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What Starbucks Teaches About Marketing Commodity Products

What Starbucks Teaches About Marketing Commodity Products
Image credit: Monica Dipres
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It’s been a while I know, but try to think back to 1992 (or ask someone who can remember), coffee was a 65 cent item that came in a Styrofoam cup. It tasted like Folgers and there was nothing romantic about it.

But some people got all jazzed up about coffee and said, “Hey, if someone were to have a fantasy about coffee, what would that be like?"

Great question. Brilliant, actually. What did that question produce?

Seductive art-deco boutiques. Five kinds of espresso. Egg Nog Latte during the holidays. Americano, Cappucino and Mocha. Flavored syrups like Vanilla, Hazelnut, Almond, Amaretto and Irish Cream. Barristas instead of clerks or waiters. A comfortable atmosphere where people could sit and talk and read. A multi-billion dollar juggernaut industry.

Related: 7 Steps to Defining Your Niche Market

Starbucks had a very, very clear vision -- to make the $2 cup of coffee the luxury that everyone could afford. Howard Schultz, the founder of Starbucks, reasoned that if Larry Lunchbox can buy a $2 hamburger at McDonalds, then he can also buy a $2 cup of coffee -- except that a hamburger is just lunch (ordinary) but that cup of coffee is a luxury (extraordinary).

And today there are millions of Larry Lunchbox people who take an extra 15 minutes on the way to work every morning to give themselves a special treat at Starbucks.

In 1992 if you wanted to write an ad for coffee there probably wouldn’t be that much to say. But companies like Starbucks dramatically increased the value of a commodity item by re-inventing it. Now there’s a lot to say.

This re-invention of a commodity to create an extraordinary experience is what I call “widget making.” Creating a “widget” with your product naturally creates a strong Unique Selling Proposition, or USP.

Related: Why Serve a Niche Market?

Once you have a USP, it suddenly becomes easy to market yourself, to tell your story. If you don’t have a USP, you’re just another guy with so many dollars per pound of coffee grounds.

So here’s a question for you: “If someone were to have a fantasy about your product, service or business, what would it be like?”

Fantasy is always a relative term. For our purposes, it’s probably not nubile young women. In the case of people you and I deal with, it’s more typically a guarantee of delivered performance or satisfaction, from someone who actually keeps his promises. Combined with you doing two more things:

  1. Go the extra mile to conveniently package things together so your customers don’t have to go through a bunch of hassles just to do business with you; and
  2. Tell them about those things. Tell them that your product already comes with that special cable they need. Or make sure the person on the phone offers to upsell it to them, tells them how convenient it will be to not worry about that too.

Tell them in detail how your extra attention to the little things saves them time and money. This becomes part of your sales story.

Related: Amending Your Marketing Strategy to More Effectively Reach a Changing America

And remember this, someone who’s mired in an ugly situation with some vendor who can’t or won’t make things easy for him really does fantasize about what it would be like to deal with someone who makes it simple. Even if it’s just wire terminals he’s buying.

When you create a USP that’s centered around your customer’s ultimate fantasy buying experience, your business literally becomes the middle kingdom between fantasy and reality.

People will read your ads because they pander to that fantasy, and they’ll buy your product, too. Because if you really can fulfill a fantasy at a reasonable price, who can refuse that?