Starbucks: fighting a land war in Asia

When a person adapts to the times, they’re seen as progressive… becoming more “highly evolved”. When a company whose brand is as highly evolved as Starbucks adapts to the times, they run the risk of appearing shifty. That’s what Starbucks is facing, as has been widely reported in the press and blogosphere. At issue is what the Huffington Post called “going undercover”.

Signage reminiscent of "You've Got Mail" and Fox Books

Signage reminiscent of "You've Got Mail" and Fox Books

It’s amusing, really. It reminds me of the David and Goliath story in You’ve Got Mail … right down to the signage Starbucks put up… does it remind you of that cute “Fox Books coming around the corner” sign, preparing to steamroll its tiny competitor, the “Shop around the corner”?

Starbucks came out today with a fact sheet to try and defuse the controversy, but the original charges still stand: Starbucks has been ham-handed in its approach to this situation. Here are the red flags that strike me:

  • Authentically local stores have described lengthy visits by Starbucks personnel who carried notebooks labeled “Observation”
  • The store right next to the 15th Ave shop has had many of its design details copied by Starbucks: wall colors, light fixtures, similar salvaged wood and framed chalkboards, similar used theatre seats in the serving area
  • Door of the remodeled Starbucks

    Door of the remodeled Starbucks

    The new store sign on the door says it was “inspired by Starbucks”. Is this true? Isn’t it more accurate to say that it was inspired by Smith, and is actually attempting to distance itself from Starbucks by the decor change, by a shift in the technology of drink production, and by the elimination of Starbucks labeling from the equipment and bags of coffee and tea? After all, don’t those bags contain the same coffee and tea that other stores get, with the Starbucks brand? It really does smack of deception.

I like the idea suggested by Matt Whiting in his paragraph about transparency: compromise by calling it “15th Ave. Coffee and Tea: your Neighborhood Starbucks.” And I would add, don’t give the appearance of deception by removing Starbucks logos from the coffee and tea bags. Take away the branding shell game, and then Starbucks is simply updating its store decor, which now becomes a virtue and a sign of sensitivity to the wishes of its customers.

So I agree with the sentiments of those who feel that the new Starbucks experiment is a good idea … a realization that the goal of being truly accessible, local and organic implies a fresh approach. Maybe even a new “unbranded” brand if it can be done without getting sneaky.

But here’s the rub: I’ve never seen a high-value brand maintain its value long-term after scaling upThe Limited gave way to Express which lost its upscale standing to a host of small competitors. Abercrombie needs its Hollister foil to keep its brand value high… Nordstrom has developed great customer service as its hedgehog concept, but it’s engaged in one of those Asian land wars now, too. (A big part of this is simply the plate tectonics of aging demo groups, too.)

Upscale panache downscales in perceived quality and value when it goes mainstream, and Starbucks has lasted longer than most. Starbucks is 1000 times more substantive than Beanie Babies, but there might be more of a similarity in the trajectory of those two brands than we care to admit. Ultimately we’re dealing with the law of supply and demand. Supply increases, demand drops. That’s why every city that has a community at its core can support 6 local one-up coffee shops better than it can support half a dozen Starbucks stores. Maybe that’s why Jim Collins writes, “Great companies do not necessarily have innovation as a central part of their vision or strategy.”

In my own industry, video production, I’ve seen lots of fads and lots of factories. I’ve seen them grow and gain market share, and prosper — for a while — by cranking out special effects and creative approaches that are markedly similar from project to project. I’ve seen these shops build their staff around specialties: camera guys, editors, 3D animators. They buy a gizmo; it cost a lot; so by golly, they’re going to use it. Creativity gets redefined from what works to what’s au courant. Remember morphs? Spins? Marquee Effects? Page turns? Remember Cranston/Csuri Productions, which lasted 7 years doing slick network animations when you could charge $1000/second for cranking them out? Yes, some of these skills require some specialization, but when you bring devotees into a room to decide on the approach, each fights for his own specialty. And the result might be efficient and it may even be truly creative … But in my experience it’s not a creativity that is harnessed to the customer’s needs, but to the production company’s internal dynamic of “the state of the art”.

Actually I think the YouTube phenomenon is a backlash against such slick communication-by-committee. It’s not that people don’t like good production values. YouTube video quality is getting better and better. What got lost was the truly unexpected, the honestly authentic, expressions of individuality; and everyone loves to see that when it happens. Along with the lower cost of entry, I think the desire for authenticity is the biggest reason why today’s best work is done by small shops and by agencies such as The Martin Agency which delegate lots of creative power to individuals in a horizontal, non-specialized community of thinkers.

