Starbucks Rebranding: Brilliant or Desperate?

Posted: July 17, 2009 in Advertising/Marketing, Business, Uncategorized
Tags: , , , , , ,

Yesterday, Word Broke That Starbucks – The Quintessential Corporate American Coffee Chain – Is Testing Out A New Branding Strategy. See This CNN Money Article for all the details.

Starbucks is the chain we all love to hate. They are, simply put, accessible. They

Starbucks

Starbucks

are everywhere, though not as omnipresent as they were a year ago. Regardless, there are still 2 on every corner in NYC. But this chain of anonymous cafe’s is in some serious trouble. American’s, myself included can’t afford their pricey crap anymore and have realized that they can save a lot of money getting it elsewhere.

I Can’t Imagine That McDonalds’ “McCafe” campaign has done much – those commercials annoy the hell out of me & I have absolutely no interest in buying coffee in a venue that reeks oily french fries. But Maybe That’s Just Me.

Dunkin Donuts notwithstanding, I’ve chosen to abandon all corporate coffee, altogether; instead running next door to the closest family owned cafe, diner, or deli for a plain old cuppa joe – No Fancy Lattes or Iced Caramel Machiattos.

But back to the issue at hand. Starbucks has chosen to “rebrand” by completely abandoning anything and everything “Starbucks”

According the the Chicago Tribune:

A Seattle outlet of the 16,000-store coffee behemoth is being rebranded without visible Starbucks identifiers, as 15th Avenue Coffee and Tea.

Two other stores in Starbucks’ native Seattle will follow suit, each getting its own name to make it sound more like a neighborhood hangout, less like Big Coffee, a Starbucks official told The Seattle Times on Thursday.

Here’s the problem – The Execs at Starbucks aren’t addressing the issue at hand. Rebranding a few stores as old school, local, homey, coffee shops is great. It’s much more appealing than their bland & sterile unitheme. But the reason they’re seeing less “Foot Traffic” isn’t because of the atmosphere, decor, lack of music, or lack of alcohol – It’s because they sell overpriced crap. And the only way to fix things is to start selling better coffee for less $$$$.

The luxury of Starbucks, so enticing only 1, 2 years ago, has dissipated as value now trumps the accessibility and semblance of cleanliness they might exude. This rebranding would have probably boosted sales immensly, back then. But I don’t think it will help now, even in the slightest, save for a few alcoholics looking for a quick buzz.

This “Rebranding” Reeks of Desperation. It’s something that they should have done years ago & have implemented too late and is grossly misdirected from a marketing standpoint.

What do you think? Will This help the failing chain? Can Anything Save Starbucks at this point? Don’t get me wrong, I’m all for the new look, the liquor, the music. I just don’t think it addresses the cause of their decreased sales & foot traffic.


Add to: Facebook | Digg | Del.icio.us | Stumbleupon | Reddit | Blinklist | Twitter | Technorati | Furl | Newsvine

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to FurlAdd to Newsvine

Advertisements
Comments
  1. Keith Trivitt says:

    I’m not so sure the problems with Starbucks – and what their execs are trying to address with this frankly bizarre rebranding – have do so much with the fact that coffee, lates, mochas and other weird-sounding cafeineted drinks are over-priced. In my opinion, Starbucks problem is a lot like what Krispy Kreme went through a couple of years ago: immense oversaturation of almost every market. Both companies simply grew way too big too fast. And now, they have lost that cache that made them the envy of almost every national chain a while ago, and caused fans of their products to scream with delight when they came into your hometown.

    To this end, I’m not really sure if this rebranding will work for Starbucks. Krispy Kreme’s efforts to move out of some markets to try to save the brand from becoming an afterthought of the snack world. And some would argue KK has lost it’s cache and now is just another snack vendor in a long line of similar companies. But back to Starbucks, let’s be honest: they’re everywhere and they have become a cliche. Usually not good for a brand. Take a few away and perhaps they may regain some market share and some of their lost cache.

    @KeithTrivitt

    • techtony says:

      I definitely feel the comparison to Krispy Kreme is fair. Starbucks become all to ubiquitous. It’s a great thing to become so immediately identified with coffee, but becoming the Kleenex of coffee (aka, a commodity) isn’t the best thing for a brand built around the idea of unique quality.

  2. This is a very timely post and a great job as usual… was just talking about this yesterday.

    Long story short, I think ,what Tom Friedman called, “GloCalization” works… though you can’t deny that’s it’s a desperate move, I think turning inward (return to simplicity…?) during the current economic climate (and competetive landscape) may be just about the only major change left to do. Who knows if it’ll work, but they can’t remain stagnant and expect to survive.

    Then again, the ‘silver bullet’ savior technique in business, as we know (you were at the Jim Collins BusinessWeek book release right?) is a sign of a failing great company… we’ll wait and see though.

    AA

  3. I agree! I occasionally hit up a Starbucks when I’m in the mood for a chai latte, but it’s SO overpriced…the only reason I choose them over another brand is because there are about 100 of them in Knoxville and not much in terms of local shops (aside from downtown – which is sadly not where my office is). They really just need to lower the prices a bit and people will respond. Plus, IMO there coffee SUCKS so if I go through I have to choose the expensive “frilly” drinks.

    Plus, if we all know the new “local” coffee shop is really just Starbucks posing as such, isn’t that the same thing? If they don’t lower the prices than there really is no difference.

