Mr. Bedbury has been quietly reassigned from senior VP-marketing to a position he created called senior VP-brand development. The post frees him from handling day-to-day marketing responsibilities, giving him rein to develop new forward-thinking, non-traditional marketing directions.
PROMOTIONS SIGNAL A TURN
"Starbucks is probably one of the best-positioned [brands] on the planet to reinvent what we may traditionally call marketing, or make whatever marketing programs we undertake better," said Mr. Bedbury. Although major new projects are in the works, he declined to be more specific.
But Starbucks might already be signaling some new direction with promotions such as an in-store book drive launched over the 1997 holiday season to benefit children, a link to Oprah Winfrey's Book Club and the promotion of company founder Howard Schultz's book, "Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time."
The Internet may also figure in plans. A company spokeswoman confirmed a new strategy is being created, but declined to add details. Starbucks is also believed to be exploring some links to music, perhaps even endorsing musicians.
The literary events "did amazing things telling a complex story that a 30-second commercial could never touch," said Mr. Bedbury, who joined Starbucks in 1995 from Nike, where he was credited with energizing that brand's image.
"It's the non-traditional [marketing arena] that will bear more fruit in the coming years," Mr. Bedbury said, adding he wants to promote and nurture the coffee house experience.
Succeeding Mr. Bedbury is Judy Meleliat, hired as VP-marketing operations last fall from InfoAccess, where she was VP-marketing. She's now senior VP-marketing.
NOT IGNORING ADVERTISING
The company won't ignore traditional advertising, however. In fact, the first creative from the company's new agency, BBDO West, Los Angeles, is expected to break soon. David Lubars, CEO-chief creative officer at BBDO West, said initial TV spots from the shop, in addition to touting coffee, will carry an overall branding message and attempt to capture the "magic" of Starbucks. He said the effort will have a non-traditional bent.
"I think you have to think out of the box with advertising, too. You don't want to come off with the usual kind of approaches," he said.
This summer, Power Frappuccino will be the focus of a marketing program, Mr. Bedbury said. A version of the iced Frappuccino with protein powder and vitamins added, Power Frappuccino was tested in Atlanta and Houston and will be rolled out nationally in April. Starbucks next week will also begin serving in all its stores a new spiced tea, Chai Tea Latte, to appeal to people who don't drink coffee.
Starbucks has drawn considerable interest from industry observers for its ability to grow the company to close to $1 billion in revenue last year with virtually no traditional broadcast advertising.
GREAT BRAND LOYALTY
"The research we've done shows we have brand loyalty any other company would die for," said Mr. Bedbury. "The average customer visits 18 times a month. That's a great base to build from. Our core customers recognize how we built that, and we have to be careful we don't behave like a McDonald's or a Burger King in how we communicate."
Starbucks has about 1,500 retail cafes in 28 states, from which it does about 87% of its business. Other revenues have come from the increasing number of products sold outside the cafes, including branded coffee supplied to United Airlines, bottled Frappuccino and Starbucks-branded ice cream.
"They are trying to improve the whole coffee experience," said Kevin Keller, visiting professor at Duke University's Fuqua School of Business, and a consultant to Starbucks, adding that Starbucks is pinpointing the "kinds of activities that make sense to enhance the brand."
Mr. Bedbury's move comes at a time when growth in same-store sales are starting to slow.
"I think it gets tougher and tougher to drive sales at the retail-store level," said Andrew Barish, a restaurant analyst with BancAmerica Robertson Stephens.