Global marketing strategy of starbucks in china

Trang 1 Global Marketing Strategy of Starbucks in ChinaInternational Business Trang 4 Overview Industry: Restaurant, Coffee house Founded: March 31st, 1971 Headquarters: Seattle, Was

Global Marketing Strategy of

Starbucks in China

International Business

Group 8

1 Starbucks Introduction

 Area served: Worldwide

 Products: Coffee beverages, smoothies, tea, baked goods, sandwiches

Starbucks’ unique selling point is the “rich experience"

that goes beyond a cup of good coffee

27,340 Locations (Sep 2019)

• 27,340 Locations

1985

• Schultz acquired

• Starbucks Joined with Il Giornale

1972

• Howard Schultz hired

• Most important acquisition ever made

• 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

Why China? The land of tea

2 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

The Chinese middle class emerged, there existed an opportunity for Starbucks to introduce a Western coffee experience

One of Starbucks key marketing strategies is to provide customers with an exceptional experience

Many go to Starbucks not just for a cup of Frappuccino, but for the

“Starbucks Experience” that makes them feel cool and trendy

Market segmentation-case

Marketing Mix-4Ps

Product Price

Place Promotion

 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.

 In China coffee alone would not do – it must go with food

 Launching its “ice zongzi” and planning

to release local products such as Dragon Dumplings with 5 tastes and colors are aimed to ease Starbucks products to the customers along with a Chinese touch

 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

 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

 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.

 Product promotions: Discount

on new products to increase acceptance rate

 Seasonal promotions

• Chinese New Year

• Mid-autumn festival

• National day

Pros and cons

• Franchises models bring

new and modern business

systems to other countries

3 Conclusions

Starbucks’ success

 Become the "third place" between home andwork and bring that feature to China - butwith modern, Western and high-end styles

 Bridge the gap between the tea drinkingculture and the coffee drinking culture byintroducing beverages in the Chinese storesthat included local tea-based ingredients

 Proper market research has helped Starbucksexpand its plans in China and localize diversemarkets

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.

“The interest and operation clinging to

Chinese culture is the root for the success of a

foreign brand in China!”

• Define customer goals and specific business orientations.

• Deliver the best customer experience and catch up with trends

but remain culturally appropriate.

• Try to innovate more.

• Bring customer loyalty and recognition.

Thanks for listening