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November 18, 2008
Cost of Starbucks Free Election Day Giveaway
By Nichole Mrasek

Many companies conducted promotions on Election Day, giving away free items for patrons that voted. Ben & Jerry’s promoted a free ice cream scoop, Krispy Kreme offered a star-shaped doughnut and Starbucks gave away a free tall brewed coffee. With all these free items, just how much does a company actually spend on a free promotion?
AdAge reports, “John Moore, a former Starbucks marketer, estimated that between 12% and 15% of customers are drip-coffee drinkers, and that each of the company’s 7,100 locations serves about 800 people a day. Those figures would set a conservative giveaway estimate at 568,000. Starbucks’ cost per cup is about 30¢, according to several executives familiar with the matter, which would put the cost of the giveaway at about $170,000.”
Speculators agree that $170k for the java giant is a very small cost, and considering many consumers purchase more than just coffee – an estimated one in six – Starbucks’ profit loss was not truly a loss at all. The company gained exposure around Election Day, while brewing up impressive buzz.
Posted by staff at November 18, 2008 09:56 AM
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