{Rules of PR. no 15} Dear Starbucks, Rebranding, FYI, is NOT the same as Lying

Image by Pierofix via Flickr.

UPDATE: July 24, 2009 9:07 a.m. ET
Funny, how in a more PC-way, ABC News & GMA this morning (as well as Nightline tonight) have said what I said below. With the excpetion of my giving Starbucks credit for their new wine and beer choices, and small menu alterations — FYI, saying “inspired by Starbucks” in your stores, doesn’t mean rebranding. It means you’ve missed the point and the reason you’ve needed to close 600 stores.

I don’t get it, why doesn’t “big coffee” understand? And sneaking into smaller, “mom and pop” shops with a lovely black binder that says “Starbucks” in order to scope out their “scene” — umm, yea. Too obvious.

*ahem*

What a tangled latte we brew…Starbucks, I do heart you, but WTF is wrong with you these days?

~*~

Word on the Mocha Latte street is that everyone’s favourite love-to-hate, overpriced, coffee chain — aka Starbucks — is getting a makeover…but, you just wouldn’t know it.

No, I’m not talking about their new snack line to compete with The Hut and McCafe — I’m talking about a real makeover. I promise they won’t look the same; they said so.

Opening this week, that’s right, “Your Neighbourhood Coffeeshop” is about to become 15th Avenue Coffee & Tea.

A Seattle outlet of the 16,000-store coffee behemoth is being rebranded without visible Starbucks identifiers, as 15th Avenue Coffee and Tea.
Two other stores in Starbucks’ native Seattle will follow suit, each getting its own name to make it sound more like a neighborhood hangout, less like Big Coffee, a Starbucks official told The Seattle Times on Thursday.
“The Goliath is coming at me under a new name,” said Dan Ollis, owner of Victrola Coffee Roasters, a coffee shop on 15th Avenue in the Capitol Hill neighborhood, about a block-and-a-half from the made-over Starbucks set to open …

But to be completely honest here — I’m sorry, I’m little confused.

If coffee prices are going to stay the same, $4-6.00 per cup, and the menu items are staying the same… this isn’t rebranding, it’s lying. Plain and simple. This is simply repackaging the same old present in new, brightly coloured wrapping paper.

Rebranding equates recreating a brand, you know, it’s “[taking] this raw clay and [making] like, Michelangelo.”

I was under impression that rebranding is taking one product and distributing it under another name, look and complete new idenity, involving some radical change in  the product in some way shape or form.

Changing one’s name, but still charging $4.00 (and up) for a cup of coffee, is the whole reason people are stepping away from Starbucks to begin with.

I feel like writing them a letter and clearly highlighting the part where our national statistics show some states have reached 15% unemployment and the nation’s average is ready to hit 10% by the end of the year.

It looks like Starbucks is not recession-proof. They are not Harry Potter and they just don’t get it.

Image by PinkLaine via Flickr.

The reason “mom and pop” and “neighbourhood” coffeeshops are still in the coffee business and doing pretty alright is because they aren’t trying to serve up coffee-couture. The luxury era fad is over. Plus, it doesn’t help the coffee giants, that Britney Spears’ daddy, has her on such a tight leash she can’t waddle into Starbucks and spend $200 a week (okay, maybe she still goes, but she’s only allowed $50 a week now!)

To compete with these smaller stores (oh, how the the irony begs,) drive them out of business, and reenact the corporate cannibalism, Starbucks had been previously known for — well, Starbucks needs to act like these stores and bring down the prices of their products.

While, I won’t beat around the bush — when I’m abroad seeing Starbucks DOES make me feel closer to home, and I will choose them over the local establishment. But be not mistaken, that is mostly because it’s a brand I trust, know, and there is some sort of conscious/sub-conscious comfort level there. However, that being said — here, at home, in the United States, I make my own coffee at home, stop by one of those great hole-in-wall-Miami Cuban bakery places to get espresso, or take a swing by Dunkin’ Donuts. I haven’t actually bought Starbucks on a regular basis for over a year.

It’ s just not worth my cash anymore. It is only coffee. And why would I pay more, when I can get the same thing, at a lower cost, to do the same job to wake me up, if not better elsewhere?

Rebranding and actually changing your brand are the same as night and day.

BIG DIFFERENCE.

  • So I wonder, will this little venture work?
  • If so, will it work well, or just alright?
  • Would you consider this rebranding or lying?
  • And as The Legends of Aerocles asks, is it brilliant or desperate?

Little Pink Book’s Rule of PR #15:
Branding, Rebranding and Lying; know the difference.
It could save you a lot of money and make you some in the long run.

