Starbucks: “investing in service not funnier TV commercials”
In a Brand Autopsy post John Moore makes a powerful point about how Starbucks has built its brand and business:
"Starbucks spends its dollars on making better products and better customer experiences and not on making funnier television commercials".
This reminds me of the quote from the Geek Squad founder Robert Stephens: "Advertising is a tax for having an unremarkable product".
John uses some interesting data to back up his point that looks at ad spend and market share for US restaurants. I’ve taken his data and worked out how much ad spend each chain needs per share point of market share:
$ million ad spend per share point (2005):
1. Mc Donalds: $94
2. Burger King: $111
3. Wendy’s: $162
4. Subway: $147
5. Taco Bell: $121
6. Starbucks: $10
That’s right. Starbucks spends 10 times less in advertising for each point of market share. Instead, it invests money in product and people.
So why don’t the other chains take a leaf out of Starbucks’ book, and spend more on product and service, and less on trying to create an "image wrapper" to cover up their shortcomings? One answer is that they are taking the easy route: making a nice new ad is a lot easier and more fun than trying to fix the real issues to do with crappy service, food and decor.
Any more good examples of brands who’ve built the business through product/service, not advertising?