North American Coffee Partnership (Starbucks Corp.)

views updated

North American Coffee Partnership (Starbucks Corp.)

2401 Utah Avenue South
Seattle, Washington 98134
USA
Telephone: (206) 447-1575
Fax: (206) 447-0828
Web site: www.starbucks.com

BRING ON THE DAY CAMPAIGN

OVERVIEW

Pepsi and Starbucks joined forces in 1994 to create the North American Coffee Partnership (NACP) to market cold ready-to-drink coffee products under the Starbucks name and using the Pepsi distribution network. The joint venture's first product, Frappuccino, quickly dominated the category. It was positioned as an afternoon drink, but research indicated that there was also a market for a cold coffee drink in the morning, leading to the introduction in 2002 of a second product called DoubleShot, an espresso drink. NACP provided some advertising dollars to launch the new brand, but after two years DoubleShot had failed to achieve much brand recognition. The 2004 "Bring On the Day" campaign, developed by ad agency Fallon of New York, sought to rectify this problem, create a buzz around the brand, and build sales.

While the campaign included some radio spots and DoubleShot giveaways at ski resorts and music events, the entire success of the campaign hinged on a single television spot, "Glen." It featured a young man drinking DoubleShot and getting ready for work. While he did so, he was serenaded live by the 1980s rock band Survivor singing their hit song "Eye of the Tiger," but with lyrics that commented on Glen's workaday world. The campaign was budgeted at $5 million to $10 million.

"Glen" was a hit with the target audience and was widely acclaimed, garnering an Emmy nomination and a Bronze EFFIE Award in 2005. It was also pirated on the Internet and became a subject of conversation on blogs and online forums. More importantly, the campaign, which ended in September 2004, dramatically increased brand awareness, increased the conversion rate from mere awareness to actually trying the product, and increased sales in DoubleShots' main distribution channels, supermarkets and convenience stores.

HISTORICAL CONTEXT

In 1994 Starbucks Coffee Company and PepsiCo, Inc., forged a joint venture, the North American Coffee Partnership (NACP), its goal to marry the Starbucks brand with Pepsi's massive distribution system to produce and market cold, ready-to-drink coffee products for grocery and convenience stores and other outlets. Two years later NACP introduced Frappuccino, a bottled version of Starbucks's popular combination of ice, milk, and coffee, available in half a dozen flavors. Frappuccino became so dominant that it achieved generic name status for all ready-to-drink (RTD) coffees, in a manner similar to the way Kleenex was associated with facial tissues. By the early 2000 this 800-pound gorilla in the RTD coffee category controlled 82 percent of the grocery channel and 75 percent of the convenience channel. In truth, Frappuccino had no serious rival.

NACP positioned Frappuccino as an afternoon drink, essentially a reward or pick-me-up drink. Overall, the RTD category represented a tiny percentage of coffee consumption, the vast majority of which took place in the morning. Research revealed that consumers would be receptive to a cold Starbucks' morning product, albeit one a bit lighter in milk. Sensing a opportunity to carve out morning sales in the RTD market, NACP introduced a new product in 2002: DoubleShot, a single-serve, 6.5 ounce can of espresso blended with nonfat milk, cream, sugar, and caramel color. The name was a reference to the way customers at Starbucks phrased their orders. The spring rollout was supported by an introductory advertising campaign, developed by Fallon Worldwide's New York office, featuring a pair of television spots as well as print and outdoor advertising that positioned DoubleShot as an invigorating drink "to get you going" in the morning. In-store merchandising and targeted sampling efforts were also included. The 2003 campaign introduced the tagline "Bring on the day" and featured a television spot in which a man who did not want to go to work was chased around his apartment by his business suit until a drink of DoubleShot braced him for the day ahead and he finally prepared for work.

After two years in the marketplace, DoubleShot had not succeeded as well as NACP had hoped. According to a write-up on the 2004 "Bring On the Day" campaign that Fallon produced for the EFFIE Awards, as of 2003 DoubleShot had still "never quite made it into the front ranks of on-the-go morning beverages." It went on to explain that this was because "not enough people have heard of DoubleShot, and not enough people get that it can really change how you experience your morning…. So our plan was to tap into the 'pain of mornings' and make Starbucks DoubleShot famous as Liquid Motivation for the day ahead."

TARGET MARKET

Greg W. Prince of Beverage World explained that NACP viewed the target market for DoubleShot to be different from the one for Frappuccino. Whereas the latter appealed to a broad age range of 18 to 49 years old, DoubleShot was aimed at the younger side of that spectrum. But the target market was characterized more importantly by something that cut across age: a certain attitude toward life assumed by a type of person that the marketers dubbed an "Intensity Hunter." These were described as passionate people who sought out new and exciting experiences; they were consumers of sports drinks, specialty coffees, and energy bars. "But two things really stood out for us about Intensity Hunters," wrote Fallon in its brief of effectiveness for the EFFIE Awards. "They index highly for listening to music (they're the iPod crew) and they're desensitized to 'marketing'—they know a shill when they see one, and they run a mile to avoid it."

COMPETITION

DoubleShot faced limited competition in the RTD coffee category that its sister brand, Frappuccino, dominated so thoroughly. Because of the backing of Pepsi's distribution network, both brands operated from a position of strength that only Coca-Cola could challenge. Coke acquired Planet Java, a bottled coffee, to test the waters, but after a few months it pulled the product, concluding that the size and scale of the market did not meet Coke's financial criteria. Nestlé also made a stab at the market, only to make a hasty withdrawal.

