Coffee company Considering Brand Expansion

Starbucks has always offered edible items such as desserts, cookies, and other sweet treats. But the Seattle based coffee company is now talking about expanding into offering food items. While some food, and beverage PR watchdogs have said the move “only makes sense”, others have expressed concerns that Starbucks is expanding beyond its simple format, and menu, thus inviting more trouble than the move might be worth.

In this article Ronn Torossian, founder and CEO of 5W Public Relations, discusses the potential wins, and pitfalls of expanding your brand beyond a marketplace you currently dominate.

The Potential Benefits

#1 – Greater market share

Some of Starbucks’ largest competitors – Panera, for example – already offer a wide, and varied food menu. Starbucks already has the locations, simply gradually expanding the menu could easily siphon customers from competitors.

#2 – More money

If people are willing to pay $5 for coffee, what will they pay for artisan sandwiches and soups? More menu items could substantially increase Starbucks’ bottom line, if they choose wisely, and price their expanded items right.

#3 – Competition absorption

Given Starbucks’ enviable footprint, a café expansion could spell doom for many local, smaller competitors. These companies, along with their customer base, and revenues could be taken over by Starbucks’ greater resources, marketing reach, and brand recognition.

The Potential Pitfalls

#1 – Loss of identity

Starbucks is the quintessential American coffee shop. There’s one within walking distance from nearly everywhere. People who shop there know exactly what they are getting. If the menu expands it could not only change the offerings, but also change the ambiance, and customer base.

#2 – Brand confusion

To most people Starbucks means lattes, mochas, and frappuccinos. To add sandwiches, and other café menu items, might create brand confusion, both here and abroad. Starbucks’ brand developers, and PR managers must be careful to preserve their brand while expanding it.

#3 – Mediocre reviews

If they start selling food, and people don’t love it at least as much as they do the coffee, Starbucks could suffer from mediocre reviews. Because the bar of expectation is set rather high, anything less than artistic artisan sandwiches, and gourmet soups will meet with profound disappointment.

Will Starbucks find more success than pitfalls? Time will tell, but this should be a very interesting brand development to watch.

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Ronn Torossian is the Founder, President and CEO of New York-based 5W Public Relations. He has overseen the company's rapid growth and expansion to the Inc. 500 list, as well as provided counsel to hundreds of companies, including members of the Fortune 500, Inc. 500 and Forbes 400. His work spans global interests, corporate entities, high-profile individuals, regional business entities, government agencies and academic institutions - both on routine public relations matters and extremely sensitive issues. One of the foremost public relations experts in the U.S., Torossian is known for his aggressive, results-focused orientation, as well as his close working relationships with members of the media, influencers, decision makers, politicians and celebrities. At 5W Public Relations, Torossian's client experience has included programs for Coca-Cola, Microsoft, Anheuser-Busch, Barnes & Noble, Cantor Fitzgerald, IHOP, McDonald's, Evian, EDS, VeriSign, XM Radio, Seagram's, The Loews Regency, Bad Boy Worldwide Entertainment, Marriott Hotels, Vail Resorts, Pamela Anderson, Snoop Dogg, the Government of Israel, and others. Referred to by The New York Post as a "publicity guru," by Fox News as a "high-powered PR CEO," by Tyra Banks as a "crisis management guru," and by CNN as "a leading PR expert," Torossian is regularly featured in and quoted by the media, including by CNN, Fox News Channel, MSNBC, NBC, The New York Times, and others. CBS National News said "Ronn Torossian knows spin," and a New York Times feature story on Torossian referred to him as "The consummate hard-driving, scrappy NY publicist." Earlier in his career, Torossian was a Vice President/Group Director for one of The InterPublic Group's (IPG) largest PR agencies, where he was responsible for significant client growth and successful client programs, including work for Clinique, Fox News Channel, DHL, Hard Rock Café and others. A resident of Manhattan’s Upper West Side, Torossian was named to the Advertising Age "40 Under 40" list, PR Week's "40 Under 40" List, is a regular lecturer at universities and conferences, a member of Young Presidents Organization (YPO) and a board member of numerous non-profit organizations.