Starbucks Devalues Its Brand - To Go!

Starbucks has become a target over the last year or so with both Dunkin' Donuts and McDonald's repositioning the coffeehouse chain to set up their own competitive positions.

They've successfully pushed the perception that Starbucks coffee is overpriced, positioning Dunkin's brew and McCafé's product as affordable alternatives.

That's hurt Starbucks. The economy didn't help, making the timing wrong for them and right for DD and Mickey D's.
Of course, a lot of the Starbucks-is-way-too-expensive bashing has used prices for mochas, lattés, etc. in a manner that somewhat unfairly tips the scales. But perception's perception.

What does Starbucks do? Provide more value to close the gap? Introduce flavored coffees with exotic tastes to broaden their core product offering? Show that a fast food hamburger joint and a donut shop might not necessarily be up to snuff compared to the world's coffeehouse leader - you know, the one known for its quality positioning?

No. Instead, they seemingly lose their collective marketing minds! Go to great lengths and expense to undercut their own carefully crafted brand. Yikes!

Starbucks recent introduction of their VIA instant, take-it-anywhere coffee is, to be kind, completely insane. After years of telling and exhibiting to us that better coffee is possible; that it takes better beans chosen from locales around the world; that it requires better care in preparation (thus the baristas with their fancy names); and that it's worth a little more per cup because people love their coffee.

Oh, no. Now, they've sent that entire history upside down and denied their own positioning based on the above. Because now you can get "the same great taste and quality" as their fresh-brewed coffee. What about the machines, the baristas, the preparation? None of that mattered? It was all a ruse? Now, any total amateur can take this new stuff out of their pocket and make it anywhere and it's just as good? So much for Starbucks' positioning. Heck, everyone knows that instant coffee is the dog's breakfast. Even if their VIA Ready Brew is great, why did they compare it to their own best-of-the-best?

Instead, the instant coffee comparison could have perfectly repositioned Dunkin' Donuts and McDonald's back. If Starbucks' new instant is better than both, that means Starbucks' carefully-prepared-by-professional-baristas mainstay products are the top of the pops.

Note that this all occurred after the big Howard Schultz return and the famous memo about how Starbucks has lost its way by abandoning the original brewing process and the arresting aromas of fresh ground coffee beans. Positionists everywhere implore Mr. Schultz to re-read his own memo - over a nice, affordable cup of coffee from McCafé or Dunkin'.