CALL ME ISHMAEL … AND NO FOAM, PLEASE

When friends Gordon Bowker, Jerry Baldwin, and Zev Siegl founded Starbucks in Seattle in the late 1960s as a single shop, they mined Herman Melville's great American novel, Moby Dick, for a name. They found it in the coffee-loving first mate of the Pequod: Starbuck. For a logo the partners devised a two-tailed mermaid-siren. The image, appropriate for the 1960s, was modified over the years, becoming less sexy and more stylized.

While Coke remained interested and waited for the market to grow—and risked allowing its rival Pepsi to gain an insurmountable foothold in RTD coffee—other players stepped forward. A distant second in the category was the Arizona brand of iced coffee. Folgers, backed by parent company Dean Foods Company, introduced Jakada, the first chilled coffee beverage to be sold in single-serve HDPE (high-density polyethylene) plastic bottles. But NACP did not view Jakada as a threat, believing that it would actually grow the category to the benefit of Frappuccino and DoubleShot Another newcomer was Wolfgang Puck Gourmet Lattes, and while it benefited from the name of the famous chef, it had limited distribution and did not seek to challenge Frappuccino and DoubleShot. Rather, it too wanted to grow the category and carve out its own slice. Other small players in the category included private-label iced coffees and regional brands such as New Jersey's Cappuccino Havana; California's Espresso Coffee Soda; Brooklyn, New York's Espresso Coffee Soda produced by Manhattan Special; and Extreme Coffee's Shock brand, marketed in California, Arizona, Alaska, Minnesota, and Wisconsin.

MARKETING STRATEGY

The 2004 "Bring On the Day" campaign had four goals: to increase brand awareness; to create brand fame through entertaining ads; to push consumers actually to try DoubleShot; and to increase sales by at least 10 percent. Reaching a target market that was jaded by a lifetime of exposure to advertising was a daunting challenge, however. In essence the creative team wanted to demonstrate to that audience how to drink the product (i.e., as a morning jump-start), but in an amusing fashion. Because the target audience included hard-core music fans, it made sense to lean heavily on music. According to the EFFIE write-up, "A music-based approach would allow the advertising to act as a metaphor for the drinking experience … After all, what's more motivational than a pumped-up, charging piece of music?"

Out of this strategic thinking came the idea to made use of one of the best known motivational songs, "Eye of the Tiger," by the band Survivor. The song had been used in the 1982 film Rocky III, helping to motivate boxer Rocky Balboa to become a champion again. The idea of the resulting television spot called "Glen" was to rewrite the lyrics of "Eye of the Tiger" and apply it to an everyday member of the target demographic as he began his day, in effect turning the pop song into a mock-heroic ballad. To take the idea to the next level, the creative team enlisted the services of Survivor itself not only to help rewrite the song but also to actually sing it to Glen in the commercial.

The 30-second spot opened with Glen drinking a can of DoubleShot in his apartment kitchen, with the sound of traffic in the background. Survivor was then heard singing "Glen! Glen, Glen, Glen" to the power chords that launched "Eye of the Tiger." The band itself was shown serenading Glen in his living room. As he shaved, the band crowded into his bathroom to continue the song: "Glen's the man. Goin' to work. Got his tie, got ambition." Next, Glen walked to the bus stop with Survivor tagging along, the drummer and his kit towed on a platform. The group continued to sing to him on the bus: "Middle management is right in his grasp. It's a dream he will never let die. Glen's the man of the hour, he's the king of his cube! Status quo reports have finally met their rival." They rode up the elevator with him and kept singing until the door opened and he walked off to his cubicle: "Burning the candle at both ends on his way to the top, he knows one day he just could become … Supervisor!" A picture of the Starbucks logo was accompanied by a voice-over: "Starbucks' DoubleShot espresso drink. Bring on the day." As a final twist, a young man walked past the open elevator door and Survivor began to follow him, starting the song over again: "Roy! Roy, Roy, Roy."

Modestly budgeted between $5 and $10 million, the campaign aired "Glen" on national cable television channels that offered what the target audience liked: music, pop culture, and sport. Hence, spots appeared on MTV, MTV2, Fuse, ESPN, ESPN2, and Spike. The 2004 campaign also included radio spots and sponsored regional sampling events at a number of ski resorts and music venues, but the centerpiece of the campaign was "Glen."

OUTCOME

The "Glen" spot was a hit from the very beginning, achieving the marketers' goal of creating buzz about the DoubleShot brand. A wide variety of newspapers and magazines—including the New York Times, USA Today, Creativity, and Adweek—published articles that praised the commercial. Moreover, "Glen" developed a grassroots following on the Internet, where the video was pirated and viewed by countless people. It was also widely discussed on websites, blogs, and forums. Starbucks posted the spot on its website, where it was viewed 3,000 times a week for the next few months. "Glen" received a nomination for an Emmy Award, and the "Bring On the Day" campaign was awarded a Bronze EFFIE in 2005 at the prestigious EFFIE Awards, presented by the New York American Marketing Association.

More important than accolades was the fact that the 2004 "Bring On the Day" campaign increased brand awareness by nearly 50 percent. Furthermore, the number of people who went from becoming aware of the brand to actually trying the product more than doubled. During the time that "Glen" aired on television, from May 2004 to September 2004, gross volume sales increased nearly 60 percent in convenience stores and almost 40 percent in grocery stores, with no distribution gains that could account for the change other than the advertising.