Recently there was an article in Business Week about how Starbucks is going back to its old logo for a couple of months to try to restore consumer faith in the brand. I would like to go on record as saying that I predicted a loss of faith the very moment (in 2006, to be exact) I noticed that Starbucks had branched out to serving Egg McMuffin-style breakfast sandwiches as well as coffee and coffee-related items. I don’t know why this bugged me so much, apart from the fact that I really like Starbucks (and we own some of their stock), and I just didn’t really like the idea of them trying to do it all. I was actually thinking about doing a whole top ten list about this, but when I mentioned this to a few people, they were like “hey man--- what do you have against expansion? Don’t you think Starbucks can do it all? Look at Costco!”
And now – ha! It turns out I was right. Not only is Starbucks taking the iffy-looking, microwavable sandwiches off the menu and closing some of the stores they opened in their bull market, mass expansion frenzy, but they’re going “back to their mission statement of coffee and community.” I like it when theories I have about the business world end up coming to pass. And by the way, for the record—“doing everything” is part of Costco’s mission, which is why they can sell everyting from dog food to prescription drugs to lawn furniture to diamond engagnement rings and still not be overextending their brand. They do that on purpose. And by the way, I am aware of the fact that it’s imperative for brands to expand in order to keep businesses vital. I’m only talking about the rare occasions when they do it in a way that doesn’t work, and the product or service starts to call attention to itself by being out of place.
Anyhow, since I turned out to be right about the ‘bucks and their overexpansion, I broke out this list I’ve been keeping of companies and/ or products that I think have jumped the shark, meaning they’ve tried to expand too much, and now it’s getting a little bit funny.
These are in no particular order, and all happen to be food related, but only because I didn’t see anything amusing in recent business news about how, say, Honda is making personal computers. Believe me, if I’d seen something like that, I’d be all over it. I did see something in Forbes about Yahoo possibly developing coffee shops, and if that happens, please come back and see me.
1. Dunkin Donuts adds “healthy” options such as multigrain bagels and lite lattes to their menu, and launches a “healthy” ad campaign featuring Rachel Ray. Ok, this is just my opinion, but healthy food on the menu or not, I really think the battle is over the minute you’ve walked inside a Dunkin’ Donuts store. If you want a multigrain bagel and a lite latte, Dunkin’ Donuts is NEVER going to be your go-to place. Sorry. It’s not that I don’t admire their initiative, but let’s get this thing clear—it’s not like you’re going to go to a strip club for a scintillating conversation. I give the “healthy products” portion of the Dunkin’ Donuts menu 6 months to a year, and then the junior executive that came up with this marketing strategy is gone.
2. Starbucks – yes, I’m picking on them again, because right after they announced the scale back and return to basics, then they turned around and added smoothies to their menu. This still smacks of brand confusion to me, and I know that they’re still trying “menu expansion” as their strategy to fend off falling profits, but I still think the “back to basics” alone might have been enough. Plus, I love this quote from a financial analyst who’s covering both Starbucks and Jamba Juice: “…even if Starbucks rolled out literally the best smoothies available in America, wiping Jamba Juice off the face of the earth and converting every last one of their customers, that would still increase revenue by just 11 percent. And the reality, of course, will be far more modest.”
I don’t know why, but this hyperbolic language amuses me a little bit. “Literally the best smoothies in America? And “Wiping Jamba Juice off the face of the Earth?” Dude, are we still talking about bananas and fro-yo? I see his point, though—even if this strategy succeeds, muddling the brand is still going to cost them. That’s my whole point!
3. Carl’s Jr. – this one is less of a brand expansion problem (though, I have to admit I am questioning the combination of Carl’s Jr. and the Green Burrito) and more of an “I think this product sounds gross.” Did you know that Carl’s is selling a Cap’n Crunch milkshake now? That doesn’t sound delicious OR good for you. For 740 calories and 35 grams of fat, I’m going to need some chocolate, and I think most of America will agree.
4. Ice Coffee at McDonald’s. Again, I’m not saying they CAN’T do this—I’m just wondering whether they can really do it well. Plus, at $1.89, it’s not that much cheaper than just getting the ice coffee at Starbucks, where you know it’s going to be good. I do know, however, that I’m not going to go to McDonald’s specifically for the ice coffee, so I can say from first-hand experience that they’re not re-converting me as a customer from this effort.
5. Peter Griffin (the overweight dad from Family Guy) in Subway advertisements, promoting their new “Subway Feast.” This is puzzling to me—hasn’t Subway built their entire reputation for being a healthy alternative to fast food? Now they want to claim that they have unhealthy food as well? It just seems weird that they’re trying to have it both ways. We’re keeping you healthy! We’re making you fat! No—we’re keeping you healthy!
See—I like to keep you guessing. You come here for the funny, and sometimes I give you some brand analysis and strategy. Yeah, I read Business Week, people. Did you think I could consult for Johnson & Johnson for eight years and not know some stuff about branding? Internet, you have underestimated me!
