Can Premier Brands Go Public – And Stay Premier?

When premier brands go public, does the market require such fast and continuous growth that ultimately, it undermines the brand? This is an interesting lesson explored by John Quelch in his latest Marketing Know: How blog, How Starbucks’ Growth Destroyed Brand Value.

Quelch suggests that to be a premier brand, one must offer something very special – exclusive. And when premier starts to become mass market, it loses the very edge on which its brand is based. Tiffany is facing a similar problem, while family-owned Prada does not.

While I don’t believe that Starbucks’ appeal was built primarily on exclusivity, I do concur that the pressures of going public seemed to have undermined their ability to stay true to executing their vision. To make earnings targets, Starbucks’ strayed into a number of ancillary businesses and focuses for its shops, and neglected to give what mattered the most the lion’s share of its attention.

Now that they’re closing 600 US stores, in what Quelch believes is the first step in a series of downsizing moves, will Starbucks be able to return to the icon it once was? You can comment on Quelch’s blog.