On the subject of coffee parlours, today I read a great diagnosis of the growth-induced erosion of Starbucks’ brand value and, consequentially, the erosion of their growth. Clearly Starbucks have lessons to learn about balancing growth with brand, but they certainly aren’t new lessons. What happened? Read John Quelch’s article “How Starbucks’ Growth Destroyed Brand Value” to find out. Allen Roberts posted a comment that nicely sums up the value of the brand:
This maintenance of the integrity of the brand as THE vital component of the value proposition to the consumer is basic marketing 101. Starbucks when they started knew this, and practised this as if their life depended on it, as it did! However, it is the easiest thing to compromise when the driver becomes numbers, and short term financials, as tends to happen after an IPO, as brand integrity and the relationship consumers have with a brand is not easily quantifiable, so is less visible, easily ignored by (often) new management under the pump for results who have not “lived” the brand.