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Effective Branding: Starbucks Essay

When thinking of a brand that I am loyal to the first brand that comes to mind is Starbucks. The Starbucks organization has done an amazing job of branding itself as the premiere coffee retailer worldwide. The Starbucks logo is widely recognized and is distinguishable even to non-coffee drinkers. The company has the advantage of commanding premium prices for their products that consumers are happy to pay on a daily, or even more frequent, basis. The ability to charge these premium prices resulted in 13.3 billion dollars in revenue in 2012 (The Wall Street Journal, 2013).

Branding

Oftentimes a successful marketing brand strategy involves consumer education (Grewal and Levy, 2012, p. 303). Starbucks did a great job of educating Americans on the coffee culture and the difference between the drip coffee made in our kitchens and latte’s or Americanos. Starbucks leveraged the consumer’s need to feel like a connoisseur and introduced them to different coffee products from around the globe (Stealing Share, 2013).

Starbucks also did a very good job of making the product very visible. Starbucks stores started popping up all over Seattle first; the rest of the country was not far behind. Currently the company has 17,003 stores worldwide, with 10,787 of those stores in the United States (Statistics Brain, 2013). You cannot walk down the street in a major U.S. city without seeing a Starbucks store or a used Starbucks cup in a waste receptacle. This brand recognition happened very quickly and Starbucks didn’t have a whole lot of competition in these early days.

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The consumer coffee experience that Starbucks helped create could eventually lead to a need for a company brand redesign. Because coffee connoisseurs are now very knowledgeable about coffee products they expect continuous evolution. Starbucks has expanded their product line to include in-home coffee brewing products and stores located in supermarkets. This could lead to the consumer not valuing the Starbucks “experience” and turning to a lower cost competitor (Stealing Share, 2013).

Packaging

The most valuable asset that Starbucks has that relates to its packaging is the widely recognized Starbucks logo. The logo has evolved over the years, and was recently changed in 2011 (Corporate Eye, 2011). The logo that was used prior to 2011 included the words “Starbucks Coffee.” The redesign removes the company name entirely, and prominently features the picture that was in the center of the previous logo. Starbucks understands that their logo and brand are now recognizable without the company name similar to companies like Nike and Apple. The Starbucks cup is recognizable due to the Starbucks logo, but it also stands out for other reasons. The company was one of the first in the food and beverage industry to use recycled product in their packaging. This started with napkins and beverage sleeves, and continued with the actual cups that beverages were served in. Starbucks was one of the first companies to receive FDA approval to serve beverages in recycled paper (Food Production Daily, 2004).

Comparison to Competitors

While there a number of smaller specialty coffee retailers in the U.S., Starbucks’ most prominent competitors are Dunkin’ Donuts and McDonalds. These competitors started out as restaurants but quickly noticed the opportunities that the specialty coffee business presented. McDonalds is arguably the most recognized brand in the world and has worldwide brand recognition. The problem that McDonalds will have is educating its customers to the fact that they sell coffee. Also, McDonalds and Dunkin’ Donuts are both seen as budget-friendly companies, and this could also be a turnoff to customers seeking specialty coffee.

References
Grewal, D., & Levy, M. (2012). Marketing (3rd ed.). New York, NY: McGraw-Hill/Irwin. Food Production Daily. (2004). Starbucks corporation joins recycled packaging reviolution. Retrieved from http://www.foodproductiondaily.com/Packaging/Starbucks-joins-recycled-packaging-revolution Statistics Brain. (2013). Company statistics: Starbucks. Retrieved from http://www.statisticbrain.com/starbucks-company-statistics/ Stealing Share. (2013). Lessons we can learn from starbucks. Retrieved from http://www.stealingshare.com/pages/Lessons We Can Learn From Starbucks Failures.htm The Wall Street Journal. (2013). Starbucks Corporation.

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