Starbucks has a new logo for its 40th anniversary, officially dropping the Starbucks Coffee name from its image of a mermaid. Starbucks executives say the logo clears the way for Starbucks to offer all types of goods that have nothing to do with coffee. The question is, is this brand dilution or a sign that the Starbucks mermaid has become so well known that it will be readily identified by the consumer?
Generally anytime you venture off into new products and try to extend the original brand, its brand dilution. Whether brand dilution really hurts the bottom line of a business is generally something to be argued in business school classrooms. On the one hand, the company reaps the benefits of selling all sorts of products because consumers associate them with the luxury image the coffee shops have. On the other hand, when you see the mermaid will you think about buying coffee, socks or some other item? From a branding perspective, brand dilution is never good. From a bottom line perspective, the money from licensing deals for clothes, cars, etc can help.
Starbucks mermaid is far from Nike’s swoosh in terms of recognition. And that could be the downfall of this new logo. Using the power of your main brand to pull in other product sales will only work if consumers recognize the connection. Would you?
The answer to the question will determine just how successful the new logo becomes.
