Starbucks Brand Strategy - Coursework Example

? Brand Management Contents Contents Introduction 3 Back ground of the brand 4 Brand Elements 4 Usage based brand equity (CBBE) Model 79 Brand Strategy 9 Marketing Communications Integration 16 Sustaining the brand 20 Conclusions 21 Recommendations 22 References 23 Introduction The origin of the word “brand” has come from the original Norwegian word “brand” which means to burn. The farmers used to put some burn identification marks on the livestock to distinguish the possession. This still happens to the main objective of branding or brand building in modern day business as well. A marketer looks to use branding or brand building to help the target customers differentiate the offerings from that of the competitors dealing with similar kind of products. Overall branding is viewed as a differentiated strategy through which the customers can easily distinguish the features of a product from that of similar products offered by other marketers. It is also viewed as a tool used by the marketers to position the products with a reliable image of quality and values to make certain the growth of a recurring fondness by the consumer. That is why it is often said that products are something which is manufactured in the factories. Brands are something developed in the minds of the customers; and, hence, the customers do not buy the product; customers actually buy the brand. From the discussion it is quite evident that in order to gain a competitive position in the market it would be important for the marketers to develop a strong brand. However, developing a strong brand is not an isolated approach; rather it is a holistic one which includes a combination of marketing activities. The present study has been conducted in lieu to critically analyze various aspects related to a brand. The brand chosen happens to the largest coffee chain in the world, Starbucks. During the course of study various elements of the brand, the present branding strategy of the company, the marketing and communications strategy of the company as well as the key factors related to the brand equity of the brand has been analyzed by using various analytical and marketing tools and models. Back ground of the brand By Origin Starbucks is an American coffee chain which has now become the largest coffee chain in the world and the one of most popular global brands. The company began its journey in 1971. The headquarters of the company is located in Seattle, US. The company has 20,891 stores in sixty two countries. The product of the company includes Coffee, Tea, Smoothies and Frappuccino beverages. As on 2012 the company had 149,000 employees and the revenue of the firm happened to be US$ 13.29 billion. The chairperson, President and CEO of the company is Mr. Howard Schultz. . Brand Elements Brand elements are a set of elements that are utilized by a brand to develop a unique position in the minds of the consumers. Brand elements play an instrumental role in creating brand identity. Creation of a unique brand identity is quite important as it helps the marketer to define how brands plan to leverage the brand to reach the predefined corporate vision; to support to corporate values and achieve the corporate vision. Ultimately it helps the company to achieve brand loyalty and equity (Keller, 2012, p.399). One of the key brand elements of Starbucks has been the logo of the company; the first logo of the company was developed in the year 1971. The next was built in the year 1987. The next logo was built in the year 1992. The present logo is almost the same as the one built in the year 1992. The star of the logo represents the company that provides high quality offerings and has been living up to the expectations of the customers for quite a long time. Another key element of the brand would be the packaging of the products (Arvidsson, 2006, p. 201) The packaging of the cups are simple and yet attractive. One of the key features of is the cups are recyclable (Elliott and Percy, 2007, p. 291). Through such brand elements the Starbucks have been able to develop brand unique brand identity of brand which provides the most perfect cup of coffee and an experience which is relaxing, friendly, and ethical, environment and community friendly. Usage of customer based brand equity (CBBE) Model The customer based brand equity model was developed by Keller to satisfy five important criteria such as the comprehensiveness, cohesiveness, up to date, well grounded and actionable. According to this model development of a strong brand consist o four important steps such as the establishment of proper brand identity; development of suitable brand connotation through sturdy and unique brand associations; development of strong branding relationship with the customers. In order to add these steps it requires six brand building blocks such as the salience of the brand, performance of the brand, imagery of the brand, judgments of the brand, feelings related to the brand and resonance of the brand. Among these the most important block, i.e. the brand resonance block is established once the other blocks are built. Salience refers to the depth of brand awareness. As far as salience is concerned it is to be said that Starbucks is among the list of the top hundred global brands. The company has worldwide present and hence the brand