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Stakeholders, Identity and Reputation 81

Schultz felt that the equity of the Starbucks brand depended less on advertising
and promotion and more on personal communications and word-of-mouth. As
Schultz put it: ‘If we want to exceed the trust of our customers, then we first have
to build trust with our people. A brand has to start with the [internal] culture and
naturally extend to our customers … Our brand is based on the experience that we
control in our stores. When a company can create a relevant, emotional and intimate
experience, it builds trust with the customer … we have benefited by the fact that
our stores are reliable, safe and consistent where people can take a break’ (Business
Week Online, August 6, 2001). Schultz regarded the baristas, the coffee makers in
the stores, as his brand ambassadors.
Starbucks looked upon each of its stores as a billboard for the company and as a
contributor to building the company’s brand and reputation. Each detail was scruti-
nized to enhance the mood and ambience of the store, to make sure everything
signalled ‘best of class’ and that it reflected the personality of the community and the
neighbourhood. The company went to great lengths to make sure the store fixtures,
the merchandise displays, the colours, the artwork, the banners, the music and the
aromas all blended to create a consistent, inviting, stimulating environment that
evoked the romance of coffee, and signalled the company’s passion for coffee.
By the late 1990s, consumers associated the Starbucks brand with coffee, accessi-
ble elegance, community, individual expression and ‘a place away from home’. And
in 2001, brand management consultancy Interbrand named Starbucks as one of the
75 true global brands of the twenty-first century. Starbucks’ identity and positioning
as ‘a socially responsible purveyor of the highest quality coffee [that is] offered in a
unique retail environment’ has thus led to a respected and strong reputation with
customers, industry analysts, communities and other stakeholder groups.
Starbucks has always been concerned about its image and reputation, and rightly
so. One of the possible ways of growing for Starbucks was to distribute its coffee
through supermarkets, airlines (United Airlines) or fast food chains such as McDonalds
and Burger King. But such alliances and alternative distribution chains carry signifi-
cant risks for the brand and its reputation. Starbucks has built its distinctive reputa-
tion around a unique retail experience in company-owned stores. And customers
could perceive the brand differently when, for instance, they encountered it in a grocery
store aisle – an environment and channel that Starbucks did not control.

Questions for reflection

1. Consider the risks for Starbucks in forming product alliances with other companies
or in adding alternative distribution chains. What rules-of-thumb can you suggest
particularly from the viewpoint of Starbucks’ corporate identity and the strong
reputation that the company enjoys?
2. Reflect upon the corporate identity of Starbucks in the coffee shop market. To
what extent do you feel that this identity is unique, authentic and competitive in
this marketplace?

Reputation Rankings
Publicly syndicated rankings converge on a number of areas including financial per-
formance, product quality, employee treatment, community involvement, environmental