Starbucks VIA: Coffee giant declares war on its own brand

It’s been a tough week here at Beg to Differ. It started with good food, find which is good, but then we broke up with Intel, mourned the loss of the Saturn brand, and today, we have to talk about another tragedy: civil war. Yes, I’m talking full on, brother-against-brother warfare. And the war-dogs are already unleashed. Today our old friend Starbucks is starting taste tests of a brand new product against… wait for it… their own product.

The “Big Bucks” thinks this is a good idea. We beg to differ…

Let the divisive, internal warfare begin! Starbucks chooses an apt metaphor for its self-abusing taste test campaign.taste
Let the divisive, internal warfare begin! Starbucks chooses an apt metaphor for its self-defeating taste test campaign. But they forget the old saying: "Nobody wins a civil war."

The new Product: Starbucks VIA Ready Brew

Apparently, this coffee master has already chosen sides for the battle to come...
Apparently, this coffee master has already chosen sides for the battle to come...

On Wednesday morning, I was at a business meeting in a Starbucks, when the store’s chipper “coffee master” came over to offer us a sample of some frothy sweet coffee stuff. “Great.” I thought, another example of  “Lethal Generosity. I must blog about this.”

But then I noticed she was wearing an orange apron, not the traditional green, and a strange new logo was there in the middle with the name of a Canadian passenger rail service on it.

That’s when she started her spiel: “Starbucks VIA is our new instant coffee. But it’s really good. come back on Friday for our taste test and you’ll see that it tastes just as good as our regular coffee…” She went on to explain that this was real Starbucks coffee processed using a super-secret process. Then she gave a very enthusiastic review of her own experience using wine-tasting language about “floral notes” “slight acidity” dark and full-bodied presentation”. But the whole time I was thinking:

Starbucks is selling INSTANT coffee?!?!

Now I admit, part of me was also thinking: “Hmm. Instant coffee, eh? Maybe this instant coffee does taste just as good. Maybe I should give this new instant coffee a try.” So congratulations Starbucks, you got me thinking about your new product, and I’ll even go try some. So as a product launch campaign, you win.

And Starbucks desperately needs a win these days. Their brand value has been deflating under competition from McDonald’s, Duncan Donuts, Tim Hortons, and a host of very smart local shops – like Ottawa’s Bridgehead (where I’m writing this post)  leading to “daring” moves like the “15th Avenue” coffee-shop concept. But Instant Coffee takes the cake.

Reasons this is a bad idea for Starbucks

1) Instant coffee is the antithesis of real coffee

As I’m thinking about this new product, the term “Instant Coffee” is going through my head and I’m picturing the stale, foul-smelling crystals that are usually your last resort when you need caffeine but ran out of the real stuff. It’s like drinking home-brew wine at a party because the good stuff is gone. Or using canned Spam because you ran out of real meat. It doesn’t matter how good it is: it’s still home brew / Spam / a non-real product / a pale shadow of the real thing.

Starbucks built its brand by creating a new product category: premium coffee with an air of sophistication, taste, and care. That is, we pay extra for real coffee, really lovingly prepared by real people in a real place that is really dedicated to that product.  You’ll often hear people at an office say: “No, not coffee-maker coffee. Let’s go out for a real coffee.”

2) Instant coffee devalues the Starbucks experience

The Starbucks store is not a coffee-buying place, it’s a place where real humans commune around the centerpiece of coffee.  By saying “now you can make instant coffee at home and it actually is a Starbucks coffee,”  you are implicitly saying that the Starbucks in-store experience is less important, easier to replicate, and worth less.

But don’t they already sell Starbucks-branded coffee-makers in store and can’t you get big bags of Starbucks-branded beans at your local Costco? Yes, and those also devalue the Starbucks brand in the same way. One or two is a stretch, too many and you break.

Again, I don’t care how good any given product may be. Starbucks brand managers should never, ever allow anyone in their organization to say anything they offer is equal to a real Starbucks experience – which is the in-store experience.

Name in full

3) The name “VIA” is not terrible. But not strong enough to stand on its own.

Good points: the name is short, punchy, easy to spell and pronounce, and it looks great in big capital letters on a poster or product logo.

But two big problems: A) in English, “via” is not a noun, so it isn’t natural to say “drink a VIA”, and 2) because it appears after “Starbucks”, it will always be fighting for attention with the more familiar name – a battle VIA will inevitably lose.

4) “Ready Brew” is a dud as a category descriptor.