 

–

Sasha Muradali runs the ‘Little Pink Book’ . She holds a B.S. in Public Relations from the University of Florida (’07) and an M.A. in International Administration from the University of Miami(’08). She loves Twitter and all things social media, so you should find her @SashaHalima.

Copyright © 2009 Sasha H. Muradali. All Rights Reserved.

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Comments

  1. Sasha, unfortunately re-branding is not about changing the product, but about changing the package. If in the process they decide to lower the price, that will be a PR/marketing strategy to attract more customers, but it is not necessary for the rebranding process.

    As far as I am concerned, Starbucks has no reason to re-brand or to change the product line. I love it as it is, but if their marketing department took this decision, they must know something I don't. And talking about prices: if $4 USD sounds too much for a coffee in US, you don't want to know how much they charge in Europe. 🙁

  2. I agree with you to a certain extent. But while, rebranding doesn't always
    mean changing the product – it means staying consistent with what you
    already have.

    This move on Starbucks end seems rather sneaky to me.

    Well, about two years ago, $4.00+ was NOT a lot for a cup of coffee until th
    recession really started to hit. People never complained about it and
    Starbucks was way 'cooler' than it is today. However, that being said the
    reason Dunkin Donuts has reemerged on the American market, the reason the
    'Joe' coffee line at Burger King and McCafe are around is to compete with
    the Starbucks brand an a lower cost.

    Long gone are the days when the average American will willingly spend $4.00
    on a cup of coffee. Especially, when you move out of the bigger cities and
    tourist areas. American 'mom and pop' coffee stores are actually more
    popular. It's part of the 'American experience' in some places.

    For example, where I went to school in Gainesville, there was a local
    establishment called Maude's. They served everything Starbucks did as maybe
    a dollar cheaper…people flocked to Maude's over the Starbuck's across the
    street from it. Maude's may have initially had Starbucks competition at the
    beginning …but then that slowly faded.

    So if Starbucks wants to rebrand itself and get people back into its
    stores…….they're going about it the wrong way. And if people are going
    into these new stores, thinking they are getting away from 'big coffee' but
    they aren't…well that's lying, not rebranding per se.

    Here is another way to think about it. In Miami, you can get a giant 6-8 oz.
    worth of Cuban espresso to keep you up for a week for $2.50. About 8-12
    people can take 'shots' of that.

    Unless they're dropping gold leafs into it, people are not going to spend
    $4.00 on a cup of coffee. When someone else can do the same job for cheaper
    elsewhere.

  3. You can get coffee cheaper in other places, but you have to understand that the quality of bean and roast is less, not to mention that Cuban espresso in Miami is not ethically traded. Even Starbucks' non-organic, non-fair trade certified beans are ethically sourced through its own rating system, (which I studied in seminar and when compared to other ethical labeling, it ranked right behind fair-trade and above organic.) Besides, most people that go into Starbucks go for the mixed drinks, not just the plain brew or straight espresso. So they are paying for consistently mixed recipes, not just the quality of bean.

    As far as the Mom and Pop coffee shops, they aren't surviving the recession just because they're not serving up “coffee couture.” Indeed, many of them have shut down and they have a hard time surviving in normal economic circumstances. Those that do survive or have been around long enough to weather the storm have done so because of customer loyalty.

    There will always be an appeal for the experience and authenticity of a mom and pop store. The experience of the authentic little mom and pop shop is what Starbucks is after. It has nothing to do with dishonesty. It has to do with us. It's a phase of consumption (see luxury article I referenced in “Luxury is Dead” post.) The phase of consumption that America is now in emphasizes experience and not just product or price.

    Re-branding does not mean a cheaper cup of coffee. It's changing the packaging and delivery, not necessarily the product and the price. Nothing Starbucks is doing is new or uncommon. As for getting away from “big coffee”, how do you suppose they do that without cutting down on the amount of logos and identical stores? It's not like they can suddenly turn into mom and pop or function like a small business. No matter what, Starbucks is going to remain a “big coffee” company, but they don't have to look the part. There are plenty of major retailers that have done the same.

    I don't find the move sneaky at all.

  4. Hi Jenn,

    You bring up an interesting POV. It’s like David from Aeroceles asks, is it
    brilliant or desperate which is another way to look at it.

    If I to choose from the POV. I would say if circumstances were different and
    non-recessional, it would be brilliant. But things as they are – well, it
    looks rather desperate to me.

    You are right, they aren’t doing anything uncommon or remotely special. But
    because it’s Starbucks we are hearing about it.

