Starbucks and Seattle’s Best Coffee

I recently discovered that Seattle’s Best Coffee is Starbuck’s fighter brand.  A fighter brand is a cheaper alternative to a company’s premier brand that it uses to compete head-to-head with cheaper competitors while minimizing sullying the value perception of the cornerstone brand.

Starbucks is putting Seattle’s Best in Burger King and Subway to compete against McDonald’s, on grocery shelves to compete against lesser brands and in vending machines.

Why fight it?  While a lot of people buy Starbuck’s premium coffee, many consumers buy cheaper stuff.   If that’s what some consumers want, you might as well provide it.

From a consumer standpoint, the risk is that Seattle’s Best and Starbucks become undifferentiated.  Car companies ran into this problem with their versioning with behind the scenes cost-cutting leading to many versioned products to be different in label only (Ford and Mercury).

But others have pulled off the versioning and maintained clear and relevant differentiation.  The Wall Street Journal article mentions Old Navy and The Gap as one example.

It’ll be interesting to watch how it plays out.

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