This Tuesday at the Marketing Society, Howard Schultz shared some of the marketing story behind the Starbucks brand, and as it’s a business we’re fascinated by, I went along to find out more, accompanied by Anne MacCaig, CEO of Cafedirect. Midway through a media tour publicising the company’s involvement in the Red project, and fresh from an encounter with the Today programme, Howard gave a polished performance, with a big emphasis on the company’s CSR efforts including a whopping $300 million investment in staff healthcare in the US. Coming from relatively humble origins in the Projects, he was keen to explain his personal motivation:”I wanted to create the kind of company my father never got the chance to work for.”
With this as his start-point, his focus has been on building the company, not building a brand. This year the Starbucks marketing drive during the economic downturn has been single-mindedly on reconnecting with the core customer and the brand is now number one on both Facebook and Twitter. And this energy and engagement has been sustained by social initiatives like giving away a free coffee on the day of the US presidential election to anyone who came into any branch of Starbucks and proved they’d voted.
Howard was keen to point out that CSR is not marketing for him; it’s part of the Starbucks ethos As you might expect, Anne asked a searching question about Starbucks’ relationship with the growers – one of Cafedirect’s greatest passions in life. It was an interesting discussion to open up – whilst Starbucks is one of the biggest buyers of Fairtrade coffee in the world, it’s still a tiny proportion of their whole product, but Howard’s justification was that the Starbucks product strategy is to put quality first above all else. Howard also pointed to a micro-lending scheme and a water programme. Anne’s view was that in reality a corporation of that size could be doing a great deal more to help growers achieve the right product quality with fairer trade, and that with their scale they could have a massive, immediate impact. Howard’s philosophy in business is about rising to the challenge; as he described it “you have to take the hill everyday” Now leading a business that has grown from 3 stores when he first joined to 16 000 worldwide with 180 000 employees, that’s one hell of a lot of hills he already has under his belt. Given Starbucks’ commitment to being a responsible employer, embracing the people who supply their product, as much as the people who serve it, seems the logical next step for the business. Maybe that’s Howard’s next hill…
