Problem: You have an established global brand but it is tied to a specific category. Your expansion plans require you to move outside of that category. What do you do?
Solution A: Rebrand yourself in an effort to distance yourself from your core business and its ‘restrictive’ category. Become more generic in your focus while maintaining some degree of visual familiarity with an evocative but adaptable logo that can easily fit on anything, from laptops and wine glasses to media players and shampoo bottles.
Solution B: Create a hierarchy/structure for your company that allows you to expand into other categories while preserving your core business and successful brand anchors. Create a new logo if one doesn’t already exist to differentiate the corporate entity from consumer brands.
It appears that Starbucks has opted for Solution A:
I would have opted for option B:
Incidentally, this has been done before, and with pretty decent success:
GM's lineup - circa not 2011
Starbucks already owns at east two brands that have distanced themselves – if not from Starbucks itself – from the Starbucks logo: 15th Avenue Coffee and Tea, and Seattle’s Best. It stands to reason then, that Starbucks Corporate is perfectly capable (and willing) to manage more than just the Starbucks brand. Unfortunately, they are both coffee/coffee shop brands as well. Ideally, Starbucks should consider reversing its current model of branding various coffee endeavors under three different identities while trying to brand new business ventures under the Starbucks umbrella. The opposite – branding its coffee endeavors under the Starbucks Coffee brand while branding music, wine and everything else they experiment with as something non-Starbucks Coffee – would make more sense.
The question isn’t whether Starbucks should or shouldn’t expand into other markets – like music, wine, food, lifestyle products and even travel. Of course Starbucks should. Companies need to grow, and the coffee shop vertical simply won’t satisfy that need for the Seattle-based company. Starbucks therefore needs to expand elsewhere. Its successive attempts at creating extensions with music kiosks, wine and beer, candy, instant coffee and ice cream have all been good tests for the brand. The real question is: How does the coffee brand “uncoffee” itself enough to be able to transcend this category without diluting its brand – in that category?
Rebranding isn’t the solution. Removing “Starbucks Coffee” from the Starbucks Coffee logo isn’t it either. And making your biggest brand asset – the Starbucks cup of coffee – look bland and less than authentic isn’t it either. What this type of rebranding does is exactly what you want to avoid: It dilutes the brand, angers core customers, further increases the distance between consumers and the promise of the authentic Pike Street Starbucks experience, and does absolutely nothing to clarify Starbucks’ brand universe for consumers.
What you want to do is bring clarity to your brand environment and allow it to grow without disturbing your existing brands. You create something like this:
At the heart of the expansion puzzle for Starbucks seems to be the way the company views its own distribution channel: Starbucks coffee shops seem to have become labs for every “shift” idea. Overnight, coffee shops find themselves turned into music stores and sandwich joints and wine bars… and then back into coffee shops again when the latest idea doesn’t scale. This dependence on Starbucks Coffee stores is in and of itself a hurdle Starbucks needs to address in its quest for clarity. Truth is that if Starbucks wants to get into the wine business, Starbucks needs to start a wine business. If Starbucks wants to launch music stores, Starbucks need to launch music stores. What Starbucks cannot continue to do is dilute the coffee shop business with every new idea that comes along. This latest step – essentially “uncoffeeing” the Starbucks logo – further unanchors the Starbucks experience inside the coffee shops from the vital core coffee experience upon which Starbucks built its brand over the last 40 years. There is danger of diluting the brand in this way. Unfocused brands tend to lose relevance.
With the logo change, Starbucks’ brand narrative unravels itself into a loose brand extension grail quest: By 2015, will we still be walking into coffee shops or will we be walking into lifestyle emporiums of music, gourmet pizza, protein smoothies and wine tastings? Will Starbucks also sell bread, like Panera? Will it sell donuts like Dunkin? Will it go after McDonalds by also offering gourmet burgers for lunch? Which begs the question:
What is Starbucks if its coffee business is no longer about coffee?
