Starbucks reduces product marketing, focuses on customer service

The Korea Times

The Korea Times

Business

Sat, September 30, 2023 | 12:00

Companies

Starbucks reduces product marketing, focuses on customer service

Posted : 2023-02-28 16:07

Updated : 2023-02-28 16:09

Staff make beverages for customers at a Starbucks Korea store in Seoul on Feb. 22 when the company held a discount event for two days from Feb. 22 to Feb. 24. Korea Times file

By Kim Jae-heun

Starbucks Korea has changed its business strategy to decrease its marketing in order to focus more on improving service quality since October last year when it replaced scandal-hit former CEO Song Ho-seop with new chief Song Jung-hyun, according to company officials Tuesday.

Previously, the coffee chain had placed a priority on promoting the sales of its popular consumer products such as diaries, calendars and tumblers every January and February to attract customers and generate solid profits.

However, as the company received negative press on multiple occasions in 2022, it decided to prioritize improving the brand's tarnished reputation this year.

The most prominent event it carried out recently was to sell its Iced Americano beverages for only 2,500 won ($1.89) from Feb. 22 to Feb. 24. This event was held to celebrate the company's achievement of surpassing 10 million users for its Starbucks Reward Membership program.

Starbucks Korea, paying close attention to avoiding customer congestion, ran the discount event from 2 p.m. to 5 p.m. The coffee house chain did not charge an extra fee for decaffeinated coffee drinks either.

"This time, we tried to minimize the noise we normally cause when holding a promotional event to increase the convenience of our regular customers," a Starbucks Korea official said. "It actually worked well and we were able to avoid too much of a crowd from gathering at our stores during the busiest time, which is usually the lunch break."

Starbucks Korea's fifth community store Kyungdong 1960 in Dongdaemun District, Seoul / Courtesy of Starbucks Korea

Starbucks Korea also presented a new business model to help with the mutual growth of traditional market merchants by opening its fifth community store in Gyeongdong Market in eastern Seoul, last December. The company remodeled the old Gyeongdong Theater that had been built in the 1960s and named it Kyungdong 1960.

Its new branch in the old Gyeongong Market has successfully attracted young consumers and revitalized the traditional market also.

Starbucks Korea is also raising funds for the mutual growth of the market by collecting 300 won for every item or beverage it sells at the community store. The money will be used to improve the local infrastructure at the traditional marketplace and develop additional win-win programs with small merchants.

"We will continue to provide unique experiences that all generations can enjoy together and regain our trust as the No.1 coffee house chain in the country," the official said.

jhkim@koreatimes.co.kr