Curated by Mathew Anthony for those who love the business of persuasion and some ...
Tuesday, January 18, 2011
The Starbucks debate
Jan 13th 2011, 0:09 by Schumpeter
NANCY KOEHN of Harvard Business School is one of the world's leading experts on Starbucks. Her opinion on the latest logo/strategy kerfuffle is broadly positive:
What I am certain of is that Starbucks and its CEO, Howard Schultz, have a history of breaking new ground with the company's brand, and that one of the core attributes of this brand is customer engagement. Seen from these two vantage points, I'm betting that Starbucks will come out a winner with this move.
Schultz bought Starbucks from its founders in 1987 and began to build what became "the Starbucks experience." In doing this, he and his company helped create the market for specialty coffee—a market that changed consumers' daily rhythms and their attitudes to paying premium prices for what previous generations had regarded as a "cuppa Joe." In addition, they began a new field of competition (think McDonald's McCafes or Dunkin Donuts Coolattas) and created a brand that is continually ranked as one of the world's most powerful.
Along the way, Starbucks broke all kinds of rules. They refused to franchise, for example, instead pouring profits back into an infrastructure of company-owned stores. And they opted to build the brand from the ground up, focusing all their marketing resources on their stores, their employees (who received health care benefits if they worked more than 20 hours a week), and the customer experience.
By focusing on the customer experience in company-owned stores, Starbucks created widespread consumer engagement not only in what the company was offering—specialty coffee served as the customer specified—but in the actual creation and promotion of the brand itself. There are few better examples of the power of customer word-of-mouth in entrepreneurial brand building than Starbucks. And this engagement helps us understand the passions aroused in the current debate about the logo. Whatever your opinion about Starbucks and its new logo, you are not likely to be indifferent or blasé.
None of this is to say that Starbucks has consistently gotten it right. Schultz is the first to admit that he has made some important mistakes, including falling prey to the hubris that he believes contributed to the company's poor performance in 2008 and 2009. But seen from the perspective of the company's longer track record, his often controversial decisions, in tandem with his palpable entrepreneurial passion for what his company is up to, have given rise to far more successes than failures.
I'm not so sure, for what that's worth. It strikes me as dangerous when a company tries to diversify too far from its core business into a white space (delivering experiences or branded products). It also strikes me as misguided to try to "genericise" the Starbucks logo for the benefit of Chinese consumers when Chinese consumers are desperate to learn English (ie, American) and behave like American consumers: the tagline is not a limiting factor but part of the brand's core appeal.
I think that Nigel Hollis gets much closer to the nub of the matter in his blog post on the same Harvard Business Review web site.
If the name "Starbucks" is so strongly associated with coffee that you have to remove the name in order to launch another product, does that not suggest that the corporate strategy is out of synch with customer understanding?
Starbucks' New Logo: A Risky Move
9:35 AM Friday January 7, 2011
by Nigel Hollis |
2010 was the year that proved that logo change is not always for the better. Gap got taken to the cleaners when it updated its branding and Tropicana came a cropper when it removed the iconic orange and straw from its packaging. Perhaps with these debacles in mind, Starbucks waited until 2011 to unveilits new face. By going with a minimalist approach, eliminating all words (the old logo said "Starbucks Coffee") and playing up the siren figure, the company appears to be pulling an Apple. But given a fundamental difference between the two, the new Starbucks logo could turn out to be a lemon.
At Apple, January 9th 2007 marked the end of an era when Steve Jobs announced that the word "Computers" was being dropped from the company's title. That change acknowledged the reality of Apple's evolution. As Jobs pointed out in hisMacworld keynote, of the four brands shown onscreen — Mac, iPod, AppleTV, and the new iPhone — only one was a computer. As for the logo, by then the monochromatic Apple was instantly recognizable with or without the Apple name.
Starbucks, too, has a highly recognizable image in its siren. But consider the difference between Apple's and Starbucks' situations. At the point of its rebranding, Apple had already proved to its customers that it stood for more than just computers. By contrast, Starbucks is dropping the word coffee in anticipation of venturing into new territory. In his January 5th 2011 post on the Starbucks blog, CEO Howard Schultz openly admits that the new design, while harking back to the brand's heritage, is intended to "give us the freedom and flexibility to explore innovations and new channels of distribution." He states that the Starbucks evolution will begin this Spring.
