Product and Brand Management at Starbucks Product

Product and Brand Management at Starbucks

Product and Brand Management -- Analysis of Starbucks

Starbucks (NASDAQ: SBUX) has one of the most recognized and perennially most popular bands recognized today. It also has one of the most loyal customer bases of any quick service restaurant (QSR) with the average visit per months of the most loyal customer segments averaging 16 or more (Starbucks Investor Relations, 2013). During a recent visit to a Starbucks near campus, customers in the store were trying coffee samples produced using the new Verismo System. This is a Kuerig-like device that can produce a single serving of many different types of beverages, from cappuccinos and espressos to regular coffee. The intent of this analysis is to evaluate how Starbucks is successfully using its branding strategies to move beyond serving beverages and food to selling accessories and coffee makers.

Starbucks Branding Analysis

The Verismo System was initially seen as a novelty by customers in the store, and is more discussed its advantages of providing superior coffee and hot beverages at home, there was greater recognition of its value. The customers evaluating the system were clearly very Starbucks-loyal customers as they were all holding their own mugs they had brought to the store for their daily coffee. What resonated the most with the customers was the immediacy of having a Starbucks-like coffee experience in their home, complete with the unique coffee blends they preferred. A core component of the Starbucks brand is the experience it provides customers (Nolan, 2007). Clearly Starbucks is aligning their branding strategy for accessories and new devices including the Verismo System with the experiential aspects of their branding strategy. The features of the system include a packet-loading lid that enables just a single cup of coffee to be produced in minutes using the unique high temperature brewing system. It's called a system as it has many different attachments and items that can be used for creating unique, one-of-a-kind drinks. Starbucks is attempting to create an in-home experience with the system by giving customers the option of creating very unique, different drinks entirely on their own. The models in the Verismo System product line are designed with a futuristic look and feel to them. They aren't as utilitarian in appearance as the Kuerig machines, yet a more streamlined version that fits with the branding and messaging of Starbucks overall. They are also branded Starbucks on their logos as well.

The Verismo System was displayed right next to the front door of a relatively large Starbucks store, where customers were invited to try it and make their own sample coffees. The experiential aspects of branding are just as important as the verbal and visual cues of branding in creating a unified brand strategy (Hanna, Rowley, 2011). This has certainly been the case with the presentation of the Verismo system in the Starbucks store, as the seasonal items where repositioned to the far back wall so the system could have more room to be presented to customers. The Verismo system was also merchandised first on the experiential aspects of the device itself, including how easy it is to use. The banding and messaging for the system also underscores how the store would always have the supplies in stock, and could also be used for a service center if the device ever was broken or wore out. Starbucks was careful in merchandising the device to show how it would further accentuate the value of the sore to the customer, further strengthen that bond between their retail and product branding strategies. An excellent branding strategy is multi-dimensional and multichannel in scope, looking to capitalize on existing retail channel, store and experiential aspects of product strategies while successfully launching new products (Hanna, Rowley, 2011). Starbucks manages their integrated marketing communications strategies (IMC) exceptionally well at the store well, as all elements were designed to orchestrate the core message of the Verismo launch. What was also interesting to observe about the launch of the Verismo system was how well integrated the website, social media and all other electronic channels were with the in-store launch promotions including the sampling day (Shalhoub, Belk, Terry, 2007). Being a loyal Starbucks customer, I did get an invitation to the sampling event for the new Verismo two weeks prior to the launch and was also contacted by text within a day of the event (I had opted in to these forms of reminders with Starbucks). All of these communications were orchestrated to remind me of the even and how the store would also be a hub for supplies, new coffee canisters and packages for the device. The integrated marketing communications strategy is predicated on driving greater traffic to the store and a continual stream of new accessories ensures upsell and cross-sell opportunities, a point Starbucks makes in their financial reports that describe the launch of the Verismo system (Starbucks Investor Relations, 2013).

Comparison of the Verismo System vs. Kuerig

The Verismo system is specifically designed to be entirely consistent and complimentary to the multichannel selling and up-sell centric approach to marketing and branding Starbucks specializes in. When seen from the context of a branding strategy the Verismo is a new product capable of producing an annuity revenue stream of revenue over time, with upsell and cross-sell opportunities designed in to the product strategy (Starbucks Investor Relations, 2013). Starbucks has also chosen to differentiate the Verismo through the use of a quality-driven image that concentrates on their experience and the uniqueness of their coffees and beverages (Park, Jaworski, MacInnis, 1986). To further differentiate from their most common competitor in this device, which is the Kuerig, Starbucks even has created unique containers that only fit in the Verismo (Starbucks Investor Relations, 2013).