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Branding Is Not Everything

Branding Is Not Everything

I recently saw a dangerous meme posted online showing two 16oz coffee cups side by side. Above the plain white cup was a price, $1.00. The other coffee cup was a striking green Starbucks cup with a cost of $3.00; the caption reads, "Branding is Everything."

The post implies that the superior Starbucks branding commands a 200% premium in price for the same product. This misconception is common among many business owners.

The idea that the Starbucks logo is the reason for the difference in price is a fatal flaw in reasoning.

I want both business owners and graphic designers to understand that this is not true.

I am a marketer, and I understand the power of a great logo and fantastic design. It drives me crazy when I see great businesses with terrible logos or branding. But the idea that design or branding is the difference maker is wrong and dangerous.

A great logo or branding package does not guarantee success and itself offers little that increases the bottom line. Very often, companies spend way too much time, money, and energy into branding with few real results.

Since the meme was about Starbucks, let's look at why the green logo commands a premium in price and maintains its outsized position in our minds.

A Brief History of Starbucks

Starbucks was a small coffee roaster, and from 1971 until the mid-1980s didn't even offer coffee drinks, all they did was sell specially roasted coffee beans.

Howard Schultz, joined the company several years after it was founded and while traveling abroad in Milan, was inspired by their coffee bar culture and set out to recreate the whole experience in America.

Starbucks opened coffee shops offering superior coffee to java drinkers at a time when America's favorite coffee was Folgers or Maxwell House. Schultz came up with the idea of establishing the "third place," a space that was not the home or office for people to socialize.

Starbucks fueled its rapid store expansion by not only selling excellent coffee but by introducing coffeehouse culture to America.

Starbucks also fostered a great company culture for its employees, which was unique among retail food and beverage establishments. No one would ever mistake a Starbucks barista for some grumpy teenager working in a McDonalds. They did this by offering excellent benefits and stock in the company.

They were up to 17 stores from the original one before they even introduced the now-iconic logo and Starbucks has never looked back, with over 14,000 locations in the U.S. alone.

Logo Me This

The cup of coffee with the green logo costs $3 because of many other factors that have nothing to do with the logo.

Starbucks basically invented an industry and therefore had first movers advantage, Starbucks had better products, Starbucks had better timing, Starbucks had better people, Starbucks had better locations. Because of all those factors, the Starbucks logo became ubiquitous and iconic. Not the other way around.

Let's remember an iconic logo is only so because of the underlying success of the product or service they represent.

If Apple made slow computers or if Starbucks would not invent the coffee shop and tried to sell their product in grocery stores, their logos would not be nearly as powerful.

So before you tie yourself into knots about your brand, your logo, or your image. Make sure your underlying business is strong, make sure you have a competitive advantage, make sure you are in the right markets, make sure your pricing is right, and your people are good. Then and only then will excellent branding make the difference.

The ash heap of business is littered with strong brands that are no more because their business was deficient (Polaroid, Blockbuster, Circuit City). Likewise, there are plenty of very impressive companies, at the pinnacle of an industry that have poor logos and branding. (ICBC, AT&T, United Health Group, Softbank)

Don't get caught up in the marketing hype. Make sure to give your branding and outward appearance the attention it deserves, but don't commit more resources than necessary. Very often hiring a salesperson or reducing your ship times will do more for your bottom line than any rebrand.

Marketing is anything you do to make it more likely for your goods and services to be chosen. Branding and other forms of Promotion are lower down on the totem pole of the five Ps. The others being Product, Price, Placement, People

For more about the five Ps, you can check out my video here

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