Repositioning Starbucks through a New Packaging Strategy

Starbucks designed a new logo for its brand and created friendly taglines to create an uplifting experience for customers. The company faced controversy when it removed Christmas from its cups, but this led to the creation of a blank canvas cup that customers can use to tell their own stories. Starbucks also plans to add book libraries to its stores to boost customer loyalty and attract new customers.

BRAND TRANSFORMATION
PLAN

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
SWOT Analysis...........................................................................................................................1
Drivers of brand choice...............................................................................................................2
Market space and Audiences.......................................................................................................3
Segmentation...............................................................................................................................4
Strategic direction........................................................................................................................5
Communication plan....................................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

LIST OF FIGURES
Figure 1Positioning of Starbucks....................................................................................................5
Figure 2Red Cup Evaluation of Starbucks......................................................................................6

INTRODUCTION
At the time of any type of challenges faced by the organizations, they often choose to
rebrand. The firms use to rebrand when they seek to refresh, reposition or grow their brand.
Some of the major goals for attaining rebranding strategies are to reduce the employee attrition
within the company as well as entering into new geo-or vertical markets. The present study is
based on the case scenario of Starbucks which is an American Coffee company as well as
coffeehouse chain (McDonald, 2002). It is operating in more than 234,501 locations with their
lavishing services as well as high class taste. They are serving their services worldwide thereby
enhancing the trust level of their customers. Due to the increasing competition, there are several
problems faced by company in which one of their major problems is related to the Persecution. It
has been founded that in past years, Starbucks has decided to have plain red holiday cups, instead
of their more traditional Christmas-themed and decorated cups. Company has also claimed that
they are making this change just to bring a sense of simplicity and peace to the holidays (CEO,
2004). This was the biggest controversy through which Starbucks have gone through and it also
leads to fall in their negative brand identity in the mind set of customers.
In this particular context, the present report is being formed just to produce a brand
transformation plan for this real world business problem. Further, appropriate strategic direction
for the company is going to be presented by defining a new brand value proposition as well as a
relevant brand identity.
SWOT Analysis
It is one of the most effective and useful techniques for understanding the brand’s
strengths as well as weaknesses. With the help of this, they can also identify the opportunities
open to them and threats they are facing (Simkin, 2002). They can find out the solution for their
real world business problem and easily evaluate the best brand value proposition with the same.
Strengths:
 Strong market position as well as global brand recognition
 High quality services
 Location and aesthetic appeal of stores
 Positive brand image
 Customer Loyalty
 Diverse product mix
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Weaknesses:
 High prices
 Overdependence in United State market
 Negative large corporation image
 American and European coffee culture does not exists with other countries
Opportunities:
 Expansion in new and emerging market due to the positive brand image
 Technological expansion
 Brand extension
 New distribution channels
Threats:
 Intense competition in the market
 Changing customer taste and preferences
 Developed countries and market situations
 Developed countries economy
From the above analysis, it has been determined that one of the major strengths of Starbucks
is its strong position as well as brand image in the market (Neves, 2007). They are having
significant geographical presence all around the world and maintain 36.7% market share in US.
It is the most recognized brand in the segment of coffeehouse. Due to this, they are providing
high quality services to all their customers which help them in maintaining high customer
loyalty. On the other hand, Starbucks charges premium prices from their entire customer due to
which low or middle income people are not able to use this services on regular basis. In addition
to this, coffee culture may not accept widely in some countries.
Drivers of brand choice
Being the world’s largest coffee company in terms of sales and market share, Starbucks
coffee company has maintained to position itself as the most likely brand among consumers. One
of the main key drivers for attracting more number of customers is its distinct and unique product
categories (Blankson, 2000). This product category cannot be easily emulated by competitors at
a higher price in niche market. There are several factors which customer considers before buying
a product or using any service. Within any product category, consumers might choose among
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different brands. With respect to Starbucks, there are several factors which customers taken into
consideration before utilizing their services such as:
 Prices
 Ambience
 Culture
 Service quality
 Taste
Company further needs to take customer insights in order to enhance their service quality and
provide appropriate taste as per the needs of consumers. By taking feedbacks and suggestions,
Starbucks can easily improve their services. Here, with respect to Starbucks, customer demands
for the premium coffee as well as snack products (Doyle, 2009). Company is offering them high
quality services with finest prices and lavishing taste as well. Most of the customers are loyal
towards the Starbucks and they are more likely to utilize the services of company as well.
Starbucks is one of the most famous coffee chains as well as coffee houses.
Some of the most common success factors of company are its quality of Arabica beans as
well as level of employee satisfaction with the firm.
Market space and Audiences
In order to define appropriate market space and positioning, there are mainly 5 factors
which are defined as follows:
 Brand Attributes
 Consumer Expectations
 Competitor Attributes
 Price
 Consumer Perception
Appropriate market space is makes the business working feasible to target and influence
the high income and business class people. Under this, they consider men and women who fall
between the age group of 25 to 40 years. Another major goal of company is to identify all its
opportunities that are financially attractive thereby are available to capture (Caemmerer, 2009).
In addition to this, they want to become the premier purveyor of the finest coffee in the world.
