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This May Be Starbucks' Dumbest Move Ever

Rick Aristotle Munarriz
September 30, 2009

Let me see if I get this VIA challenge right.

Come Friday, Starbucks (Nasdaq: SBUX  ) is inviting Canadian coffee fans into its stores for a taste test. Through Monday, java junkies will be able to sip freshly brewed Pike Place Roast alongside its new VIA instant-coffee grounds that are stirred into hot water.

"We're so confident that you won't be able to tell the difference between Starbucks VIA and our brewed coffee, we're inviting customers into our stores to see if they can tell the difference," Starbucks CEO Howard Schultz notes in the event's press release.

Maybe I slept through business school when taste tests were being discussed, but I always thought side-by-side comparisons were more sadistic than masochistic. Why is Starbucks ripping itself? Why is it belittling its barista-brewed drinks in favor of a much cheaper solution that doesn't involve stepping into a Starbucks store?

The more I let it percolate in my noggin, the stupider this "Taste Challenge" becomes.

The fiend is caffeine
Marketing challenges pit Brand X against Brand Y, but usually they involve a gutsy upstart attacking an established rival. This year's collection of Coca-Cola (NYSE: KO  ) spots, where the soft-drink titan tries to establish that Coke Zero is comparable to Coke itself, is a rare exception.

However, no one took Coca-Cola to task for the campaign, even when it made a Super Bowl splash with a Coke Zero commercial that lampooned its classic Mean Joe Green spot.

Coca-Cola knows what it's doing, though. Coke Zero isn't cheaper than regular Coke. It broadens the market without diminishing the brand.

The same can't be said for VIA. Why didn't Starbucks go after the competition?

  • It could have targeted premium-coffee rivals Dunkin' Donuts or Peet's (Nasdaq: PEET  ) . 
  • It could have stacked up VIA against the fast-growing barista killer: Green Mountain's (Nasdaq: GMCR  ) Keurig single-cup brewers with the K-Cup portion packs.
  • Nestle (OTC BB: NSRGY.PK) is the gl