Brand Development Strategy of Starbucks Coffee Company - Case Study Example

Brand Development Strategy of Starbucks Coffee Company Background This paper is focused on a scenario. In the scenario, the writer is promoted to a senior management position in Starbucks Coffee Company. As a senior manager, he is required to create and develop a brand management strategy. The research will create the strategy and disclose a brand name, logo and tagline which incorporates the slogan of Starbucks. The report will also include timescales for short term aspects of the brand development plan as well as longer term considerations. The long term consideration will include potentials for globalization and feasibility of brand extension. The report will be analytical and hence, will justify decisions taken and strategies chosen. Introduction A brand is “a mark made by burning with a hot iron to attest manufacture or quality or to designate ownership.... [a brand is a] characteristic of distinctive kind” (Yang, 2005 p187). This implies that a brand is something unique and distinct that sets a given product aside from other similar products in the industry. Kotler gives a famous definition of what a brand is, “a name, term, symbol or design or a combination of them which is intended to signify the goods or services of one seller or group of sellers and to differentiate them from those of their competitors” (1984 p4). Hence, the role of a brand is to set aside a given product from a corporate entity from similar products that are turned in by other companies. Starbucks is a popular brand. The name of Starbucks is quite pervasive around the world. This lies in the fact that Starbucks has a history of specializing in coffee products and building a brand based on practices in European countries like Italy (Thompson, 2007). The company became heavily capitalized and it became a popular chain of shops throughout the United States in the 1980s and 1990s. Historically, the company merged with Il Giornale and built this current major organization which has a single unified logo (Thompson, 2007). Due to the pervasive nature of the Starbucks identity, the company just maintained the same logo from the days of the merger with Il Giornale, which reads simply, “STARBUCKS COFFEE”. This is found in all different branches of the company around the world. A sample is placed below: Fig 1: Starbucks Logo This logo shows the simplicity of the company's identity. Due to the sheer numbers of Starbucks outlets, this brand is quite identifiable. However, it seems to be quite limited in some ways and in some senses. Beck-Burridge et al (2001) state that the primary aim of a brand is to promote identifiability which boosts profitability which in turn promotes survivability and competitive advantage for a business. Hence, brands need to be changed when the markets are matured and demand begins to fall. Also, in the quest for specialized niches, international markets and improving profitability, businesses need to review their brands and build new brands from time to time. Development of The New Brand There are several stages that brands go through when they are instituted. They include: Unawareness > Awareness > Knowledge of Features > Brand Preference > Brand Trial > Brand Repurchase > Regular Brand Repurchase (Watkins, 1986). Hence, this forms a chain and a cycle for consumers who get to know of a new brand and develop an attachment to it. At this stage, it appears that there are several people who have several reactions and connections to the Starbucks brand. From the observation of the writer, the following groupings can be made: 1. Loyal Customers: These are customers who are strongly connected to Starbucks. They are typically regular caffeine consumers who work in central business districts where Starbucks outlets exist. These people are regular brand repurchasers. And they come back to purchase. They might be too familiar with the current logo and brand. Their need might be to see a new look and consolidate their desire and connection with the brand. 2. Non-Regular Customers: These are people who do not really have a strong attachment to Starbucks. However, they go to Starkbucks outlets from time to time and have a drink. These people are likely to belong to the brand preference class. As such, there is the need for a new logo and brand to draw their attention to Starbucks. This will cause them to give the brand a second thought. 3. Potential Customers: These are people who do not often go to Starbucks outlets. They can be converted to customers through advertisements, promotions and recommendations. As such, they would expect a catchy brand and logo in order to build and sustain some kind of interest in the Starbucks logo and brand. The concept of Integrated Branding indicates that a business should intersect its company strengths with customers' value (Aggarwal, 2008 p2). In other words, the business must integrate its core competencies with its customers' priorities and uppermost needs. In this sense, brand development involves matching the organization's goals with customer loyalty. In other words, the organization's goals should guide the organization to carve out a joint value proposition through a concept and idea that will resonate with existing and potential customers. This will build brand connection and ultimately lead to brand choice by customers. According to Professor Dunne, who undertook an extensive research on the Starbucks brand, the company evolved and became popular in North America through four main themes: 1. Healthy lifestyle: People sought to replace alcohol with coffee. 2. Meeting place: The premises of Starbucks outlets became a preferred place for quick meetings to be held in-between busy office hours. 3. Affordable luxury: The premises of Starbucks were always luxurious, however, the prices were quite low enough to accommodate the not so rich people who sought a comfortable and luxurious place to have a drink and read or meet with associates. 