Case Study Fridays: Seattle’s Best

I’m sitting at Seattle’s Best on a Friday afternoon, which is how I came to pick this for this Friday’s case study. In high school, when my algebra teacher proclaimed that she’s a Seattle’s Best kind of person, I didn’t know exactly what she meant. I thought, “Why wouldn’t you want to be loyal to the best coffee company out there– Starbucks?” But because back in high school we don’t really question anything (that’s for college) especially math teachers who lives by hard and fast rules, whose perception of the world is as definite as 1 + 1 = 2, there was no point in trying to argue.

Then a year later, in my senior year, I realized what she meant– Seattle’s Best has identity, a charming one. Seattle’s Best is the kind of coffee shop you’re with a dear friend and what lies ahead are stories and long conversations. Seattle’s Best evokes the feeling of being in Seattle, when cozyness is a required component of an afternoon. Starbucks is the kind of place you go to when you’re in business with a colleague or a boss, when you don’t want to bother over what kind of coffee you might like, there is only one kind you order and you order it often: a double shot espresso. Starbucks is the coffee shop when you want fast, urban and gritty like New York.

My math teacher wanted to say that she’s that cozy kind of girl you go to for lengthy conversations (about all things numbers, I assume).

Years ago, when Seattle’s Best had more physical stores and they had more visibility than being hidden away inside coffee shops, each location is like a respite from the mainstream Starbucks that littered around almost every city corner– it had less locations than Starbucks, it’s not constantly up on our faces, but it had more locations than Peet’s Coffee, which made it more convenient to locate. Some even engender loyalty to the company for that reason itself: the underdog of coffee shops.

A few years ago, Seattle’s best underwent a design transformation across its marketing platforms. They launched a new logo, a new website, and even some commercials that capitalized on people’s hatred for Starbucks (imagine: Seattle’s best employees wreaking havoc on Starbucks stores and defaming the Starbucks logo by plastering a Seattle’s Best one).

A clever video, since it speaks to the repulsion to Starbucks that some customer may feel. Clever because Starbucks is Seattle’s Best parent company.

Seattle’s Best is owned by the Starbucks Corporation, and doesn’t directly compete with Starbucks products. In fact, the coffee shop is positioned in a way to capture those consumers that Starbucks can’t capture. A smart move to increase Starbucks’ coffee market share by another means.

Abroad, I think Starbucks is still the preferred coffee brand, not only because of its prominence, but also because its logo endows a certain status symbol. Seattle’s Best, if they still have international locations, is seen as a Western coffee shop too, with the same price but not the same cachet of Starbucks.

Starbucks’ business strategy is to buy out its competitor, while not cannibalizing that competitor’s products into its own existing product line up. The company still maintained Seattle’s Best as a distinct coffee shop on its own, even retaining the red colors on its logo (a contrast to Starbucks green) after the design transformation.

Seattle’s Best still remains the coffee shop you go to when sitting down is about charm and conversation. Their coffees taste richer, their flavor combinations more innovative, and particular drinks come with extra goodies– chocolate sticks, extra chocolate dusting, or a candy cane treat. These are very small things, but add to the experience. You just don’t buy a Seattle’s Best mocha when all you want to do is gulp it down for a caffeine rush. You order that mocha when there’s a chair nearby to sit down on so you can quietly and smilingly bite a morsel of chocolate and let it melt a little with the warm drink in front of you.

Meanwhile, Starbucks is the partner coffee shop of Barnes and Nobles. Both stores share the same color motif on their logos, and they also parallel each other in their specific industry– Barnes and Nobles is the popular behemoth retail bookstore, while the same thing can be said in the retail coffee industry for Starbucks.

What do you think about a company owning two competing product lines and positioning them as each others’ rivals? Should there be more transparency on Seattle’s Best part that it’s owned by Starbucks, say, a “Distributed by Starbucks” inclusion on its paper cups? It’s not that Starbucks is meticulously hiding this piece of information, but it’s not apparent either to a random Borders customer that Seattle’s Best is owned by Starbucks. How can other coffee companies compete with the Starbucks brand when two of the biggest artisanal coffee shops operate under one roof? And does this business model create holes of vulnerability for either brand?

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