December 13, 2003

Advertising

People in advertising tell me that advertising is important because it helps create, manage, and maintain brands. This is why companies like coke and nike spend untold hundreds of millions on advertising. Why is it then, that Starbucks, a company that does zero advertising, has far and away the best (maybe only) brand in a market that's founded entirely on commodity product.

I'm not saying they don't spend on marketing, i'm saying they don't spend on advertising. So, ok then.

Posted by Dick at December 13, 2003 02:28 PM | TrackBack
Comments

While Starbucks does do a lot less advertising than other major brands, the don't do zero advertising -- I've seen TeeVee ads (particularly around their drinks sold at supermarkets) and plenty of magazine ads.

But, talk about a commodity product with zero advertising that's a monumental success: Krispy Kreme!

Posted by: peterme at December 14, 2003 11:31 AM

I figured I might get trumped on this one - Krispy Kreme is a much better example. I never have seen Starbucks ads on the telley myself. I suppose I might have said "I personally have never seen...", but if this weblog is one thing, it's long on hyperbole. Mamby-pamby equivocating won't get me anywhere at this point.

Posted by: dick at December 14, 2003 12:06 PM

Both Starbucks and Krispy Kreme share the Ultimate Franchise Success Equation:

Deliver a superior product the same way everywhere.

The first key: Superior. Bad products available everywhere? Not as good.

The next key: Consistency. Good product one, bad product the next time = no more next time.

The final key: Ubiqity. Great product you can't ever get your hands on is not a sustainable equation. At some point unrequited desire devolves into hatred.

If you can deliver on the Ultimate Franchise Success Equation, you don't need to spend as much money on marketing. Unfortunately, my guess is you're spending those dollars elsewhere, in training and equipment and rent and so forth.

FWIW, I predict Subway will soon decline. Why? Consistent? Check. Ubiquitous? Check. Superior? Uh oh.

Posted by: Scott Hess at December 15, 2003 02:47 PM