Starbucks had the right way of branding a commodity. Starbucks reinvented a nine-hundred-year-old product they had dominated for generations. They chose not to compromise quality in order to spend money on expensive advertising campaigns. They instead chose to serve up a steady stream of handcrafted, customized products in a welcoming, well-lit, clean, and comforting environment. Starbucks also didn’t limit their brand development to coffee alone.

The company went through a branding blitz: serving Starbucks on all United Airline flights; producing Double Black Stout with Redhook Ale Brewery, Inc. (Fall 1995); marketing Starbucks Frappuccino drink in Supermarkets with Pepsi-Cola Co. (summer 1995); six flavors of Starbucks Ice Cream with Dreyer’s Grand Ice Cream (Spring 1996); opening retail stores internationally; expanding to 1100 store outlets, with 22,000 employees; serving coffee to 4 million people each week.

Starbucks had little in way of research or insights to work with when reinventing coffee. Bedbury asked his assistant Jerome Conlon to create a “Big Dig… to dig deeply into everything that has been written, felt, said, or thought about coffee.” First, he conducted an in-depth examination of every piece of readily available research about the entire product universe of coffee. This served to provide the feel for the language that people used to describe their coffee experiences. Second, he conducted a series of focus groups with a range of coffee drinkers. And last, but not least, he zeroed in on the Starbucks brand.

“The Starbucks brand core identity was less about engineering a great cup of coffee than about providing a great coffee experience. Of course, it was about providing the highest-quality coffee beans, ground correctly, brewed with the purest water, at the right temperature, and for very specific periods of time…the Starbucks brand was about what Abraham Maslow might have called the coffee “gestalt”- the atmospherics (Bedbury, 2002).”

Starbucks was not just about driving unit costs down, but about elevating the experience around drinking a cup of coffee. They wanted to transcend the cup and go beyond the physical domain of the product.

Starbucks did not want to pursue growth for growth’s sake. They faced brand dilution with the expansion of the company, but doing nothing to grow and expand can be the worst decision. An attempt to broaden a brand- whether for increased revenues or profits- the impact the additional “brand-width” will have on the brand strength should always be assessed diligently.

Starbucks was dealing with such issues when United Airlines approached them to have Starbucks served on all flights. They recognized the opportunity as an incredible growth opportunity. They would gain worldwide product trial and exposure, exposing their brand to 100 million United passengers per year. On the downside, the deal could pollute the brand image and the mystique that Starbucks was not available everywhere.

At the same time the United deal was on the table, a proposal from Sam’s Club to expand the sales of Starbucks whole-bean coffee through their discount channel was also on the table. The Sam’s Club deal seemed to good to pass up for them.

Before deciding on acceptance of the United deal, Schultz and Bedbury decided that three basic concerns must be met first:

• Concern with the product quality being protected.
  
• Concern with the presentation of the brand, both on board and in advertising.
  
• Concern with how flight attendants would explain the dark roast and body of a cup of Starbucks.
  

After careful thought, Starbucks thought it was not wise to start to big ventures at once. They chose to pass on the Sam’s Club deal, but accept the United deal. Starbucks would take its first flight aboard United in January of 1996.

Starbucks was very wise with building its brand-width. The United deal represented a co-branding arrangement where both sides benefited. They also had phenomenal success in brand-extension, the most prominent being the introduction of the Frappucino, both in store and bottled. Starbucks also transcended distribution channels with the introduction of its ice cream.

Starbucks is a company in two businesses: the food-service business and the business of lifting spirits one cup at a time. The heart of its business though is serving coffee in coffeehouses.

Starbucks has kept in mind that “everything matters” in many aspects of their company. The most notable is their training program required of all new Starbucks employees. Everyone, whether a part-time eighteen-year-old or a corporate executive, must attend. The program teaches you all about the company: its values, its history and its culture. It also teaches you how to brew a decent cup of coffee.

Starbucks also has strict guidelines in its stores. Beans have one week to be ground or used before they get sent to a local charity. Also, since beans absorbs odor, Starbucks was one of the first retail establishments in North America to ban smoking. They also know not to reduce expenses at the cost of threatening the brand (such as the use of 2-ply toilet paper vs. 1-ply that is considerably cheaper).

Starbucks is also big, but not bad. The Starbucks Foundation, a literacy program, was started from profits by Howard Schultz’s book Pour Your Heart into It. The program has consisted of ll Books for Children” book drive announced on Oprah, as well as a $5,000 donation to local literacy organizations every time Mark McGwire hit a home run in 1999.