April 16, 2012

Fuel to Burn: Now What?

By JAD MOUAWAD

Published: April 10, 2012

THE reversal of fortune in America’s energy supplies in recent years holds the promise of abundant and cheaper fuel, and it could have profound effects on what people drive, domestic manufacturing and America’s foreign policy.

The Eagle Ford basin in Texas produced 30.5 million barrels of oil in 2011.

Cheaper fuel produced domestically could reduce the cost of shipping and manufacturing, trim heating and cooling bills, improve the auto market and provide tens of thousands of new jobs.

It might also pose new environmental challenges, both predictable and unforeseen, by damping enthusiasm for clean forms of energy and derailing efforts to wean the nation from its wasteful energy habits.

But for Americans battered by rising gasoline prices, frustrated by the dependence on foreign oil, skeptical of the benefits or practicality of renewable fuels and afraid of nuclear power, the appeal of plentiful domestic oil and gas could far outweigh the costs.

Just a few years ago, the dominant theme in discussions about energy was of declining production and the fear of running out of oil. Even today, political tensions in the Middle East, particularly in the Persian Gulf, have fanned fears of supply disruptions that are keeping prices high.

But a new boom in energy production in recent years has upended these expectations in record time. High energy prices led to a wave of successful oil and gas exploration in North America, including in fields that were deemed uneconomical only a few years ago. Using techniques like horizontal drilling and hydraulic fracturing, oil companies are tapping into deeply buried reserves in shale rocks and in the ocean’s depths.

The surge in energy prices, along with a recession and new government rules that tightened fuel-economy standards, led to a sharp cutback in gasoline consumption. This decline in demand in the last five years reversed decades of almost uninterrupted growth that made the United States the world’s top energy consumer, accounting for one in every four barrels of oil burned around the globe.

The North American energy revival is primarily the result of so-called unconventional sources of energy — like shale oil and shale gas across the United States, oil sands in Canada and deepwater production in the Gulf of Mexico. In the last five years, the United States and Canada combined have become the fastest-growing sources of new oil supplies around the world, overtaking producers like Russia and Saudi Arabia.

“The transformation unfolding in North America represents a potentially decisive shift in the history of energy,” Rex W. Tillerson, the chairman and chief executive of Exxon Mobil, who is not usually given to hyperbole, said in a speech in Houston last month.

Ed Morse, head of global commodity research at Citigroup and a longtime energy analyst, says North America has the potential to become a “new Middle East.”

“The reduced vulnerability of North America — and the world market — to oil price spikes also has deep consequences geopolitically, including the reduced strategic importance to the U.S. of changes in oil- and natural gas-producing countries worldwide,” Mr. Morse said in a recent 92-page report called Energy 2020. ”Pressures towards isolationism in the U.S. will likely grow, with consequences for global stability that can only just begin to become understood.”

“The only thing that could stop this is politics — environmentalists getting the upper hand over supply in the U.S., for instance,” the report said.

The new supplies ensure that the United States will remain well entrenched in oil, but the continuing reliance on fossil fuels also carries significant environmental concerns — whether from the risk of offshore drilling, or the hazards, many still unknown, of hydraulic fracturing. It also means that greenhouse gas emissions will most likely increase, at least until carbon emissions are capped or new technology to store carbon dioxide underground is developed.

The glut of natural gas supplies cuts two ways on emissions. It has effectively put an end in the United States to any new investment in coal plants, which produce much more emissions. But it also makes the economics of alternative, noncarbon energy sources like wind power or solar power difficult to justify without public support and subsidies.

Regardless of the environmental impact, there is no guarantee that new supplies will inevitably lead to lower gasoline prices, as proponents of unfettered domestic drilling argue. Oil is a global commodity with a price set on the global market. With rising demand around the world, particularly in emerging economies, and instability in many oil-producing countries, many analysts predict global oil prices will remain volatile — and high — for many years to come.

And with gasoline prices above $4 a gallon, the nation’s energy resources remain a polarizing topic, pitting Republicans against Democrats, environmentalists against oil companies, and conservationists against advocates of unfettered drilling. 

