The Starbucks effect: Luxury brands for everyone

Wednesday, June 29, 2005 at 1:00am

Where can you find a good "double shot latte in a tall glass" when you need one?

Apparently almost everywhere. Have you noticed that Starbucks seems to be as prevalent as McDonald's? They both serve coffee, but the price and experience are worlds apart.

How can a luxury brand like Starbucks be everywhere? It's not just at retail locations in malls, bookstores, airports, office buildings and kiosks. It's also in grocery stores, office coffee bars and liquor stores. And it's even on music, through its exclusive CD collections sold in stores and online.

And who are those people who can afford a $4 daily caffeine habit? Are they all part of the Richey Rich set?

A true Starbucks aficionado test:
What was the inspiration for the Starbucks name?

A. a constellation that sailors used to chart their course
B. a jazz pianist from the 1940s who was noted for his love of coffee
C. a street in Seattle where the first store was located
D. Captain Ahab's first mate in Moby Dick

Who is the woman in the Starbucks logo?

A. The siren of the seas who lured sailors
B. The White Goddess
C. The ancient female deity who predated classical Greek gods


Answers:
Starbucks was named for Captain Ahab's first mate, Mr. Starbuck, reinforcing the theme of imported coffee and exotic blends. The woman in the logo is all three - a mythical being whose song was said to drive sailors mad with desire. Needed a caffeine fix lately? Then you know the feeling.

No, they are just everyday people with money they devote to a luxury item.

The market for luxury products now includes people living in small condos, the inner city, tract houses, suburban mansions and high-end neighborhoods. They are students, young professionals, baby boomers and seniors. Today, millions of Americans who once made up the mass middle market are less price-sensitive and are migrating upscale toward premium and luxury goods.

It's a trend recognized by Trendwatching.com, a global consumer trend spotter, and dubbed "Mass Class," the massification of luxury brands.

The economic boom of the 1990s created new wealth at the same time that technological advancements, a global economy and the emergence of China as the world's factory pushed the cost of goods down. Consumers suddenly had unprecedented access to luxury products not previously available.

It seems that we all seek to satisfy our desire for self-expression through the things that we buy. In the "trading up" phenomenon, consumers shop at low-cost mass-merchandisers for some products so they can free up funds for luxuries in other categories.

Our interest today is not in prestige but in true self-expression. Example: Carrie Bradshaw in the TV series Sex and the City had more than 100 pairs of Manolo Blahnik shoes but no financial assets. This is a new breed of consumer who wears Gap jeans with a $2,000 Hermes Birkin handbag because it expresses individual style.

Sorry, Madonna, but the "Material Girl" of the '90s is gone. It is not just consumption for consumption's sake. While consumers used to buy luxury items for self-indulgence or status purposes, today's buyer is interested in products that offer self-expression, exceptional experience, innovation and discovery.

Luxury used to be closely associated with high price, prestige and ostentation. As large segments of consumers move upscale and luxury goods move downscale, there has been an explosion of products and services that seek to fulfill our experiential needs.

That's where Starbucks comes in. Starbucks figured out early on that it's not in the business of selling coffee. Instead, it's in the business of selling a coffee experience. And that coffee experience fits a new class of everyday luxury items.

Starbucks has spent a lot of time understanding these new consumers. It has investigated their lifestyles, their societal interests and their daily rituals. Its stores are all focused on delivering a great coffee experience that meets consumer desires.

The choices are both interesting and exotic, from the four corners of the world, all based on fair trade practices. The servers are "baristas" who are expert in brewing and serving coffee drinks. The music is particularly suited to the clientele - a pleasing mix of alternative and jazz forming a convivial setting.

Comfortable chairs, a variety of newspapers and wireless Internet invite you to stay awhile. All of these elements blend in a design vocabulary that continues to reinforce the brand.

Even the cups are sturdy, portable and socially relevant, with provocative quotes from opinion leaders across many professions. My recent favorite from poet, philosopher and author Noah benShea: "Do not kiss your children so they will kiss you back, but so they will kiss their children and their children's children."

Now, I ask you, isn't all of that worth $4?

"Marketing Insights & Trends" is written by staffers at BOHAN Advertising/Marketing. This column is by Jamie Dunham, BOHAN Brand Consulting.

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