Can Starbucks be both a premium and a value brand?

starbucks_rudolf_schubaStarbucks 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

1 Responses to “Can Starbucks be both a premium and a value brand?”

  • I don’t think Starbucks is doing enough to promote its breakfast pairings. Based on this post, I went there the other day to get my morning fix of coffee and oatmeal for under $4. However, there was no signage or friendly barista alerting me to the deal, nor have I seen any other type of advertising. BTW, my total ended up being over $4; I think it was because I ordered a medium coffee (I refuse to say venti, or whatever a medium is) instead of a small; I guess it would be clear if there was any sign that these “breakfast pairings” existed.

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