My Comments:  With the current recession that is occurring gasoline is becoming a very difficult product to "deal with". People need gasoline to fuel their houses and their cars. It has also become extremely difficult to find a replacement for this product because most other known fuel sources require gasoline in some form. For example, electric cars need to be charged. Plugging in your car though to "charge" also requires gasoline as well as ethanol, the corn needs to be produced with some form of a gasoline run tractor and delivered in some form of delivery truck. Especially with the upcoming election, it will be interesting to see what the candidates propose to do about the gas supply and demand.

April 13, 2012

Best Buy's CEO Brian Dunn resigns

Ryan Joe

April 10, 2012

More in Direct Line Blog:

My, f-commerce, what big teeth you have

Read More >>

Best Buy's announcement that CEO and director Brian Dunn had resigned, amid “no disagreements” related to “operations, financial controls, policies or procedures” underscores just how much the big-box electronics giant is groping blindly around in an age of changing consumer shopping and spending habits.
Dunn's resignation arrives a little under two weeks after Best Buy laid out its “Actions to Improve Business Performance,” which included the closure of 50 big box stores in the U.S., the launch of 100 Best Buy Mobile “small format stand-alone” stores and a $250 million cost reduction in 2013. The company also said it would eliminate 400 corporate and support staff jobs. These reductions, while unpleasant, make sense.
Best Buy says it plans to grow by opening stores in China, selling more mobile handsets and growing its e-commerce. Unfortunately, these measures aren't enough, and Dunn's resignation isn't going to change that. Perhaps Dunn was part of the issue, but the fundamental problem with Best Buy is that it has no idea how to compete against online vendors offering better prices and greater convenience. It's the easiest thing to walk into Best Buy, examine a product, and then search for a better price online. The company has essentially become “a showroom for Amazon.”
In its 2011 financial statement, Best Buy acknowledges its “strong competition from traditional store-based retailers, internet-based businesses, our vendors and other forms of retail commerce.” I would argue that since Circuit City shuttered, Best Buy faces no competition from brick-and-mortars and nearly all its competition comes from online retailers from Amazon to the iTunes Store.
Best Buy has tried to squeeze blood from a stone by “offering [their] customers packaged value propositions that take the complexity out of managing devices, content and connectivity.” Usually this entails selling services customers don't need, understand or really want. While small brick-and-mortar outlets, like B&H in New York, can differentiate with in-store expertise, that's logistically impossible for a national chain like Best Buy.
While Best Buy has certainly invested heavily in e-commerce—it has one of the best Spanish-language retail sites to tap into multicultural consumers—Best Buy needs to figure out what, exactly, its points of competitive differentiation are. Right now, it's certainly not price, it's not convenience and it's not expertise.
Personally, I think one step Best Buy definitely needs to take is better integration of mobility with the in-store experience. Right now, the mobile channel is actively taking away business rather than bolstering it. Imagine customers entering the store, scanning their mobile devices over relevant products, and having immediate access not only to product specs, but user reviews and even price comparisons. While the company maintains a price-matching program, it needs to become a point of emphasis for mobile users instead of a giant point of confusion.
Obviously, Dunn was not thought of as the right man to push the company in the proper direction. Perhaps the next CEO will have a more focused vision.

 My Comments:  I thought the way this article was written was very interesting. When I first read the title I thought it seemed like the CEO was jumping ship, getting away from a failing business but this article spins it a different way. It seemed like while Best Buy is failing they are still optimistic that they will succeed with a new CEO. They hope to expand their business to China and by selling more mobile handsets and e-commerce. What I thought was very interesting was that the article called Best Buy a showroom for Amazon. This seems incredibly true. Why pay retail price when you can pay much less and even have other options delivered straight to your door. It will be interesting to see where Best Buy goes in the next few years.

April 11, 2012

Macy's transformation

Alex Palmer

April 01, 2012

 

 

