Paving the Way to Brand Extention

Here in Toronto, we have a number of coffee houses. The most well known of them, however, are Tim Hortons, Starbucks, Second Cup, McDonald’s, and Timothy’s. I use the term “well known” because I want to recognize the role that each of their respective brands play in their consumers’ memories. 7-Eleven’s and their counterparts’ coffee is fairly consumed too, I’m sure. But from discussions I have had with a number of fellow consumers, they have never entered conversation, let alone dominated it. Each of the four coffee chains I mentioned have a pretty distinct understanding of who their respective target market is. But this blog is particularly about Starbucks, so I will save you the trouble of reading through excruciating detail.

About a year ago, I wrote a final exam of a Marketing class and in that exam, my case-study analysis was based on Starbucks. The following is almost exactly the image we were shown:

Starbucks 1992 vs. Starbucks 2011

The case-study required us to analyze the significance of this change, and provide our thoughts on it. Of course, the exam was for a Marketing Management class and I since taking that class I had been interested in pursuing a career in Brand Management, so this exercise posed quite an interest for me. It got my juices flowing and I, thus, decided to write about it.

Frankly, I think this is a very subtle, yet superbly defining change in the course of Starbucks’ history. I believe that this simple rebranding of the age-old symbol of the Starbucks’ Siren sans the word “Coffee” along with “Starbucks” on the logo liberate the company from their strict association with the beverage that brought them the immense riches that it did. The Siren is also an immensely popular symbol of the company and is expectantly recognizable by virtually everyone in their target market(s), but also by the masses that constitute their secondary or tertiary market(s).

Now, Starbucks is free to leverage their brand equity to pave the way to line extentions, among other things. Starbucks cafes may not only be spots where the young and/or the affluent go for coffee, but may also transform into a hub of social activity with their own brand of wine, beer, or fresh fruit juice. This idea, of course, is now old. This article in USA Today dated July 1, 2011 mentions the fact that Starbucks has indeed begun vending wine and beer at Seattle locations. Surprise, surprise! The renunciation of the word “Coffee” from their logo was a clean, low-key way of saying: “Hey, let’s use what equity we have to push us into the unknown.” This risk-taking behaviour is how most successes are achieved and I think it has been quite well done.

One expectation of being able to offer alcohol is to possibly see people drunk. Well, I don’t suppose that will happen too often with a glass of wine costing $9 and a bottle of suds $5. That’s pretty steep seeing as one can get a bottle for about $3 at a pub/bar and for just a little over a buck a bottle at the Beer Store. Strategically priced, this encourages a fairly conservative consumption as compared to a pub where one can get a pitcher of brew for about $13-15. (I’ve also heard of a place in downtown Toronto that has 8-dollar-pitchers of awful tasting, but highly effective beer which I have yet to try) This pricing, I feel, has also been well thought of to align perfectly with the drinking habits of their coffee-drinkers. PLUS, I expect that alcoholic drinks will provide a fairly high margin as well – especially beer since each serving is packed individually, unlike wine.

Looking at the logo, past and present, it is clear that Starbucks uses their trademarked green, HEX code 006542 I believe, quite tastefully. Going forward with the minimalist trends of corporate graphic design nowadays, the revised logo not only renounces “Coffee”, but also renounces the black colour that it contained. Now entirely in the trademarked green, the logo looks simpler and prouder than before – the smile of the Siren even more evident now that there is more room for her. Additionally, Starbucks’ Siren has earned, over the years, the unassisted brand recognition and reputation that it needs to be a standalone representation of the company’s value proposition. No longer does the Siren entice the consumer with the promise of premium coffee; she now entices the consumer with the promise of the premium quality of whatever product she resides on.

Starbucks have opened themselves up to a whole new world, not by giving up what made them famous, but by downplaying it for strategic reasons because the expectation is that what made them famous will no longer have to be the only reason for their continued popularity in the future. The possibilities are endless.

Until the next blog.