If you’re launching a product in a category like instant coffee that has a low perceived-value, but you’re trying to say “this is better / different / real”, do what Dove has always done. Don’t call yourself soap; call yourself  a “Beauty Bar”.

It would have been smart for Starbucks to create a strong new category that has a name that implies higher value and sophistication. As in, “this isn’t Instant at all, this is (insert term here)”. Starbucks has already done this with their cup sizes. We may roll our eyes ordering a Tall, Grande, or Vente, but it works. It makes them seem like more than just a cup of Joe

“Ready Brew” fails on all counts. It sounds even cheaper than “Instant Coffee”,  and doesn’t have enough character to replace that term.

5) A taste test is a no win battle for Starbucks

The call to arms. The internal battle begins today.
The call to arms. The internal battle begins today.

And finally, back to the wars. The problem with a civil war is this: it doesn’t matter who is right, and it doesn’t matter who wins, when two armies from the same place fight each other on their own territory, things get broken. Badly.

I can see two possible outcomes for the Starbucks brand of the taste tests:

  • A) The new product loses: in this case, Starbucks ends up looking silly, and the new product either tanks or manages to hobble along. Worst case, it tanks like New Coke and becomes a buzz-word for corporate hubris. This may give the Starbucks brand a small lift as people rally around “classic”, but the damage will be greater than the gain.
  • B) The new product wins: In this case, Starbucks has a popular new product that ends up undercutting the value of the brand with every package sold.

As I said: no win.

Thoughts for brand managers:

  • Are you creating your own internal civil wars by pitting your brands against your own offerings?
  • Is that new product launch strategy going to benefit the product at the expense of the corporate brand?
  • Is there an opportunity for a house brand or an endorsed brand strategy to put some distance between you and your new product?
  • Is someone speaking up for your customers and for the brand in your organization? If not, maybe time to get some help.

More reading:

The Motley Fool describes the civil war effect brilliantly in This May Be Starbucks’ Dumbest Move Ever. They make the suggestion that Starbucks should run taste tests against competitors’ coffee. So if Starbucks Ready Brew wins, they can say “see, even our instant coffee is better than their real stuff.”

Brandchannel provides a review of  several opinions, mostly negative:

Street interviews in New York caused local blog Gothamist to declare, “Starbucks Instant Coffee Instantly Hated By New York.”

BNET joins the pile-on, with some Brand Management 101 (“How to Blow a Turnaround”), asking: “[H]ow does Via stop the market share erosion to McDonald’s and Dunkin’ Donuts? How does it bring customers back to Starbucks? Why didn’t the marketing geniuses at Starbucks compare Via to competitors’ fresh brewed coffee? At least that might have made some sense.”

Lethal generosity in my neighbourhood: Taste of Wellington West 2009

This Saturday, drug I had the privilege of photographing some of my favourite people from my favourite place in the world doing what they love to do. The event was the third annual Taste of Wellington West festival – when the food shops and restaurants of my neighbourhood in Ottawa give away free samples of thier food to benefit a local food bank. What could be better?

Sushi kids

From a marketing perspective, of course, the idea of giving away free food is a guaranteed hit and a very smart stratgey. But what’s better, I see this as a practical example of a term Shel Israel introduced me to a couple weeks ago – first on Twitter, and later when he visited Ottawa to promote his book Twitterville: How Businesses Can Thrive in the New Global Neighborhoods.

“Lethal Generosity”

Here’s Israel’s own definition of this term from his Web site:

Shel Isreal: Lethal Generosity is the business strategy of doing as much good for your customer as possible, thereby screwing your competitor who has to either follow your lead or ignore programs that serve them.

Don’t you love that idea? Now, “lethal” and “screw your competitor” are hard-edged, cut-throat words. But they get your attention don’t they? In reality this is a “bad cop” way of describing a very “good cop” phenomenon. Because actually lethal generosity only works when you do it the way we do it in Wellington West: generosity comes first; lethality follows.

So here’s how I’d (humbly) alter Israel’s definition to put the emphasis on the strategic sequence of events:

Denvan: Lethal Generosity is 1) doing something warm, human, and generous that endears you deeply to your community, which 2) also has the pleasant side effect of giving you an incredible competitive advantage, 3) forcing others to either follow your lead or look really stupid.

Taste of Wellington West

Heavy construction didn't keep the huge crowds away in 2008 (shown here) or 2009.
Heavy construction didn't keep the huge crowds away in 2008 (shown here) or 2009.

A couple years ago, I helped out with the establishment of the Wellington West Business Improvement Area (BIA) – partially as a response to other local areas who had been running their own BIAs for years – particularly Westboro, Somerset Chinatown, and Preston Street.

