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THL · 02-26-2008, 10:55 AM

...Let's remember that, folks.

Quote:

Since his return as Starbucks' chief executive, Howard Schultz has authored several "Transformation Agenda" memos very publicly heralding how the company will regain its former dominance in the world of specialty coffee drinks. But one nationwide strategy could provide a brief window of opportunity for Starbucks' competitors.

On Tuesday, Starbucks plans to close almost all of its 7,100 stores between 5:30 and 8:30 p.m. for an unprecedented education and training session for its employees. The event, according to Transformation Agenda Communication #6, "signals the company's focus on transforming the Starbucks experience" for both its customers and workers.

Coincidentally, Dunkin' Donuts has planned a special promotion offering 99-cent small lattes, cappuccinos and espresso drinks that overlaps with the event.

"We never want any customers to ever be denied access to their specialty drinks," said Frances Allen, Dunkin' Donuts' brand marketing officer. "It's definitely a fortuitous time for us."

Dunkin' Donuts representatives insist that the promotion -- which is between 1 p.m. and 10 p.m. -- is really a celebration of last week's announcement that the company had taken first place in the coffee category of Brand Keys' Annual Customer Loyalty Engagement Index. This was the second year in a row that Dunkin' Donuts took the top spot in the New York consulting firm's survey.

"It's a way of saying, 'thank you,' and giving back and recognizing the value of our customers and giving them something back," Allen said. "We think we will have a lot of participation. We may even introduce some new people to Dunkin' Donuts'."

Starbucks didn't appear too concerned about Dunkin' Donuts 99-cent promotion.

"We want Starbucks to be the preferred destination for high-quality espresso and service," the spokeswoman said. "We are confident that our customers will understand this and that this is an investment in their experience through better quality beverages and services."

During Tuesday's training session, baristas will learn updated quality standards for "pulling the perfect espresso shot, skillfully creating steamed and foamed milk for every beverage and ensuring that every beverage and every experience is right for every customer, every time," the spokeswoman said.

Schultz has been attempting to reinvigorate the brand and refocus the company on the strengths that led to its rise, experts said. In addition to closing underperforming stores, the company announced that it will quit making hot breakfast sandwiches.

Starbucks has been conducting its transformation very publicly -- the "open and honest," position, said Robert Passikoff, founder and president of Brand Keys Inc., a Manhattan-based market-research firm. But he questioned the strategy of announcing the training sessions and the three-hour store closings.

"With brands as fragile and undifferentiated as they are, you don't need to call attention to your deficiencies," Passikoff said. "What you want to do is continual improvement. . . . Let people be surprised. I just don't think you want to do anything that erodes the brand equity or causes people to even consider going to a competitor."

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