Martine Reardon, CMO of Macy's

This spring, Macy's will begin a $400 million renovation of its flagship Herald Square store in New York City. Touted as the largest store renovation in U.S. history, the transformation reflects where Macy's marketing is headed as a whole, with the company eagerly embracing the possibilities of new technology, while carefully preserving the elements that made it an icon in the first place.
In just the past three years, Macy's has made major changes in how it approaches its marketing, reorganizing its marketing department, putting a greater emphasis on local targeting, while aggressively incorporating mobile, social and e-commerce into its  channel mix.
“There's a famous quote from Mayor Michael Bloomberg that, ‘If you have not been to Macy's, you have not been to New York,'” says Martine Reardon, CMO of Macy's. “There is a halo effect on this building that permeates out to all of our other locations.”
The retailer has also recently made a number of executive moves, with Reardon taking over as CMO at the beginning of February. She assumes the role from Peter Sachse, who moved into the position of chief stores officer after Ron Klein retired from that position. Prior to her new role, Reardon had served as EVP of marketing and advertising, having risen through the ranks at Federated Department Stores and Macy's Inc.
Macy's many bold choices seem to have paid off. The company's revenue has increased for four straight quarters, with a 5.5% increase in its most recent earnings report, and with consistently strong monthly same-store sales numbers.
The Herald Square makeover is the latest in the company's ambitious plans and the most tangible demonstration of how the brand will balance fast-changing technology, while showcasing its 154-year history.
Among the innovations underway are interactive store directories that allow visitors to find what it is they are seeking, an enhanced signage system and digital product information. Live video feeds of Macy's events throughout the country will be broadcast in-store. Customers will be able to download a mobile app, which they can use to guide them through the landmark.
“Technology is a big focus for us,” Macy's CEO Terry Lundgren said during a press preview of the renovation plans last November. These updates are partly a play to get younger shoppers into the store, with Lundgren adding that, “We're focusing on millennials because they're huge.”
Indeed, a new Impulse apparel and accessories department, targeted toward 13- to 30-year-old shoppers, will also be part of the transformation. The upgrades, which will continue in phases through the fall of 2015, will also include a 100,000-square-foot expansion of the store's selling space, a new hall of luxury brands and the creation of the world's largest women's shoe department, which will feature as many as 300,000 pairs of shoes on any given day. The new shoe department will be accompanied by a special shoe locator system.
While the renovation marks an ambitious effort to bring mobile and location-based marketing into the Macy's experience, the company has already been innovative in its use of the new technology in recent years. Macy's was one of the first stores to partner with the Shopkick app, offering rewards and offers to its customers for walking into the store. Last September it became an early adopter of the Google Wallet payment system.
Last spring, the retailer introduced Backstage Pass, which integrated Quick Response (QR) codes into in-store promotions as well as print and online. A store guest can snap a code and get a 30-second video of Tommy Hilfiger talking about spring fashion trends, or Carlos Santana playing guitar (while also promoting his new line of shoes and handbags). Sean “Diddy” Combs, Martha Stewart, Kenneth Cole and Rachel Roy are other style mavens that visitors can access.

My Comments:  After reading about JCPennys decline in sales and their new strategy of eliminating timely sales, it is funny and almost sad to read how well Macy's is doing. It seems like it's starting to be the way, though, that if you can't keep up with technology, it kicks you out. Some stores (and perhaps even some people) seem to be trying to pretend as if technology doesn't exist, not Macy's though. This is very smart considering almost everyone is connected these days. New advances such as ShopKick, QR codes, and other apps/websites are changing the way people shop for everything from clothes to food. Pretending like it doesn't exist will just cause companies to un-exist, and from this article, it seems like Macy's will be around for a while.

April 4, 2012

Mind Games: Sometimes a White Coat Isn’t Just a White Coat

Michael Temchine for The New York Times

PERCEPTION Wearing a coat thought to be a doctor’s may improve attention.

By SANDRA BLAKESLEE

Published: April 2, 2012

If you wear a white coat that you believe belongs to a doctor, your ability to pay attention increases sharply. But if you wear the same white coat believing it belongs to a painter, you will show no such improvement.

So scientists report after studying a phenomenon they call enclothed cognition: the effects of clothing on cognitive processes.

It is not enough to see a doctor’s coat hanging in your doorway, said Adam D. Galinsky, a professor at the Kellogg School of Management at Northwestern University, who led the study. The effect occurs only if you actually wear the coat and know its symbolic meaning — that physicians tend to be careful, rigorous and good at paying attention.

The findings, on the Web site of The Journal of Experimental Social Cognition, are a twist on a growing scientific field called embodied cognition. We think not just with our brains but with our bodies, Dr. Galinsky said, and our thought processes are based on physical experiences that set off associated abstract concepts. Now it appears that those experiences include the clothes we wear.