    I was just explaining to @miguelstil that I do in fact, still drink
    Starbucks and it’s actually what I brew at home. And I love their coffee.
    Normally, I don’t drink straight American coffee either. I actually drink
    espresso from Starbucks.

    But Jennifer you and I are not the typical American coffee drinkers. And the
    majority of those drinkers drink straight up American coffee and can get it
    cheaper elsewhere.

    For example, if you head into Canada – Tim Horton’s is more popular than
    Starbucks. It IS the definitive Canadian brand. Canadians who want good
    straight brews, are buying Tim Horton’s, not Starbucks.

    On the subject of mixed recipes – I have never had a better Caramel
    Macchiato, the way I like it, from anyone in this entire world – except
    Starbucks. And I’ll pay the $5.00 for my grande, w/ an extra shot, no whip,
    w/ skim or soy. Make no mistake about it.

    Will I do it as often as previously? No, but that’s because I’m in a more
    stable living environment, and not in college where I ate out almost all the
    time.

    The thing is, if we are talking about repackaging/rebranding whatever we
    want to call it.

    If you’re changing the entire look of something, but still handing out the
    same product – that’s sneaky.

    Rebranding doesn’t have to mean cheaper coffee, more expensive coffee or
    something the same. It can mean anything. But if the point of Starbuck’s
    rebranding was to compete with ‘mom and pop’ stores…well, they missed the
    point by a long shot.

    You said, “No matter what, Starbucks is going to remain a “big coffee”
    company, but they don't have to look the part.”

    So my question is – with the current American economy, do you think it will
    work? Is it desperate or is it brilliant?

  5. But aren't the menu items changing? http://tinyurl.com/mvb2jk

  6. They are — at all locations. Not just the new ones, or the ones that they
    are renaming as Starbucks.

    The only BIG difference in menu at the new place is alcohol. These new
    Starbucks stores that are not called Starbucks is that they will have beers,
    wines etc.,

    Think of poetry, throw pillows and older-traditional-fashioned coffee
    houses. Something near a university or in a boho type of area perhaps.

    But otherwise, it's supposed to be the same basically.

    The other Starbucks are/have already started changing the food items etc.
    It's part of The Hut v McCafe v. Starbucks v Dunkin Donuts battle.

    Think of it this way —

    Nicole Nailpolish and OPI are OWNED by the same company, OPI.

    Nicole has half of the same colours as OPI and charges $1 more for a $7.00
    bottle ($14.00 at Harrods in England actually) for the SAME exact thing in
    another package.

    Brilliant, sneaky or desperate, I ask you?

    Now apply the marketing strategy to Starbucks, it's nothing new…but in my
    personal opinion, I consider it lying.

    🙂

  7. I don't think it has to be “brilliant or desperate.” Not every move a corporate giant makes has to be earth shattering. I think the press loves to make it seem that way. It's a spin-off. I don't think they are competing with mom and pop either. Taking a note from the little guy is not competing with the little guy.
    Will it work? Well, it's worth a shot. Especially since it seems that they've done their research. They're only testing it on a few new shops. What's the worst that could happen? It's not like a more comfortable coffee shop will hurt.
    BTW, suggested reading:
    http://www.coffeestrategies.com/2009/07/16/15th
    It's not sneaky to change the way something looks or is presented. Further, it seems that this is going to be a sub-brand. If they take a few of their old locations that they were possibly looking to unload anyway, or even if they buy a new location, and play around with a new concept under a different name, that doesn't make it dishonest. It's evident that they may be looking to serve different beverages and alcohol. They could be trying to attract a different customer or perhaps they will learn something that they could apply to the “Starbucks” brand (and not this new one they seem to be developing. I could be wrong, but it looks like there will be Starbucks stores and this new brand. Starbucks as a corporation, as a parent company, will own and operate both brands.
    It would be sneaky if they advertised their prices as being cut and then proceeded to charge you for each customization, which many companies frequently do. It isn't sneaky to create a new brand and test it. Actually, come to think of it. I wouldn't even call this rebranding.
    Would you call Honda sneaky for creating Acura? They started with the same parts, produced by Honda, the parent company. Yes Acura has a different customer base. Well, who is to say that these new stores won't have a new customer base?
    I think perhaps the question that someone needs to ask here is “Who is in Starbucks' target market for these new shops?” I really don't believe that the “average american” as you have described is Starbucks' target customer for the original stores OR this new store. Consider where Starbucks started. West Coast, not a small town, trendy. They went for the cafe and coffeehouse patrons. Those people don't drink standard brew, they drink iced lattes, cappuccinos, and now frapuccinos. Starbucks was the cool indie shop when it first started and then it got big and popular. Then some groups purposely targeted them with criticism to make an example of them (a proven method in activism is to go after the biggest target with the closest ethos to your own.) Yes it helped the activists' cause, but it also vilified Starbucks and opened them to general media criticism. They are now the big bad guy no matter what they do, even if they are doing more for ethical behavior than most of the little guys.
    So now, they are no longer the indie cool kid; they are “big coffee.” However, the customer base has not changed by much. It still isn't the average middle class american. Starbucks may have lost some of that indie street cred, but it still has a loyal fan base which it acquired on the way up. So yes, some of the customers that previously had the extra $4 bucks a day are cutting back. However, I'm willing to bet that those folks were just bonus for Starbucks. (Think of luxury brands losing some of their customers and having to change their product and tactics.) So they'll have to sell of a few stores, cutting back on growth of the original brand, offer a few cheaper menu items and keep their old ones. (Note: It's harder to cut back on prices and then move them back-up when things get better than it is to keep the prices the same.) That being said about the original brand and parent company, this new venture is interesting. I guess we'll have to wait and see what they actually serve and what the price point will be to pass any sort of judgment, but I do think they are headed in a good direction in changing the atmosphere and adding alcohol to the mix. My guess is they'll find customers.

