Starbucks..and a failed promotion

In Brandweek No.: 33 there was an interesting article on Starbucks, one of the strongest brands in the US. The article “Lessons Learned From Starbucks’ Coupon Snafu” portrays a situation where Starbucks let down their customers. Starbucks emailed coupons for free iced coffee, though, the distribution was supposed to be limited to the Southeast. Evidently, this limitation was not feasible in practice, and soon coffee coupons were emailed across the country, thus, causing Starbucks to cancel the offer three weeks before the initial expiration date. Customers were outraged and accused Starbucks of fraud, which resulted in a $114 million lawsuit. -was this really a wise decision?

Can the US population really consume $114 million worth of iced coffee in three weeks??

Apart from the $114 million financial loss, their competitor, Caribou Coffee, managed to take advantage of the situation and ridicule Starbucks by accepting the Starbucks coupons in the Caribou Coffee shops.

Even though it was only a smaller percentage of the Starbucks customers who became “disloyal”, it cost them a lot more than three more weeks of free iced coffee would have. Starbucks, being such a strong brand, survived the episode without losing much of its brand strengths. But imagine the loss it could have been for smaller competitors.


/Christina Fahrenholtz