People know Starbucks. They recognize the logo, the brand and the name. However, unlike other conglomerates, you will rarely see a Starbucks commercial or billboard. Even with revenues of $10.7 billion in 2010 and 16,850 shops in 40 countries, the massive corporation rarely advertises and occasionally combines its public relations and advertising campaigns when it need to restore its image. Without promotional material, you wonder how the company garners as much revenue as it does.
Starbucks doesn’t rely on traditional advertising.
CEO Howard Schultz has claimed that traditional advertising cannot capture the “heart and soul” of the Starbucks culture. Instead of aggressively advertising on mainstream media with standard commercials, the company has used product placement in several blockbusters to increase recognition of its brand. When Starbucks does advertise, they tend to use billboards or mobile platforms to reach their audiences, such as targeted Web advertisements and their mobile app. Generally, their advertising is not specific and is not the main source of image safeguarding the company uses.
Public relations does it all for Starbucks.
However, after the 2008 economic crisis, Starbucks had the slowest two years of growth in its history. To counter these effects, the company hired Edelman to increase its brand recognition and public image for its fortieth anniversary. Edelman brainstormed a strategic campaign which Starbucks enacted, and the by the third quarter of 2011 the company had record earnings, operating income and earnings per share. The campaign catered to customers, consumers and stakeholders alike, so although the company termed it a ‘public relations campaign,’ it had the elements of both public relations and advertising.
Starbucks doesn’t generally use traditional advertising techniques, but when the company encounters hard times, they tackle their public image by combining public relations and advertising into singular campaigns.
But Apple does it too! Apple has a similar business model. If you’re visiting New York City, you may see an Apple billboard or two. But you won’t ever see your TV screen plastered with Apple commercials.
At first glance, Starbucks and Apple may not have much in common-one is an innovative tech company, the other a beverage giant. But if you dig a little deeper, the two companies have products-maybe you consider them ‘designer’-that are priced well above the competition. And yet people keep forking over loads of extra cash for products they can obtain for far cheaper on the retail market.This is because the two corporations, unlike most today, rely on simple, old-fashioned hype to promote their products-and they do a darn good job, too.
Stay tuned for details on Starbucks’ and Apple’s marketing models in my next post.