Riffing Space

I saw this great podcast from Chris Pirillo on how to make the perfect cup of coffee.  I took note because he makes it almost exactly the same way that I do (except I use an electric teapot to heat the water).  If you love to drink coffee and like to be able to have amazing coffee at home, you must check this out!  Also note that my favorite coffee (purveyor and blend) has a starring role:

The less remarkable a product is, the more that price becomes a factor. This is now evident as Starbuck’s coffee becomes ubiquitous. There was a time when Starbuck’s made me passionate about coffee when they first came to Los Angeles nearly 20 years ago. I often credit this passion for coffee as leading to my passion for food and wine. Anybody who knows me can attest to the importance of these three things in my life. But I have long since abandoned as my coffee purveyor of choice as the product has become less, well, remarkable.

John Moore, who honed his marketing skills while working at Starbuck’s, takes issue with the problem them as they choose to lower their prices:

Starbucks CEO Howard Schultz once said, “Our marketing will emphasize quality and service, not price.” He’s now doing something different.

In a bigger shift in marketing strategy than spending millions on national television advertising, Starbucks is now selling short-sized cups of brewed coffee for a $1.00 and offering free refills at Seattle-area locations. (Reuters link | WSJ link)

Oh My! That is a MAJOR shift in strategy for Starbucks. Here’s why…

“Starbucks fiercely protects its pricing power because it knows a low-price strategy is the quickest pathway to commoditizing and marginalizing coffee back to being, well, just coffee. It also knows if it lowers prices, it will have a hard time ever raising them again. Most important of all, Starbucks knows higher prices bring them healthier profit margins, which fuel the cozy experience customers enjoy. By ever deciding to run itself as a priced-to-sell retailer, Starbucks would be admitting it no longer values a unique product or a unique customer experience. Seth Godin, author of Purple Cow, goes one step further, saying that a low-price strategy is “the last refuge of a…marketer who is out of great ideas.” The folks at Starbucks are too smart, too savvy, and too creative to fall for the low-price trap. And if they ever did, Starbucks as we know it—Starbucks as a forward-thinking company—would cease to exist.” SOURCE

Those words were written in TRIBAL KNOWLEDGE, my love story to a company that shaped how I approach marketing. In my eight-years there, we, Starbucks marketers, would have never considered promoting a $1 Cup o’Joe to increase sales. Instead, we would have used of a combination of these ideas to solve for Starbucks problems.

A “cheap coffee strategy” … Oh My! is right; because, a low-price strategy is indeed the quickest pathway to commoditizing and marginalizing coffee back to being, well, just coffee.

Okay, I am inspired. Mike Carter has a post about an inventive addition wine world…

The newest addition to the East London bar scene, The East Room is a members-only ‘new world wine room’ with a 24hour license from the people behind the Milk and Honey establishments, offering over 50 wines from the Southern Hemisphere- most of which are available by the glass or tasting measure via a self-operated machine. Simply charge up a wine card with as much credit as you like and try DIY sampling of some rare, unusual, and expensive wines normally only available to buy by the bottle.These machines, known as Enomatic wine serving systems, seem to be popping up around London- first at trendy Islington wine shop The Sampler where the available wines are rotated fortnightly to allow regular tasting of their 600 bottles – ranging in price from 30p for the cheapest to £30 for 25ml samples of the 1999 Pétrus, which to their surprise, disappeared in just a few days – and more recently at Selfridges new Wonder Bar, an addition to the Wonder Room that they describe as a weekly changing ‘jukebox of wine’, apparently created as a ’suitable riposte to the culture of binge drinking’!