Brand Development and Marketing

Assignment 1:

Case Study Starbucks

Timo Hasenohr
Student-ID: 3242379
timo.hasenohr@uon.edu.au

Submitted to:
Dr. Sonia Vilches-Montero

Overview of the issues in the case

Observing developments of logos nowadays is very interesting. Companies more and more
get defined by their logos and in doing so there are lots of important characteristics: Form,
colours and text for example help us to identify companies and relate logos. While marketers
want customers to create awareness and relationships to their brand it is very important for
them to have a well-designed logo that is easy to recognize.
Like Apple and Nike some years before, Starbucks also launched a new logo in 2011
dropping its brand name, category name, the rings and the black colour.
With the present work I will discuss why Starbucks decided to do so. Therefore before
analyzing the brand resonance model and the brand equity pyramid I will analyze brand
positioning and positioning guidelines. Afterwards I will link the theory to the practical issues
and answer the questions.

Analysis of relevant branding theory

Brand Positioning
Starting with identifying and developing brand plans it means that it is very important to get a
clear understanding what the brand stands for and how it should be positioned. In this
connection brand positioning plays a major role because it helps to find the right location in
the mind of consumers and/or a market segment. Brand positioning includes both identifying
the right customers and designing the companys offer and image. (Kevin Lane Keller, 2013)
Thus identifying the consumer target is one of the hardest and most important tasks for
marketers because different consumers may have different knowledge and preferences for the
brand. Only by knowing this it is possible to carve out which associations for example should
be strongly held. While understanding a market as a set of all actual and potential buyers it is
important to segment the market. Though the more finely segmented a market can be the
easier a company will be able to provide good marketing programs. In the mind of Kevin
Lane Keller (2013) a consumers market can be segmented for very different aspects. As an
example he mentions the four categories behavioral, demographic, psychographic and
geographic.

Positioning Guidelines
Positioning guidelines help to choose points-of-difference and points-of-parity. Therefore
companies should define and communicate the competitive frame of reference and choose and
establish points-of-parity (POP) and points-of-difference (POD). While defining and
communicating over all is about choosing a categories membership, choosing and establishing
POPs and PODs understands that establishing both POPs and PODs is a fundamental
criteria for success. Thus competitors PODs can become the brands POPs and own created
PODs can make clear why they are so desirable to consumers. (Kevin Lane Keller, 2013)

Brand Resonance Model and Brand Equity Pyramid

The brand resonance model describes how to create intense, active loyalty relationships with
customers. It also takes care of what consumers think about a brand and as an outcome of this
it creates brand equity (figure 1 Brand Equity Pyramid). The keywords of this model are
brand identity, brand meaning, brand responses and brand relationships.(Kevin Lane Keller,
2013)

Figure 1 Brand Equity Pyramid

Brand identity and brand meaning cover the subject Who are you? and What are you?
(Kevin Lane Keller, 2013). Starbucks with their new logo in my opinion miss to make very
clear who and what they are to new customers. Of course everybody that knows Starbucks
knows that they are a coffee shop also offering other beverages and snacks. But even in
Germany where most people love coffee not everybody knows them and therefore I think
only showing a mermaid is not enough.
Brand response covers the question what about you and addresses judgements and feelings
of customers. Whereas brand relationship is all about you and me and about intense, active
loyalty (Kevin Lane Keller, 2013). In this two cases I think Starbucks did very well in the last
few years. Consumers know exactly what they offer and why its so desirable to be a
customer of Starbucks. But even in this context the new logo isnt able to communicate or
address feelings, judgements or loyalty. Compared for example to the swoosh of Nike that
clearly communicates energy, dynamic and speed the Siren isnt able to communicate feelings
that would be positive associations for Starbucks.

Answering Question 1
The changes in positioning strategy have always been totally similar to the changes in their
logo design (figure 2 Starbucks Logos from 1971, 1987, 1992 and 2011). When they
established their first logo in 1971 they were exactly selling coffee, tea and spices as they
mentioned in their logo. From 1987 until later than 1992 they wanted to focus on coffee and
therefore only added the text Starbucks Coffee to their logo, so they dropped tea and spices.
With the new logo of 2011 they want to diversify again and add some new snacks and
beverages such as tea and juice. Therefore they dropped all the text from their logo for no
longer to be noticed only as a coffee shop.

