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November 18, 2008

Corporate BlogsCost of Starbucks Free Election Day Giveaway

By Nichole Mrasek

starbucksUSE.jpg

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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