“I love the idea of trying to figure out why, when we put on certain clothes, we might more readily take on a role and how that might affect our basic abilities,” said Joshua I. Davis, an assistant professor of psychology at Barnard College and expert on embodied cognition who was not involved with the study. This study does not fully explain how this comes about, he said, but it does suggest that it will be worth exploring various ideas.

There is a huge body of work on embodied cognition, Dr. Galinsky said. The experience of washing your hands is associated with moral purity and ethical judgments. People are rated personally warmer if they hold a hot drink in their hand, and colder if they hold an iced drink. If you carry a heavy clipboard, you will feel more important.

It has long been known that “clothing affects how other people perceive us as well as how we think about ourselves,” Dr. Galinsky said. Other experiments have shown that women who dress in a masculine fashion during a job interview are more likely to be hired, and a teaching assistant who wears formal clothes is perceived as more intelligent than one who dresses more casually.

But the deeper question, the researchers said, is whether the clothing you wear affects your psychological processes. Does your outfit alter how you approach and interact with the world? So Dr. Galinsky and his colleague Hajo Adam conducted three experiments in which the clothes did not vary but their symbolic meaning was manipulated.

In the first, 58 undergraduates were randomly assigned to wear a white lab coat or street clothes. Then they were given a test for selective attention based on their ability to notice incongruities, as when the word “red” appears in the color green. Those who wore the white lab coats made about half as many errors on incongruent trials as those who wore regular clothes.

In the second experiment, 74 students were randomly assigned to one of three options: wearing a doctor’s coat, wearing a painter’s coat or seeing a doctor’s coat. Then they were given a test for sustained attention. They had to look at two very similar pictures side by side on a screen and spot four minor differences, writing them down as quickly as possible.

Those who wore the doctor’s coat, which was identical to the painter’s coat, found more differences. They had acquired heightened attention. Those who wore the painter’s coat or were primed with merely seeing the doctor’s coat found fewer differences between the images.

The third experiment explored this priming effect more thoroughly. Does simply seeing a physical item, like the coat, affect behavior? Students either wore a doctor’s coat or a painter’s coat, or were told to notice a doctor’s lab coat displayed on the desk in front of them for a long period of time. All three groups wrote essays about their thoughts on the coats. Then they were tested for sustained attention.

Again, the group that wore the doctor’s coat showed the greatest improvement in attention. You have to wear the coat, see it on your body and feel it on your skin for it to influence your psychological processes, Dr. Galinsky said.

Clothes invade the body and brain, putting the wearer into a different psychological state, he said. He described his own experience from last Halloween (or maybe it should be called National Enclothed Cognition Day).

He had decided to dress as a pimp, with a fedora, long coat and cane. “When I entered the room, I glided in,” he said. “I felt a very different presence.”

But what happens, he mused, if you wear pimp clothes every day? Or a priest’s robes? Or a police officer’s uniform? Do you become habituated so that cognitive changes do not occur? Do the effects wear off?

More studies are needed, he said.

My Comments: This article examines what effect certain clothes have on our cognitive abilities. It was found that students who wore a "doctor's coat" had increased performance whereas those who wore a "painter's coat" (same as the doctor's) had lower performance scores, along with those who also simply saw a doctor's coat. This made me think of uniforms and why certain schools and institutions require certain dress codes. It also speaks to cultural norms where certain people must dress a certain way for certain situations. It speaks to Chapter 14 of our textbook about person to person selling. If a salesperson isn't dressed in the attire that seems to be the social norm for the situation the potential buyer may be turned away from the sale.

April 2, 2012

Kotex's awesome Pinterest campaign

Erin Dostal

March 30, 2012

 

:Kotex — yes, the tampon company — launched a super innovative campaign on Pinterest that was anything but awkward or hush-hush. Actually, it was really awesome. 

Here's how it worked: The company targeted 50 influential women and analyzed them based on their Pinterest boards — shoes, bikes, photos, wedding dresses, crafts and all. Kotex made them a gift box based on their interests. To get the box, all the lucky ladies had to do was re-pin their gift. Kotex then mailed them the box, completing the buzz-worthy cycle.
And all of it was meant to celebrate Women's Inspiration Day. How's that for knowing your audience?
The campaign was a success. The audience was targeted, and Kotex clearly knew not only how to reach them, but how to speak to them. The company's marketers collected the right information from these women to make them happy — not creep them out for snooping their sites — and surprised and delighted them. Besides, it created inherent buzz through its sheer innovation and it claims to be the first-ever Pinterest marketing campaign. There's even a YouTube video where customers can learn more, complete with sappy music, lots of hot pink and snappy graphics.
In total, the campaign launched 2,284 interactions and 694,853 impressions online. Not bad at all considering that the company only reached out to 50 women directly.
For a company who's slogan on their website is “your period is as unique as you are,” this seems all-too fitting. Brand consistency. Boom.
So, Kotex, I will no longer think of you as just a tampon company. And that seems pretty amazing on its own.

