Everyone knows about the difficult transition period Starbucks is going through. It is a very commonplace for brands to face tough challenges while expanding a street corner theme into the world. The fear of competitors results in lashing out of stores in wherever they can find a decent piece of land.
Starbucks soon came out with a good strategy of going back to its basics and launched its unbranded stores. Howard Schultz reportedly closed down the stores for a day and ordered everyone to learn how to make a good coffee all over again. Great vision. But what is happening to Starbucks with instant coffee VIA?
First of all, Starbucks is not an instant drink brand. It takes away or dilutes what it stands for. Where is the warmth and smile in a cup of instant coffee? It should not have lent its name, first of all, to a brand that is totally opposite to what it does. Recent competition by McDonalds and Dunkin Donuts with their cheap range of coffee has resulted in a reactive step by Starbucks. McDonalds and others are diluting their brand image by providing something out of their normal category, Starbucks hasn’t capitalized on that error but fallen into the same “you do I react” policy.
Starbucks soon expanded under the not so watchful eyes of its CEO Jim Donald from 2005. It expanded vigorously outside the United States while those stores could not replicate the Starbucks experience. You walked into a Starbucks to find people smiling at you and the overpowering smell of their famous $4 coffee. Starbucks customers were never the ones who looked at economy but they saw value in Starbucks. So what does Starbucks do after it finds out that people are extremely loyal to them? They try to squeeze in more from the people. That is where the difference between management and marketing comes. Management is looking at the reality but perception tells a different story altogether. And more often than not perception always overpowers management. Starbucks soon launched its range of breakfast menu which not only slowed down the queues but also overpowered their famous coffee aroma. It soon was translating into a food joint rather than an exclusive coffee bar- for which people were ready to pay a premium.
Soon, Schultz realized what was going wrong with the brand and fired Donald and took over the reigns in 2008 and ordered the closure of all non profitable chains and re-focus the brand that was previously known for exactly that- FOCUS.
However, the launch of via is going to be harming the company in the long run. Taking the sales of via in isolation might show that it was a great decision, but over the period of time it is watering its strong image. It is as impersonal as Starbucks can get. Instead of its USP of bringing the customer to the shop and making him/her spend time, via focuses on driving away the consumers by stating that via is as good as our brewed coffee. How could someone pass that copy that undermines the classic Starbucks coffee to a product totally opposite to their ethos. Comparing the sales is the management way of doing things and it will soon find that Via is doing really well. But can they measure perceptions? Certainly not.
If it had to combat the likes of McDonalds and Dunkin Donuts who are equally blind, it should have separated its name from the product. This endorsing strategy of Starbucks VIA isn’t exactly a bright idea. And to top that they are conducting taste challenges in their store. Wonder how the Starbucks Barista is going to feel when he/she knows that his/her coffee is similar to an instant coffee. We all know how flawed the taste challenges can be- ask Roberto Goizueta, CEO of Coke, when they launched their disastrous masochistic brand New Coke. After the drinks the management said “This is our surest move ever”, people thought otherwise.
It is all really simple. Marketing is simple. Management complicates it. The likes of Kotler (The MBA favorite) complicate it. People are still stuck in SWOT analysis whereas the reality is nothing close to it. We do it according to What Malek’s Law prophesized –“ Any simple idea will be worded in the most complicated way.” And worse still – it will be followed too.