Case Study Starbucks Turkey

Case study: Starbucks Turkey Date: June 17th, 2020 Has Starbucks has done well in Turkey? What are some of the common growth drivers in terms of consumer characteristics, market characteristics, and entry strategies across USA and Turkey that might account for Starbucks’ success? Starbucks' goal is to create an environment interwoven between home, work and a coffee shop, so when entering a Starbucks store anywhere in the world, customers always feel an atmosphere that incredibly comfortable and friendly, a famous characteristic of the world's largest coffee chain Starbucks was able to capture a large portion of the market by catering specifically to a clearly defined target audience With the rapid expansion, Starbucks targeted customers of some age group and expanded throughout both the US and Turkey both in the US and Turkey In fact, there are a big number of coffee drinkers in urban areas where most of educated people, employees and working professionals live in The target customers of Starbucks are Millennials and Gen Z, which range from the age of 16 to 40 in both females and males Its primary target market is adults aged 25 to 40, who are working and have high income or professional careers In the US market, they account for nearly half of their total businesses Starbucks appeals to consumer age groups through its space and consistent modern design in its advertising and decoration Customers are usually those with relatively high incomes, professional careers and focus on social welfare Turkey’s median of its population is 28, so it falls into Starbucks’ primary target market In addition, Starbucks also targets students and teenagers because “tens of thousands of western educated young people that got exposed to take-away style drinking habits as in the U.S or Europe” Students and teenagers make up a large part of Starbucks's customer base in Turkey since “the country’s population was young 25 percent of the population is below 15 years of age” Starbucks is a place where students can study, take notes, chat with friends, and meet people It attracts these customers directly through social networking, and actively builds a dynamic, youthful image To determine the number of potential consumers in Turkey’s market, they started from a big city, Istanbul Based on the geographic factor, the country’s urbanization rate was high, approximately 75%-80% of the population now lived in urban areas Starbucks focuses on its market share to those with stable incomes and in urban areas That is the reason why its first store was open in Istanbul, one of the busiest, top-end streets of Istanbul, the Bagdat Street, which was the ‘in’ place for the trendy and wealthy ‘Istanbulites’ Istanbul is the largest city in Turkey in terms of population and economy, size and one of the most important economic and cultural centers in Turkey It inherently attracts so much attention from the locals, tourists, passersby as well customers and the location is always crowded with people The cultural factor is also an advantage for Starbucks to enter Turkey In Turkey, coffee is not only a simple culinary culture and an important part of etiquette but also a drink for each other’s fortune Since the days of the Ottoman Empire, coffee has played a significant role in Turkish lifestyle and culture Coffee became part of the ritual from court to marriage, even the marriage was decided through formal coffee receptions Women of this time were well trained in making coffee, and her future husband also commented on her quality by preparing coffee Coffee has become a unique cultural feature of this country, which makes a good foundation for Starbucks to penetrate its industry here What are the core, actual and augmented product benefits offered by Starbucks in Turkey? Starbucks brand is the leading coffee chain brand in the world Established in 1971 in the US, Starbucks was then just a small shop specializing in selling coffee beans and roasting equipment Everything changed when Howard Schultz, CEO of Starbucks, joined the company in 1982 as the Director of retail and marketing operations He came up with the idea that the company should sell both coffee beans and ground coffee after realizing the unique way coffee is served in Italy Starbucks became the most successful coffee chain in the world with the with premium coffee as their core product It has never claimed to sell cheap coffee despite this “there was a minimum threshold income-level above which people started to spend a little on extras – and dining and drinking out was considered a big treat in Turkey” By offering their own style of an enriched upscale coffee experience, Starbucks still stands out from other competitors, locals with customer services and ambience Speaking of the difference, Starbucks also develops other product lines that are suitable for a large number of customers who prefer not to drink coffee but wish to experience Starbucks coffee space They offer a diverse types of drinks with high quality In Turkey, they “offer more than 30 varieties of drinks, including espresso-based coffee drinks, teas, iced coffees, made from up to 15 types of coffee beans, food items, and merchandise goods, the only difference compared to all other Starbucks’ in the world was Turkish Coffee on their menu” As with other markets around the world, Starbucks Turkey also continues to place their recognizable logo front and center of the cup and bag The packaging of their takeout coffee is a simple, elegant plastic cup and a paper cup with the Starbuck mermaid logo It is a great way to keep customers engaged with the brand Customers, especially “tens of thousands of western educated young people that got exposed to take-away style drinking habits as in the U.S or Europe” enjoy having their food and drinks enhanced by this Western, eye-catching packaging Customer service is also an important factor to attract more loyal customers as well as add value to the company Understanding the importance of service, Starbucks around the world and in Turkey always hires their employees and trained them to ensure excellent service will be served, not only just coffee cups Another product that Starbucks offers to Turkish market is the enjoyable and relaxed atmosphere Starbucks is neither a home nor a workplace, but a community space where people can meet and work Buying a Starbucks cup also means that consumers have a cozy, pleasant workplace Is Starbucks using a standardization, localization or hybrid marketing strategy in Turkey? Starbucks is using both standardization and localization marketing strategies in Turkey Product standardization strategy is on in which a company produces a set of products of the same standard, same