For the same, they are trying to overcoming with their existing threats and grab the total existing
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opportunities. Starbucks position itself as a place where college students can hand out and
business class people can meet each other.
Starbucks use to sell its coffee products to adults who belong to age group of 25 to 40. In
addition to this, young adults, kids and teens have been their own priority (Simkin, 2001). With
the changing time and taste as well as preferences of customers, Starbucks started targeting
affluent young families with products like organic fruit squeezes for toddlers.
Segmentation
Demographic factors
Children's (13-17)
Young Adults (18-24)
Adults (25-40)
Matured (Above 40)
Geographic factors
Main cities
Targeting
Age groups: 18-40
Occupation: Business class people and college students
Gender: Both male and female
Income: High and middle income as well
Location: Main city hubs
Market spaces of company have been decided as per their segmentation strategies. It has
been planned according to the most attractive and feasible location for the brand to target and
own. On the basis of this, Starbucks has segmented their market on the basis of geographic and
demographic factors (McDonald, 2012). In this, demographic factors covers the age group of
people i.e. Children’s (13-17), Young Adults (18-24), Adults (25-40), Matured (Above 40).
They are the people who are highly aware with the new trends of country and taking
interest with the changing taste. Further, the Starbucks is based on the socio-economic
segmentation foundation in consumer market. They have segmented the market on the basis of
all the social class people particularly the business category. The main target market of Starbucks
is for both males and females. However, the age group varies within the same. Age group
selected by them is from 18 years to 40 years and all people can come for the category of young,
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adults, kids, teens etc. In addition to this, they are targeting both males and females from the low,
middle as well as high income class (Luther, 2011). It is the most likely place for college
students as they can hang out here and work on any type of their assignments. Wi-Fi access and
contemporary designs help to retain young adults and eventually turn them into regular
customers.
Positioning of Starbucks
Figure 1Positioning of Starbucks
(Frambach, 2001)
Strategic direction
Starbucks needs to set better strategic direction in order to overcome with the problems
faced by them. Due to their red cup controversies, Christians has raised an issue related to the
discrimination. In order to overcome with the same, they can go through the appropriate brand
value proposition in which they can reduce the issue (Keller, 2011).
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Figure 2 Red Cup Evaluation of Starbucks
(Source: CEO, 2004)
An appropriate brand value proposition for the Starbucks is a perfect cup of coffee with
the designing logo of its own brand as well as creative and friendly tag lines to create an uplifting
experience of customers (Doyle, 2009). They can present different cups with friendly tag lines
and logos. However, American consumers were highly dissatisfied with this red cup logo. This
has proven to be successful for company in some other ways as it become a future case study of
MBS course that how business can get into the customers subconscious. Nearly, every American,
company got its brand into conversation. It has proven to be a well-known brand among all and
almost 93 percent of member agencies did not think that this controversy would hurt the brand
name of Starbucks as well. The negative aspects which has been covered is related to this
controversy is that Starbucks belled its core value by removing Christ and Christmas from its
cups. Due to this, company presented their design this year in another way. They are inviting
customers to create their own stories with a red cup that mimics a blank canvas. They can further
give a message that follows Starbucks brand (Frambach, 2001).
The brand is presented everywhere where customers can easily access the services.
Moreover, they can add the services of book library with the same store. Here, customers can
enjoy the coffee with the books and boost up their mood. It is the most effective way to boost up
the brand equity and easily attract more number of customers. Here, with the concern of new
direction for Starbucks, they can provide book library service to their customers. It is the most
effective way through which perception of customers towards the company can be changed
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(Lewis, 2002). It can make the brand promise clearer and attract more number of customers
easily.
Consumers do not so understand and if they are being purposefully misdirected for
marketing and public relations of company, they can give negative feedback about company as
well. A new brand value proposition framed by Starbucks is being presented by building a
strong, distinctive brand. From the logo to the store design and everything in between packaging,
signage and displays, the Starbucks brand needs to beautifully design and come up with a new
experience for their customers. They need to stay true with their core values. Further, it can be
determine that the above given steps can become the best brand identity of Starbucks. By
changing their packaging and developing trust among Consumers, Company can easily set a
better strategic direction (Harris, 2002).
Communication plan
In order to attract more number of customers, Starbucks need to communicate to all their
customers with the help of appropriate communication strategies. Starbucks use to communicate
with their customers through formal as well as informal communication methods. These methods
are as follows:
• Verbal communication as well as face to face interaction at their physical store.
• Via E-mails
• Social networking sites
• Internet
• Feedback form etc.
These are some of the most effective communication options through which Starbucks come
up with the huge base of customers (CEO, 2004). With the help of social networking sites, they
can promote any information regarding new product as well as any other area. Further, by taking
feedbacks from customers through social media sites and e-mails as well, company can easily
improve their services.
CONCLUSION
From the above whole study, it has been concluded that there Starbucks can reposition
itself by setting their new packaging strategy. With the help of best packaging, they can
overcome with the red cup controversy faced by them. The new brand value proposition for
company has changed the packaging of their cup’s logo with different and friendly tag lines on
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every cup. They can add up the libraries in their stores just to attract more number of customers
and make this place as one of the best hang out places for youth specially. With the help of
rebranding, organizations can overcome with the real world business problems. Company can
easily strengthen its brand position and develop a trust among the mind-set of consumers.
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