Case Study-answer questions according to the article

SEATTLE, May 18, 2015 Starbucks Coffee Company (Nasdaq: SBUX) today announced that it has entered into a letter of intent with leading music streaming service, Spotify, to establish a multi-year relationship that will link its 7,000 company-operated stores in the U.S. and 10 Million My Starbucks Rewards loyalty members with Spotifys more than 60 Million global users to offer a first-of-its-kind music ecosystem. This interconnectivity will allow Starbucks MSR members unique access to Starbucks music on Spotify, the ability to influence in-store playlists as well as opportunities for Starbucks MSR members to earn Stars as Currency.

For over 40 years, music has played a vital role in Starbucks Third Place experience inspiring our partners and customers in unexpected ways that have helped to shape the global pop culture. And we are delighted and honored to bring Spotify directly to our customers, said Howard Schultz, chairman and CEO of Starbucks. Throughout its history, Starbucks has worked closely with the music industry, offering a variety of artists a platform for their work. By connecting Spotifys world- class streaming platform into our world-class store and digital ecosystem, we are reinventing the way our millions of global customers discover music.

Through a phased rollout later this fall in Starbucks U.S. company-owned locations, followed shortly thereafter in Canada and the United Kingdom, the agreement specifies that Starbucks and Spotify will collaborate on a next generation music ecosystem. As part of the agreement, Spotify Premium will be promoted in these stores.

Coming first, Starbucks 150,000 U.S.-based partners (employees) will receive a Spotify Premium subscription, followed shortly thereafter by partners in Canada and the U.K. This fall, Starbucks partners can help shape the in-store music programming using tools provided by Spotify. These partner-influenced playlists will then be accessible on Spotify via the Starbucks Mobile App so that customers can stream music anywhere, anytime from their mobile device.

In addition, Spotify users will enjoy opportunities to obtain Stars as Currency for My Starbucks Rewards loyalty program. This will represent the first time that Starbucks loyalty program stars can be accessed by a third party for the benefit of Starbucks MSR members and Spotify users. Spotify will also include a dedicated section on Spotify featuring new playlists from Starbucks and its most popular music from the past 20 years, available to all Spotify users.

Starbucks has a rich music heritage and customers who are passionate music fans which makes us incredibly proud to be their music partner, said Daniel Ek, CEO of Spotify. Spotify has powered more than 25 Billion hours of listening around the world so far, and were looking forward to creating unique in-store music experiences while also making more than 20 years of popular Starbucks music available to both Starbucks customers and Spotifys 60 Million global music fans.

Source retrieved from:

https://stories.starbucks.com/stories/2015/starbucks-spotify- partnership/

Question:

1. Explain in detail the co-branding concept in brand management.

2. Refer to the above article, is there any possible risk of dilution brand equity? Justify your opinion.

3. Elaborate the advantage and disadvantage of Co-Branding based on the article above.

4. Reading from the co-branding between Starbucks and Spotify, critically discuss how does it help to maintain or strengthen brand equity for both companies.