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Starbucks New Instant Via Faces Web Scrutiny

Posted by Stephanie Startz on October 1, 2009 03:52 PM

Will Starbucks's new instant -- sorry, "ready brew" -- coffee Via get a lukewarm reception from consumers? Or is demand piping hot?

As the countdown builds toward Via's four-day "taste challenge" at Starbucks stores tomorrow through Monday, what din has Starbucks Via registered around the web?

Reviews of the four 15-second ads have been positive. Viewers responded well to the offbeat humor featuring dog people and jockeys. The "Town Hall" commercial, slyly alluding to conservative protestors, leads Mediaite to question whether conservative viewers will "have a sense of humor about themselves[?]"  But the conservative blogosphere seems able to play along with the joke. Hot Air sees an element of flattery in the ads:

If the man’s so excited about Starbucks instant blend that he needs to sing out, then damn it, sing out. Frankly, the fact that townhall protests are now so thoroughly embedded in the national consciousness that a major company feels safe to parody them in paid ads is a testament to their effectiveness.  On the other hand, this is Starbucks we’re talking about. Hmmmmm.

Reactions to Starbuck's instant-coffee brand extension are more skeptical.

Harvard Business School professor John Quelch defends Starbucks' decision-making, but warns they could lose sight of their long-term objectives.

Starbucks' launch of Via shows great commercial courage. And commercial courage is what consumers need in the face of this recession...This launch is not dumbing down the Starbucks brand. It is making it affordable and accessible in the face of recession. It is innovative, unexpected. So long as it doesn't distract management from continuously improving the in-store experience, it could be a winner.

Unfortunately for Starbucks, those kind words are a dissenting view.  The Motley Fools bluntly headlines "This May Be Starbucks Dumbest Move Ever," and condemns Starbucks'decision to position Via against its in-store drip coffee:

Maybe I slept through business school when taste tests were being discussed, but I always thought side-by-side comparisons were more sadistic than masochistic. Why is Starbucks ripping itself? Why is it belittling its barista-brewed drinks in favor of a much cheaper solution that doesn't involve stepping into a Starbucks store?

Street interviews in New York caused local blog Gothamist to declare, "Starbucks Instant Coffee Instantly Hated By New York."  Maybe HQ should have included New York in their test market? And BNET joins the pile-on, with some Brand Management 101 ("How to Blow a Turnaround"), asking:

[H]ow does Via stop the market share erosion to McDonald’s and Dunkin’ Donuts? How does it bring customers back to Starbucks? Why didn’t the marketing geniuses at Starbucks compare Via to competitors’ fresh brewed coffee? At least that might have made some sense.

What do you think of Starbucks Via campaign? Innovative product strategy, or is Starbucks brewing up failure? We'll monitor reactions to the taste challenge promotion starting tomorrow.

Comments

Rob Dawson Canada says:

Short Term Gain. Long Term Drain.

In my view, Starbuck's launch of Via is brilliantly myopic.It is further indication that the brand has lost its way in a quest to improve same store sales and drive quarterly revenues. Via's introduction seems completely contrary to the direction Starbucks indicated it would take when Howard Schultz reclaimed the reins and pledged to focus on the brand's roots.

Sure Via will likely increase revenues in the short term. It may in fact be a decent product. It has been launched with some solid marketing. But the strategy is flawed. In one fell swoop, the creator of the premium coffee category has successfully turned their flagship offering into a commodity.

For years, consumers have been educated that Starbucks delivered a superior coffee experience. Consumers have been educated in the virtues of coffee varietals, the perfectly brewed or expertly prepared coffee beverage made to the consumer's exact specifications. Now consumers are being told they can mix their own with a little hot water.

Driving consumers out of stores, to prepare products for themselves, decreases the opportunity for add-on sales, brand differentiation and engagement in the long term. Starbucks should know that their brand is more than just a product, and certainly more than the commodity they are now selling in little sleeves.

Brand stewards should have the courage to remain consistent, to hold steadfast to their core brand strategies and to innovate in ways that build long term equity in the brand.  

October 2, 2009 01:51 AM #

Michael Miller Canada says:

Starbucks sells an experience in affordable luxury, not just coffee. This completely strips that value proposition out of the equation. It is completely off brand. It reminds of when Krispy Kreme started selling its doughnuts in gas station convenience stores in Canada. That was the nail in the coffin here. Their value proposition was hot, fresh doughnuts - from a gas station?

