Worlds Apart

24 04 2008

I came across two interesting articles on digg today.  I’m going to share them with you and put my 2 cents in on them, but I would love to hear your interpretation of how the companies in these articles are heading down different paths.

Here’s what I found:

Starbucks has recently cut its profits forecast for FY 09, blaming the economic housing crunch in the US.  Read More

Apple on the other hand as announced, among other things, a 51 percent unit growth and has had their best March ever.

Read More (Note – in the article, you’ll see they made no direct reference to the MacBook Air… interesting, but besides the point)

How is this happening?  A year or two ago, these companies seemed to be on the same path, but as Apple has flourished, Starbucks is struggling to maintain in these times.  Many of you out there might be thinking “Aaron, I barely have enough money to deal with $4 gas! How am I supposed to handle $4 coffee!?!”  You could then go on to point out how McDonalds and Dunkin Donuts are simply stealing Starbuck’s customers with cheap, quality coffee.

But explain to me how Apple can sell $200 iPods and $400 iPhones and $2000 MacBook Pros consistently when you can buy any other MP3 player, cell phone and a laptop for a quarter of these prices?

…seriously, explain to me…

The way I see it is that Apple has been able to develop a “perceived need” among all consumers.  Because of their “everyman” marketing, they’ve made their brand into a unique image that crosses all boundaries – economic intellectual and cultural.  The focus for customers isn’t on the price but on the Mac movement.  And when your computer has that little piece of fruit on the front, you’re a member.  This is what causes a college student to take out a loan to buy a 2.16 GHz, Intel 2 Core Duo MacBook Pro (I NEEDED IT!)

Meanwhile, Starbucks focused their brand towards the on the go businessman or the overbooked sorority girl with her hair in a pony tail and father’s cash in pocket.  Many paying customers are left out of this picture, which let them find other coffee.  Their competitors capitalized and proved themselves worthy adversaries.

So, what do you think?

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One response

6 05 2008
Trey Many

See, here’s the thing… with Starbucks, most people have other good options available: affordable coffee at Dunkin Donuts or McDonalds, fancy coffee at independent coffee shops (depending on where you live). As far as computing goes, it’s Apple or nothing as far as I’m concerned… That’s why I believe they are still thriving in a difficult economy: people are figuring out that Windows is terrible, and it’s worth investing a little bit more money in a computer you don’t want to smash at the end of the day!

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