Trang 1 Global Marketing Strategy of Starbucks in ChinaInternational Business Trang 4 Overview Industry: Restaurant, Coffee house Founded: March 31st, 1971 Headquarters: Seattle, Was
International Business Group Global Marketing Strategy of Starbucks in China Content 01 Starbucks Introduction 02 Global Marketing Strategy of Starbucks in China 03 Conclusions Starbucks Introduction Overview Industry: Restaurant, Coffee house Founded: March 31st, 1971 Headquarters: Seattle, Washington, U.S Number of locations: 28,218 (2018) Area served: Worldwide 27,340 Locations (Sep 2019) Products: Coffee beverages, smoothies, tea, baked goods, sandwiches Starbucks’ unique selling point is the “rich experience" that goes beyond a cup of good coffee History 1971 1972 • Created by students • Strabucks Coffee, Tea and Spice • Howard Schultz hired • Most important acquisition ever made 1985 • Schultz acquired • Starbucks Joined with Il Giornale 2000 • 88th in the 100Best Global Brands Present • 27,340 Locations • China: 3,600 • USA:13,327 • Japan: 1,415 Starbucks in China • Entered in 1999 • Market share: 58.6% (2018) • 3600 locations Why China? The land of tea • Developing market – over 30% every year • Opportunity of positioning Starbucks as a leader • Possibility to educate the market • Demand for fresh coffee in disfavor of instant coffee Global Marketing Strategy of Starbucks in China Branding strategy • Focused on selecting high-visibility and high-traffic locations to project its brand image • Starbucks has highly localized menu of beverages that is particularly tailored to Chinese consumers • Starbucks has established itself as an aspiration brand and is able to charge premium prices Branding strategy Market segmentation-case Marketing Mix-4Ps Product Price Place Promotion Product Starbucks specialty is its “specialty” to address particular needs China is known for its tea history and well routed traditions, which goes beyond thousand years Instead of trying to force onto the market the same products that work in the U.S, Starbucks developed flavors, such as green tea-flavored coffee drinks Introduced traditional Chinese items, such as festival moon cakes, curry puffs, and sausage rolls Product In China coffee alone would not – it must go with food Launching its “ice zongzi” and planning to release local products such as Dragon Dumplings with tastes and colors are aimed to ease Starbucks products to the customers along with a Chinese touch Price In China, by local standards, Starbucks is a luxury They never wanted to decrease their prices to China when they started Coffee is not grown in China at large scales When comparing prices to USA, it varies between products depending from where the materials were obtained For example, a “tall latte” sells for $4.50 in China where it is $3.50 in the US A “grande latte” costs $3.75 in US and $4.10 in China Place Starbucks had to place their stores in more exposed areas – such as Beijing, where local people would have being exposed to foreign elements compared to suburbs Starbucks' global success was based on being the "third place" between home and work Chinese highly value their community, Starbucks designed its retail spaces to facilitate these “circles” coming together Place In many cases, the spaces are up to 40% bigger than in the U.S., and have been placed in very visible and easily-accessible locations in office buildings The sitting areas are open format and usually have no walls - the chairs seem to flow out into adjacent spaces Starbucks customers not only enjoy the coffee, they feel fulfilled going to a Starbucks with their friends or families Promotion Product promotions: Discount on new products to increase acceptance rate Seasonal promotions • Chinese New Year • Mid-autumn festival • National day Promotion Interactive marketing events (tasting, sampling) Starbucks community programs Loyalty promotion Personalized marketing: Starbucks China is using mobile advertising to encourage users to check-in on the social network Jiepang as part of a holiday-themed promotion Pros and cons Pros Cons • Localization can be attract • more customer Intellectual property protection is uneven • The consumer class is expanding fast • The regulatory environment is evolving • Franchises models bring new and modern business systems to other countries • Not all customer can’t approach products Conclusions • Focus on selecting high-visibility and hightraffic locations to project brand image • Send the best baristas from established markets to new markets and train new employees • Provide customers with an exceptional experience about Western coffee culture as a symbol of modern lifestyle • Localize menu of beverages that is particularly tailored to Chinese consumers • Target customers: middle-class people, people with decent incomes Starbucks’ strategy Starbucks’ success Become the "third place" between home and work and bring that feature to China - but with modern, Western and high-end styles Bridge the gap between the tea drinking culture and the coffee drinking culture by introducing beverages in the Chinese stores that included local tea-based ingredients Proper market research has helped Starbucks expand its plans in China and localize diverse markets Experience for other brands • Research the nature of the market, thereby wisely developing long-term vision, local relationships and localization of products for the market • Deliver the best customer experience and catch up with trends but remain culturally appropriate • Define customer goals and specific business orientations • Bring customer loyalty and recognition • Try to innovate more “The interest and operation clinging to Chinese culture is the root for the success of a foreign brand in China!” Thanks for listening