The question is much bigger than a logo redesign.
In order to change, Starbucks needs to think beyond the obvious logo update. The puzzle here, while not difficult to figure out, is a little more complex than a bit of uninspired graphic design wizardry. The company’s strategic expansion model needs a little clarity and structure. Starbucks need a plan more than it needs a new logo.
Focus, Starbucks. Focus. We love you and want to see you succeed, but you need to think this through just a little bit harder. The logo should have been just a cool little detail, not the centerpiece of what comes next.
Cheers.
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It has to be asked whether the Starbucks brand has any relevance in the markets it wants to move into. It would be better to have Starbucks as the holding company and create a new brand for each new venture, with Starbucks’ expertise and investment behind it.
Virgin managed to extend its brand across different businesses because its brand stands for forward thinking and value. Whereas the Starbucks brand stands for coffee and little more.
Agreed.
And agreed. Virgin took a completely different approach. Besides, starting with music (media) is far less restrictive than say, coffee, fast food or bike helmets. Starbucks has been relatively successful every time it has focused on launching new products that tie back to the coffee brand (like ice cream). As soon as it moves beyond their core business with something like music or wine, things slow down. Way down. It may just be the Starbucks identity is so melded to the coffee experience for us that no matter what Starbucks does – short of launching new companies and brands – the Starbucks name will not soon be successfully associated with anything but coffee. In this sense, the Starbucks brand may be the victim of its own success. That’s actually a good thing. It’s an asset. Rather than try to force the issue, Starbucks should look for the path of least resistance. There are simpler ways to do what they are attempting to do.
Cheers, Chris.
Olivier & Chris, we may be viewing the Virgin expansion with the benefit of time. I’m not a Virgin historian but I wouldn’t be surprised if more than a few people in 1984 questioned why a company, Virgin Records, well known for producing and selling music would be launching a trans-Atlantic airline.
I’m not entirely sure that Virgin had any relevance in the markets it entered when it entered them. at least initially. “Hang on, the label that brought me the Sex Pistols is now going to fly me to New York!?”
Perhaps 30 years from now when we’re sitting in the living room of our Starbucks Lunar Biosphere we’ll be telling our great-grandchildren about how Starbucks started as a coffee seller. Perhaps.
Could be. I can’t wait to try on a pair of Starbucks moon socks.
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Exactly. Excellent article, Olivier.
Many companies make the pedestrian mistake of thinking that a logo change constitutes a “rebranding”. Think again!
Kudos,
Peter
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The problem I have with your argument Olivier is that it’s based entirely on the assumption that the change was only made to accommodate brand extension. I don’t think that’s the case. This update to their image is part of celebrating their 40th anniversary. It tells their customers they’re as concerned with keeping their image fresh as they are with their coffee. Encircling your symbol with your brand name is a dated approach. It works for retro brands but that’s not Starbucks. One thing I’ve noted in the examples you’ve created is how much more clear the new symbol is at the same size as the original. In signage, it will be recognizable from a greater distance. We also don’t know how the Starbucks name will be reconnected with the logo. I’m sure it will reappear albeit without the word coffee.
That’s actually a really good point, Daryl: I am indeed making an assumption, which I rarely do, and that alone puts my argument on shaky ground.
That said, I make the assumption on the grounds that a company like Starbucks would need a legitimate reason to 1. purposely weaken its brand, 2. deliberately separate it from its coffee business, and 3. incur the significant cost and headaches that come with completely changing out every sign and replacing its logo across the whole business.
Not to mention that the brand and associated logo are not broken. The symbol is universally recognized now. And last but not least, the majority of Starbucks fans are angry about the change.
Surely, Starbucks wouldn’t risk all this just to… update their image without some kind of business plan to go along with it. That would be a bit irresponsible, don’t you think?
Cheers.