It's easy to see how, from a corporate viewpoint, leading with the logo makes eminent sense. If you intend to invest heavily in offerings outside the coffee category then removing the word "coffee" is logical. For that matter, if coffee is no longer to be the core of the brand, it's logical to remove the word "Starbucks" given how synonymous it has become with coffee.
But therein lies the risk. If the name "Starbucks" is so strongly associated with coffee that you have to remove the name in order to launch another product, does that not suggest that the corporate strategy is out of synch with customer understanding?
To be sure, if before the launch of the iPod you had asked people what Apple's brand stood for, many would have said "computers." It is only now that people perceive that it isn't computers, or even iPods, iPhones, or iPads. The Apple brand has freed itself from product category ties and has become a shortcut to positive brand associations: leading-edge technology, cool design, simple to use. Likewise, looking toward Schultz's promised evolution, I am sure that Starbucks' logo designers intend it to transcend product and signal all those "third place" feelings of connectedness, comfort, and reliable quality.
Perhaps the public will follow them to that place eventually. But the chances are lower since, by announcing the logo change without a track record of out-of-the-category innovation, Schultz is promoting a corporate strategy, not acknowledging a customer reality.
Customers are notoriously unreceptive to logo changes, and this will be no exception. (See the comments already piling up in response to Schultz's post.) That is something that marketers need to ignore to some extent, but it's another good reason not to make them in advance of strategic shifts. Starbucks' rebranding might only invoke one deep-seated emotion in customers : their antipathy to change. And that would get its evolution off to a shaky start.
With the cropping of its logo, Starbucks has elected to join the limited fraternity of nameless entities — meaning it's now positioned to rely on a symbol-based logo without any text to serve as training wheels. In doing so, it has freed itself from some limiting baggage
No one is saying that this mark will never be accompanied by "Starbucks" on marketing or other collateral materials. In fact, the company's CEO, Howard Schultz, in the introductory videoof the edited logo on the company's site, shows an example of the Starbucks name set as a floating wordmark that can accompany the logo.
Really, the decisive edit to this visual brand shift is the elimination of the word "coffee." That's a critical move because "Starbucks" and "coffee" have become synonymous — maybe not to the degree of a proprietary eponym like Kleenex, or Band Aid, or Xerox, but to the point that, if Starbucks is the question, coffee is the answer. This kind of product association can be a blessing and a curse, and it's more the latter if the company wishes to leverage the name against product or services of the non-java orientation.
Recall the rapid growth of Boston Chicken in the the early 1990s, and then the species trap it found itself in by 1995. It changed its name to Boston Market that year, too late in the game.
Knocking "coffee" out of the nomenclature of the brand sets the stage for Starbucks to explore other offerings in a segment that may already be oversaturated. It also moves the brand to a place where language differences are no longer a barrier. Will it work? That's up to consumers to decide. They are the only ones who can give an entity permission to make a brand extension, and they will vote with their dollars.
For designers, meanwhile, the point of greatest contention seems to be the elimination of the logo's green surrounding donut. There is a good argument to be made that the encasing outer circle may have as much if not more equity than the siren. Unfortunately, the outer circle was hardly a protectable device. Travelers throughout Europe have come to identify coffee shops by knock-off circular signs with type wrapping around whatever happens to sit in the center. Maybe stepping away from the outer circle will leave the one-off coffee shops wondering what visual vernacular is left to steal.
This is a welcome refresh that will build new relevance for Starbucks and the next generations of consumers of caffeine or whatever comes next. Had the siren turned into a mule, or the green changed to orange, or the circular shape changed to a triangle, then the warning lights would have been warranted. As is, the internal creative team has paid proper heed to all of the serious points of equity in the logo and presented a fresh look built from the existing kit of parts.
For Starbucks, shedding the big green donut may be the healthiest new year's resolution yet.
Bill Gardner is founder of Founder of LogoLounge, a research tool, reference guide, and online portfolio for logo designers. The sixth in his series of hardcover compilations, co-edited with Catharine Fishel, is forthcoming.