is fortunate enough to have strong degree of brand awareness. Brand performance is the intrinsic properties of the brand with reference to the inherent product benefits. The fact that Starbucks is among the 50 most admired brands, speak a lot about the performance of the products. The company has been providing quality coffee along with personalized pleasant store ambience to provide the ultimate experience to the customers. Brand imagery refers to the way the people think about brand on an abstract basis rather than the actual physical existence of the brand. Starbucks is perceived as sophisticated, trendy, iconic cup, coffee, customized, high degree of variety, relaxing, ethical, environmental friendly. Judgments refer to the way customers combine the performance and the imagery association to develop different types of brand opinions. As far as judgment is considered Starbucks is among the 50 most admired brands in the world. Hence the figure speaks for itself regarding the judgment factor (Gabriel, and Lang, 1995, p. 229). Feelings refer to the emotional reactions and responses related to a brand. The feelings towards Starbucks among the customers are usually positive. People look at the brand as trendy, ethical, relaxing, quality, consistent, etc. There are some negative associations also though. Most of such associations are concentrated on the price factor. Also the brand is one of the most socially engaged brands as the Facebook page of the brand holds the third position in the top Facebook Page likes list. Brand Strategy Brand strategy refers to the activities or set of activities adopted by the marketer to develop a strong brand. In case of Starbucks one of the keys to the success has been the brand positioning of the company. Here, it is to be said that brand positioning is quite different from traditional positioning statements; Traditional positioning statements ignore the possibility of the presence of multiple point of differences. It also ignores the requirement if points of parity. Over all a conventional brand strategy does not provide onward looking growth platform. On the contrary brand positioning is all about the how the marketers would want to target the customers to think about a brand with respect the competitors. A strong brand positioning guides organizational activities by focusing on the essence of the brand. The key aspects of the positioning statement are the target market, unique point of difference (POD), shared point of parity (POP) and brand mantras (Haig, 2003, p. 301). The key target market segment of the company includes the upper middle class to upper class people; people who are outgoing in nature and loves to drink coffee. The points of parity include the degree of responsibility, locally involvedness and fair price (prices are on the higher side though). The points of difference include the relaxing nature of the stores, rich consumption experience, convenient and friendly service, Fresh high quality of exotic Coffee. While talking about the point of difference one of the key aspects of the POD has been the in shop branding of the Starbucks store that has made the brand stood a sight from all other potential competitors. Starbucks has put in a lot of effort in case of in shop branding. This includes the lighting, store ambience, merchandising and of course the architecture of the store. For example the company targets people who are working professionals as well as youngsters also. The following pictures provide a clear picture about the architectural planning of Starbucks is concerned (Arvidsson, 2006, p.223). . The company has also adopted a three to five word phrase that reflects the PODs and the essence of the brand as it says “Rich, rewarding coffee experience”. Another successful branding strategy adopted by the company has been the co branding strategy. Through co branding strategy the company has been able to develop to develop strategic alliance with other brands this has helped the brand to get exposure to the brands of the partner band. Starbucks previously had struck a partnership with Apple i-Tunes. Add to this the company has been able to develop coo branding with Pepsi to launch products such as the Double Shoot, Double Shoot energy and Frappuccino. Marketing Communications Integration While discussing about the integrated marketing communications strategy of Starbucks it is important to mention that Starbucks looks to focus on customer in store experience as compared to mass market commercials as the senior executive feel that improving the in store experience would be a lot more effective than the commercial via mass media. This is mainly done by providing relaxing music, outlets for laptop, relaxing chair, etc. However, Starbucks do go for advertising. Some of the commercial created by Starbucks happened to be quite successful one. One o f the commercials featuring character of a double shot drink before going for a work was quite success. Another of the commercial featuring Stacey, someone who decides to a break from work to Frappuccino was also loved by the audiences. In the year 2009, the company had launched a long term campaign with an objective to focus on the unique experience and exceptional experience provided by the brand (Kornberger, 2010, p. 225). Another ad campaign launched by the company was mainly for the Frappuccino