My Comments:  My first reaction upon reading this article was Finally! Pinterest took off with such a boom that even I, as a young person in Generation Y, could barely keep up! Facebook and Twitter have become so main stream that obviously ads are going to be all over them. Finally a company has decided to take advantage of the amount of people on Pinterest and advertise to them. It's no surprise that the first product is a feminine product considering most of the people on Pitnerest are women.

March 30, 2012

Should marketers spend more on social and mobile than email in 2012?

February 06, 2012

 

:

Mobile and social vs. email: Where should marketers spend their limited dollars this year? It's a question that's top-of-mind for many marketers out there — and that's why we asked you.
We polled our readers on what they thought and we've tabulated the responses. Thanks to everyone who wrote in.
YES
David Chapman, founder and CEO, 919 Marketing Company, more than 30 years experience in the marketing industry
My initial reaction to this question is that marketers and businesses should spend more money on the marketing programs that are working best for them in 2012. If it's not broken, why try to fix it?
But I believe marketers would be better suited to spend more money in social and mobile than email in 2012, particularly if those programs are being used to supplement traditional marketing activities, such as media buys, public relations and direct mail. In the past few years, many of the companies we work with have been pleasantly surprised about the amount of customer engagement they've generated when they have executed targeted social and/or mobile marketing campaigns in tandem with traditional marketing tools. Far fewer have reported similar experiences and success stories surrounding email campaigns.
Personally, I believe this is because people are more mobile and social than ever before. In this day and age, brands can no longer rely solely on “push” marketing to drive brand awareness and preference because customers have the power. Blogs, comment streams, social media profiles and other online tools give customers a voice. Each customer can have a powerful impact on brands he or she uses so it's important for brands to get involved in the conversation. Therefore, in addition to “pushing” customers toward their products and services via traditional marketing tools, it's also important for brands to “pull” them toward their brand by contributing to online conversations and offering up valuable discounts through texts and social media posts.
Also, this isn't just a trend that impacts large corporations and multi-unit franchise systems. In fact, it may be even more important for local businesses to manage the conversation online than it is for large businesses because just one negative review could destroy the company's reputation and loyal customer base.
Email is a great tool and can certainly be a difference maker for many companies, but it's typically used as nother “push” tool. I anticipate a continued rise in mobile and social marketing efforts because they allow marketers to influence the conversation online while both “pushing” and “pulling” customers to their brand.
NO

Adam Shlachter, managing director for digital, MEC, 13 years of experience in the marketing industry
Every chart and stat and report I've seen over the last few quarters and years point to exponential growth in the social and mobile spaces. So it makes sense that many of these reports indicate that there will be a stronger focus on mobile and social when it comes to digital ad spending or the channels in which marketers are planning to invest in next. Both mobile and social — in fact, the whole digital space — is ever-changing and evolving, and is becoming a more serious communications vehicle, as well as an excellent platform for marketers and commerce. With such dramatic growth, some would say that social and mobile have become almost as significant as email, but while email is a more mature channel, it is still one of the most effective drivers of positive return on investment and customer engagement for many brands, particularly retail brands.
Billions of emails are sent every day to users who have chosen to receive the brand messages and offers contained within, and we need to understand how these consumers' preferences for brand communication may have changed, or if they have changed at all. Maybe they have a brand's mobile app to keep up with their account, or they subscribe to the brand's social feeds and updates — or maybe it's a combination of all of the above, but for different reasons and in different mixes. Clearly, there is an opportunity to look at customers' behavior and optimize how, when and how often they're pinged, texted, emailed or pushed any sort of message, including direct mail, print and even TV if there is enough valid data available.
Every brand should invest, or continue investing, in its social and mobile platforms to keep up with the trends and remain relevant to customers who are engaging in these channels, but not at the expense of what may already be working well and efficiently. Finding the right balance between all of these touchpoints is key, and email remains an important and viable channel for communication and engagement.
Direct Marketing News Decision
Although mobile and social marketing are exploding as consumer channels, they're still new and largely unproven in terms of results as marketers explore their value. Email is a proven channel of engagement with results marketers can rely on while exploring new communications vehicles. The key to making the best use of advertising dollars is remembering that channels are not mutually exclusive, and this is a good time for marketers to explore all those available to understand their true viability. Many are likely to find that different segments of their consumer base may prefer to be contacted in different ways.

