When it comes to business branding strategy, establishing a company’s logo is one of the most vital decisions. Due to the properly chosen logo, a simple paper cup can turn into one of most popular and recognizable to-go cups in the world. Back in 1971, when Starbucks was a simple coffee shop on Seattle seafront, it searched for a way to capture attention of potential customers (Schultz & Yang, 1997). The three founders asked a consultant Terry Heckler for help (Schultz & Yang, 1997). Because of the nautical history of coffee and Seattle’s strong seaport origins, Heckler looked through old marine books until he found a logo based on a 16th-century Norse woodcut ‑ a mermaid or Siren (Schultz & Yang, 1997). An attractive and seductive mystery of the Siren together with a marine theme was exactly what the founders of Starbucks were searching for. A logo was created around her, and the relationship with the Siren began. Today, for customers all over the world, Siren is an indication of one of the best beverages in the world. She invites people to explore Starbucks experience with its nice and luring atmosphere (Murray, 2011).
Over the last four decades, the company has made a few changes to the logo (see Figure 1) (Murray, 2011). It is believed that, in order to keep the company relevant, it is necessary to evolve without losing sight of heritage. Thus, the Siren (in spite of a few changes) has always remained on the coffee cup, because she is at the heart of Starbucks (Murray, 2011). At first, the half-naked mermaid was more than exotic. Nevertheless, in spite of some complaints, Starbucks just left the mermaid the way it was. The seductive and topless Siren was supposed to be as attractive as the beverage itself. However, the company was evolving, and it was necessary to put the logo on delivery trucks (Schultz & Yang, 1997). The company did not want to put huge mermaid’s breasts on the trucks. Thus, Starbucks covered the trouble spots with Siren’s new hairstyle (Schultz & Yang, 1997).
In addition, the mermaid’s tail was transformed and the initial brown color was changed to green in order to reflect the merger between two companies ‑ Il Giornale and Starbucks (Schultz & Yang, 1997). Il Giornale’s logo put the emphasis on speed, and the company’s name was written in a green circle surrounding the head of Mercury, the messenger of god (Schultz & Yang, 1997). Il Giornale’s business was successful. However, Starbucks had more history and a strong basis for a new business. For that reason, Howard Schultz, Starbucks’ chairman, president, and chief executive officer, decided to preserve Starbucks’ brand name and to make a logo merging both companies’ emblems (Schultz & Yang, 1997). So, if it was not for Il Giornale, the Starbucks logo may never have evolved in what it is these days.
The third variation of the logo was publicly introduced in 1992 when Starbucks turned into a publically traded company (Schultz & Yang, 1997). Heckler was once again invited to revise the logo. As a result, Siren remained the same but lost her navel. Thus, the logo became more sleek and modern reflecting the existing state of the society (Schultz & Yang, 1997). It was iconic, recognizable, and resonated with many Starbucks customers (Schultz & Yang, 1997).
In 2011, Starbucks presented their new logo on the occasion of their 40th anniversary (Isobe, 2012). The final change represented Starbucks’s desire to become a company selling mostly consumer packaged goods (Isobe, 2012). The company removed the “Starbucks Coffee” phrase from the logo, because they decided to produce an assortment of other goods with the company’s name on it with no coffee inside (Isobe, 2012). It is worth mentioning that Starbuck’s logo is pervasive throughout all of the company’s marketing campaigns. Besides, it is one of the most well-known branding components that customers will think of when someone mentions Starbucks (Isobe, 2012). It is unforgettable and consistent, and it gives people a sense of what the brand is about. This logo has always had the words “Starbucks Coffee” surrounding an image of the Siren (Isobe, 2012). For those who do not know anything about the Starbucks logo, the addition of these words helps to explain what it reflects. Nevertheless, Starbucks decided to remove the phrase hoping that they had enough brand recognition (Isobe, 2012).