Oliver, great in depth discussion with incredible graphics. I agree with you that Starbucks needs the strategic flexibility to move beyond coffee (should have done it long ago) but there are other ways to do it than to walk from the green coffee logo. Some verions of the corporate brand and logo (see Intel, GE, and Kraft) could service that purpose. The key then is the equity and relationship role the coffee logo plays. I suspect it is huge and it is risk to get rid of it.
Exactly. Well put.
I agree with some of your comments, David but coming from a non-US market (Australia) with a limited Starbucks presence, we don’t have the same attachment to either the identity or to the look and feel of the space. Sure it has a strong heritage and equity but I think Shultz and his team have taken a measured and informed approach (unlike Gap) to the brand. Look at what Starbucks have done in Japan to see how far they are committed to pushing it. Starbucks approach is organic, timely and generally in-line with other brands like Nike, McDonalds, Apple and Chanel who have moved similarly .
It’s a good argument, Stephen, but you can’t compare Nike or what it has done to Starbucks. Nor can you compare Apple to McDonald’s. Just because one brand changes its logo or approaches a facelift one way doesn’t mean other brands should follow suit.
I don’t see how this “approach” is any more measured than Gap’s, frankly. Can you explain what you mean by that?
Smart brands don’t wait until something is broken to change and improve. At that point, they appear desperate and nothing they do is perceived positively. The Gap fiasco is an obvious example. This is not Gap II. It’s a (grande) bold move by a confident company willing to bet international recognition with its symbol appearing alone.
I agree that brand expansion is the strongest practical reason but disagree that the brand will be weakened. Starbucks will always mean coffee in the same way that Nike will always mean shoes despite the product expansions of each.
Without knowing actual plans I can’t comment on costs. But it is an investment in keeping the brand current – the same as replacing furniture and equipment. Stale is likely a banned word in Starbucks corporate culture.
Thanks for the comment, Daryl. And yes, while I agree that change and improvement should not be afterthoughts of failure, how exactly does this logo change (which isn’t popular by the looks of comments on Starbucks’ own Facebook page) constitute “change?”
That’s the missing piece of this puzzle.
Gap tried to “change” too a few months ago.
Cheers.
Olivier,
I suggest you actually read and watch the Starbucks presentation and argument about brand essence, equity and potential brand expansion. Here is a company that might actually understand its brand equity.The fact that stock price is now x3 from its 2009 low seems to indicate the business is on track with this strategy as well as other aspects of its business strategy.
http://www.starbucks.com/preview
Gap clearly has no clue about its brand. Its volte face shows that.
Stephen
Yes, I have watched the video. And clearly, what is being implied is a shift to areas not touching on coffee, which is what my last three posts have been about: Starbucks evolving beyond “just” coffee.
The fact that Howard has to tell people not to worry about what the logo change means to the coffee business tells me that I am not incorrect in pointing out that this particular course – the rebranding across the board – is not the ideal way of going about this. Starbucks’ 2010 stock performance has absolutely nothing to do with branding decisions that will go into effect in Q2 of 2011.
As for “the strategy,” I still haven’t heard what it is. The video talked about colors and sirens, not about any specific strategy.
My posts simply call for caution when it comes to expanding a brand like Starbucks beyond consumers’ comfort zones and offers a way to create order and clarity so that a strategy – when it finally appears – will be better understood and embraced by customers.
Cheers, Stephen.
Of course they don’t need only a logo change. In case to expand their business, Starbucks must make another brand – it’s called branding
Rebranding or not, Starbucks is coffee. Period.
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Its just a brand lol, I am pretty sure nobody will care if they switch around abit.
Olivier … to make your Starbucks house of brands argument stronger, delete the 15th Ave. Coffee & Tea mention. (Like its sister location, Roy Street Coffee & Tea, its a small scale petri dish experiment.) Instead, add in TAZO Tea. (Starbucks bought the TAZO Tea brand in 1999 and has been operating it as a separate brand.) Also add in Ethos Water. (Starbucks acquired Ethos Water in 2005.) And, consider adding the RTD brands of Frappuccino Bottled Coffee Drinks and Doubleshot.
