Starbucks visionary Howard Schultz is concerned the international coffee store behemoth is losing focus and commoditizing its own product.

"In a blunt Feb. 14 memo, he warned executives that the chain may be commoditizing its brand and making itself more vulnerable to competition from other coffee shops and fast-food chains. The nearly 800-word memo questioned whether Starbucks’ automatic espresso machines, new store designs and elimination of some in-store coffee grinding may have compromised the "romance and theatre" of a visit.

The criticisms pinpoint Starbucks’ biggest challenge. Mr. Schultz, the company’s resident visionary, wants Starbucks to become one of the world’s most recognized brands, with 40,000 locations around the globe, or more than triple its current count of about 13,000. But to do that, Starbucks must improve its efficiencies and make other changes that threaten to erode the virtues that made it so successful — which in turn could jeopardize its ability to charge premium prices.

"Over the past ten years, in order to achieve the growth, development, and scale necessary to go from less than 1,000 stores to 13,000 stores and beyond, we have had to make a series of decisions that, in retrospect, have lead [sic] to the watering down of the Starbucks experience, and, what some might call the commoditization of our brand," Mr. Schultz wrote in the memo."

Read the rest of the story here.

I have been driving myself crazy watching the Alexa rank on MortarBlog. As the blogosphere lacks a meaningful traffic measurement system, most blogrolls (lists of top blogs – like the right hand column here) draw on the Alexa rank of the sites listed. But Alexa seems flawed to me.

First, let’s refresh ourselves on how Alexa works:

"Alexa Rank is a relative measurement on how popular a web site among the Internet community. Alexa is relative because it depends on the data of Alexa Toolbar users. And also Alexa Toolbar is only for Internet Explorer which means it doesn’t count growing group of Firefox fans or any other browser users. But there are over 10 million Alexa Toolbar users who make it a recognized measurement.

Alexa orders web sites according to Alexa Traffic they get. That means a site with a rank of 1000 gets more traffic than a site with rank of 1001 according to Alexa, of course." HomeBizPal.

So why does Alexa suck? Well, the last few weeks were banner weeks for MortarBlog. We had huge traffic from two great mentions from the lovely Angela Natividad on AdRants (eSurance and Anti-Advertising) and design site NotCot sent hundreds of fans of St Mary’s campaign our way after posting about our new ER campaign. Consequently we received 10x more traffic last week than we had ever got before.

And our Alexa rank shot down fom 580,000 to 800,000 or so (bear in mind 1 is good, 800,000 is bad). Um.  Now many marketing blog sites, like the mighty Seth Godin’s have impressive Alexa ranks and cater to the ad community: so it can’t be all down to Marketing and Ad types using a Mac+Firefox combo.

And its not just me. We are in the midst of launching a blog site for a technology client. When we proposed the idea of using Alexa ranks to monitor their success, the client’s CTO (and this is one sharp hombre) shot back a look of disgust.

So, there you have it. Alexa technology defines the list of top blogs, but seems to be fatally flawed. 

Credit: Tom Fishburne

Alain Thy’s “7 Secrets of a Good Marketing Budget” on FutureLab inspired me to share some of the things we’re advising our clients to consider this year:

1. Continue to cut back on traditional advertising channels — but don’t simply pour every penny saved into impressions and clicks. Organizations of all types are moving the savings into PR as well. Even though it is more challenging to draw a direct line between anticipated sales and increased media outreach, there is a reason the PR industry is enjoying one of the biggest booms since the dot comm crash. In the battle for the hearts and minds of cynical consumers Earned Media is even more influential than Paid. (See this recent post for details of tying PR outreach to shopping cart success).

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