Archive for July 10th, 2008

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Starbucks (NASDAQ: SBUX) is in such a pickle. On the one hand, it’s famous for its java-room atmosphere and its quality coffees that cost an arm and a leg to acquire. On the other hand, growth is gone and its stock is in the dumps, forcing management to do what is necessary to bring traffic into its locations. According to this article, the company will be experimenting with vouchers and discounts at many of its stores throughout the summer. One example given involves a free iced coffee promotion in several major cities.

Just the other day, I wrote about increased competition in the coffee wars from McDonald’s (NYSE: MCD), which continues to bolster its java strategy. Things are getting tough out there for Starbucks, and it’s a shame that the company has to go this discount route. It’s a funny thing when it comes to sales — people get used to them awfully swift, and in the case of Starbucks, it sort of blemishes their model of making people pay up for their exotic lattes. Starbucks needs to be careful and not be too aggressive in offering discounts. Of course, the natural response to my assertion is, if the company is doing badly, isn’t it management’s responsibility to step up and get people to cross the threshold of their locations? It sure is, but one thing I’ve always noticed when any kind of retailer isn’t performing care about it used to is that it doesn’t tend to implement new marketing campaigns that focus on the experience a consumer gets when she walks through the door. I think that can be more effective than waging a price war.

That’s what I would say to Starbucks. Create an innovative, unique marketing campaign based on the image of Starbucks and try to keep people paying those high prices. Allowed, that’s easier said than done, considering everyone has a tight budget these days. Giving away free coffees is fine on one level, but it’s a slippery slope for a company that based its model on expensive beverages.

Disclosure: I don’t own any company mentioned; positions can change at any time.

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Multicolr Search lab

Flickr has hundreds of millions of photos, and extensive search functions to help you get to the ones you want. But Flickr users, being acreative, discerning bunch, need even more search types. Searching by color is particularly useful for designers, and Multicolr Search Lab, from Id

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They state it’s never too early to begin getting ready for the upcoming school year, and Tuesday, Staples Inc. (NASDAQ: SPLS) announced it was officially kicking off the back-to-school shopping season. This came as a reaction to a survey showing that parents would indeed like to know when they could start finding school supplies on store shelves.

And what can be easier than establishing an official begin to the back-to-school shopping season? Based on the example of Black Friday, which announces the start of the winter holiday shopping season, Staples followed the same logic and decided to declare July 8 as the official opening day of the 2008 back-to-school shopping season. Staples is serious about setting an official precedent, and celebrated it by ringing the bell to open the NASDAQ Tuesday.

“Staples is giving parents a clear road map of where and when to the find the ideal products and deals this season,” the company stated. But the more apparent reality is that the current economic environment has consumers more closely watching their spending, while at the same time stores are trying to do anything they can to get shoppers through the doors.

In order to promote this shopping season, Staples started a campaign called “Do Something 101″ together with Dosomething.org and American Idol winner Jordin Sparks. Under the promotion, teens are advised to collect school supplies and bring them to Staple stores, or make a donation of $2 for other students who might need some help. I’m sure that thousand of students would be glad to receive some help from those able to offer it.

Eliza Popescu is a financial writer for the on the internet investment advisory service Investor’s Observer.

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