Starbucks--Can an Expanded Brand be Contracted?

Starbucks began as a creation of Howard Schultz--a high-end coffee house in the European tradition. Flavors and armomas of coffee being ground, people lingering, a feeling of neighborhood. It was a life-style brand.

When Schultz stepped down as CEO, his successor changed the brand by expanding it. Food was brought into the stores; coffee was no longer ground. The customer base was expanded by "dumbing down" the original concept to appeal to a wider audience.

Schultz is back and has brought back with him his original chief marketing officer. The two want to recapture the Starbucks brand that they first created. However, the question is whether or not the "horse is out of the barn". The brand is no longer the same and the question now is whether it can be contracted and returned to its original. It is a facinating brand question and living case study.

I am not sure that Starbucks can return. Consider that the brand was built in a time of good economic growth. People had money and were willing to pay $4 for a latte. It was a bit of an extravagance, but Starbucks was not for everyone--it was only for those who appreciated high quality or for those who wanted to be considered well bred enough to appear to appreciate the coffee and the experience. It was the experience (life style) that was being sold. Starbucks created an XM radio music station so that you could "take the experience with you".

Mistakes were made--they are made in every business. From a brand perspective, I cannot quite understand why they licensed their name to franchisees that opened small "Starbucks" at service stops on highways or in college classroom buildings. These bear the Starbucks name, but do not offer the Starbucks experience--just the coffee--but it is made by people who could be working at McDonald's, not baristas like they have in their "real" stores. It is a diluted Starbucks. A mistake.

The economy is bad now and a $4 latte looks a lot more expensive than it did a year ago. Starbucks recently announced a quarterly proft loss of 97%. The company is loosing market share to McDonald's, Dunkin' Donuts and the like. How many of these people will return to Starbucks once the economy improves after they learn that coffee at 1/3 the price is not that bad?

I am not a Starbucks customer, but I wish them well.