Why Starbucks is Losing Market Share

Author: Tommy Leung | 10.21.2008 | Category: Business, Life, Marketing

I had mentioned my switch from Starbucks to Dunkin Donuts for my usual coffee a while back. Since then, I had actually started buying coffee from Starbucks again. For the most part, it wasn’t the same pleasant experience I had remembered from when they were a company to be modeled after. The product was better and the staff was friendlier. I don’t know what Starbucks’ is doing since its fall in stock price and reduction of expansion but, it isn’t making things better.

The quality of the coffee appears to have gone down significantly. I have received less than preferable temperature for a regular tall coffee more than once. The Starbucks I remember always had their coffee at a certain temperature and the staff were well-trained to make sure that happens. The new pike roast is just not as good as what Starbucks used to have.

Last week, I had went into a Starbucks to accompany someone who was actually buying a cup of coffee. I had went to Dunkin Donuts prior and bought a medium cup of coffee and a bagel with cream cheese. We entered this Starbucks and the staff behind the counter proceeded to heckle me about the Dunkin Donuts’ product I was holding. It would have been friendly teasing if the barista had not suggested that they provide me with a paper bag with place my DD in as to not embarrass Starbucks when I walk out–how insulting.

The barista should leave the marketing to the marketers. Due to the barista’s faulty misplacement of brand image over customer service, I have since told many friends and acquaintances about this story. And now, I have made it available to the internet. This whole social network thing is a rather powerful means of spreading a message.

I am unlikely to buy coffee from a Starbucks again in a long time and I would suggest that when you have the option of Starbucks or some other coffee house, go with the latter. A company that is no longer operating in a fashion that justifies its price should be punished by decreased revenues and market share.

From Starbucks to Dunkin Donuts

Author: Tommy Leung | 07.07.2008 | Category: Business, Marketing

A few months ago I stopped buying my coffee from Starbucks and started going to Dunkin Donuts. I don’t know what exactly prompted me to do that. I had been buying Starbucks coffee for years and would specifically look for Starbucks when I wanted coffee. It might have had something to do with the economy going south–do I pay for gas and food or expensive coffee? Starbucks was also going through–and still is–a rough patch. Their stock price was down and the company had plans to close a great number of stores.

Then came their new marketing campaign. I’m not sure about Starbucks stores outside of New York City, but they started putting up little signs on every Starbucks that said something to the effect of having the best neighborhood coffee. Starbucks was trying to go back to their original image of small and local. I find that rather difficult in NYC when there is a Starbucks on every other street corner.

Read More >>

Developing Facebook Applications

Author: Tommy Leung | 06.19.2008 | Category: Business, Internet, Marketing, Money

I’ve worked on several Facebook Applications since the beginning of the year and although none of them have been massively successful hits, I’ve learned a couple of things about developing Facebook Applications. Hopefully, I can share some of what I’ve learned and experienced. I’m not going to talk much about the technical development process but instead, more of the marketing and business aspects. I’m also going to try to not make broad assumptive conclusions based on my experiences but instead, share my experiences and give conclusions that I’m pretty confident in. Some of us are making applications because we want to share our great ideas with the world but, all of us would like to monetize our ideas–don’t lie, you know you do. :)

Facebook launched their application platform in the middle of 2007 and it has done very well since. Thousands of people have made applications for it and some businesses have sprouted from it. I was generally cautious of the Facebook Platform and did not look into it until mid-January of 2008. As of today, I have four active Facebook Applications that were developed solely by me and one other that I worked on. My applications aren’t drawing any significant number of daily active users–I don’t even have an application that has 1000 installs yet. The total combined user base of all my applications probably falls in around 1500 - 2000 installs. It isn’t impressive but, keep reading.

Read More >>

Dunkin’ Donuts Pulls Ad

Author: Tommy Leung | 05.29.2008 | Category: Marketing, Politics

Dunkin’ Donuts pulled an online ad with Rachael Ray because some conservative bloggers thought the scarf she was wearing looked like a keffiyeh. The ad intended to promote Dunkin’ Donut’s Iced Coffees.

Apparently, having articles of clothing that remotely resembles something that Arab men wear to “provide protection from direct sun exposure” is a crime against the public. Granted, there is some vague association with jihad but, that is not what it is intended for. There’s a lot of sand, sun, and generally uncomfortable weather conditions in the desert.

