Stop Growing, Already!
Must business growth mean “do more of everything”? Why do companies seem to believe that the only way to extend their value is to do everything they can, in every direction?
I’ve written a bit about Starbucks before, about how, over time, the unique Starbucks experience has become watered down to the point that it’s no longer special. Today, though, I was struck by several further dilutions of whatever it is Starbucks thinks it is.
Exhibit A: My company provides coffee to its employees. In the kitchen is a semi-industrial coffee maker and a half-dozen pump-thermoses for coffee. We have several bins containing pouches of coffee of various sorts, including “Starbucks House Blend.” It’s good when it’s freshly made, but this afternoon I poured a mug full of what turned out to be really awful, tepid coffee. It still had that distinctive Starbucks coffee flavor, but it was undrinkable. I doubt the coffee experts in Seattle intended that particular experience.
Exhibit B: A little later, I wandered over to the convenience store around the corner from my office. They had Starbucks coffee, ground, in one-pound bags. Sitting on the shelf right next to the bags of Dunkin’ Donuts coffee. So much for Starbucks being a better experience than Dunkin’ Donuts–if they can sit on the same shelf, how different can they be? I doubt the branding experts in Seattle intended that particular experience.
Exhibit C: On my way home, I stopped at Staples, a giant office-supply store. While looking for the tape aisle, I passed a shelf holding–you guessed it–one pound bags of Starbucks coffee. They’ve reduced themselves to the level of paper-shredders and post-it notes. I doubt anyone in Seattle intended that.
Three times today I encountered Starbucks extending its brand well beyond the “third place“–someplace besides home and work. It turns out they’re in those two as well, with bad results. At work, the chances of a substandard experience is fairly high; to get into my house, they’re sharing shelf space with scotch tape.
Maybe if they’d concentrated on being special, they wouldn’t be struggling to convince customers that it’s true.
Question for you: Are you overextending your brand?
Hello Aaron,
I found your posting via my newsgator feed and found it interesting. Interesting in the way two people can look at something and have two completely different opinions.
Exhibit A: Well, not much to say about that one, just an old pot of coffee, can’t blame that one on the siren.
Exhibit B: Supermarket shelves can’t create value, that has to be built away from that medium. If you are counting on the supermarket to build brand exclusiveness then they are doing something wrong.
Exhibit C: Staples and other office supply stores are perfect to display in and I would try and capture that business too. You boiled it down to tape and post-it notes, but they are also along side Dell, Apple, & HP. Not bad company in the marketing departments.
In case your wondering, yes, I am in marketing. But it is that experience that has taught me to value the other opinion as well. Great post. Looking forward to seeing more of your work.
Eric
Hi Eric,
Thanks for finding me!
For me, the point is that a company who wants to own their brand must tightly control it. I’ll remember that bad cup of coffee. I’ll remember seeing the Starbucks logo in the dingy convenience store. And I’ll associate this special coffee with toner cartridges. At each of these points, Starbucks gave up control.
Its true that, by selling through Staples, Starbucks ends up associated with some great brands. But the company started out with a very specific vision of the relationship it wanted with consumers. Maintaining that relationship requires them to regulate as many of the consumer “touchpoints” as possible. Is being associated with computer companies really an advantage?
Selling through other outlets isn’t a bad idea per se; they could, for example, create a sub-brand for their coffee (e.g. Pike Place Roast), give it credibility through a “now served at Starbucks” or whatever), and so protect the core brand.
Full disclosure: I’ve done a tiny amount of work with Starbucks through a partner company of theirs, and I happen to like their product. But I believe could show a little more self-restraint when it comes to extending the brand.
Great points Aaron!
It all comes down to being public. All of that warm and fuzzy went out the window when they started chasing quarterly results.
Once you have to pacify that beast, I imagine selling your soul or “selling out” has to be part of the retail matrix. I wouldn’t mind seeing a large amount of share buybacks announced considering the current share price.
Thanks,
Eric
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