Brand audit: Starbucks

Starbucks’ decision to join the suspended coffee charity movement has been slammed by critics as a cynical attempt to rebuild its damaged brand in the wake of accusations of tax avoidance last year. Whatever the motivation, the brand is gradually recovering its reputation, according to brand tracking measures, but still has a long way to go to fully recover.

Starbucks Mondays
Monday promotion helped improve brand perception.

YouGov’s BrandIndex shows Starbucks’ Buzz score, a net balance of the positive and negative things people have heard about a brand, has grown in recent days following the announcement it will enable customers to donate the cost of coffee to the charity scheme when they make their purchases – a move that followed customer feedback on social networks.

Starbucks BrandIndex
Starbucks (blue line) brand Buzz compared with Costa (red line).

Recent gains aside, the brand is still suffering from negative perception. Its Buzz score currently sits at -10.9 (11 April), a significant increase from the -34.9 in the aftermath of the news Starbucks paid next to nothing in tax for several years (28 December) but well short of the 0.2 it enjoyed on the 2 October, before the news broke.

Starbucks’ highly visible presence on the high street meant it bore the brunt of public disquiet and was vilified more than other brands caught up in the tax avoidance accusations, notably Amazon and Google.

The brand’s perception across all BrandIndex measures is significantly below where it was six months ago.

Its decision to pay £20m in UK corporation tax and other moves, has lifted Starbucks in all brand tracking measures but only moderately.

Starbucks’ overall Index score, which takes into account how customers rate the brand in terms of impression, quality, value, reputation, satisfaction and whether they would recommend it, languishes at -10. In the three months before the tax scandal emerged it hovered around 0 and it reached its lowest Index score of -20.3 on 28 December.

Starbucks BrandIndex
Starbucks (blue line) brand Index compared with Costa (red line).

Starbucks’ communications efforts throughout the media storm sought to address the issue front on and explain its position. Although the efforts did little to halt the swift decline in all measures tracked by YouGov’s BrandIndex, marketing activity launched since January is likely to have helped the gradual recovery.

A number of advertising campaigns to promote new products such as the UK stronger latte and a new kind of espresso, discount offers and giveaways, have been launched to win back many customers who might have defected to rivals.

Starting the year with a campaign offering discounted lattes every Monday in January showed Starbucks was at least in tune with the mood of the nation starting back at work after the festive season, and encouraged trial of its reformulated latte.

Starbucks’ BrandIndex scores are taking longer to improve than they did to decline. In October its Reputation score, which measures whether someone would want to work for the brand, plummeted 28 points between the start of October and the end of the year, reaching its lowest point (-23.3) on 31 December. It has climbed 13 points to -9.6 in the first 16 weeks of 2013, but is still significantly below is positive 4.6 score at the start of October.

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