4. Knowledgeable of coffee: Starbucks prides itself in the specialization in coffee. They have different coffee brands and other dessert brands that offers a wide range of choice to different consumers from different backgrounds. Hence, the important things about Starbucks can be integrated into four main concepts: Health Place Affordability & Variety Branding is based on three main things (Kapferer, 2012 p28). The first is brand concept. The brand concept must embrace the core activities and evolution of the business. The second component is the experience that the consumer gets and the third is the symbolism and the integration of all components into identifiable words or symbols. Since Starbucks is based on coffee, nice premises, affordable services and diversity, the brand should be one that shows all these in clear unbiased terms and formats. Brand Name As a Senior Manager, I believe that it is about time that the Starbucks brand gets qualified. This is because Starbucks is a household name now. It is something that most people have a connection with. However, there is the need for some kind of adjective to be integrated to the brand to provide more description of the achievement and hard work of those who have kept the business in motion to-date. I will therefore propose that the name STARBUCKS COFFEE becomes changed to STARBUCKS CLASSIC. This trademark will indicate some kind of evolution from the normal everyday Starbucks to a value-added product that will make consumers more satisfied. STARBUCKS CLASSIC will show that there has been some transformation from the ordinary Starbucks that everyone knows to one that has become refined and more potent in meeting the needs and demands of consumers. Logo Design The current Starbucks Logo is not one that most people can connect with. Most people do not know much about the current logo and what the woman in the logo signifies. However, it is apparent that the company is strongly steeped in coffee and coffee products. In replacement for the existing logo, I will recommend that STARBUCKS CLASSIC adopts a logo that includes the following important symbolisms: 1. Coffee [a brown coloured coffee fruit]. This will symbolize the healthy life that coffee seeks to promote in lieu of alcohol. 2. Five Stars that will symbolize the 'Star' in STARBUCKS. The five stars will symbolize the fact that the company has transcended the limitations and has been moved to a classic level. However, the logo background, the green area in the outer circle should be maintained to enable old customers to connect with the new brand and logo. However, in the middle, the brown coffee seeds should be put there to symbolize the central product of the company. Around the coffee, the logo should be adorned with the five stars that signifies STARBUCKS CLASSIC. Slogan for STARBUCKS CLASSIC I will propose that the name and logo that will represent Starbucks should be one that integrates the four components of Starbucks. Thus, the new STARBUCKS CLASSIC should be one that will go with different slogans that will promote the brand and give it the necessary exposure. This should reflect the history of the development of the company and strike a potential customer the moment s/he sees the Starbucks brand. In this direction, I propose that Starbucks should be branded in these five main themes STARBUCKS CLASSIC: AFFORDABLE LUXURY STARBUCKS CLASSIC: HEALTH IN DIVERSITY STARBUCKS CLASSIC: GIVING COFFEE A MEANING STARBUCKS CLASSIC: IN A CLASS OF OUR OWN STARBUCKS CLASSIC: THE FIVE STAR All these five themes will replace the oversimplistic logo which exists today: STARBUCKS COFFEE. This is extremely simplistic. However, the original logo of Starbucks has gained roots. As such, it will be problematic to have a revolutional change in the logo. As such, it will be better for Starbucks to have these five phrases which will describe the brand to customers. This will build on the old system and also help to promote the core values and ideas that Starbucks stands for. Also, different themes and ideas of the company can be presented in different forms that will resonate well with different people in the customer base of the company. The five different options will give Starbucks Classic a different view amongst different people in different society. The diversity will allow separate people to get separate connections for the Starbucks Classic products throughout the different branches. In terms of marketing, advertising and promotions, Starbucks Classic can rely on four different themes that promotes one of each of the major concepts and ideas of the brand. This will help the company to build effective promotions that will target different niches in the market with ease. Positioning of STARBUCKS CLASSIC Brand positioning answers the question of “where are you in consumers' minds?” (Okonkwo, 2007 p117). In other words, brand positioning lies in the minds of consumers. It is about the brand value and how the consumers view the brand in their minds. Stevens (2009) identifies that there are four key elements of brand positioning. These four elements are relevant to the new STARBUCKS CLASSIC brand that is being promoted. They include: 1. Characteristic: STARBUCKS CLASSIC must resonate to the consumers as a brand that transcends the old Starbucks brand that is quite ordinary. This means that it must show a higher quality and improvement over the old systems and characteristics of the STARBUCKS COFFEE brand which was quite limited. 2. Attributes: This involve the main features of the new brand. STARBUCKS CLASSIC must represent a unique and advanced brand that is separate from other competitors. It must set the gold standard in the coffee outlet industry. This will set STARBUCKS CLASSIC apart from different coffee companies around the world. 3. Personality: STARBUCKS CLASSIC should be associated with important persons who have achieved incredible feats in their fields of engagement. Since Starbucks has a tradition of appealing to the business class, executive and middle class, role models and achievers who have prove track records should be associated with the brand. Primary personalities that will endorse the CLASSIC brand should be individuals who have proven records in whatever they do, preferably executive positions. The personalities that will be used should reflect consistency and achievement. This will depict the successes that Starbucks has attained over the 40 years of their existence. 