design and same quality Since Starbucks is a global coffee chain, it must follow the standard to (1) adapt to the lifestyle of its original target customers, wherever they are in the world; (2) maintain product and service quality due to standardization and mass production; (3) take advantage of finance and technology of the company; (4) strengthen the brand to other competitors in Turkish market However, Starbucks still has to localize their marketing strategy to tailor to Turkey market, beverage menu in particular They include Turkish coffee which has “a major role in the culture meant that they needed to adapt to the customers’ needs and wants” Localization and standardization strategy can be achieved to a certain extent depending on the objective and cultural conditions of each country Since coffee became a ritual part of Turkish culture, it should be included to serve the needs of the local people Using the product/market expansion grid shown in Figure 2, apply the growth opportunities available to managers in Starbucks Turkey Any business usually spends time thinking about how to increase their profits They will therefore have hundreds of ideas to compare and implement, including developing new products, entering new markets, new channels, or launching new marketing campaigns Using the product/market expansion grid helps business to start considering their options This tool will select the ideas that best fit a business’s current situation This grid indicates that a business can grow in ways, and also it shows the risks in each way Each different strategy has different risks, and each time a business moves a new cell (horizontal or vertical), the risks are increased Starbucks managers can enter a new market with existing products or develop a new product to the current market Perhaps the new market may have completely different needs and motivations than what the mangers think, or a new product fails, but if Starbucks wants to develop in Turkey, they must take risks Existing Products New Products Existing Market Penetration Product Development Markets Coffee and other beverage, open in Add more prepacked cold drinks major neighborhoods New Markets Market Development Diversification Open in other areas such as the Using the mobile app to place orders suburbs and cooperate with Uber eats, Postmates, Doordash, … When life is getting busier, people expect to have their service fast and convenient To develop new products and existing markets, Starbucks can make some changes to its current product strategy by adding more prepacked cold drinks like teas, energy drinks and cold brewed coffee, so customers can just grab their product in the fridge and get going to their work without waiting for drink preparation According to the case study, Starbucks Turkey only focuses on major neighborhoods In a market with too many players, Starbucks needs to expand brand awareness to the new market as a way to maintain its dominance and growth momentum In fact, after surveying the consumer behavior and the market in major cities in Turkey, Starbucks should expand its stores to other locations including suburban areas to raise brand awareness throughout the country There will be always be numbers of people who live far away from major cities and want to taste Starbucks coffee, a Western product Also, Starbucks can open stores to most attractive tourism areas, which can get attention from tourists, passersby as well as their customers from other countries Starbucks managers can plan to drive the number of customers using a mobile app to place orders as well as to increase the loyal customer base They can also apply business-to-business model, which is cooperating with other apps like Uber Eats, Postmates, Doordash and others to promote their sales What marketing recommendations would you make to Starbucks in Turkey to help them sustain and/or improve sales growth, and remain competitive as they look towards the future? To sustain and thrive Starbucks’s sales growth and its position in Turkish market, Starbucks has to protect its core values A core value is considered and essential and long-term principle of a business It is a set of rules that affect the thinking and actions of any members in Starbucks The core value of Starbucks is keeping their commitment in product quality and offering customers excellent services and experiences Every business must represent something, for Starbucks, it’s famous for the “Starbucks Experience” The core of the business must be a product bearing bold identity, a product that surpasses the wishes of customers, maintaining the quality of product and service at the same time To control the quality, it’s insisted on keeping the coffee throughout the process, from fresh coffee beans to a steaming coffee cup; it is a closed integration process To maintain its excellent service, any new Starbucks employees need to be trained carefully, so that every cup of Starbucks coffee has the most authentic values and that customers received the same experience every time they walked in the store or any Starbucks store in Turkey Theodore Levitt defined marketing myopia as providing needs and experiences to customers through their products is the foundation for any marketing strategy Thereby, Starbucks Turkey always needs to pay attention to customer’s needs as well as local culture Marketers have to give customers what they want and what they expect For example, for health and weight reasons, more and more people try to avoid whole milk However, non-fat milk is bland, which changes the taste of Starbucks coffee The mission is to give customers the right to choose their product and the right to enjoy coffee the way they want, so Starbucks has to serve non-fat milk to pleases their customers In addition, Starbucks Turkey can have specialty drinks related to Turkey’s traditions Even though it can only be sold for a short period of time, but it shows that Starbucks is keeping up with the local tradition Indeed, any changes for Starbucks to fit in the Turkish market, they will always have to follow the true value of its premium coffee References: Case Study Starbucks Turkey ... waiting for drink preparation According to the case study, Starbucks Turkey only focuses on major neighborhoods In a market with too many players, Starbucks needs to expand brand awareness to the... Indeed, any changes for Starbucks to fit in the Turkish market, they will always have to follow the true value of its premium coffee References: Case Study Starbucks Turkey ... customers In addition, Starbucks Turkey can have specialty drinks related to Turkey? ??s traditions Even though it can only be sold for a short period of time, but it shows that Starbucks is keeping