Even though we had a blossoming arts community, many dozens of restaurants, our own outdoor farmer’s market, and the biggest cluster of owner-operated gourmet food shops this side of Montreal, other neighbourhoods were getting all the attention because they were organized, and were investing in building their brands.

What’s more, we were facing three years of heavy disruption from a massive and dirty construction project that would replace century-old sewer and water lines and make a wasteland of our street, and chase away customers.

So how do you compete with all that? Well, you build on your strengths. In our case, the incredibly warm and quirky characters who ran the shops and restaurants of our neighbourhood – who could always be counted on to give their time, money, and products to worthy local causes. But now they had a new weapon: a way to organize, mobilize, and capitalize on their native generosity to help them through a tough time.

The trick: to be more generous: 

The more you give, the more lethal you are. Absynthe gave away full sized gourmet Buffalo Burgers - resulting in longer lines.
The more you give, the more lethal you are. Absinthe gave away full sized gourmet Buffalo Burgers - resulting in longer lines.

Generosity, in the form of Taste of Wellington West, has helped us to bring thousands of new customers into our area at a time when most would rather stay away. And it allows locals a risk-free way of trying new places and meeting the humans behind those shops. I particularly love the picture of the kids trying the sushi. It really captures the spirit of the day: passionate merchants sharing their passions with people. 

But even more interesting, the merchants themselves have started to compete with each other to see who can out-generous whom. One high-end restaurant created waves by offering meal-sized Buffalo burgers, while another that had opted not to participate, had to reluctantly start giving stuff away. One of the employees told me: “everybody’s asking where the free stuff is. It’s just easier this way.”

Slideshow of some people pictures from the day:

More pictures here (Picasa Web album of 130+ photos)

What I love about these pictures:

1) The warmth: I’d call these people the salt of the earth, but “spice of the city” is closer to home. Don’t those smiles just make you want to move to my neighbourhood?
2) The energy: these are always hard-working people, but for one day they double their workload to make magic in the process.
3) The variety: from the high end restaurant to the tiny family groceteria, everyone brought something different (and yummy) to the table.
4) The food: my biggest regret is being on the wrong side of the camera again this year! I get hungry all over again looking at these.

10 Highlights from the 2009 Best Global Brands list

Ten days ago, shop I wrote  10 days to Interbrand top 100 brands & 10 reasons to care. Well Friday (three days earlier than adverstised), the results came in. And if you have time, you can read full results and commentary at two sites: 1) Interbrand and 2) Business Week.

But I’ll warn you, it’s a lot of information, and you’ll have to wade through some sections knee-deep in self-congratulatory hype. So as a public service, I’ve distilled 10 aspects of the list that jump out for me (below).

Symbol of an industry? This year, ING crashed right off the list, along with a few other financial industry stalwartsn The past year for the financial industry in one concise picture.
This year, ING crashed right off the list, along with a few other financial industry stalwarts.
(Image from the Dutch-language blog

(But first, a slightly bitchy side note to Interbrand: guys, if you’re going to release these three days early, please 1) skip the giant countdown clock , and 2) actually send notices to people that signed up. Okay, my chest is clear, on to…)

10 Highlights of the 2009 Best Global Brands

1) Coke is still it: Top five brands are unchanged

2009 top 10 list

The top five brands on the list are exactly the same brands in the same order as last year, and although Microsoft and GE lost more value than most brands ever have, with the spread in value between the top four, those mega-brands don’t look likely to change anytime soon.

Nokia’s brand is losing steam however, while gaining ground behind it is Google (in a big way) and McDonald’s (growing, but more modestly).

2) Google is the big disruptor

The Google brand shouldered ahead of Toyota, Intel, and Disney, and now is very close to overtaking McDonalds. As a matter of fact, its brand value has almost doubled since 2007, when it was 20th in the rankings.

Think about that for a moment: “Google” has grown from geek-niche-buzzword to #7 brand in the world in just 10 years – growth rates we haven’t seen since, well, Microsoft pulled the same trick for the ten-odd years before that.

But now that Google is starting to look more and more like a big, aggressive company (because they are), can their brand sustain its quirky garage-band appeal? Already their “don’t be evil” internal mantra is attracting more cynicism than praise. And while Googlers are still innovating, and making a lot of feel-good noise with their open source projects, one wonders when critical mass and inertia kick in (see Microsoft?).

3) Other big winners this year

By dollar value gained, H&M, Ikea, and Amazon gained a solid amount of value this year.

