Ben Wise on Branding

Watching the world through the lens of the brand

Starbucks Protects Itself with Defender Brand

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While marketers love to examine the price premium that a strong brand can command, the reality is that all brands face price pressures. There is always a cheaper alternative. As most brand managers are in their role for only a few years and are evaluated primarily on short-term results, the temptation is to cut price to maintain volume.

But there is another way!

A Defender brand is one used to protect against low-cost competitors. For example, if P&G were to launch a low-priced laundry detergent it would be a defender brand. The new brand would protect P&G from losing market share to private label competitors, without having to lower the price and potentially damage the brand equity of Tide.

Seattle’s Best Coffee: The Defender of Starbucks

Starbucks acquired Seattle’s Best Coffee in 2003, but only recently has gained much value from it. Facing increasing pressure from less expensive competitors (McDonald’s, Tim Horton’s, etc), Seattle’s Best Coffee allows Starbucks to compete in the low-price segment of the market without harming their core brand. Starbucks is now pushing Seattle’s Best Coffee into national fast food chains, including Burger King and Subway.

Starbucks is able to successfully implement a defender brand strategy for two key reasons:

  1. Starbucks can leverage their geographic coverage and get national distribution quickly for Seattle’s Best Coffee
  2. Both brands are kept almost completely separate. It is important that consumers don’t have a close association between the two brands, or they won’t effectively play in their respective segments.

What do you think? What other companies are effectively using Defender brands?

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Written by benwisebranding

May 17, 2010 at 10:14 pm

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