Thursday, January 6, 2011

Starbucks logo change - is there more to it?

You may recall just before Christmas, the Gap changed their iconic logo. It caused so much outrage among Gap loyalists they recanted and changed it back.

The same is not likely to happen with Starbucks and here's why.

This is not the first time the logo has had a minor facelift. They have had three variations since 1971. The speculation is now that the removal of the words coffee from the logo was due to a desire to want to attach the Starbucks name to non-coffee products.

Jim Edwards of Bnet has some excellent insight on this:

If corporate logos reflect the priorities — or anxieties — of management, then the new Starbucks (SBUX) logo exhibits all those and more. It appears to be a mere evolution of the chain’s existing identity but is actually a representative of Starbucks’ abandonment of its core equity.

On its face, the new logo is yet another tweaking, or simplification, of the original. (The images, top to bottom, represent Starbucks’ logos since 1971. The company merged with Il Giornale in 1986.)

This time the circle has been removed and the words “Starbucks Coffee” are gone. The new marque appears in only one color: green. (And yes, the “siren” mermaid still has no nipples. Go figure.)

The Gap, Seattle’s Best Coffee and Tropicana all recently learned to their cost that giving your brand icon a whole-scale makeover invites backlash from loyal consumers. A mere haircut is the correct way to go.

That’s what Starbucks has done here, but the stakes are still high as the company — a daily ritual that’s close to an addiction to many — inspires a unique level of loyalty (and hostility) from its audience. Do you know anyone who does not have something to say about Starbucks?

The change was needless. Starbucks enjoyed record revenues last year. It has bounced back as if the recession never happened. So why screw with a winning recipe? Because CEO Howard Schulz is no longer interested in the whole coffee thing, as such. He told the Wall Street Journal:

“Even though we have been and always will be a coffee company and retailer, it’s possible we’ll have other products with our name on it and no coffee in it,” Chief Executive Howard Schultz said.* He added that any noncoffee products Starbucks sells will adhere to the same standards the company applies to its coffee. “We’re not going to put our name on things that dilute the quality of Starbucks,” he said.

Bear in mind this is the same man who wrote this barnstorming memo on “The Commoditization of the Starbucks Experience.” And the AP:

Starbucks leaders say the changes to the logo are in some ways a metaphor for the company dropping the boundaries of its own business and growing into new areas.

There’s another marketing industry term for diversification into “new areas”: brand worsification. It’s what happens when a perfectly good brand with a solid record in selling, say, coffee, suddenly decides it can sell anything “with our name on it and no coffee in it.” Such a transition requires that defining — even dominant — attributes such as “coffee” are removed from the brand, thus by definition diluting the brand’s equity.

I’m not saying sales will decline as a result, but consumer loyalties may. The company is already so big, and its stores so crowded, that it is fast becoming a byword for “public restroom,” in much the same way McDonald’s was in the 1990s. Sure, there’s more money to be made in non-coffee products, but the price will be becoming just another high street brand that no longer charms or commands. That’s not a trade I would make if I didn’t have Wall Street to answer to.

And finally: Let’s at least pat Starbucks on the back for not abandoning its pre-Christian pagan symbolism. More timid companies have fled from such connections …

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