But apart from the indominatable Google, Apple grew the most, adding an incredible $1.7 Billion in brand value. Apple is the darling of the branding industry of course and a favourite of mine (see my Steve Jobs tribute), with its creative energy and  focus on human-friendly products and messaging, so it’s heartening to see that doing it right by your customers still pays off during a recession.

4) Surprise! Financial institutions are the biggest losers

Have you heard about this recession thing? Well, if you have, then it should come as no surprise that the industry hardest hit in the brand value bottom line was the same industry that imploded and begged for (and received) massive government  bailouts.

American Express, Morgan Stanley, and HSBC all lost billions of dollars of brand value, while Citi and embattled Swiss giant UBS both lost half of their brand value in one year.  Several others dropped right off the list, including Merryl Lynch, AIG, and ING. Could it be a coincidence that many of these losers also have meaningless nomonyms for names (see my definition here)? Probably just a coincidence, but their names certainly didn’t help them.

5) Automobile brands: losing value

Also not surprising, every automotive or motorized equipment manufacturer on the list except Ferrari lost a significant amount of brand value this year.  Harley Davidson and Lexus lost the largest percentages.

But despite losses, a few brands managed to hold their own or gain ground. Apart from Ferrari, Audi managed to gain, while Ford kept its ranking – the only one of the “Big Three” American manufacturers to have a substantial corporate brand seems to have benefited from its perceived stability as well. Another star: Hyundai:

Hyundai boosted ad spending and aggressively promoted its Assurance program, which allows buyers who lose their jobs to return cars. Hyundai’s brand value slipped 5%, but it moved up three places to No. 69.  – Business Week.

6) Food and clothing: the basics still sell when times are bad

You can download the whole Interbrand report here.
You can download the whole Interbrand report here.
Comfort food standards Campbells soup and Burger King appeared for the first time, while all the other Big Food brands gained in the rankings – Nestlé, Heinz, Pepsi, Kellogg’s, and Danone. Restaurants KFC and Pizza Hut creeped ahead a few positions, while Starbucks lost 16% of its brand value and fell five spots.

The same pattern held true for clothing brands – although it must be said that the list is incredibly top-heavy with luxury brands – so Gucci, not GAP; Rolex over Timex. I suspect that this is because of a) the weighting given to “brand premium”, that is, the amount consumers are willing to spend over and above competitors, and b) the fact that lower-priced clothing brands for us mere mortals tend to be less global.

7) Adobe: New kids on the branding block

Abode finally made the list after it “recorded record revenue and double-digit growth for the sixth consecutive year. They weren’t immune to the downturn (they lost money overall), but importantly from a brand perspective, they grew strongly in the consumer preference category. And their brand awareness continues to grow through the ubiquity of their consumer-facing products Flash, and the Acrobat / PDF line.

8 ) Brand USA – still the biggest brand builder

We were watching to see if the recession would dent the US dominance in global brands. With 52 brands on the 2o08 global 100, the Yanks are the uncontested branding champs, but those of us who were hoping for a moment of guilty schadenfreude were mostly disappointed that the US claims 51 – still a majority – of the 100.

Note to the rest of the planet: keep working.

9) No new countries

The names of countries in the Global branding club stayed exactly the same this year with only 9 brands coming from outside Europe and North America (Japan 7, Korea 2). Russia, China, India, Brazil, and the rest of the world have yet to break in. But of course, it’s only a matter of time.

10) Brand Canada: maintaining numbers, but losing ground

Both of our two Canadian contender brands Thomson Reuters and Blackberry grew this year, and both made gains in the rankings with Blackberry jumping 10 spots to number 63. But they weren’t joined by any other brands, and what’s worse, we slipped a rank in number of brands-per-capita when the UK added a brand and vaulted ahead of us. On that list, we were 10th; now we’re llth.

The great brain freeze: the perils of too much ice cream… or choice

This happens to me a few times every week: I’m standing at a store or restaurant, this web getting customer service by phone, information pills or buying something online, and suddenly I’m faced with a dazzling, badly organized array of choices like this menu board at an Ottawa area Dairy Queen Brazier (no comment on that name for today). And how does it feel? Well, imagine shoving a whole Chocolate Chip Cookie Dough Blizzard down your throat all at once…

The THARN Effect: for me, this DQ board was a Brain-Buster Parfait
The THARN Effect: for me, this DQ board was a Brain-Buster Parfait

Basic brain freeze

In the video below from the last Beg to Differ Brand Strategy Boot Camp, I describe what happened when I was faced with this menu board.

