Ben Wise on Branding

Watching the world through the lens of the brand

Starbucks Benefits From A Portfolio Of Brands

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Since Starbucks invented the mass market for upscale coffee shops, there has been great competition in this space among quick serve restaurants (QSR). McDonald’s is increasingly pushing coffee and has launched their posh McCafe’s across the US. Now Burger King is entering the fray with the signing of a deal with the Seattle’s Best coffee brand.

The most interesting part of this deal is that Seattle’s Best is actually owned by Starbucks. Starbucks is cleverly using a portfolio of brands to reach a more diverse set of consumer without sacrificing the integrity of their core brand.

The Starbucks brand is positioned as your ‘home away from home’. They could not credibly maintain this position if they were to offer their coffee through fast food chains like Burger King (although I believe they are pushing the boundaries on their brand already with instant coffee for the home). However, the number of consumers of fancy coffee is increasing and are looking for more product distribution. Emerging segments are more concerned with the coffee than the atmosphere.
Starbucks has realized that the market for upscale coffee is becoming more mainstream, and thus consumers are willing to purchase it on a more regular basis from more traditional outlets. By selling Seattle’s Best instead of their Starbucks branded coffee ensures that they do not miss out on this growing segment of the market. And, the core Starbucks brand is untouched and able to remain your ‘home away from home’.

What do you think? Is Starbucks making good use of a portfolio of brands?

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Written by benwisebranding

February 19, 2010 at 1:58 pm

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