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Starbucks New Concept: No Name "Local" Coffeehouse

Posted by: Jennifer Bassett on Monday, July 20 2009 01:03 PM

The recession has hit Starbucks hard, with McDonald's stealing market share with high-quality, coffee beverages, and lower performing stores shutting its doors.

So what's the company to do? One wouldn't have predicted its latest move. After spending millions to build its brand, Starbucks is going undercover by opening 15th Avenue Coffee and Tea, one of several stores Seattle that will be unbranded. Selling itself as a local community hangout, the store will serve alcohol, serve espresso from a manual machine, and host book readings and music performances.  

I'm curious to find out what people make of this. The new stores don't seem to address Starbucks real issue right now: its high price point.

 

Category: Brand Extensions




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Comments  (9)


  • Sparsh Jain

    Dear Jennifer,

    I believe that this is a sound move, based on current times.
    Without diluting the brand of starbucks, and without creating a new supply chain, the company is trying to find a new way to maintain its topline.
    any price cuts, would have been a reactive measure which would be difficult to correct later i.e. when the market looks up.

    This way they are venturing into a new format, without diluting their earlier brand. They maintain their topline in these times & start earning big bucks through both the formats when markets look up.

    Thanks
    Sparsh
    (sparshjain@gmail.com)

  • cosmetic dentist Northampton

    They should have studied and analyzed the problem more rather than just settling for a no-name business. It is their high price that is pulling them down, especially with the recession going on worldwide.

  • fap turbo review

    I think it is the price that is pulling them down. With all the problems in recession, I think they should do a more in-depth study on how to survive and succeed in this business, and not resort into strategies such as this.

  • luggage

    I have traveled the world, and starbucks will succeed with any initiative. I believe a company must evolve with the economic tide.

  • Kempf

    I Reckon the principal point is to reduce the costs. Every traditional Starbuck store has special things that was made just for Starbucks, it makes the coffee a little more expensive than another ones With this news stores, with "no name", can sell a less quality coffee, probably for a lower price, and maybe some persons who just can't stand the brand Sarbucks will drink coffe in these stores.. Of course i agree that they've studied it before done it.

  • Indianapolis web design

    it sounds like they are just trying to appeal to another market. A lot of trendy people who go to the local ma' and pa' coffee shop seem to be against star bucks mega corporation

  • Nicole Armstrong

    I'm excited for this endeavor by Starbucks for 4 main reasons: 1 - I feel it allows the organization to explore new ways to improve the current Starbucks' in-store experiences 2 - It opens up Starbucks to a new consumer group that prefers a more down-to-earth coffee shop experience 3 - By reaching new consumers they don't need to lower prices, which I feel will tarnish the brand long-term. At Starbucks you are not just paying for a cup of coffee you are paying for the sense of belonging to the Starbucks tribe 4 - Lastly, this new concept provides the organization with a new way to satisfy its brand by creating exemplary coffeehouse experiences

  • David Cameron

    I agree with Sparsh. Starbucks has made a brilliant move in experimenting with a new offering, one that doesn't dilute its brand, yet draws inspiration from it. Plus, the coffee giant can appeal to a larger audience and pull "local" heartstrings to build a whole new set of brand loyalties. Brand move: definitely Venti!!

  • David Cameron

    Starbucks has made a brilliant move in experimenting with a new offering, one that doesn't dilute its brand, yet draws inspiration from it. Plus, the coffee giant can appeal to a larger audience and pull "local" heartstrings to build a whole new set of brand loyalties. Brand move: definitely Venti!!


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