 

From the March 01, 2012 Issue of Direct Marketing News

 

My Comments:  My first thought upon reading the title of the article was, yes. Companies should definitely be focusing more on Social Media rather than email. From personal experience, I hate receiving emails telling me about products or events I should buy or take part in. When they are on the side of my facebook page, though, or in my twitter time line I am way more interested in checking these things out. I definitely agree though with the "Direct Marketing News Decision" that the "key to making the best use of advertising dollars is remembering that channels are not mutually exclusive" Both forms of advertising need to be used, and used well.

March 28, 2012

n Europe, Starbucks Adjusts to a Cafe Culture

Agnes Dherbeys for The International Herald Tribune

The Starbucks on the high-rent Boulevard des Capucines is a sumptuous hall adorned with velvet chairs, chandeliers and a gilt-leaf ceiling depicting cherubs aloft in a blue sky.

By LIZ ALDERMAN

Published: March 30, 2012

PARIS — On a recent sunny morning in this city’s chic Marais district, Marion Bayod squeezed behind a tiny table at Le Cactus, a neighborhood cafe she has frequented for years. She cast a sidelong glance at a Starbucks across the street.

“I never go into Starbucks; it’s impersonal, the coffee is mediocre, and it’s expensive,” Ms. Bayod, a 35-year-old masseuse, said as a waiter greeted her by name and quickly brought her usual espresso. “For us, it’s like another planet.”
Nearly a decade after venturing into Europe, Starbucks is still laboring to lure people like her. Despite engineering a strong turnaround in the United States and growing steadily in Asia, where Starbucks is still a novelty, the company has struggled here on the Continent that gave birth to cafe and coffeehouse culture.
Now, Starbucks is embarking on a multimillion-dollar campaign to win over more of Europe’s coffee aficionados — with an upscale makeover of hundreds of stores to cater to an ingrained cafe culture, and adjusting beverages and blends to suit fickle regional palates.
France may prove a particular challenge. Promenade on a Parisian boulevard with a paper coffee cup? Ça ne se fait pas! It just isn’t done.
After eight years spent setting up 63 French Starbucks stores, the company has never turned a profit in France. And even in the parts of Europe where the company does make money, sales and profit growth lag far behind results in the Americas and Asia.
Europe’s debt crisis and sluggish economy are a factor. So are high European rents and labor costs, which impinge on profits more than in any other region in which Starbucks operates. But the biggest challenge may lie in tailoring the Starbucks experience to appeal to a variety of European tastes.
“Europe is critically important for our future,” said Troy Alstead, the company’s chief financial officer. “We have not always put our best foot forward,” he added, but “we know we can have a bigger impact.”
To be sure, Starbucks has plenty of European fans. Whether in Amsterdam, Berlin or London, or even among subsets of Parisians, Starbucks stores are often packed with urbanites, tourists and laptop-wielding young people who embrace the coffee chain as an avatar of American popular culture.
“We see stars like Kim Kardashian in all the magazines walking around with a Starbucks,” Daphka Monteiro, a 19-year-old Parisian and aspiring fashion designer, as she licked the cream off a 5-euro ($6.50) Frappuccino, across from Ms. Bayod’s preferred cafe. “My friends and I come because it’s hip.”
That may be. But Starbucks struggles to make money from people like her.
While a New Yorker might grab a coffee to go — carry-out orders are one of the company’s biggest money makers — French friends tend to sit when they sip. So Starbucks is having to invest huge amounts to give its stores in France additional seating space, along with other renovations.
Michelle Gass, who last fall became the chief of Starbucks operations for Europe, the Middle East and Africa, recently took an anthropological tour to try to better understand the varying wants and needs of coffee lovers at the company’s European locales.
“In markets where there is an entrenched coffeehouse culture, like Paris or Vienna, I was expecting to hear more requests to be like them,” Ms. Gass said. “But I heard the opposite — people want the true Starbucks experience.”
Because that can mean different things to different Europeans, though, the company has devoted hundreds of hours to studying the variations. The British, for example, are quite happy to drink takeaway coffee, so Starbucks is planning hundreds of drive-through locations in Britain.
And Britons like lattes, although many consider the Starbucks version too watery. So baristas in Britain recently began adding a free extra shot of espresso.
Across the channel, however, 60 percent of French people prefer espresso, while only 20 percent can stomach an “Americano.” And yet, many find that Starbucks espresso tastes too charred, even by French cafe standards. So just two weeks ago in Paris, the company introduced a lighter “blonde” espresso roast.
And then there is the issue of service. To humanize its chain-store reputation, earlier this month Starbucks had its baristas throughout Europe start wearing nametags.
In London, an experiment is under way to take customers’ names with their orders and then address them by name when filling it. Participating patrons get a free coffee, but many others have lit up Twitter with complaints about bogus, American-style chumminess.

