Corporate Eye

Starbucks Tests the Brand Extension Waters with Soft Drinks

starbucks handcrafted sodasThe success of Starbucks over the years has been driven by consumers’ emotional involvement in the brand. In 2011, Starbucks reached the epitome of logo recognition success when it dropped the “Starbucks” name from its logo entirely. However, Starbucks is still known as a one trick pony.

The company’s extreme brand focus served it very well for a long time, but in recent years, the company has struggled. Prices went up, stores changed, menus and products came and went, and loyal Starbucks customers continued to seek their caffeine fixes regardless of those ancillary offerings. The truth of the matter was simple. Loyal customers were coming for coffee. Starbucks needed to find a way to attract new customers and possibly convince existing customers to break out of their coffee habits and try something different.

For the non-coffee drinker or the Dunkin’ Donuts coffee loyalist, a trip to Starbucks isn’t going to happen. If a friend wants to stop at Starbucks, that non-coffee drinker is likely to leave empty-handed while their friend enjoys their Starbucks flavor of choice. That’s a huge missed opportunity for Starbucks.

Now, it appears that Starbucks is making an effort to turn those anti-Starbucks customers into willing-Starbucks customers by offering brand extensions like the Refreshers energy drinks launched last year (new flavors have been introduced for the 2013 summer season) and more recently, testing handcrafted sodas in a few markets.

As USA Today reports, the carbonated beverages industry is a $77 billion category, and although the category as a whole has been declining in recent years, it’s still the second biggest category in the United States. It makes sense that Starbucks would try to carve out a niche in that market by offering its own premium (i.e., “handcrafted”) sodas in its brick-and-mortar stores. If they taste good, some of those people who step into a Starbucks location with a friend who needs his coffee might just shift from saying, “I don’t like anything at Starbucks,” to “I don’t like Starbucks coffee but I definitely want one of their Spiced Root Beers.”

Sounds like a win for Starbucks if the product is good enough to motivate people to travel to a Starbucks location to get it and pay the higher price ($2.45 or $3.45 in Atlanta according to USA Today) attached to it.

What do you think? Leave a comment and share your thoughts below.

Image: Starbucks

The following two tabs change content below.
Susan Gunelius is the author of 10 marketing, social media, branding, copywriting, and technology books, and she is President & CEO of KeySplash Creative, Inc., a marketing communications company. She also owns Women on Business, an award-wining blog for business women. She is a featured columnist for Entrepreneur.com and Forbes.com, and her marketing-related articles have appeared on websites such as MSNBC.com, BusinessWeek.com, TodayShow.com, and more. She has over 20 years of experience in the marketing field having spent the first decade of her career directing marketing programs for some of the largest companies in the world, including divisions of AT&T and HSBC. Today, her clients include large and small companies around the world and household brands like Citigroup, Cox Communications, Intuit, and more. Susan is frequently interviewed about marketing and branding by television, radio, print, and online media organizations, and she speaks about these topics at events around the world. You can connect with her on Twitter, Facebook, LinkedIn, or Google+.
 
Comments

No comments yet.

Leave a Reply