beverages. The campaign was launched in the year 2010 and emphasized upon the customization of the drink (Danesi, 2006, p. 131). Starbucks also targeted the youth by running an ad in MTV and VH1. The main objective of the campaign on MTV and VH1 was to create and maintain the level of brand awareness. Also it was a method to analyse the buying behaviour of the youth. Starbucks had put up a banner on the MTV and VH1 sites which asked for consumers: What is the Starbucks signature; tap to find it out ( Riezebos, 2003, p. 323). However when it comes to promotion and advertising the main medium of the company has been the digital medium. In 2011 Starbucks started a mobile run ad campaign to increase the number downloads of the mobile applications. The ad was run by flixtserphone application. The company also continued mobile strategy through mobile campaigns that allowed customers to choose the favourite summer beverages. It was a banner ad that read as the handcrafted refreshment is waiting (Kapferer, 2008, p. 469). In order to make the brand of Starbucks go viral the marketer also gets indulged in to event marketing, sponsorship and public relations. The public relations activities include posting quality content and most importantly asking lots of questions to engage the fans. Also the company runs contests to increase public engagement as a part of the PR activity As a part of the PR activity the employers of the company quite often post videos talking the experience of working in Starbucks (Zarrela, 2010, p. 393). Apart from this the company also focuses on the sales promotional activities especially during the holiday seasons. Personal Selling is also a part of the promotional mix. Once a customer walks into the store the personal selling process can be explains via the picture below. Sustaining the brand It has already been discussed during the analysis that Starbucks is brand which is loved and admired not only in the native country but also on global basis. Therefore it is safe to assume such the preference of the consumers for the brand of Starbucks would continue. However, one of the major challenges for the company would the environmental threats. Consumers have become a lot more health and environment conscious. Hence the customers are looking to be with brands that provide healthy and environment friendly products. As a result the company has already started to use recyclable cups. But, in order to increase the customer adoption of reusable cups, Starbucks has decided to roll out low cost that would also be reusable in nature. The plastic cups would cost $2 only and add to this the company would also provide a 10 cent discount to the customers who are using the cups (Elliott and Percy, 2007, p. 291). Conclusions To conclude it can be said that in the modern day competitive business environment developing strong brand is absolutely essential for the success of a company. One of the prime examples of it has been Starbucks. The company has been providing quality services to the customers since 1971. Through the brand elements such as the corporate logo, improved packaging the company has been able to develop strong brand identity. Such brand identity ash helped the company to gain brand loyalty and strong brand equity. The consumer based brand equity model has also shown that the company through set of all the six blocks has been able to become one of the strongest brands in the world. The brand positioning strategy shows how with the help of POD, POP and a unique brand mantra. As far as the communication strategy is concerned the company uses an integrated approach. However, rather than focusing on mass advertising the company focuses on WOM marketing through digital and social media. However, every now and then the company has been able to come up with some pretty successful ads. Recommendations Keeping the paradigm in shift in the customer behaviour in mind it is recommended that the company should continue to focus on the digital marketing strategy. The focus should be on creating customer engagement leading to a group of loyal customers. Also ads on Google maps and Facebook places should be looked upon to ensure that the customers can locate new stores. Keeping the health and environmental consciousness in concern it is suggested that the focus should be on positioning brand as a healthy and green one. Also the company should focus on the operations in some of the emerging countries like India and China keeping in mind that the market in UK or USA is a matured one. References Arvidsson, A. 2006. Brands. Meaning and value in media culture. New York: Routledge. Danesi, M. 2006. Brands. New York: Routledge. Elliott, R. and Percy, L. 2007. Strategic Brand Management. Oxford: Oxford University Press. Gabriel, Y. and Lang, T. 1995. The Unmanageable Consumer. London: Sage. Haig, M. 2003. Brand Failures. London: Kogan Page. Kapferer, J-N. 2008. The New Strategic Brand Management, London: Kogan Page. Keller, K. 2012, Strategic Brand Management, Global Edition 4E. Londoon: Pearson Education. Kornberger, M. 2010. Brand Society: How Brands Transform Management and Lifestyle. Cambridge: Cambridge University Press. Riezebos, R. 2003. Brand Management: A Theoretical and Practical Approach. Harlow: Prentice Hall. Zarrela, D. 2010. The Social Media Marketing Book. New Jersey: O'Reilly Media, Inc. Read More