Starbuck Your Name Recognition

Starbucks Corp. said it is wiping its name from one of its Seattle-area stores and adding alcohol to the menu. Smart...change the formula that made you the giant company you are.

The Seattle-based gourmet coffee chain said it is changing the name of one of its existing stores to a name that reflects the neighborhood location, but says nothing about the difference of it's menu. The store will be called 15th Avenue Coffee and Tea. When it opens next week it will serve wine and beer in additional to coffee and tea.

The company said it will then open two more Seattle-area stores without the Starbucks name in locations that aren't currently Starbucks stores, and that if the rethought coffee shop is a success it will consider replicating it in other cities. Word of advise - unless you're putting them only on 15th Avenue, maybe you might want to think about a better brand name.

So weigh in the pundits and marketing specialists...

"It's interesting," said Morningstar analyst R.J. Hottovy, "especially since the Starbucks brand has been such an integral part of their success." Yes, the brand of their product has been key to the sales of the same named product. Give that man a raise! The genius adds he thinks the Starbucks brand still "resonates" with those who drink coffee regularly, but with the recession now in its second year, the brand may be struggling more because it is considered "premium," and therefore expensive, by consumers. When is the default considered premium? And with thousands of locations, how exclusively premium does he really think regular folks view it as? Because the alternative is a cup at 7-11. There's nothing better than an analyst trying to connect with and think like the common folk.

Starbucks has been unable in recent months to keep its sales growing as more consumers cut out small luxuries to save money. Starbucks is slated to report its fiscal third quarter financial results on Tuesday and analysts have largely predicted another same-store sales decline, particularly, in particular, that competition with lower-priced rivals like McDonald's has heated up. McDonald's has been rolling out its own line of espresso-based drinks to all of its 14,000 U.S. locations and has been heavily promoting the beverages.

Que the next genius...

Andrew Hetzel, who is also the founder of coffee consulting group (yes, they have one that specific) Cafemakers, said Starbucks may also be renaming its stores to provide a testing ground for changes and, possibly, to bring in a new brand of consumer. Gee, what tipped you off? The new menu items? Please, elaborate... "It looks to me that they are testing a specialty sub-brand to see if they can capture some other segment of the market that would otherwise be disillusioned by a large corporate chain," Hetzel said, adding that opening only one at first "gives them a live shop to test changes in menu offerings, store design and, perhaps, procedures quickly" without disrupting operating stores branded with the Starbucks name." Yep, the fertile market of anti-corporate coffee drinkers who also want to mix in alcohol. This is turning into a Bill Hicks routine...

Companies often take a location to test out new (bad) ideas, but there is a huge difference between launching a bad product (Coke II, anyone) and taking the brand recognition and selling point out of a good product just to add bad ones. Sit back, enjoy a coffee - or beer, and watch this idea fail.