Michelle Malkin of Fox News is quoted as saying, “for the clueless, [a keffiyeh] is the traditional scarf of Arab men that has come to symbolize murderous Palestinian jihad.” Those are words to be expected from a neo-conservative. There are millions of Arab men who wear a keffiyeh for its actual purpose: protection from the harsh weather. Leave it to the neo-cons to take every opportunity–valid or invalid–to demonize a group of people so that we can fight this perpetual war.

$46 Billion for Anheuser-Busch

Author: Tommy Leung | 05.23.2008 | Category: Business, Marketing

The world’s largest brewer, Belgium-based InBev, is preparing a $46 billion takeover bid for Anheuser-Busch. It is expected the this offer will not be greeted with smiles by August Busch IV, CEO of A-B. InBev will likely appeal to the board of directors with their offer which is a significant premium over A-B’s current share price.

I don’t drink much of the brands that A-B produces or imports–I’m more of a Coors guy. I’m a little saddened to see the possibility of this American brand being purchased by foreigners but business is business. InBev is also known for their tight budget controls which may not bold well for A-B’s advertising budgets under InBev. If this takeover succeeds, and the analysts believe it will, it will be interesting to see how the other major brewers react. I will continue to drink my Coors Light.

Live Search CashBack

Author: Tommy Leung | 05.22.2008 | Category: Business, Internet, Marketing

There were flutterings yesterday about Microsoft’s new search initiative to give people money for completing transactions with Live Search. Bill Gates has officially announced the plan at Microsoft Advance ‘08.

Microsoft’s new business model for search, coined Live Search CashBack, will basically give the consumer the fee that the advertiser would have paid Microsoft in a cost-per-action model. Under this plan, Microsoft is not going to make any money on the advertising. One would have to conclude that this is predominantly a strategy to steal users away from Google and Yahoo!

Gates proclaimed that “we can look back and say search started to get a fair bit more competitive and we can look back to this announcement.” I welcome more competition in search. As a business, Google has impressed me at every turn and I am curious to know how Google will combat this. No one knows how successful this model may or may not be but as I mentioned previously, I will certainly try it out.

Marketing and the Internet

Author: Tommy Leung | 05.21.2008 | Category: Internet, Marketing

The majority of marketers have yet to really grasp the ideas of online marketing. It isn’t difficult to see why. Online marketing is still very much a new frontier. The majority of marketing executives didn’t learn about online marketing in college and may not even be that adept online. Universities are barely scratching the surface of online marketing today. Avinash Kaushik, Google’s “analytics evangelist”, says “so many websites ’suck’ today is because of the hippo — as in the ‘highest paid person’s opinion.’”

Kaushik wants marketers to think more about the “why.” He also advises conversing with consumers to determine what we need to fix. He also goes to talk about Google’s Analytics tools which I am finding more and more useful by the day. Google wants “to be the company that really lives the spirit of accountable advertising.” Sounds good to me.

Search and Get Cash

Author: Tommy Leung | 05.21.2008 | Category: Business, Internet, Marketing

That is Microsoft’s new search initiative in order to gain more market share. The plan is to have consumers search for products using Live search and then complete a transaction. Microsoft will give the consumer back a percentage of the transaction as a reward for using Live search. So instead of spending billions to buy Yahoo! and grow market share, Microsoft looks like it will just give the money to us–I like that.

At this point I am likely to use this Live search at least once because of this cash-back program. I’m sure the savings are not going to be that significant but if Microsoft wants to pay me to use their products, why not? I wonder what Google intends to do about this, if anything. Competition is great.

Viral Loops

Author: Tommy Leung | 05.20.2008 | Category: Internet, Marketing

Viral Loops are the next big thing in digital marketing. A former advertising executive at MySpace, Andrew Chen, says that viral loops are the “most advanced direct-marketing strategy being developed in the world right now.” David Armano at Ad Age compares it to Velcro. So what is a viral loop? Chen defines it as:

The steps a user goes through between entering the site to inviting the next set of new users

Read More >>

Rocky Mountain Success

Author: Tommy Leung | 05.19.2008 | Category: Business, Marketing

Source: A.C. Nielsen data, 52-week period ending April 19.

Coors simple and to-the-point advertising has helped it outperform its biggest competitors in Anheuser-Busch and Miller. I personally love the recent advertising for Coors Light and that is probably why it is my beer of choice. I even bought a six-pack of Coors Banquet within the last year. I didn’t particularly like it but it felt authentic.

I also love the packaging innovations that Coors has made: frost-lined cans, wide-opening cans, a 12-pack case that holds ice, and my favorite: labels that turn blue when its “ready”. Coors seems to care more about the beer than funny or provocative advertising. I think the people are liking that.