Starbucks’ unbranding and the persuasion defense

Whoa, say brand observers. What’s up? Starbucks recently opened coffee shops in Seattle with unique names totally unrelated to the master Starbucks brand. One outlet is called 15th Ave Coffee and Tea, which Liz Muller, director of global concept design at Starbucks, says will make the chain more accessible. “Is this for every Starbucks?” she says. “No. There is a place for this in specific neighborhoods in the U.S. and potentially globally. Each approach will be different to reflect the neighborhood it is in.”

You heard that right — each approach means Starbucks is expanding such “unbranding.” Morningstar analyst R.J. Hottovy seemed puzzled “since the Starbucks brand has been such an integral part of their success.” And Starbucks is hiding the master brand well; 15th Ave’s web site has no mention of the corporate parent and hints it’s run by a pleasant woman named Jenna.

We asked Branislav Peric, social influence marketing lead at Duke Razorfish in Paris, what he thought. “Unbranded, in the case of Starbucks, does not mean another brand, but compromising the Starbucks’ difference,” Branislav said. “Unbranded also means that this new Starbucks experience will be close to unbranded coffee shops … unpredictable.”

Consumers are building a persuasion defense

Media analyst Gladys Santiago counters Starbucks is making a savvy move, similar to Pepsi’s recent decision to allow consumers in Argentina to misspell its name. It’s all about overcoming consumers’ defenses to your brand, she says, pointing to a landmark 1994 thesis by Marian Friestad and Peter Wright on persuasion knowledge. In simple terms, persuasion knowledge means consumers know that you are trying to seduce them, so they filter every message accordingly. Like a businessman arriving in a foreign hotel who is suddenly approached by an attractive woman, consumers are constantly on guard against the hidden motive.

Consumers know, for instance, that attention, emotion and trust are common tactics in influence. Celebrity endorsements capture attention. Scare tactics spur emotion. Brands provide trust. And when any of these aspects seems suspect — is William Shatner really your gateway to travel savings? Will health care reform really kill old people in death panels? Is Starbucks really so trustworthy that you wouldn’t rather try a little unknown coffee shop? — consumers move on.

Marketers have known for decades that consumers are gun shy about buying from single brand entities. Brand architecture often creates fragmented options to provide the illusion of choice and to remove boredom; stroll down a convenience store beverage aisle or the laundry detergent row in your grocery store and you’ll see hundreds of sub-brands produced by the same five or six corporate parents.

But Starbucks’ move poses a deeper question, as well, of whether Jack Trout’s 1969 concept positioning has finally met its match in the 3,000 marketing claims consumers must now process every day. Positioning held that a marketer could grab a top rung in a consumer’s mind; but if the little brand ladders in our heads are now filled with 1,000 rungs in every product category, perhaps being totally unique is as good a brand position as any. Uniqueness suggests authenticity, and authenticity has value. We hear you can find it on 15th Avenue in Seattle.

Image: Konekotichy

7 thoughts on “Starbucks’ unbranding and the persuasion defense

  1. With regard to your comment, ‘has Trout’s concept of Positioning finally met its match,’ au contraire. The principles of positioning are even more relevant today and just for the reason you outlined. Competition is at fever pitch. All rungs are filled. Starbucks is on the top rung. So, what to do? One of the best moves a market leader can do is compete against itself. Better to take market share away from yourself than let the competition. In the Seattle market, as well as other Starbucks-saturated markets, opening up another Starbucks wouldn’t gain them much. However, a new counter brand, 15th Ave Coffee and Tea, would. Starbuck’s is making a smart move.

    Dick Maggiore, President & CEO, Innis Maggiore

  2. Dick, thanks for your thoughtful response. On one level, I agree: when a brand has maxed out its market share as a leader, it makes sense to chase a new slice of the market from another angle.

    But at the macro level, I wonder if in this age of user-generated content, when every voice on Twitter is crying to be its own brand, whether the power of brand leaders is beginning to wane. Not only are the ladders in our heads full. People now want to create their own rungs.

    Brands were created by mass production and enabled by mass media. If production has fragmented to the user’s creative control, and media has become millions of individual voices seeking their own fame, couldn’t brands face devaluation as well?

    In other words, it’s a supply and demand argument. The supply of brands is becoming infinite. If demand is static, the price, or value, of any brand must fall.

    Nice to meet you. I’ll explore your book.

    Ben Kunz

  3. Maggiore’s comment is nonsensical. Compete with your own brand? Starbucks is not a software company where they get to decide when to kill the product. You’re also dealing with a company that is subject to commodity upswings and downturns and large operational costs. So now you are force to deal with the the perils of early market dynamics while you’re still closing stores and trying to reduce costs. This is a company that was forced to reduce its cost structure by $500 million. Not sure this is about taking market from anyone. There are lucky if they maintain theirs.

  4. Interesting post! Peric’s point about compromising the branded difference and becoming unpredictable is valid, but I think the stronger argument is in support of it being savvy. Consumers that don’t drink Starbucks are naturally defensive to the brand. They don’t want mass market and find unique, local and stand-alone coffee houses to be more appealing.

    Starbucks isn’t stealing marketshare from themselves, it allows them to go after the consumers that have already decided they don’t want the “Starbucks experience.” Not a bad move…they just need to be sure they strategically choose appropriate locations, don’t grow too fast (which got them into trouble before)and carefully watch how this experiment really works.

  5. I agree with Maggiore and Trout and with respect disagree with you Ben. If Starbucks has reached the apogee of all it can be in terms of delivering a relaxing premium experience with a beverage and some people want something else, then it would be better to deliver the something else under a different name and concept, than try to change what Starbucks stands for. The question of course is after Starbucks, what? Andrew Jaffe, Compass Consulting LLC, Norwalk, CT

  6. Andrew, thank you. I do agree that Starbucks’ move is a form of brand architecture designed to capture new share under a new name (and potentially create a testing forum for new ideas).

    Still, I wonder if the heyday of mass brands is waning. The market is so crowded; the crowds are now so diverse. Just as politics and religions have fragmented over the centuries to meet more and more diversity in human needs, perhaps brands must do the same, too?

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