Starbucks has traditionally been regarded as a premium brand, thanks to its comparatively high price point and general fussiness (size “tall” = small, etc.). At a time when low price is everything to many consumers, it’s in a tough spot. Which explains why Starbucks is now trying to straddle the line between value and premium with its new breakfast offerings—so-called pairings that allow patrons to buy food (egg sandwiches, oatmeal, etc.) with coffee for just below $4. These are targeted at the budget-conscious, infrequent Starbucks customer.
The danger is that Starbucks will lose its premium proposition by emphasizing value. And consumers might find the value proposition dubious, considering that a “deluxe breakfast platter” (eggs, sausages, hash browns and a biscuit) can be had for a similar price at McDonald’s. And that other ubiquitous beverage chain—Dunkin’ Donuts—now sells a small latte for 99 cents. In terms of price, there seems to be a race to the bottom among fast food marketers.
But Starbucks isn’t about fast food, and there’s no way it can compete on price; it should differentiate itself by emphasizing the quality and nutritional value of its offerings (its “perfect oatmeal,” for example, has fewer than 200 calories).
Photo credit, Rudolf_Schuba