Starbucks Verismo: An extension too far or a stimulating change?
Posted by Richard Oldham on March 9, 2012
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Every marketing case study on Starbucks lauds the success of the brand in creating the concept of the ‘third place’ – the coffee shop as safe, desirable destination that isn’t work or home. Whilst ‘extra-shot, skinny latte with caramel syrup’ personalised coffee consumption was an important part of the offer, the brand was always at pains to point out that it was so much more than just a coffee business.
All that changed, of course, when the brand entered the grocery and convenience channels with pre-mixed chilled latte and cappuccino products, and then again with the launch of the ‘premium’ instant Via product. Today Starbucks have announced that they will be taking on Nespresso with their own single cup coffee maker, the Verismo. So, do these coffee-based product leave the Starbucks brand compromised and confused or can it credibly be both a product brand and an experience brand?
In the new world of complex user-constructed brands we would argue that Starbucks’ integrity is still intact. The core of the brand’s positioning will always be focussed on the full coffee shop experience and the notion of the third place, but beneath that umbrella it is perfectly credible for the brand to offer a range of product (and service) propositions, targeting different users or occasions, as long as these still maintain a clear and tangible link back to the core positioning. The role of future brand building activity should always be about reinforcing the core Starbucks experience, but for as long as that remains attractive and relevant, the brand can comfortably offer a range of appropriate propositions underneath it, allowing their diverse consumers to access the brand in different ways at different times.
For us this is an example of preserving the core whilst stimulating change. A brand remaining true to its core philosophy whilst recognising the need to develop and manage the multiplicity of its offer.
I’m sure Starbucks will be delighted to hear that we agree with their brand strategy(!) …but it looks like Wall St agrees already as shares in Starbucks’ main American competitor, Green Mountain, fell 20% on the news.