Why The New Look, Starbucks?

I was shocked to find out that Starbucks celebrated its 40th birthday this week. I would have guessed them to be 20-25 years old. I read this on the Huffington Post website where they where Starbucks was revealing their new logo.

I may not have known that Starbucks is 40, but I do recall the Starbucks euphoria rise in the late 90’s and early millennium. And if the past 3-4 years were to be taken out of the equation (they were stretched thin and had over-branded themselves to the public and therefore had lost some of their luster), they have always enjoyed a steady stream of success, so my question was ‘why change a winning formula?’.

This article in the Huffington Post website about Starbucks new logo and the decision-making behind it sorted things out for me. The article states that after a period where Starbucks logo was an essential part in the growth of Starbucks Coffee to the most recognized coffee brand in the world, it had eventually

“suffered from its own success. It grew too far, too fast and began drawing criticism that it had become the Wal-Mart of coffee. Its luster further faded as the recession hit and consumers drank coffee at home or went to lower-priced competitors like McDonald’s Corp., which had upped their coffee offerings. The coffee’s giant’s sales and stock price both fell.”

Starbucks survived the dip, and brought back founder Howard Schultz in 2008 to help clean up their operations.

They immediately reverted back to what had made them successful in the first place. They emphasized customer service through intensified training. More effort was placed on their in store goods such as ice creams, muffins and other packaged goods.

On one hand they also downgraded a bit by closing a number of stores. On the other hand they increased their efforts in their Tazo tea and Seattle Best Coffee business lines.

John Quelch, a marketing professor explained it by saying,

“The brand is now evolving to a point where the coffee association is too confining and restrictive…Starbucks is fundamentally selling an experience, but by no means is coffee the only part of the experience. It is important that they not have a logo that is too confining.”

It now makes perfect sense why Starbucks made this change, and it turn it is nice to see that they analyzed their weaknesses well and made according changes to turn their fortunes. And if we were to believe Schultz, the future sure looks bright.

I’ve never been more excited about the future of the company, I’ll tell you that.”

2 Responses to “Why The New Look, Starbucks?”
  1. Mary says:

    Thank you for that post, Saiid, I hadn’t heard that side of the story yet! Very interesting that the more you read about a topic, the more different opinions you get to know, right? When I first read about the logo relaunch, I found another explanation which picks up Hofstede. Here is a quotation out of physorg.com.

    A second study found that when angular logos were changed to rounded logos, they were more acceptable in interdependent and collectivist cultures — often found in Asian countries, such as India and China — than in Western countries, which tend to have a more independent or individualistic culture.

    So Starbucks might be successful in managing Diversity worldwide! Or, less romantic, they just aim to be cutting printing costs by sticking to one colour… 😉

  2. martinjaja says:

    Really interesting spotlight you presented to us which opens up a new dimension to our blog! I have not heard that much about that topic so far which makes it even more interesting for me. The reference to Hofstede is also great.

    When I read your post the first thing which popped into my head was the strategic implementation of the case. Over the last ten years Starbucks really wanted to expand and increase the market penetration. Based on a to aggressive strategy and the upcoming economic crisis they started to struggle.

    In the end, they finally changed their expansion strategy as well as adjusted their products to the customer. Starbucks more than just coffee, it shall be an experience. In the end, they are currently the most popular coffee place in the world.

    I also found this really interesting video about Starbucks Socail Media Strategy.

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