Coffee branding is no mug's game
In less than a decade, Starbucks has opened more than 650 outlets in Britain and Ireland, propelling the expansion with a negligible marketing spend which makes other firms jealous
ZERO ADVERTISING: Starbucks' UK and Ireland marketing manager Dubliner Brian Waring is one of a rare breed, preferring to attract customers through the in-store experience and community
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Thursday May 15 2008
A MARKETING boss hell-bent against advertising seems almost as unlikely as a priest hell-bent against mass. Yet Dubliner Brian Waring, aka Starbuck's UK and Ireland marketing manager, professes to be just that.
Four years into his tenure at the coffee giant, the number of campaigns Waring has launched stands steadfastly at zero, a volume equalled by his sponsorship and promotions initiatives.
"We just don't do a great deal of conventional marketing," he says during a visit to Dublin to speak at a Bord Bia conference.
"For us, the way we build our brand is fundamentally through the store experience, and through getting involved in local communities."
Building the "store experience" embraces everything from in-store coffee tastings to music evenings, while "getting involved in communities" extends to painting walls in a Dublin school and nurturing coffee growing co-ops in Ethiopia.
Cultivated from Starbucks' birth in the 1970s, it's an approach that suits Waring, who says he joined the coffee giant because he "wanted to work for a company that made a difference".
So far the strategy seems to be bearing fruit, with Starbucks' UK footprint growing to 650 stores and the Irish tally running at 18 despite negligible spends on marketing.
In the US, however, the minimal marketing has been paying smaller dividends.
Dwindling economic fortunes, fierce competition, and a Starbucks on every street corner, have combined to push the US business into a downward trend, prompting global profits to slump 28pc in the last quarter alone.
The coffee giant has responded by embracing the long-shunned concept of traditional marketing, spending $68m on measured media last year, up from $38m in 2006.
Marketing spends are expected to surge as high as $100m this year as Starbucks love bombs the market with discount coupons and other enticements.
The US difficulties are a far cry from Waring's market, where he remarks on the "phenomenal" welcome Starbucks has received on his native isle since its autumn 2005 launch.
"We were really surprised that there was such an understanding of Starbucks here before we opened," he says. "It was almost like people were waiting anxiously for Starbucks to arrive and once it came they just took to it."
That "anxiety" led to mammoth queues at Starbucks' first Irish branch in Dundrum Town Centre. "That was a double-edged sword," says Waring. "You want people to come but you want them to have a good time too and a long queue isn't a good experience."
Seventeen stores later, Starbucks' queues have calmed down some, but other criticisms remain.
There's the globalisation argument, as people bemoan the homogeneity promised by Starbucks' onward global march.
Then there's the "cluster bombing" opponents, who slam Starbucks for opening masses of stores in one district, stamping out local competition.
And finally, there's the rip-off conscious, who baulk at the €4 price tag for a premium Starbucks latte.
"What is globalisation?" muses Waring. "For us, what we do is about being a good company, buying fair trade, relating responsibly to the local community.
"Clearly we are a global brand, but we need to be locally relevant too and we make sure we are."
As for the "cluster bombing" argument, it seems to visibly offend the marketing boss. He admits "there's no reason Dublin can't be like London" where people are never more than five minutes away from their nearest Starbucks, yet he insists this is no threat to the indigenous coffee shop market.
"All the evidence is that we grow the market," he argues. "We open stores one at a time and our approach is very gradual. There's no cluster bombing.
"It is very important to us that we are making a positive contribution to the Irish economy and the Irish community, so we're trying to grow in a sensitive way that respects local competition."
On pricing, Waring is positively unrepentant, even in the face of an impending economic downturn. "We're a premium brand. The store experience, the quality of the coffee, it's all consistent with being a premium brand," he says.
"We are an affordable treat. History suggests that during economic changes things don't vary greatly for companies like ours."
Waring's defence of the Starbucks brand goes to the core of its strategy, where branding, not marketing, is king.
Interbrand ranks Starbucks as the 88th most valuable brand in the world. While the world's top brand Coca Cola shed 2pc of its value last year, Starbuck's grew its brand capital by 17pc to $3.63bn, confirming its status as a marque on the up.
Neutralising globalisation, being "sensitive" to local markets, and guarding Starbucks' "premium" status helps to protect the brand and yield sales and profit growth over the long term.
"We're mindful of how we build our brand," says Waring. "I'm sure that if we sold mugs in Tesco we'd make money from it, but that's not how we see ourselves."
- LAURA NOONAN