With Starbucks VIA, they have now put themselves in the same category as Folgers crystals and Nescafe. Why?

October 2, 2009 09:30 AM #

Schuyler United States says:

I've seen many a new brand/extension crash and burn because it didn't have some appeal in the NY/LA/SF/Seattle markets, but this might be one of the rare occasions where brand "snobbery" is the reason for failure in these markets and also the reason for success outside of these markets - in particular, middle America. Despite themselves, and despite the pedestrian nature of this product, Starbucks might actually win with this.

October 2, 2009 09:30 AM #

RJ Hagel United States says:

I am suprised to hear such negativity, I guess like Walmat, people love hate Starbucks. I think this is a smart move for Starbucks. People have to remember that Starbucks is a lifestyle brand. They are giving consumers the ability to have their famous coffee where ever they are—Fresh Brewed when you can get to a local store, fresh ground at home, or the Instant Via where ever else you may be. It is the total experience and the brand loyalty that they are after and I think Via is a great addition.

The pricing of the Via will also not hurt the in-store experience you get at your local store. The Via is $1 for an 8 oz. serving. I personally like to go venti with my coffee which would require two packets of via, thus costing $2. $2 for instant or $1.95 fresh brewed? I would still go fresh brewed.  

October 2, 2009 12:28 PM #

Michael Miller Canada says:

Let me qualify my comment above based on RJ's suggestion of hating Starbucks. Not true. I love Starbucks. I'm an addict and brand enthusiast. It's just that Starbucks + instant coffee feels like an oxymoron and that can't be a good thing for the brand. Can it?

October 2, 2009 01:07 PM #

Tommy O United States says:

I too am a big Starbucks fan - I love their commitment making a truly great cup of coffee. As big brands go, Starbucks is one that I've embraced(although I love funky little independent coffee houses!). I'm a wait-and-see person on this. Personally, I don't even like those pod thingys, even though people rave about the coffee. They better have a sizable rabbit up their product development sleeve on this one. Who knows...they could change the way the world views INSTANT coffee? I know I'll never buy it - but I'm at least smart enough to know this is about me.

October 5, 2009 09:57 AM #

Denise Lee Yohn United States says:

if it were simply a matter of taste, i have no doubt via would be viable (!) -- but it's not about the coffee -- a colleague of mine has written an impassioned and informed rejection of via:  deniseleeyohn.com/.../

October 3, 2009 09:34 AM #

Jaron Singapore says:

has anyone actually tried the VIA coffee itself before commenting? If you had tried it, you would know that it is actually quite a revolution by itself. The coffee is strong and more than decent. Coming from Asia where Instant 3 in 1 coffee rules the instant beverage aisle in the supermarket, the product which Starbucks has produced is truly outstanding.

As a sign of transparency, you should know that i drink Starbucks coffee everyday, but that is also because I can't feel that I can't get decent coffee here in NYC ( i may be wrong. but that is a personal opinion and is by no means sweeping ). And i digress..

I love the way they call it Microground soluble coffee. the texture and aroma is really quite unlike any instant coffee i ever had. In fact, i used to hate instant coffee because of the sheer "flighty" taste which they usually come in.

i just think that it is smart marketing tactic as Starbucks probably know they will be hit and criticized a thousand times more if they had tried to pitch themselves against their competitors. I can just imagine the watchgroups and news media waiting with bated breath to pounce on how "unethical" or "unjust" they are etc...Yet, with this campaign, they created a whole cycle of publicity which doesn't just shed light on the new VIA but also re-focuses the consumer eye on the actual Starbucks brew.

look how many comments have been made about this launch already. as sometimes we say, there is no such thing as "bad publicity", only "publicity".  

I would go as far as to suggest that Starbucks probably perceive the VIA launch as a product extension into a completely different category. They merely started out in their stores first. But I do think their main target is to get into all the grocery stores and dominate the entire coffee aisle. Think how nicely the VIA coffee adds to the Starbucks grocery store "touch point" system :pre-mixed coffee ( in the chillers ), whole and grounded coffee beans ( in the aisles ). Do not be surprised if they come up with the Starbucks version of Altoids very soon.


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