Arun Sudhaman 02 Mar 2012 // 12:00AM GMT
LONDON--Coffee chain Starbucks is set to launch a major new campaign in Europe to dispel the perception that it is out of touch with local communities.
The new campaign, which will include PR, advertising and digital marketing, follows the arrival last year of Michelle Gass as the company’s first Europe-based regional president. The former Starbucks CMO is aiming to replicate the success of Starbucks' recent North American turnaround, by paying greater attention to the views and expectations of the company’s consumers and staff in the region.
“Michelle recognised things aren’t perfect here,” Starbucks global communications and public affairs SVP Corey duBrowa told the Holmes Report, after attending an Amsterdam conference that announced the company's revival plan. “[The new campaign] is to create the right level of awareness about who we are and what we stand for.”
The “New Day” campaign sees Starbucks working with its global agency partners - Edelman, BBDO and Blast Radius - to improve its connection with local consumers. DuBrowa said the push is likely to be replicated in other global regions, including Asia-Pacific and Latin America, as Starbucks attempts to kickstart growth outside North America.
While results from its latest quarter revealed a nine percent hike in American sales, stores that had been open for at least 13 months in EMEA grew their earnings by just two percent.
“The good news is we have a $1bn-plus business across Europe, but the level of awareness market-by-market is wildly variable,” said duBrowa. “Couple that with the level of competition we see across markets, and what’s going on from a macro-economic view - the thing we felt we needed to do was reintroduce ourselves to our European customers.”
One element of the campaign aims to respond to criticism of Starbucks coffee, and better cater to local tastes. “One thing we heard consistently in the UK is that our espresso beverages are not strong enough,” explained duBrowa. The result is that Starbucks is now adding an extra espresso shot to its drinks.
In France, meanwhile, the company is rolling out a lighter espresso roast in response to consumer feedback in that country. DuBrowa said that Starbucks’ new global structure - it now has three regional presidents based in-market, rather than an international head in the US - enable the company to make much quicker decisions.
The initiative will also include a major internal communications component. “The key thing for us is to get our people onside,” said duBrowa. “We can’t exceed customer expectations if we don’t exceed the expectations of our people.”
In addition, Starbucks will aim to improve existing customer loyalty, through such methods as improving store layouts, and expanding its loyalty and mobile payment programmes. In the Middle East, the company is investing in its digital and social media presence, added duBrowa, to make the Starbucks brand more relevant to a younger audience that “lives on the mobile phone.”
“We need to tell our story much more effectively at a local level,” said duBrowa.
Starbucks is planning aggressive expansion in an attempt to revive its European business. The company is investing millions of dollars to redesign its cafes in line with local tastes, and is aiming to significantly expand its 1,700 store presence in the region.
Starbucks also recently announced its India entry via a joint-venture with Tata Coffee. Asia-Pacific sales, despite healthy growth, account for five percent of global revenue.