Americans have always liked their coffee hot. But then Starbucksmade hot coffee desirable, in demand, and extraordinarilyprofitable. And then Starbucks made coffee “cool” with itssuper-popular iced Frappucino drink — just as trendy,fashionable, and universally appealing.
Starbucks is no doubt one of the greatest marketing stories ofrecent history. How this company turned an unassuming beverageinto an icon of sophistication and taste is no mystery, however.It’s all about a marketing tenet called positioning.
The coffee company started out in Seattle’s Pike Place market in1971 as a single gourmet coffee shop, and by 1995, the chain’searnings were $26.1 million. Marketing experts agree thatStarbucks’ skyrocket to fortune centers on its aesthetic sense.In other words, the public’s perception of Starbucks has to dowith how it appreciates this company’s style. Sure, Starbucksfilled a need and created unique product brands, but whatattracts coffee drinkers again and again is the experience ofthe Starbucks environment and its products. Smooth,sophisticated, artistic: These are seductive qualities even fora business based on a little brown bean.
The Starbucks story illustrates at least two powerful marketingprinciples. Both help us to better understand effectivepositioning, or the process of finding a “place” for ourselvesin people’s minds:
When you are assessing your own position and considering how youmight improve your image and thus your market share, rememberthat there are essentially four winning positions: better,different, faster, or cheaper. You can certainly positionyourself as one of these, perhaps even two; capturing a positionas three of them is tough and probably not desirable, andcornering all four is just about impossible.
Not everyone is up to the task of creating another Starbucks.It’s tempting, with price wars so rampant, to believe that aperception of being cheapest is easiest to establish. Yet intruth this is the most difficult because of fixed costs. It’slike doing the limbo: you can go only so low, and then you’reoverextended or flat on your back. Definitely not the easiestposition to be in.
How about being better instead? Contrary to popular belief, thisis perhaps the easiest position to take, since making animprovement or simply creating the impression of greater qualityor ability has no constraints. One tip: when you capture thedifferent category, you may get the better category as aby-product.
Starbucks capitalized on this technique, as did Dennis Rodman,the oddball of basketball. He came up with a way to take twopositions in fans’ eyes: both different and better. Okay, maybehe wasn’t actually better than his teammate Michael Jordan, whowas unbeatable, but certainly he was perceived for a time asbetter (cooler, trendier) among those who were captivated by hisstyle. His fashion and fascinating antics made him so unique thathe became unforgettable. And because he was also an excellentball handler, he became famous and highly regarded in hissport.
BMW has also taken the better-different approach. Until fairlyrecently, Mercedes-Benz had the better luxury car market sewnup, so BMW — a competitor with a parity product — simplyrepositioned itself. Its tag, “the ultimate driving machine,”appeals to a younger crowd and gives them luxury with power andhandling. This is “hip luxury,” which is different from theMercedes position, which could be summed up as “elegant luxury.”And voil
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