Higher-end coffee shops like Starbucks are getting severally effected in our recession now, as more and more consumers flock to places like Dunkin Donuts and McDonald’s for a cheaper cup of coffee. Its second quarter profits fell by 77%! Their new marketing strategy is to focus on the quality and value of the whole Starbucks experience, because this and its servicescape really differentiate it from the competition. Some of their new advertising is warning consumers to watch out for the “cheap coffee”, implying coffee from places like McDonald’s is not up to par. Even so, Starbucks will cut costs slightly for their more popular products like the iced coffee and tall lattes. Will these plans counteract the effects of the recession? Only time will tell.
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