Red Cups and Consumer Behavior

In the winter of 1997, Starbucks made a permanent imprint on pop culture with one of the greatest marketing campaigns of all time – the red holiday cup. At the time, Starbucks had only 1,400 stores and had just opened their first stores outside of North America in Japan and Singapore. They were on the rise as a company, so the creative team decided to generate some excitement around the holidays and created a festive holiday cup. Almost 20 year later they have nearly 24,000 stores in 70 countries and the Starbucks red holiday cup is still creating lots of excitement. The red holiday cup has influenced consumers’ behavior, set a standard that has been a challenge for their competitors, and has created conversations surrounding the brand.

The release of the red cup paired with holiday themed beverages has become a marketing frenzy and Starbucks has reaped the financial benefits. Customers anxiously await the red cup and the artistic designs  are usually leaked prior to the actual release date. The marketing efforts start with the holiday cup, but are carried by limited edition drinks such as the salted caramel hot chocolate, eggnog mocha, and the gingerbread latte. The marketing efforts proved to be profitable with Starbucks holiday revenue increasing by 12% last year. Starbucks has perfectly timed their holiday marketing efforts with a slight price increase to compensate for their efforts. This past November several menu items increased 10 to 30 cent. Although the company did not say why prices were raised, it is presumably aligns with the holiday season. Due to the red cup and holiday menu items release, consumers’ are such in a rush to get the limited red cup and holiday themed items that they pay little attention to this price hike.

The red cup has become a trend and competitors can barely keep up with Starbucks holiday cup popularity. In order to stay competitive, Dunkin Donuts has also created festive cups for the holiday season. Dunkin Donuts changed their logo cup to a white cup decorated with the word “joy” in red script as well as Christmas stocking and snowflakes. Dunkin Donuts also released a creme brulee macchiato that is reminiscent to one of Starbucks holiday drinks. However, the enthusiasm of Starbucks consumers is still unparallel to the efforts of Dunkin Donuts. Starbucks have created a high standard that competitors are simply not reaching. The brand attachment and consumer expectations have not been phased by competitors nor controversy.

The red holiday cup is sewn into tradition and pop culture, subsequently the red cup is central in conversations both positive and negative. In 2015, Starbucks released their most controversial holiday cup. A solid red cup with no embellishment was caught in a social media firestorm. Many argued that the lackluster cup was a piece “anti-Christmas” propaganda. Some customers even decided to decorate the cup themselves and post it on social media. Despite the controversy, Starbuck’s holiday sale revenue still made a large climb. The company harnessed this energy and held a design contest for the 2016 holiday cup. This year 13 red cup designs were released, featuring designs by Starbucks customers. This is an example of how Starbucks built from last year’s controversy.

In summary, Starbucks holiday red cup has become an essential component during the holiday season. It is just as classic and memorable as your favorite holiday movie. Starbucks has used the holiday cup as a building block in their marketing campaigns and the company has grown from this marketing strategy. The red cup symbolizes the start of holiday season, which triggers and emotional brand attachment. The popularity and attachment is unchallenged by competitors. This red cup tradition is only expected to grow as 2017 will be the 20th season for the holiday red cup. Starbucks more than likely already has a plan to celebrate the milestone anniversary of their classic holiday cup.

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