Starbucks Trying to Cut Buyer Pain

As described many times here at Neuromarketing, paying for a product activates the brain’s pain center, particularly if the price seems too high to the person making the buying decision. Starbucks is the company that taught us that $5 for a cup of coffee (or at least for a skinny mocha peppermint latte with an extra shot ) isn’t too much too pay. A simple cup of brewed coffee costs less, but the high cost of Starbucks beverages has made the $5 Starbucks coffee a staple of stand-up comedy routines. Now, new competitors like McDonalds are creeping in and showing consumers that maybe Starbucks actually IS kind of expensive for what you get. The buyer pain that Starbucks had suppressed over the years is in danger of returning. […]

By |January 24th, 2008|

Starbucks vs. McDonald’s: Coffee War Heating Up

Burger giant McDonald’s has the lucrative upscale coffee market dominated by Starbucks clearly in its sights. According to an AP report, McDonald’s Eyes Ballooning Coffee Market,

After the success of its upgraded drip coffee – which even managed to snag a thumbs-up from testers at Consumer Reports earlier this year – the fast food chain known for super-size meals is gearing up for a massive expansion into the world of lattes.

“We want to move from beverages as an accompaniment to being a beverage destination,” Don Thompson, president of McDonald’s USA, said in a meeting with analysts Tuesday. “Our speed, our convenience, the value that we can afford to customers without quality comprise [sic] will make us a formidable player.”

Restaurants will offer lattes, mochas, cappuccinos and espressos with a choice of different flavorings and milk. Industry watchers say the drinks cost about 50 cents less than at Starbucks.

Starbucks, meanwhile, is already feeling a bit woozy after its stock hit a 52 week low, as detailed by Chicago Tribune writer Mike Hughlett in New pressures grind at Starbucks). The picture isn’t entirely hopeless for Starbucks, though – neuromarketing research may hold the key to staving off the McDonald’s challenge. […]

By |November 19th, 2007|

Sensory Marketing to Jolt Espresso Sales

One of the keys to the phenomenal success of Starbucks has been that its stores offer a consistent and appealing sensory experience. The music, colors, and lighting are all important, but clearly the wonderful coffee aroma is what dominates one’s senses on entering a Starbucks outlet. I enjoy brewing Starbucks coffee at home, too, but it never seems quite the same as when I consume it in the actual shop. It turns out that I’m not alone, and that my coffee maker isn’t the entire problem. Yes, coffee in the coffee shop DOES taste better, but not for the reasons you might expect. Research from another coffee maker, Nespresso, shows that 60% of sensory experience of drinking espresso comes from the retail environment! […]

By |November 1st, 2007|