4. Image: The image of STARBUCKS CLASSIC should be one that shows the achievement and consistent successes that is ingrained in the new brand. This will get the brand to become different from the competitors of the industry and provide a rock solid performance for different customers and consumers. Secondary Association Secondary association refers to the representation that is given to a brand, aside the primary personalities connected to it (Kautish, 2011). STARBUCKS CLASSIC will need secondary association to maintain its image as a brand that supports affordable luxury. In this wise, people who are less endowed and average persons should be depicted as going to Starbucks and using their services. This will provide some kind of encouragement to the lower class people who might be contemplating on whether to use their services or not. Legal Protection of STARBUCKS CLASSIC The STARBUCKS CLASSIC brand name, the slogans and the related logo should be registered trademarks. This registration should be done in the US Patents and Trademarks Office (USPTO) or the United Kingdom Intellectual Property Office. Once this is registered, the brands can be used with the ® sign will be attached to the brand, slogans and logo. Under the World Trade Organization (WTO) Trade-Related Aspects of Intellectual Property Rights (TRIPS), the registration in the US, UK or several countries are recognized in most parts of the world. This means that the brand name and the slogans cannot be replicated by anyone without permission from Starbucks. Communication of STARBUCKS CLASSIC According to Shimp (2008), communication of new brands needs to be done through a verbal prioritization system. This means that the management of Starbucks will have to come up with a systematic method of communicating the release of STARBUCKS CLASSIC. Step 1: There should be a launch of STARBUCKS CLASSIC. This launch should involve the top level management of the company and should be done after a series of communications within the organization and amongst the major stakeholders. This will lead to the unleashing and commercialization of the STARBUCKS CLASSIC brand. Step 2: The launch should be followed with the transformation of the different places within which the company operates. All the different branches of the company should be given the appropriate changeover to reflect the new changes in the company's image. Step 3: Starbucks should begin promotions based on the new brand. This will give people the awareness that the brand has changed from STARBUCKS COFFEE to STARBUCKS CLASSIC. Step 4: After the evolution is complete and awareness is created, important facts of the brand should be unleashed. There should be a promotion of the company's history and competitive advantage on the basis of the five slogans. Each slogan should come with a story about the current position of Starbucks under the new brand. Step 5: There should be brand preference based on the fact that customers should be allowed to make choices based on the different offerings that the previous step. Customers should be encouraged to choose STARBUCKS CLASSIC ahead of the offering of competitors. This should create brand preference and convert new customers to become loyal to the brand. Possibility of International Brand Extension of STARBUCKS CLASSIC The secondary association should be flexible enough to accommodate people of different backgrounds, including the different national cultures and systems within which Starbucks has outlets. In this case, the primary personality that represents the STARBUCKS CLASSIC should be a global figure that different people in different parts of the world can connect with. This will help in the globalization of the brand. However, for the maintenance of deep and intimate connection on the national level, STARBUCKS CLASSIC needs to contract local stars and ordinary locals to promote the idea that Starbucks promotes healthy lives for the commoner and is also affordable luxury that any one in the society can access. In Singapore, the primary personalities connected to Starbucks can be promoted in connection to what they do on the global level. However, there could be other familiar figures like successful academics, professionals and entrepreneurs in Singapore who can be paid to endorse the brand to the local Singaporean market. This will build a brand extension from the US to the local Singaporean market. Conclusion Starbucks Coffee is a brand that seem to be struggling in a mature market where competitors are entering the industry at a fast rate. In order to promote survivability and competitive advantage, Starbucks needs to rely on its unique history and competitive strengths to develop Starbucks Classic which will be a brand that will exhibit the company's affordability, health consciousness, locational advantages and diversity. Starbucks Classic can be a strong brand that will promote the different strengths of Starbucks in a unique manner. Once the brand is created, it should be promoted in a gradualist fashion that will be based on the launch and the exposition of the brand to the public. This will provide proper connection by the different customers around the world. References Aggarwal, S. (2008) Brand Management: A Theoretical and Practical Approach New Delhi: Global India Publications. Beck-Burridge, M., Gupta, S. P, Sato, G. and Walton, J. R. L. (2001) Sports Sponsorship and Brand Management London: Palgrave Macmillan. Dunne, D. (2011) The Starbucks Brand University of Toronto: Joseph L. Rotman School of Management. Kapferer, J. N. (2012) The New Strategic Brand Management: Advanced Insights & Strategic Thinking London: Kogan Page Kautish, P. (2011) An Analytical Study on Perspectives of Brand Awareness Berlin: GRIN Verlag. Kotler, P. (1984) Marketing Management: Analysis, Planning and Control New York: Prentice Hall. Okonkwo, U. (2007) Luxury Fashion Branding: Trends, Tactics and Techniques London: Palgrave Macmillan. Shimp, T. A. (2008) Advertising, Promotion, and Other Aspects of Integrated Marketing Communications Mason, OH: Cengage. Stevens, L. (2009) Marketing and Brand Management New York: Prentice Hall. Watkins, T. (1986) “A Consumer Based Model for Researching New Products” Emerald Journal of Marketing Vol 2 Issue 4. Yang, K. (2005) Design for Six Sigma for Service Chapter 8 Brand Development New York: McGraw Hill Read More