Will Starbucks be a pub soon?

Here is what I think happened. Starbucks had someone research the eating and drinking habits of its customers. They found that many Starbucks customers also drink wine and a good fraction drinks beer. So why can’t you also sell these drinks to them? Well, it would work if the customers would come back at a different time, on a different occasion that is. May be that will happen. And if it did I would still like to think of the same customer on different occasions as a different customer because the experience that they seek is different. I sort of imagine a cup of coffee at Starbucks, when it is not to go, as being an occasion for a little quiet computing or reading, or an informal business meeting. An occasion with wine brings other things to mind. It is also possible that the new menu brings in customers new to Starbucks. That will require some managing because they may or may not like to drink wine where coffee is the main event, so to speak. And then there are issues of space and whether audible conversations are good or bad. When I was at Starbucks in downtown Sydney what struck me was the two-storey layout that had oodles of space and possibilities for quiet corners. I can see that wine and beer would work well in such places not the least because of the tourist traffic. But for my neighborhood Starbucks in Dallas the bigger worry should be not that there will be no takers for wine or beer but how that will affect the brand meaning for customers: a place to get coffee and a little work done or a place for a drink with buddies. The challenge for Starbucks is no different from what it is for other companies – how to sell more – but in that quest now the casualty might well be what the brand means to its customers.

Apple in Target Stores

Anyone that has been to an Apple store knows exactly what the store ambience is. Lots of people, mostly young, mostly dressed in clothes that anyone over 35 would feel uncomfortable in and mostly people who look like they have known computers and video games all their lives. And yes, they probably have.

There is plenty of help from store employees who resemble the clientele I just described. Some offer advice and others just sell, and they wear T-shirts of different colors. They don’t all look like geeks but in the store it is easy to feel that way. A trip to the store is meant to be an experience not a purchase occasion. You might have gone there half a dozen times or even more but the next time you are in the neighborhood you can’t help but go there to get your fix: of the latest whatever. The motto of the store is “Come to shop. Return to learn.” Well, learn what is the question.

So why have a mini store in Target now as in Best Buy earlier? Surely, with no offense meant to either Best Buy or Target, the experience cannot be why people will go to the mini store. But that is precisely the point. You go to Target to buy diapers for your baby or towels for the home and you are not the type that seeks the experience at the Apple store. But Apple wants you. So they are coming to you via Target. Yes, soon they may even come to a bookstore, if those are around long enough. But Apple has you in its sights. And that is a good thing, I think.

NETFLIX: dual branding or pricing problem?

Qwikster is for movies on DVD and Netflix is for streaming video content. This is quite different from Toyota and Lexus or Honda and Accura. It is more like Walmart and Sam's warehouse club. When Toyota decided to have the Lexus brand, the customers for each brand were different and the two brands prevented any confusion in the segmented market. Walmart and Sam's often serve the same customer on different occasions or different types of shopping trips. But at the heart to of this segmentation strategy is the fact that on any one occasion the customer visits only one store and so both assortment and pricing can be different at the stores.

Now let us turn to Netflix. The customer orders DVDs and streaming content on the internet and prefers a single website with a single sign in. She may even order both at the same time. The real problem for Netflix has been the flat price strategy. Adding streaming content to DVD's without rethinking pricing has landed the company in trouble. And what is more, it has lost control of its value proposition. Ideally, each time a person goes in for the streaming they should be charged a variable price. Or like the cell phone companies there could be tiered pricing with various options. There really does not seem to be any need for two brands. Netflix should learn from i-tunes which used to have a 99 cent a song pricing strategy and then changed it, for good and for better. A couple of years ago I discussed a paper at the QME conference and the question of uniform price for all songs was the topic. Of-course such a strategy is not a good one.

Why Red or Blue might matter to marketing researchers

Now there is a research finding reported today on NPR, soon to appear in Nature, which says that it matters whether the color is red or blue when you are working, or for that matter watching an ad or shopping. Apparently, quantitative marketing researchers, who presumably are engaged in logic and other mind bending details, should work with computer screens that are red. I know most of my colleagues will see red just at this thought. At the other end, the color blue is associated with improvement in tasks that can only be termed creative. All this begs the question why IBM has for so long been Big Blue and Coke, you know, Coke Red. I recall reading back in July that Coke went about decking Beijing in red just before the Olympics. Like the Chinese really appreciate the Red times.

Anyway, it occurs to me that these new findings, if they are really new, might open up lots of opportunities for research in marketing. I imagine there'll be several experiments although it would be important to screen the undergraduates for color blindness. In the meantime, you might want to look at some of the nay saying comments that are already streaming in based on the news report. Good luck with finding out whether the next new product should be packaged in red or blue or possibly red, blue and white!