The current Starbucks house of brands includes: Starbucks, Seattle’s Best, TAZO, Ethos Water, and possibly the two RTD brands. So it appears Starbucks is following through on your Option B strategy of growing sales through a house of brands strategy.
Before we go all-in and play the Starbucks has lost its focus card, since it became a public company and revved up its growth engine in 1992, Starbucks has been selling merchandise and playing in business areas far outside of its coffee roots. As a former Starbucks retail marketer, I’ve questioned many of the company’s moves but the logo revision is a non-issue to me. Practically no one I know, except for Starbucks partners (employees), refers to the company as “Starbucks Coffee.” It’s simply Starbucks.
Did the company need to make the logo change? Probably not. Did they think this logo evolution through? Absolutely they did. You don’t grow a mom and pop shop to become a nearly $11 billion company without thinking things like this through.
John,
Thanks a bunch for the Tazo and Ethos info. I completely forgot about those.
BTW, I am not saying Starbucks didn’t think the logo evolution through. Although… It isn’t an evolution as much as a reduction – but I digress. What I am saying is that Starbucks, in focusing on its logo “evolution” didn’t think its brand ecosystem through. You are thinking about Starbucks as it exists today, not as it will be in 5-10 years, when coffee is just one of its points of focus. You’re also an insider, so your perspective of the brand (and imprint) is very different from that of a typical customer.
The danger here is that as Starbucks increasingly adds new businesses and products to its universe, the brand will – in consumers’ minds – move away from its coffee roots. It would have been nice for Starbucks to create some clarity for its market(s) now, instead of watering-down its mark (no pun intended).
I am glad you agree that they probably didn’t need a logo change though.
Cheers, John. It’s been too long, man.
True, I’m not the typical Starbucks customer. Neither are you, as I doubt the typical customer will ever utter or spend a nanosecond thinking about the Starbucks brand ecosystem.
Let’s give Starbucks time here. They do have a solid track record of making stellar business/brand/marketing decisions. (They’ve also made some poor decisions. In nearly every one of those cases, they’ve walked away from its poor decisions before it irrevocably hurt the business and or brand ecosystem.)
As I mentioned in my earlier comment, Starbucks has been adding new businesses and products to its universe since it went public in 1992. Almost since that time, smart marketing types and smart investor types have been saying Starbucks has moved too far away from its coffee roots to achieve success in the marketplace. The reality of yesterday and today suggests otherwise.
Your recommendation of Starbucks following a house of brands strategy seems to be the path they are on. We’ll see how that works out for them. The insider in me thinks Starbucks will continue to find success for the foreseeable future.
Agreed. Whether they stumble a bit along the way or lose their way altogether is still anyone’s guess. Consumers will adapt to whatever Starbucks does, even if a relative lack of clarity – even focus – makes the process a little less smooth than it could be. And whatever its logo, Starbucks won’t be going anywhere anytime soon… I think. My guess is that we will see at least a couple more logo changes yet – before the company either grows into a Nestle/PepsiCo/Kraft-style conglomerate, or shrinks into something a tad smaller than what it is today. We’ll have to wait and see.
Cheers, John. Great having your input on this.
Brand evolution is okay, but it has to be supported by a strong business plan. I don’t believe that Starbucks will be dong any action with a strong system to back it up.
…i meant, WITHOUT some system to back it up
Fans of any brand are angry at any change. Witness the grief over Apples change even the drop of computers from the name. To make changes its easier to resist than actively looking for changes. Who campaigns for more modern logos? From your article its more about what they are doing in-store not what the logo means. We have a brand here called Bewleys. It was originally a coffee house now its known as well for tea. For Tea drinkers (china/India) coffee does not hold the same connection. Growth now will come from abroad. Fads will be dropped also who would have agreed with sandwiches when Starbucks started.