When Starbucks unveiled plans to launch its instant brew Via, the reaction seemed to be a nearly unanimous HUH? Why would a company responsible for turning so many people into gourmet coffee disciples promote a down-market product that seems to be the antithesis of its brand?
Not to imply that Starbucks won’t pull this one off. I recently spoke with David Rogers (pictured), executive director of Columbia Business School’s Center on Global Brand Leadership, about the key steps that companies must take when trying to rebrand an unpopular product category, such as instant coffee:
- 1. Decide on the brand name: Rogers says a crucial decision is keeping the brand name or creating a new one, whether going up or down from your price point: “When Toyota went into the luxury car market, they created Lexus. They didn’t call it a Toyota car. Similarly, when you’re going downscale, so to speak, you have to decide if you want to use the same name or create a new name, and just use your organizational assets for distribution and so forth.”
- 2. Show product innovation: Convey what your company is doing to improve the product. In Starbucks’ case, “They’re claiming they’ve spent 20 years developing a new micro-grind technology. They waited until they felt they had genuine product innovation to set them apart from what had been done in instant coffee before,” says Rogers. He adds that when a company does this well, it should be safe attaching its brand name to the product.
- 3. Invest in communication: In Starbucks’ case, it launched a rare national ad campaign. Rogers says that companies “have to invest in putting their message out there, or else people are going to default to their existing perception of that product category, and it will overwhelm your brand perception, rather than vice versa.”
- 4. Target core customer niches: “Find out who are the real champions or have the most need for this particular product category,” says Rogers. He points to Starbucks selling Via at Home Depot to target contractors; the company is also targeting doctors, who might need to drink instant coffee but also have the disposable income to pay for a more expensive cup.
There are always dangers when taking on an unpopular product category. According to Rogers, “The risk is it will reflect badly on the brand, and that might hurt sales in its core product. Starbucks could start to look like cheap supermarket brand, and it takes away the allure of going for your brewed cup of coffee at a Starbucks café.”
However, in Starbucks’ case, Rogers believes that the company is doing a good job of changing people’s perceptions with its taste challenge and marketing campaign. What do you think: is it possible to turn an ugly-duckling product into a swan? And have you tried a cup of Via yet?
