The simple reason Benjamin Franklin’s famous quote, “The bitterness of low quality remains long after the sweetness of low price is forgotten,” has been carried so far through time in our collective consciousness is that it’s an unassailable truth. Nonetheless, it would appear that despite its historical acceptance, some brands appear to have somehow missed that lesson along the way. Those many imperfect businesses notwithstanding, the companies with the prevailing brands that we know and love, and who thus have raving fans, did get the memo.
Another commonly held notion is the assertion that, “After innovation comes imitation.” There is a term in business circles known as “commoditization” – per the Encarta Dictionary it means “the process by which a product reaches a point in its development where one brand has no features that differentiate it from other brands, and consumers buy on price alone”. While it may seem that “commoditization” and ubiquity (presence everywhere or in many places) of a product are common paths to obscurity for brands in a saturated market, there are some enterprises today which prove that with proper management, this stigma can be avoided. A prominent example is a top brand such as Starbucks, which operates at the leading edge of the highly commoditized world of coffee.
It has been a long time since coffee was conceived as the beverage of choice for many, and over the years, countless brands have come along to serve it; so how is Starbucks taking something old and commonplace into the marketplace while remaining both innovative and difficult to imitate?
According to an article in Business Insider, there are “11 things that make Starbucks stand above the competition,” but for the sake of brevity, we’ll look at the general mindset and actions that are evident throughout the entire list. Take, for example, Starbuck’s founder, Howard Shultz’s, fanatical passion and pursuit of quality. In 2008, following his own personal concern that his brand was becoming commoditized, he reinvigorated employees worldwide and modernized technology while holding firm to his core quality values—all of this despite institutional investors’ incessant assertions that he needed to make other changes that Shultz feared would “gut what the company stood for.” Earlier in that same year, Starbucks, at Shultz’s insistence, bought the small coffee equipment company “Clover” and started adding their high-end $11,000 brewing machines to their stores after he tasted a cup of coffee made by one and declared that it was “the best-tasting cup of brewed coffee I’ve ever tasted.”
He added the high-end brewing system, along with other “top-of-the-line” machinery, to all of his stores (which was no small matter, considering that at the time of this writing, Starbucks’ website claims that the brand has “more than 21,000 stores in over 65 countries”). Now, it’s obvious that a decent cup of coffee can be brewed in a machine that demands far less than the $11,000 price tag for just one of these Clover machines, but Mr. Shultz isn’t thinking like a businessman with a focus on scalable cost controls; he’s driven by the fanatical pursuit of quality.
The Starbucks approach, as led by Schultz, has been described as “artisanal tech,” which is right in line with what L. Ron Hubbard wrote in an article titled ARTISTIC PRESENTATION: “Art seeks to create an effect. An effect is not always created the easy way. Indeed, the better effects are quite difficult to achieve.”
Starbucks customers are not aware of how much the machines that make their coffee cost, and they’re certainly aware that they can get a cup of brewed coffee for less than $4, but apparently they can taste the passion for quality that the brand has, and they line up for it.
Mr. Hubbard further states, “The whole world of the arts is directly opposed to the philosophy of the businessman or the manufacturer.”
Interestingly, a separate article published on Inc.com is titled, “Starbucks is a case study in the art of perpetual renewal.” That’s a second characterization of their methods which contains the word “art.” Art is not a common descriptor in big business, presumably because of its resistance to pragmatic measurement and quantification, but its importance cannot be underestimated.
Mr. Shultz once told the brief story of when he “truly discovered coffee’s magic.” During a stop in a café in Italy while on a business trip, he recounted an experience that was “nothing less than transcendent.” He dreamed of creating a similar experience for customers in his stores. Schultz said, “I deeply wanted people to fall back in love with Starbucks and recapture the essence of what we set out to do: inspire the human spirit. I realize this is a lofty mission for a cup of coffee, but this is what merchants do. We take the ordinary—a shoe, a knife—and give it new life, believing that what we create has the potential to touch others’ lives because it touched ours.”
Mr. Hubbard described that phenomenon this way: “A true professional may do things pretty easily from all appearances, but he is actually taking care with each little bit that it is all just right.”
The traps that weaken brands are avoidable, especially when you consider how predictable they can be if you’re upholding a high ethics standard, following a worthwhile purpose, and listening to what your customers need and want. Unfortunately, the mechanisms of failure can often come dressed in the guise of defendable corporate principles, such as cutting costs in various areas like marketing, materials, labor and customer support.
Starbucks was chosen as an exemplar in this brief case study because they endeavor to do things the right way, not the easy way. They have high affinity for both their product and their customers. They attend to both their service and product as an art, considering each detail down to the customer’s emotional response to the smell of fresh roasted beans that lingers in their stores.
“It isn’t magic or luck that makes the professional. It’s hard-won know-how carefully applied.” —L. Ron Hubbard
Of course, there are many successful brands that also exemplify quality and clearly express the use of art and aesthetics in their products and services; to name a few, think of Apple, Walt Disney, Porsche, Chanel, Gucci. These all put quality first; yet, their offerings range in price from a $97 entrance fee to Walt Disney World to the Porsche 918 Spyder’s starting price of $845,000.
We’ll take up how you can work towards creating a power brand and apply the material covered in Mr. Hubbard’s article, ARTISTIC PRESENTATION, to your organization in the follow‑up article to this one, “How to Create a Power Brand”.