BrandingWire Case Study: Opinions by the Dozen

As promised, here’s the initiation of a monthly series of blogs based on case studies that twelve of us – a posse of pundits – will be addressing through the vehicle called BrandingWire. Our first “problem” was contributed by Steve Woodruff at Sticky Figure. Here’s the company profile he’s presented us:

“Growing A Company from the Coffee Grounds Up”
 
“A small coffee company in America’s heartland has been in business for 8 years and is ready for real growth. To date, they are moderately successful, profitable, and carry no debt. They roast their own beans on-site and their retail sites are relaxed, and kind-of country-funky. The locals love them but no one outside the region knows they exist.

This is a family business and the owner is committed to doing whatever it takes to create a thriving business. Before they do, however, they have a few “challenges”. Their brand name may be inadequate to go national, their tagline, “Great coffee at great prices!” sucks, and they have no marketing/branding pieces that can carry their growth. Finally, their logo looks like a five-year old drew it. On the upside, they have lots of roasting capability and their coffee sources can deliver all the beans they will need. They also have money to invest in growth, without placing any burden on their operations.”
 
You can read my ruminations and recommendations below, and the other eleven perspectives by accessing BrandingWire. But since you’re here, please read mine first.:o)

My Concept of Branding

First I should define what I believe branding is. Before the more traditional tasks such as naming a company or creating a logo, branding is a strategic activity that defines the very business to be created. It involves assessing the market, paying attention to trends and positioning the company in relation to competitors. It is the junction where customer desire and company strengths cross. I call it the brand platform.

So I suggest exploring the very nature of the business.

At present, the owners of this company are deeply committed to competing in the “coffee shop” category head-to-head with Starbucks, the semi-successful Peabody Coffee and a few other “me-too” coffee shop chains and local imitators. If as stated, the owners are “committed to do whatever it takes to create a thriving business”, I’d ask them to think more broadly.

I’d want to explore creating a new product category in which there is no significant, organized competition. This is a matter of combining the coffee-making component with another, equally attractive service business opportunity.

How to Create a New Product Category

How would I go about that? First I would study trends. And I would study Starbucks and try to find those areas in which they are not strong.  I’d look at activities in which coffee drinking could be an accompaniment, much as beer is hooked to bowling. I’d then associate with those types of establishments and sell my brew from under their roofs or in co-owned facilities. This is being done in at least one market, bookselling.

Here’s an example of one direction I’d explore based upon my own, very narrow experience in Starbucks, and knowing about one significant trend in American life. I’d want to walk through the financials before exploring it much further than I have here.

Here’s the premise:

There are few places where small groups can meet regularly except in the back rooms of a handful of restaurants where participants are required to eat a meal. And those groups, either business or social, are becoming more popular what with the trend toward social networking. So I’d provide a place where leads groups, master-mind groups, MLM groups, sales networks, plus non-business groups like mother’s morning break groups, retired social groups and charity organizers could meet regularly for a room fee and the cost of refreshments.

I’d have up to five semi-private areas of different sizes, each of which equipped with conference table, whiteboards, sideboard for refreshments and coffee. These “pods” would offer some privacy. Plus the meetings would no longer dominate the entire seating area as they do when groups “invade” a Starbucks. There would also be a “public area” for one and two people seating, and a take-out function as well.

But instead of being known as a coffee house, I’d create a new category: meeting place. I’d call it something like “Rendezvous”

I’d serve great coffee and variations, but the thrust is a place to gather and to come back regularly to meet, even though you could meet with a friend there anytime, and occasionally just drop in for a cup.

The networking propensity of group members will provide word to spread about this meeting place so that when some one asks, “where can I gather with my cohorts?”, Rendezvous comes to mind.

Think Outside Your Existing Category

So, by thinking outside the traditional product category, by creating your own category in which you are the first to reside, by designing the business around a particular type of customer, by targeting niche activists, by combining business concepts, these coffee folks can compete effectively without competing directly with the Starbucks machine.

If the new model has legs, then I’d build a brand platform upon which the traditional branding elements can be created and integrated into a differentiated new business that just happens to sell great coffee.

Now go visit the BrandingWire and read what the other eleven members of the pundit posse have to say about growing coffee shops. (Their individual blogs can also be reached from the “Posse of Pundits” blogroll in the right column.

Martin Jelsema
303-242-5975

 

10 thoughts on “BrandingWire Case Study: Opinions by the Dozen

  1. Martin,

    I like this approach as a starting point: “So, by thinking outside the traditional product category, by creating your own category in which you are the first to reside, by designing the business around a particular type of customer, by targeting niche activists, by combining business concepts, these coffee folks can compete effectively without competing directly with the Starbucks machine.”

  2. Martin,

    I love the meeting space idea. I was in a Caribo Coffee last week and they had one. I thought..wow, that is so smart. Some of your comments reminded me of Joe Calloway’s book, Becoming a Category of One. I think you are dead on!

    Drew

  3. Great ideas on the meeting room, Martin. I alluded to that a little bit, but you took the idea all the way home! We had a small, local coffee house in the city where I used to live, and there was a room with a conference table in the back where the community could hold meetings. We used it for Boy Scout parent committees. Great stuff!

  4. Excellent forum and suggestions Martin. My question to you is, often Coffee Shops are all about location location. Do you think if one were develop a venue with meeting rooms for “Business People” without a primo location, that they will be as likely to experience it, assuming you can market effectively?

  5. Chris:
    Yes, location isn’t as important for a pre-determined appointment as it is for a spontanious urge for a cup of caffine. However, I’d like to have visual presence so people will know where the venue is when invited to it for a meeting. Martin Jelsema

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