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.