Some people think that a siren alone is not enough for a strong brand image, because it is not related to the product base and the company could preserve at least its name on the logo (Isobe, 2012). In fact, the Siren does not make people think of coffee. However, probably, this is exactly what Starbucks needed. The company decided to work on the other product lines. For that reason, the unclear message of the logo was precisely what the company required. In any case, there is proper time and reasons to change the logo. In case of Starbucks, the logo change was reasonable, because it reflected their expansion into other product lines and new distribution channels.
The new logo preserved the essence of the Starbucks experience (Isobe, 2012). At the same time, it let Siren come out of her circle, which provided the company with flexibility to come out of the boundaries of only coffee-oriented business and expand into the other areas of the food industry (Isobe, 2012). Starbucks also mentioned that, irrespective of all changes, the company will never abandon their core values. The Siren has represented Starbucks for forty years, reminding the company of its fundamental values and guaranteeing that it always remains true to its roots (Isobe, 2012). Since there is no name of the company on its logo now, Starbucks has to pay attention to its brand name protection in order to guarantee that competitors do not manipulate their name to sell their own goods (Melewar, 2008).
The power of Starbucks as a brand rests on the logo and the name. Starbucks coffee awakens the thought of tasty beverage served in a warm and comforting atmosphere. Clear brand identity guarantees that the business will meet customers’ expectations. A brand comprises of the corporation’s reputation and the trust the company builds with its buyers. The company’s brand contribution is a part of intangible assets that are determined exclusively by the brand. Millward Brown (the brand ranking system that calculates consumer data when assessing brand values) provides calculations of intangible assets including logo, which is valuable, because it considerably contributes to the company’s profits (“Top risers,” 2015). According to Millward Brown, Starbucks increased its brand value in the fast food category by satisfying consumer preference with a more sophisticated design including the new Siren and quality menu options (“Top risers,” 2015). In fact, in 2014, Starbucks significantly improved its ranking. The company was one of the top 20 risers, which improved its brand value from 17,892 in 2013 to 25,779 million dollars (“Top risers,” 2015). Thus, the brand value increased by 44% in only one year (“Top risers,” 2015). Moreover, Starbucks Corporation’s intangible assets in June 2015 accounted for $2,086 million dollars (“Top risers,” 2015). The intangible assets as well as the brand value of the company demonstrate that Starbucks is not simply a coffee company but a corporation that values clients and a business that is making difference in the world. These elements are the reasons for high profits of the company, and the Starbucks logo adds an indisputable component to the company’s value. Due to the fact that customers treat Starbucks as a luxury brand, they have a strong connection with the brand. These numbers demonstrate the strength of Starbucks brand name and logo, since consumers themselves did most of the advertising for the company.
Starbucks serves its customers at high premium for a long time owing to the fact that it is more than a coffee company ‑ it has built itself around core values highlighting the significance of customer relations and offering buyers unique experience (Isobe, 2012). Starbucks has steadily changed the logo in order to remain attractive while offering new approaches to keep up with the times. The new logo of Starbucks without “Starbucks Coffee” phrase posed a hazard. However, the company was willing to take risk hoping for greater revenues. Basically, Starbucks heavily depends on its brand to generate profits (Isobe, 2012). The logo transformation demonstrates that the company believes that its brand name is very strong and has the power to redefine the company. In order to confirm or refute the company’s confidence in its own logo, it is necessary to calculate profits generated by this logo. Clearly, there are no proper accounting standards to account for intangible assets, particularly for all that includes a brand (Wahlen, Jones & Pagach, 2015).
Since the company’s brand can actually influence the value of the company, it is necessary to create accounting standards, which can precisely reflect the company’s value (Wahlen, Jones & Pagach, 2015). Whether a company’s brand is strong or weak, it impacts a company’s profits. Thus, it is necessary to create a way to calculate values of the logo and brand changes. In case of Starbucks, the power of the Siren may be tested by reviewing success of the company’s new logo. Considering that Starbucks’ brand value significantly increased from 2011 to 2014, it may be said that Starbucks is on the right track.