  4. Aerocles says:

    I Think you guys are all spot on regarding the “Oversaturation Effect” Besides – What we’re all calling a rebranding is nothing more than simple deception. That fact is – A Starbucks By Any Other Name Tastes Just As Bitter & Costs Just As Much.

    I Like the comparison to Crispy Creme & It will be interesting to see if the New NYC Tim Hortons will have any impact on Starbucks. I would imagine that regardless of this move’s success in Seattle, we’ll see similar efforts made in the Big Apple – Again, If only out of desperation. The need to really get back to their roots, not just appear that they are.

  5. techcommdood says:

    They’re taking tips from “Big Beer”… AB/InBev and MillerCoors market craft-looking beer but hide their name on the labels. It’s not a branding strategy, but trickery. I personally don’t care if big companies want to spin off a local-feeling offering, but be honest about it. It would be nice to see the big-company brand on their small-looking offerings, even if sub-text just below the logo reading something like “a XYZ Corp initiative”.

    As an example, here are the brands owned by AB/InBev: http://www.anheuserbusch.com/BeerVerified.html

    I was fooled by a few of them recently (Red Hook and Wild Blue), and some of the others were a surprise as well. Now, the beer was good, but let’s be fair and clear about who brews it.

    • Aerocles says:

      Agreed. Transparency & Disclosure, as important as they are in new & social media, are equally important in traditional marketing and advertising. When consumers feel like they’re being deceived they’ll reject the brand, plain and simple.

  6. CT says:

    Starbucks lives by the buzz and dies by the buzz. When they were opening stores across the street from one another in Manhattan and other big cities, they were geniuses because sales at both stores would zoom up despite the logical danger of cannibalization. When the recession hit, suddenly that same strategy was criticized because, surprise, sales slackened.

    It’s one extreme or another with their strategy, and that’s biting them in the butt with this rebranding experiment. There shouldn’t be any alarm bells over an isolated single-store test of new concepts, even ones that are radically different from their business-as-usual — all companies do R&D. But because it’s *$, it’s scrutinized to the nth degree and taken as a sign of desperation.

    Of course, they bring this on themselves by hyper-hyping every little move they make. It worked in flush times, but it boomerangs during downturns.

  7. Great minds think alike – this is the Pink Book’s scheduled Rules of PR for Monday! Ha!

    But my take is slightly different than yours.

    Great article nonetheless, my friend. Love it! Way to start a good discussion.

  8. Thanks for bringing this up David. I’ll argue with you and say that not all of Starbucks’ drinks are overpriced crap. I happened to really like their sweet black iced tea and simple iced coffee (both are only $2ish for grandes) so I’m biased.

    But I do agree with you that a rebranding doesn’t address more important issues. They’ve got a long list of negative perceptions. Though they have made some solid improvements to listen to their customers and improve their offerings, trying to dupe customers by glocalizing (thx alexa) and hiding their true identity would seem to hinder rather than help. True, plenty of brands do this at a product level when they get really big (A-B was brought up– I suggest Frito Lay as an example) but to hide your name for a retail store seems like an outright lie. And a purposeful, subversive one (which seems worse).

    To me, their opportunity to localize would be great.. Just this week I read that Uncommon Ground (a coffee shop here in Chicago) opened the first green-roof-garden of its kind, so that they can provide patrons with fresh produce grown literally above their heads. Why not localize your foods, the art on your walls and yes, the drinks while keeping the Starbucks name? And sure – close a few stores. There’s three on the same street less than a mile apart here on Clark St.

    Why not? Because those types of efforts are costly and complicated. And Starbucks, like any other large retail operation is about streamlining all aspects of its operation. It’s very nature is to be replicable anywhere and everywhere. As long as that’s the case, they’ll never be as unique or care as much about their operations as a local private operator.

  9. […] And as The Legends of Aerocles asks, is it brilliant or desperate? […]

  10. Aerocles says:

    Quick Shout Out To Sasha For Her Take On The “Rebranding” At: http://sashahalima.com/blog/?p=3316&dsq=12961510#comment-12961510

    I’ve been thinking about this since I wrote about the topic last week (thanks for the shout out btw). We’ve all been calling this a rebranding, but is that really what it is? I mean, aside from the deception. The defining characteristic of the Starbucks brand is the price – They could redesign every store to look like a living room and dress up their baristas like disney characters and it wouldn’t be a rebranding, so long as they send the same message to consumers – “Our coffee must be better because it costs more!” That’s the message I get – That’s their brand & It’s one that clearly does not work well in a financially strained state of affairs, such as ours, putting them in quite a pickle.

    Best I can assess, this “redesign” is not only deception, but distraction from their exuberant prices and possibly an attempt to justify the costs.

    Sorry Starbucks, In the words of Dana Carvey This Ploy is Just “Not Gunna Do It.”

  11. […] The news this week has spoken of a corporate rebranding, but it has also been recognized for what it is, an attempt of a stealth subterfuge so we might not notice their uber priced coffee-appearing beverages with weird names and sizes—as if we were ordering a true European coffee specialty right on the streets of Verona, Italy. […]

  12. […] received any offers like this? Starbucks is fairly social media savvy and have been undergoing a rebranding process for a while now – between the unbranded stores in Seattle to taking on the instant […]

  13. […] platforms and generally attempting to keep the brand evolving alongside consumers. Be it with unbranded stores, partnering with Klout, the legendary My Starbucks Idea, or being the first major brand to tout a […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s