traditional view, Kris notes that Starbucks in the UK and Ireland were hearing from customers that they wanted a “stronger” latte, and over a five-year period, stores in the region had noted an approximately 60 percent increase in customers adding an extra shot of espresso to their lattes. Kris continues the product evolution story by noting, “We considered making our latte stronger by defaulting to an extra shot of espresso. We test-marketed that idea, and that recipe was a success—a success not only in the taste tests with our customers, but also in tests with a key competitor’s customers; 60 percent of the competitor’s customers liked our latte better than the latte being prepared by the competitor. So at no extra charge, we changed our tall latte to a two-shot espresso drink.” Shortly thereafter, a headline in the London Telegraph read, “Starbucks’ UK sales boosted by extra shot of espresso.” The article added that a 9 percent increase in latte and cappuccino sales occurred even in “cash-strapped” and “difficult economic times.”

A similar challenge occurred with the Starbucks Espresso Roast in France. Rob Naylor, managing director, Starbucks France, shares, “We were hearing anecdotally from customers that they would like us to consider a change to our Espresso Roast. You have to understand our Espresso Roast has been the absolute foundation of the brand for over 40 years—so any changes would certainly be unlikely.” Despite his reluctance to consider a change, Rob reports that consumer research was conducted. As expected, the existing Espresso Roast received “extremely good” ratings from a large portion of the French consumer base; however, a significant number of younger females in those tests preferred a lighter Espresso Roast. Rob remembers getting sample data from 1,000 customers and addressing the findings with Michelle Gass and Howard Schultz. Rob notes, “That was a tough message to deliver, but Howard, with good grace, said, ‘We’ve got to give people what they want. Let’s give it a go as long as it’s the highest quality coffee, it’s ethically sourced, and it’s served in a way that is consistent with our brand and values.’” So Starbucks created the Starbucks® Blonde Espresso Roast for the French market. If you were to place the beans that constitute the standard and Blonde Espresso Roast side by side, you

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