Other changes in the way baristas operate — they now keep milk within arms’ reach of the steamer, for instance — are meant to overcome the Continental curse of slow service.
The most visible innovations, though, involve “concept” stores designed to make a Starbucks feel more like a trendy neighborhood shop. Last month in Amsterdam, the company’s chief executive, Howard Schultz, cut the ribbon on a striking space with local woods and avant-garde architecture, including a stage for poetry readings.
In Paris, the company recently gave a rustic facelift to the Starbucks near the Paris Opera. A vast store near the Louvre got a modern makeover, featuring a sleek, wood coffee bar. And the Starbucks on the high-rent Boulevard des Capucines is a sumptuous hall adorned with velvet chairs, chandeliers and a gilt-leaf ceiling depicting cherubs aloft in a blue sky.
As it adjusts, Starbucks can consult the history of two other big American food chains. Burger King was forced to shutter its 39 stores in France in 1997 after its strategy of directly transplanting its American model, without local adaption, failed.
McDonald’s, by contrast, has grown rapidly in France and in Europe over the years by fine-tuning as needed, like using French cheeses, mustards and meats; preserving local architecture in some of its showcase stores; and more recently, creating a cafe area in some locations to accommodate coffee-sipping patrons.
It is too soon to know how well Starbucks’s new strategy might buoy its European financial results.
The company posted record earnings of $3.4 billion worldwide in its most recent quarter, and its stock has rocketed to $53, up from $8 in 2008. But in Europe, the weak economy continues to stunt sales.
In the quarter that ended in December, sales in European Starbucks that had been open at least 13 months rose by only 2 percent. That was well below the 9 percent growth in the Americas and 20 percent in Asia.
Starbucks’s profit margins are also much thinner in Europe, as a result of high real estate costs and labor laws that require relatively high employee wages and benefits.
But executives are so confident in their strategy that they are planning hundreds of new stores in Europe, from Paris to Moscow, beyond the 1,700 already in place. To corral “captive audiences,” Ms. Gass said, Starbucks plans to put many of the new sites in airports and railway stations on the Continent.
Some analysts see a danger of overexpansion, noting that the global recession in 2008 and 2009 forced Mr. Schultz to close more than 900 locations worldwide and cut $580 million in costs.
In Europe, “it’s possible the business could become more profitable and focused through the closure of stores,” or by leaving some markets altogether, said John Ivankoe, an equity research analyst at J. P. Morgan in New York.
Ms. Gass rebuts the doubters.
“In Europe, there’s no concern about us being oversaturated — quite the opposite,” she said. “It sounds like a lot. But when you’re walking the streets of Paris, compared with Manhattan, you have to go find them. It’s not like you can turn a corner and a Starbucks will be two blocks away.”

My Comments: I thought this article was interesting. I never realized how different European coffee culture was and how difficult this is for Starbucks to combat. Starbucks definitely has a foot in the door with American coffee but Europe has different views on coffee and how people socialize with it. It was interesting that in most European countries people usually will sit down with friends to enjoy their cup of coffee every time whereas in America it is seen as "cool" to be carrying around your paper or plastic coffee cup, showing you are "on the go"