Starbucks is starting to feel the pressure from a
slowing economy. The Seattle-based coffee behemoth
offered coupons in several major newspapers for a
free tall (Starbucks for small) Pike Place Roast coffee,
redeemable on Wednesdays through May 28, 2008.
Why spend so much money on a nation-wide campaign,
only to offer what by today’s standards is a shot of coffee?

I keyed in the words: starbucks+coupons+usa today, and
discovered that the ad was placed in the “Money Section”
of the paper- they also took out a full page ad in the Wall
Street Journal. Apparently, they are targeting mainly
males (sorry for sounding sexist, but unfortunately finance
is still dominated by men). But, I am a man who reads
financial rags; I also have a serious caffeine addiction, and
I’m sorry, a 12 ounce “tall” coffee just does not provide an
adequate fix.

Although it is a generous offer (one that gives off more than
just a whiff of desperation), Starbucks should go all the
way and offer the Venti, 20 ounce cup instead of the
dainty “tall” shot glass size. Let’s face it, most of the people
who read the financial section in major newspapers are already
customers, and they are most likely to be unhappy, tired men
(or less than happy women suffering from serious caffeine
dependencies) who need coffee served in a bucket.

Anyone who reads the financial pages and drinks coffee by the
gallon, has probably seen Starbuck’s stock chart. As of today,
the company’s shares are fetching around $18, down from a
high of $40 about a year and a half ago. The market, and
Starbucks’ core java drinkers believe tough times lie ahead
for premium-priced coffee pushers. A slowing economy means
less disposable income, and people may start to think
twice before plunking down over $2 for a cup of coffee.

Overall, the coupon idea is a good one. It is a way of rewarding
regulars and enticing new customers (if there are any out there)
into the store. But, why not do it right by offering what java
junkies want- a coupon for a truly American-sized coffee?

©Greg Strid 2008

An inflationary wave is building around the globe and
it threatens living standards and political stability. Prices
for food, energy and industrial commodities have been
rising steadily for the past few years. (The soaring cost
of food has sparked riots in Bangladesh and China this
year.) There are two main components that are giving
life and breath to the steady rise in global inflation. The
first is the erosion of the U.S. dollar, and the second is
the strong economic growth of developing economies.

Although the once mighty dollar has witnessed a period
of relative stability as of late, it’s overall direction is most
definitely lower. As the Federal Reserve and the U.S.
government scramble to resuscitate terminally ill U.S.
financial institutions and a weak economy, the Fed is
printing money- and the government is spending it- with
reckless abandon. Just as with commodities, the value of
a currency depreciates when its supply is drastically
increased. More money ends up chasing the same amount
of goods and services, causing prices to rise.

The nations that comprise the developing world- China
and India in particular- are becoming the new engines of
global economic growth. This boom in activity has increased
demand for all goods, thus fueling global inflation. Millions
of new consumers are being minted each year, mainly in
Asia. As the American religion of consumption spreads like
wildfire, it is sparking increased competition for raw
materials between nations. This causes both component and
wage costs to increase, thus fueling inflation. (Flat screen
TVs are made with industrial commodities by people who
eat expensive wheat.)

The U.S. economy will continue it’s struggle to move forward
as it is forced to drag the heavy baggage of a housing bust
and banking crisis. Therefore, monetary policy will continue to
expand in a vein attempt to lessen the load of that these
economic maladies are creating. As a result, the dollar will
inevitably continue its steady decline. The developing world’s
new consumer class is just starting to grow, and will continue
to put more pressure on the world’s finite supply of resources.
It appears that global inflation is here to stay.

© Greg Strid 2008

Man Vacuuming Woman

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Manifestation

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Mister Hand

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Mind Bridge

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Magnificent Woman

Here is the email that I sent to a representative of Earthwise Bag Company last week:

Hi Jennifer,

I live in Jersey City, NJ, and I am the proud owner of three Earthwise
bags. I bought them at the local C-Town grocery store. I spoke with
the store’s manager, and he told me that they were selling well- but
only affluent customers were buying them. He told me that 95 percent
of his customers are poor and cannot afford them. I have written two
articles on my website that concern this experience, as well as a
possible solution to expanding your company’s market to include people
of low- to moderate-incomes.

I worked for the Housing Partnership Development Corporation as
Associate Director of Marketing until last month, and I plan to pursue
marketing positions in nonprofits and companies that promote
environmental solutions. I will be starting a new website soon that
will feature more articles like the ones I have written concerning
socially and environmentally conscious products and services.

Excerpt form the article:

“I have a suggestion to the people at Earthwise: reach out to
companies like Coca-Cola and Proctor & Gamble. It would make
sense to cross-promote basic consumer products with those
that help save the environment. It would also make sense for
promotional campaigns to be advertised in local urban dailies
in addition to larger publications and the web (internet access
is also a luxury that many with low incomes cannot afford.)”

Please click to read both articles:

http://splendidmarbles.com/category/commentary/on-marketing/

Have you thought about starting an Earthwise blog? (Also, keep up
the good work- the Earthwise bags are great!)

Best regards,
Greg Strid

And this is the response from Jennifer Gordon of Earthwise:

Thank you very much for your email, and thank you for your support.
Our bags were conceived with ALL consumers in mind, not just the
affluent. Our suggested retail is 99 cents, which is considerably
lower than reusable bags were previously sold at (ranged from $5 to
$25 for heavy canvas bags). Look for many cross marketing and other
promotional campaigns in 2008. Also, we donate thousands and thousands
of bags each year to different organizations that use them for
educational activities or provide them to low income people. We will
continue to participate in these causes moving forward.

Again, thank you for your support. Take care.

Jennifer Gordon

Earthwise Bag Company, Inc.