Monday, May 10, 2010

Starbucks brand balance

Starbucks is rolling out two new commercials this week for two new initiatives.
One to promote the national grocery launch of Via, its instant coffee product, and customizable Frappuccino beverages in store.

Here's some food for thought (no pun intended) for Starbucks to think about.

Brands are pegged by level and perceived value.


Once a brand becomes too ubiquitious it loses a lot of its value. The tradeoff with being everywhere is the loss of scarcity. That special quality. A premium brand can not be everywhere because it becomes ordinary. That's when it becomes a commodity and is no longer worth the premium price. The thing that made Starbucks different was the experience, but that is exactly what they sacrificed when they tried to multiply it a thousand times. You can not have the authentic European coffee house experience when you build a thousand stores that all look and feel the same.
Listen to the Stock Analysts

If Starbucks would have listened to their customers rather than the stock analysts they wouldn't have sacrificed the European coffee house experience to keep up with growth forecasts. They added greasy breakfast sandwiches, crowded the “third space” with coffee machines and merchandise, and rushed to open new stores to grow profits, while sacrificing the level of service.

Recent store sales have gone up so it's hard to argue with the end result. One wonders however if the long term brand proliferation will continue in positive directions.

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