Friday, February 25, 2005

Starbucks thinking out of the cup

Starbucks plans to serve lunch items in five new cities this year and push breakfast items into 100 outlets in the city of Washington. Furthermore, it is going to roll out music stations into half of its outlets in the U.S. It is clear that Starbucks wants to reshape itself more broadly into a retail chain. Now, Starbucks is thinking of wringing more profit out of its existing loyal following with new merchandise that does not come in cups.
Since we have more choices (substitutes), Mc Donald and Wendy’s will loose some early morning and afternoon business. I myself would rather have a Starbucks coffee with a sandwich for breakfast than making two trips for them. More often in the morning or at noon, we need coffee more than food.
On the music scene, Starbucks aims to be the first national retailer to offer CD-burning stations. Adding music as a complement to coffee is an interesting but risky idea, for music does not necessarily go with coffee or food. Though music creates better product experience in the coffee store, buyers may not be willing to take it home. As a manufacture, is it better to think about meeting existing expectation or creating new expectation of consumers?

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