    p.s. The company is also doing a sort of revamp on a few Starbucks stores and pushing the ethical “shared planet” campaign.

  8. Correct me if I’m wrong but I thought they were ‘re-branding’ to try something almost completely new- not to just ‘hide their Starbucks identity.

    I think it is smart to try this new approach under a new name. If I were Starbucks I would want to test this out in an environment that is not directly associated with my brand. Right? If it works, then great, they can either start a more widespread implementation, or replace all Starbucks BUT- it doesn’t sound like this new atmosphere is meant to attract the same crowd – maybe they will do both (implement more ‘traditional small town coffee shops AND keep “Starbuck” as we know it):

    In the spirit of a traditional coffeehouse, it will serve wine and beer, host live music and poetry readings and sell espresso from a manual machine rather than the automated type found in most Starbucks stores. – http://tinyurl.com/mvb2jk

  9. Hey Sasha, Gr8 Post, As Always. I've been thinking about this since I wrote about the topic last week (thanks for the shout out btw). We've all been calling this a rebranding, but is that really what it is? I mean, aside from the deception. The defining characteristic of the Starbucks brand is the price – They could redesign every store to look like a living room and dress up their baristas like disney characters and it wouldn't be a rebranding, so long as they send the same message to consumers – “Our coffee must be better because it costs more!” That's the message I get – That's their brand & It's one that clearly does not work well in a financially strained state of affairs, such as ours, putting them in quite a pickle.

    Best I can assess, this “redesign” is not only deception, but distraction from their exuberant prices and possibly an attempt to justify the costs.

    Sorry Starbucks, In the words of Dana Carvey This Ploy is Just “Not Gunna Do It.”

  10. Thanks for a great set of new insights after a day of debating / blogging about this topic myself.

    I'm not sure if price is as big a problem as the perception (probably true) that they're acting like a corporate giant again – looking for not-so-subtle ways to put the little guys out of business. In my neighbourhood, the little guys often charge more than Starbucks and they still win! Why?

    Because they're really local / engaged / real / small enough to adapt.

  11. elizabethdhill says:

    The iTS has surpassed Amazon on the list of the largest music distributors. People do not disney acting auditions prefer to buy non-DRMed CDs from Amazon over the iTS anymore. Please check for facts if you want to make such silly arguments. WalMart, yes. Target, yes. Amazon, no.

  12. ….I'm slightly confused, who are you replying to/what are you talking
    about?

  13. elizabethdhill says:

    The iTS has surpassed Amazon on the list of the largest music distributors. People do not disney acting auditions prefer to buy non-DRMed CDs from Amazon over the iTS anymore. Please check for facts if you want to make such silly arguments. WalMart, yes. Target, yes. Amazon, no.

  14. ….I'm slightly confused, who are you replying to/what are you talking
    about?

  15. elizabethdhill says:

    The iTS has surpassed Amazon on the list of the largest music distributors. People do not disney acting auditions prefer to buy non-DRMed CDs from Amazon over the iTS anymore. Please check for facts if you want to make such silly arguments. WalMart, yes. Target, yes. Amazon, no.

  16. ….I'm slightly confused, who are you replying to/what are you talking

    about?