Basically, I had walked through the door having already made a number of choices: first I’d chosen between a dozen different food establishments in that neighbourhood; then I’d to choose to ignore my guilt about going with fast food at all; then I chose between ice cream – the product I normally associate with Dairy Queen – and hot food; and finally I had to choose whether to wait when I saw a significant lunch-rush line at the counter.

So by the time I got to the counter, after passing up several opportunities to walk away, you’d think DQ would try to make my life easier. But no, once I got inside the store, I faced a wall of giant posters with exclamation marks and starbursts all over them, and the menu board above that utterly failed to line up my choices in a clear way, filled with cleverly-named products that were all yelling, dancing, and fighting for my attention like a room-full of sugar-buzzed preschoolers whose Ritalin had run out.

Choice: the hidden “THARN”

Richard Adams, in his classic novel Watership Down, coined a great rabbit-language word that I like to use to describe the consumer’s mind-state when faced with too much choice:

THARN: (adj) the helpless, catatonic state a rabbit enters when it is caught in the headlights of a car.

Humans react the same way when you throw too many choices at them: they go “tharn”. Sounds a lot like the headache most people get when they swallow too much ice cream doesn’t it? Like ice cream, small, measured bites are a heavenly experience; too much too fast is physically painful.

But bright headlights & ice cream sundaes are good aren’t they?

Now, you may say, “but that’s just effective consumer marketing”, and perhaps the marketing sages at DQ know something I don’t about what sells sandwiches. Plus, as a 40-year old male, I suspect I’m not at the heart of their target demographic.

I also don’t want to imply that choice is bad, nor is it a bad thing to get your customers to slow down a bit and pay more attention to you while you have their attention.
But remember all the other choices they had to make to get to your “counter”: it’s a delicate balance between deepening their understanding by showing them more and overwhelming them with too much choice.

So ask yourself:

  • 1) Are you helping customers quickly scan their options by organizing clear “decision trees” of plainly labelled and named options?
  • 2) Are you making them feel confident about your brand – that is, their their end-to-end experience of it , and not just the individual sandwich they buy?
  • 3) Are your marketing tactics really deepening their understanding, or just adding to the wall of noise they already face and defeating the point of marketing (to help people decide to buy your products)?
  • 4) Are you managing your whole brand including your product portfolio, your decision-making interfaces, and your customer service to remove THARN moments or are you just turning on the high beams and shoving the ice cream down their throats?

The choice is yours. Well, actually, it’s theirs. And that’s the real point isn’t it?

Tag lines: if they don’t help people, there’s no point

When I was in Korea a few years back, adiposity I was struck that even in cities where very few people spoke English, find “upscale” stores always had an English tagline under an English name. But the words didn’t seem to matter: most were incomprehensible, cialis 40mg vague, or with uninteded double entendres (as below). Weirdly, these businesses seemed to have taglines simply for the sake of filling space under their name with letters, not because anyone would get information from them. You know what’s even weirder? It happens here too.

Fitting and Feeling - w
For this Korean tag line, you can at least tell what they were going for. But are they really offering both those services?

A global plague:

Lest we seem to be picking on obscure stores in non-English speaking countries, a couple of weeks ago, we pointed out this tagline from a local real estate agent – and we could have chosen many more from that industry alone.

And size of company doesn’t seem to matter. Check out this bit of tagline vapidity from a major international brand – spotted in July 2009. “Sychronizing the world of commerce” is actually less meaningful than “Fitting & Feeling” – and I imagine UPS has a few more people working on their materials than Teman.

Another space-filler tagline - UPS fails to deliver.

Say something nice… or say nothing at all

KR - KY - Good Feel
Another uncomfortable tagline from a Korean store - but it just looks right to have one doesn't it?

Or rather, just say something useful.
Like every other aspect of your brand, a tag line is supposed to be a tool to help people understand something about your brand – some aspect of your service that will help them make a purchase decision in your favour.

A good tag line needs to inform me or help me differentiate you from your competitors; maybe it will make a leadership claim or offer me a guarantee; at the very least it should give me a clever “hook” to remenber you by; otherwise it’s just filling a space.

Here’s a secret that should never have to be spoken: a tag line isn’t a design element. It’s actually a set of words that happen to be occupying  prime real estate on your sign, page, or Web site. So make sure they “pay their rent” by actually doing useful things.

At Brandvelope, we have a whole set of tools to help clients develop really useful tag lines. But without getting too deeply  into that topic in this post, just remember that at the very least, make sure it’s helping somebody.
Tomorrow: 25 useless taglines from brands that should know better.