Starbucks chain unwraps summer marketing plans

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Starbucks Coffee Co., as part of stepped-up marketing for its growing roster of products, is rolling a repackaged Frappuccino into grocery stores.

A clear glass bottle, with minimal decoration, replaces a shrink-wrapped bottle that obscured the view of the milk-based coffee beverage. Bottled Frappuccino--a grocery version of the popular made-to-order drink sold in Starbucks' approximately 1,500 U.S. cafes--is a joint venture with Pepsi-Cola Co.

"The overriding rationale was, gee, let those flavors be seen," said a spokes-man for Pepsi-Cola Co. He added there are no current plans for ads specifically backing bottled Frappuccino.

Frappuccino posted sales of $65 million at wholesale last year, soaring from $16 million in 1996, the year it was introduced in limited markets, according to consultancy Beverage Marketing Corp. It leads the $101.4 million ready-to-drink coffee category.


On other fronts, Starbucks later this month will break a campaign for Tiazzi, a new made-to-order juice and tea drink. It will be available in two flavors. Print and possibly radio ads will support from BBDO Worldwide, Los Angeles.

The first major Starbucks work from the agency, which won the business last fall, is currently running in some 15 markets to support Starbucks' supermarket coffee products as well as its cafes. The campaign includes print, outdoor and radio, but no TV.

The supermarket-coffee ads tout the convenience of buying the beans at a supermarket and refer to Starbucks cafes. "All grocery stores need now is jazz playing over the intercom," reads one outdoor board.

Some ads for the cafes tout Power Frappuccino, the company's new vitamin-enhanced version of the drink. Others advertise traditional iced coffee.

"We are presenting Starbucks as a company that really cares about your cup of coffee," said John Hoge, senior VP-creative director at BBDO West. David Lubars, formerly CEO-chief creative officer, served as creative director for much of the work; he left last month to become creative director at Fallon McElligott, Minneapolis.


In a move some observers find surprising for the popular chain, some current ads feature coupons for free beverages as a way to drive sales and trial. One print ad in The New York Times, next to listings for a jazz festival, included a coupon for a free 12-ounce iced coffee after 10 a.m.

Starbucks has drawn attention from industry watchers not only for its rapid growth but for the fact that the growth has come with little TV advertising. Of the $13.8 million the company spent on measured media last year, 54% was on spot TV, according to Competitive Media Reporting. No TV has been used this year.

Starbucks posted net income of $88 million for the fiscal year ended Sept. 28, up 54% from a year earlier. Comparable-store sales for the 34 weeks ended May 24 were up 6% from the same period a year ago.

Al Ries, chairman of marketing consultancy Ries & Ries, cautioned that despite this strong performance, Starbucks risks diluting its brand.

"The problem down the road a piece is invariably going to be the line-extension problem. They are getting into too many things," he said. "Initially it doesn't hurt you. But from a longer point of view, it destroys the mystique of going into a Starbucks and having a cup of coffee."

Copyright June 1998, Crain Communications Inc.

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