Figure 2 Starbucks Logos from 1971, 1987, 1992 and 2011

Answering Question 2
In my opinion (as I mentioned in the answer before) Starbucks dropped the coffee primarily
for no longer to be noticed only as a coffee shop. But concerning dropping the black colour I
think it is all about communicating certain feelings that are cohere with the green colour.
From my point of view the green colour communicates things like environmental awareness,
energy, youth, harmony, health and life. Wherease black mainly is afflicted with negative
associations like loneliness and sorrows.
Furthermore from my point of view brand positioning and positioning guidelines are very
important aspects and in this two cases I think Starbucks doesnt do very well with their new
logo. In my opinion they should be able to know that besides USA and some parts of Europe
they arent very well-known yet and that their positioning still has to be improved on the
global market before launching a new logo. Even a logo with these immense changes.
Just as I think that the points-of-parity and the points-of-difference arent worked out clear
enough yet and getting even worse worked out with the new logo. Without any hint about
their category and what they are doing I think that they will probably be losing a fundamental
criteria of their former success.
To me even the two words Starbucks and Coffee meant something like a certain lifestyle
and addressed my feelings. As I have already shown in conjunction with the resonance model
the new logo misses to make clear who and what they are and what feelings they want to
address.

Overall because of the points mentioned I dont agree with the strategy of Starbucks to launch
a new logo dropping its brand name, category name, the rings and the black colour from their
previous logotype.

Answering Question 3
Nike and Apple are two examples of other companies that in the past changed the colours of
their logos and in the end dropped the text out of their logos (figure 3 and 4).
Nike focused on their swoosh to demonstrate energy, dynamic and speed. Therefore they
dropped the name and a colorful background.

Figure 3 Development of the NIKE-Logo

Apple dropped their name early in 1976 and since then are only showing their apple in the
logo. Over the years there was a lot of change in the colours of their logo. Starting with
rainbow colours and becoming black the logo now is silver and reflects the luxury and highquality products of Apple.

Figure 4 Development of the APPLE-Logo

Compared with this two examples to me there are three issues that caught my eyes. First of all
neither Nike nor Apple have changed the central design element of their logos like Starbucks
does it now. Nike has ever kept exactly the same swoosh and Apple has ever kept the apple.
Starbucks now not only drops the text and a colour, with changing the Siren they also change
the central design element and in my opinion this decision is too risky.
The second point is that the reasons for changing the logos have been completely different in
case of Nike and Apple than for Starbucks. As I mentioned above Nike wanted to concentrate
on the swoosh and demonstrate certain feelings and Apple wanted to show the high quality of
their products. Whereas Starbucks wants to demonstrate diversification in their product range.
From my point of view this isnt the right way to do that because customers will always first
of all rely on the logo.

The third and most important point to me is that Nike and Apple have already been very
famous when changing their logos. They have already been one of the world wide market
leaders. Whereas I dont think Starbucks is that famous outside the USA and some parts of
Europe (e.g. Germany) yet.
So finally I dont think that the current change of the Starbucks logo is a good choice, because
although Nike and Apple were successful with their changes, they had different reasons and
were in a different situation. Starbucks was in a totally different position when they launched
their new logo in January 2011.

Reference list
Books and online:
Keller, K. L. (2013). Strategic Brand Management: Building, Measuring, and Managing
Brand Equity (4th ed). Kendallville: Pearson Education Limited
Starbucks.com. (n.d.), Environment, Retrieved September 26, 2015, from
http://www.starbucks.com/responsibility

Figures:
Figure 1: Brand Equity Pyramid, Retrieved September 26, 2015, from
http://kissmbadissertation.com/wp-content/uploads/2015/02/Brand-resonance-pyramid.jpg
Figure 2: Starbucks Logos from 1971, 1987, 1992 and 2011, Retrieved September 26, 2015,
from http://worksdesigngroup.com/brand-redesign-e and
http://www.brandingpersonality.com/wp-content/uploads/2012/02/300pxStarbucks_Corporation_Logo_2011.pngvolution-starbucks/
Figure 3 Development of the NIKE-Logo, Retrieved September 29, 2015, from
http://blog.print-print.co.uk/wp-content/uploads/2012/09/Nike.jpg
Figure 4 Development of the APPLE-Logo, Retrieved September 29, 2015, from
http://www.handy-tests.net/wp-content/uploads/Apple-Logo-ver%C3%A4nderung.png