Starbucks is a Seattle based coffee shop, with over 21, 000 stores worldwide. (Statista 2014) While its success has been huge, its brand equity has diminished throughout the years. This essay will use Hamed Shamma and Salah Hassan’s brand equity model to determine the reasons behind the slump and loss in brand equity. (Shamma and Hassan 2011)
Product Brand Equity
Starbucks entered into a Blue Ocean market in the 1970s in Seattle. They focussed on premium quality coffee beans, and did not sell coffee by the cup until 1984, when Howard Schultz joined the company for a second time, introducing the notion of Italian-style coffee houses. He wanted to present Starbucks as a “third space” between home and work, where people could relax and socialise. …show more content…
This affected them detrimentally, as people felt as though Starbucks was no longer a unique place they could just sit for a coffee. (Starbucks) In an email to staff, Schultz warned of the dangers of commoditisation, suggesting that they were losing brand equity because people could no longer see the care and detail that went into coffee. Hot sandwich smells were overpowering the aroma of the coffee, and the visual excitement of seeing coffee beans being freshly ground was lost. (Schultz 2007) Once they began to distribute branded merchandise such as instant coffee, notebooks and mugs their brand equity was at an all-time low, as were their …show more content…
(Halliburton and Bach 2012) Schultz realised that all employees of Starbucks were essential for communicating the brand values to customers. To offer incentive he introduced health insurance for workers, allowed employees to take home a proportion of the stock each month, and as of June 2014 has offered to pay college tuition for some employees. (Luckerson 2014) This relaxed, people-centred “brand personality” is an important part of corporate brand equity as it becomes synonymous with the brand name and values portrayed to the customer. (Halliburton and Bach 2012)
To create a strong brand equity companies must understand and differentiate from competitors. (Campbell 2002) Starbucks do this well, exemplified by their advertisement in 2009, where they stated “If your coffee isn’t perfect, we’ll make it over. If it’s still not perfect, you must not be in Starbucks.” (Brizek 2012) This philosophy means that customers are guaranteed a good Starbucks experience, but also demonstrates the differentiation between Starbucks and fast food alternatives that also offer coffee (for example McDonald’s and Dunkin’
Product Brand Equity
Starbucks entered into a Blue Ocean market in the 1970s in Seattle. They focussed on premium quality coffee beans, and did not sell coffee by the cup until 1984, when Howard Schultz joined the company for a second time, introducing the notion of Italian-style coffee houses. He wanted to present Starbucks as a “third space” between home and work, where people could relax and socialise. …show more content…
This affected them detrimentally, as people felt as though Starbucks was no longer a unique place they could just sit for a coffee. (Starbucks) In an email to staff, Schultz warned of the dangers of commoditisation, suggesting that they were losing brand equity because people could no longer see the care and detail that went into coffee. Hot sandwich smells were overpowering the aroma of the coffee, and the visual excitement of seeing coffee beans being freshly ground was lost. (Schultz 2007) Once they began to distribute branded merchandise such as instant coffee, notebooks and mugs their brand equity was at an all-time low, as were their …show more content…
(Halliburton and Bach 2012) Schultz realised that all employees of Starbucks were essential for communicating the brand values to customers. To offer incentive he introduced health insurance for workers, allowed employees to take home a proportion of the stock each month, and as of June 2014 has offered to pay college tuition for some employees. (Luckerson 2014) This relaxed, people-centred “brand personality” is an important part of corporate brand equity as it becomes synonymous with the brand name and values portrayed to the customer. (Halliburton and Bach 2012)
To create a strong brand equity companies must understand and differentiate from competitors. (Campbell 2002) Starbucks do this well, exemplified by their advertisement in 2009, where they stated “If your coffee isn’t perfect, we’ll make it over. If it’s still not perfect, you must not be in Starbucks.” (Brizek 2012) This philosophy means that customers are guaranteed a good Starbucks experience, but also demonstrates the differentiation between Starbucks and fast food alternatives that also offer coffee (for example McDonald’s and Dunkin’