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Comments
Interesting. Thanks for pointing this to us.
I notice they are distributing VIA their stores. Their tactic for preventing cannibalization of their existing product lines seems to be by selling VIA in packs of three and 12. The press release gives the impression that they will not be automatically providing you with the hot water you need to make a VIA coffee in store. This implies you might be expected to buy these packs in addition to the coffee you came in store to buy.
What is likely to happen is that customers who usually buy take-away coffee and are happy with the VIA may not come back as often to the store. I guess by distributing the VIA through their own stores Starbucks are ensuring customers come in-store at least once in a while. Distributing via their own stores also reduces the comparison consumers might between the VIA and much cheaper instant-coffees available in convenience stores.
- Posted by D.G.
February 18, 2009 12:56 PM
While I see Prof. Quelch's point that in the U.S. market instant coffee has had no premium player, I disagree completely that the introduction of Via is a good extension of the Starbucks brand.
First, Starbucks has never really been about the coffee. Howard Schultz created an aspirational brand identity around Starbucks as a social ethic. The term "The Third Place" described the mythical place in the loyal consumer's mind (not some ubiquitious retail selling space). This is true brand equity.
Second, despite what has been a flurry of recent new menu items from Starbucks, this "place" certainly wasn't centered around a perfect shot of espresso or a foaming cup of soy milk latte, which are products, not the brand.
Third, as Starbucks has become a mature and monolithic retailer, it has refused to grow with a changing market and a new generation of consumers. In recessionary times people desire to connect to brands that comfort them, as they did with Starbucks immediately after 9-11. If Starbucks current challenges were only about price than Panera Bread, also a beneficiary of the post 9-11 times, would also be losing market share (which it isn't).
The Starbucks brand has never been the "coffee", it has always been the "place." Via doesn't occupy that place, in fact, I doubt it even knows the neighborhood.
- Posted by Christopher Muller
February 19, 2009 11:52 PM
VIA will definitely bring a boost to the premium drinks as well. An "instant" customer may come to the store for VIA, but will undoubtedly leave with a latte, frappucino or other premium drink as well. I think Starbucks still has to worry about the price point for VIA. $1 a cup still sounds like a lot for a make it at home cup of instant coffee. There is a ton of premium options in the grocery store isle for non-instant coffee, and it won't take long with this push to create the market for new instant options as well.
- Posted by Jeremy Scheller
February 20, 2009 1:49 PM
I think they are wasting time with too much product dilution.
You got TO Starbucks because you want the experience, not just the coffee. Since we can not re-create that at home, then instant coffee will not be of help. They should just lower in store prices and grab the people who are cutting back because of their own budgets.
Dr. Letitia Wright
The Wright Place TV Show
www.wrightplacetv.com
www.twitter.com/drwright1
- Posted by Dr Wright
February 23, 2009 12:49 PM
VIA will offer Starbucks customers an offramp to other brands. Just as installing drive-thru windows and offering smelly breakfast sandwiches enabled McDonalds and others to equate themselves with the Starbucks brand.
Christopher Muller's comment above is spot on - Starbucks isn't about the coffee, its about the place.
- Posted by WayneK
February 24, 2009 11:50 AM
The problem is that Starbucks has already built an image as the "4 dollars for coffee" place. Yes, they are now offering a great product for less, but how do you reposition your brand get new market share. Their brand awareness is extremely high, and this includes the group that is not willing to do business with Starbucks bases on financial reasons.
VIA - great product, but i'm curious to see how Starbucks is going to reshape what they've built into the minds of millions of people.
Andre
http://www.newlinecreativegroup.com
- Posted by Andre Ivanchuk
March 2, 2009 9:31 PM