What dilutes a brand

I have been reading the news of Starbucks $1 Coffee with some interest. What makes a case-study brand depart considerably from its 'core' of premiumness and comfort? Will it survive the new line of competition with behemoth value chains that it puts itself in now?

Brands are what add to margins. If so, what kind of brands still continue to do so during a downturn like this? I have been pondering over these questions for a while now. Expect to see some research based answers on this soon.