Starbucks is a great company which may succeed as it adds food, alcohol, and more neighborhood individuality to its impressive quality brand. If it can keep providing health care costs for its part-time workers (and if good health care coverage remains in short supply), I think the company can continue to retain great people who attract loyal customers. (John Moore has much wisdom to offer as an observer of Starbucks.)

On the other hand, the difficulty of truly scaling creativity makes Vizzini’s joke relevant, it seems to me. A big company can compete because of economies of scale, and a small 3-store chain can compete because it has no scale. All its decisions are individual. One good, in-touch entrepreneur can feel what needs to happen in a neighborhood … and the individuality of such a person can out-maneuver an army of junior managers carrying “Observation” notebooks.

So while I agree that Starbucks “gets it” that unique, neighborhood stores are what people want, and wise in its desire to deliver a truly local experience store by store, I also sympathize with those who were offended by their execution of the plan.

Imitation is not creation, and hiding a brand does not change its fundamental identity. Those are classic blunders, along with fighting a land war in Asia.


Boone Oakley

The story of Billy, Marketing Director, courtesy of Aden Hepburn and his Digital Buzz Blog. Do you agree with him that it’s the most creative website ever?

Largest July 4 Chinese Fireworks Display Ever

On July 4, 1054, Chinese and Arab observers saw a star appear in Taurus that was 4 times brighter than Venus, and could be seen day and night for 23 days. Eventually this supernova turned into …

You can read about the facts behind this visual phenomenon at
You can see other Absolut Ads here:

Disclaimer. I don’t normally drink any liquors other than a beer or glass of wine. However, I do like to indulge a taste for highly creative advertising, which as you know is more dangerous than the occasional martini… 🙂 Have a happy, safe, and sober weekend!

Fair use abuse

This Chronicle clip talks about the academic/pop culture remix uses of copyrighted video on the web. The American University profs in the interview claim that the sorts of uses they sample for the reporter are fair, and contribute to a new kind of dialog among people. I’m not inclined to agree. I think most of those things are opportunistic misuses of creativity… because they build a creative product on someone else’s investment.

The fact that they’re funny and creative in their own right doesn’t matter to me as an artist. The law is designed to protect artists from having their work reproduced and distributed by others, because the duplication of images I created cheapens the resale value of those images for me, as the artist.

I’ve done many parodies of other creative works over the years. No problem with that. But I’ve done so the right way, by recreating, with a twist, the original idea in a way that serves my client’s communication objective.

Fair use? Sure, a couple seconds of a news event, a very brief clip from a concert at a college, to show the audience that the event occurred. That’s fair use. But if I were to repurpose the entire chorus of an artist’s song as part of the sound track, letting the words or music set the mood for that segment of the video — that would NOT be fair use, but would instead be benefitting from the other artist’s work without paying him. So in those cases I always contact the artist and explain the desire to use his work for that purpose, and tell him what the college can afford (usually from a few hundred to a few thousand dollars, depending on artist, purpose, and how it will be distributed). Usually, along with credit they’re happy for the exposure at a nominal rate.

In the movie I Am Sam, the screenwriter wanted to use Beatles songs because that was part of the title character’s shorthand way of communicating with his daughter. They didn’t have the king’s ransom it would take to use 10 seconds here or 30 seconds there of real Beatles songs. This seemed like a setback … but instead they went to relatively unknown bands who cover Beatles tunes and hired them to recreate the songs. Then, they only had to buy less expensive performing rights and the much less expensive song usage license for the movie. Was this a noble purpose, a new audience, a creative recontexting of Beatles music? Yes. Would it have been fair use? No, and if they had tried it they would have risked facing the punitive damages and criminal penalties that the copyright law has been given to enforce it.

I once violated the copyright law myself, and it still gives me the creeps to think about it. I was doing a motivational show for a sales meeting in Phoenix… a one-time feel good meeting for a bunch of guys who had been through a rough time in their struggling division of a Fortune 100 company. I took 20 second to 1 minute clips from a bunch of different movies and added a narration by a voice that sounded like the country philosopher. The theme was “great beginnings”, and every clip was either funny or inspiring. Did I get away with it? Yes, because it was under the radar in 1989 or so. Was it fair use? Not on your life. It was an abuse of the fair use laws and I’m glad no one ever caught me.

Let’s end this on a light note by breaking the law together… 🙂

PS. The report you can read yourself is by Pat Afderheide and Peter Jaszi, co-director of the American University Law School’s Program on Information Justice and Intellectual Property.

I just interviewed an attorney who is an expert in intellectual property a few months ago. I’ll contact him and report back to you what he says about it.