On 19 March 2008, Howard Schultz, chief executive of Starbucks, announced to its shareholders that the company would be returning to its roots: 'all things coffee'.
On 5 January 2011, the same chief executive announced a bold new strategy: to 'think beyond coffee'.
Symbolising that reversal, Schultz unveiled a stripped-back logo from which the words 'Starbucks Coffee' had been excised. Instead, it comprised only a softly enhanced version of its 'mermaid' icon (Marketing, 12 January).
The big task for Starbucks as it ventures beyond coffee will be determining what its core equity is, since this will be the foundation on which any market entry must be based. The hesitation at the top - with Schultz still hedging his bets by promising that Starbucks will 'always be the world's leading purveyor of the highest-quality coffee' - indicates that all is not crystal clear.
Maybe that logo is the place to start. A mermaid is part-woman, part-fish, a seemingly incongruous pairing that, artfully joined, creates something so magical that it has captured the imaginations of people for centuries.
Starbucks, too, has always been part this, part that; in truth, it has never been solely about the coffee.
There is that 'third place' vibe that mysteriously works; somewhere you can sit with a laptop and feel as happy sipping a juice as a latte. It's a curious fusion of energy and relaxation - the take-away buzz at the bar, the comfy, soft-jazz environment beyond.
Is Starbucks a service brand? Of course, but it's also about the converse: the baristas are there when you need them, but also know how to leave you alone and not hover.
The Starbucks experience embeds opposites and ideas that don't normally belong together, but which have been artfully joined to create something sufficiently magical to capture imaginations around the world.
Once Starbucks' management has clarified what this magical amalgam is, the next step is to decide on the most promising markets in which to extend it.
The normal place for brands to look is so-called 'adjacent market space', but recent research shows this approach might be misguided. According to a study published in the Journal of Consumer Research, the predictors of brand-extension success are less about naturalness of fit and more about the strength of branded competition in the new sector. In other words, it may be better to venture to a territory that seems distant from the original one if the competitors are relatively weak, than to tackle a closely related sector, where they happen to be strong.
This might explain the lukewarm reception for Via, Starbucks' adjacent-space venture into instant coffee: it had the might of Nescafe and Maxwell House up against it, with its own brand looking uncomfortable pared down to sachet size.
Would Starbucks do better looking away from packaged goods and focusing more on the experience - Starbucks spas or care homes? How far beyond its coffee-house origins could the brand venture and be a success?
The Starbucks brand is extraordinarily rich, and this is what gives its marketers such a headache. But if it can find a way to codify its unique emotional flavour, and translate it to new categories, it will remain a powerful force to be reckoned with. Certainly, for complacent competitors in its newly targeted markets, it would be time to wake up and smell the coffee.
- Helen Edwards has a PhD in marketing, an MBA from London Business School and is a partner at Passionbrand, where she works with some of the world's biggest advertisers
30 SECONDS ON ... BRAND EXTENSION
- This is a favourite conversation for marketing teams, especially when measurement tools suggest forward momentum. But how do you know what will work?
- The brand extension history book is littered with failures: one of the best known is from 2000, when the Lynx team opted to open hair salons. The idea was shelved when Unilever realised service was not a core competence.
- Marketing academics suggest that the parent brand's equity should drive decision-making. Kevin Keller cites four assumptions that must hold true for a brand extension to succeed and all relate to the parent brand - but how does that explain the failure of Campbell's Tomato Ketchup - surely a 'no-brainer' extension?
- The Journal of Consumer Research last September offered another view - it was all about relative brand familiarity. The authors suggested this explained the success of Samsung Binoculars, where the existing competition was the relatively unfamiliar Tasco and Bushnell.