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STARBUCKS INTERNATIONAL PRODUCT STRATEGY WITH APPLICABILITY IN THE
CHINESE MARKET
THE BUCHAREST ACADEMY OF ECONOMIC STUDIESFACULTY OF INTERNATIONAL BUSINESS AND ECONOMICS
Scientific Coordinator:Cosmin Joldes Ph.D
Graduate:Dima Alexandra
Bucharest
2011
Overview
I. Introduction & ObjectivesII. Theoretical aspectsIII. Practical aspectsIV. Conclusions
Introduction & Objectives Practical aspectsTheoretical aspects Conclusions
Introduction and objectives
First impression matters
Introduction & Objectives Practical aspectsTheoretical aspects Conclusions
3000 ads / day90.000 ads / month1.080.00o ads / year
Image is everything
Theoretical aspects and Controversies
Introduction & Objectives Practical aspectsTheoretical aspects Conclusions
• Common consumer tastes• Marketing economies of scale• Strong positive country of origin
effect
Standardization
• Different use conditions• Different culture• Different levels of economic
development
Adaptation
Strategic choices in global marketing
Strategy 2: product
extension communicati
on adaptation
Strategy 4: dual
adaptation
Stragety 1: dual
extension
Strategy 3: product
adaptation communicatin extension
Product
Com
munic
ati
on
Different
DifferentSame
Same
Introduction & Objectives Practical aspectsTheoretical aspects Conclusions
Starbucks in China
Introduction & Objectives Practical aspectsTheoretical aspects Conclusions
• Created by three stdents
• Strabucks Coffee, Tea and Spice
1971
• Howard Schultz hired
• Most important acquisition ever made
1972 • Schultz acquired Starbucks
• Joined with Il Giornale
1985
• 88th in the 100 Best Global Brands
2000• 24.000 in
USA and Canada
• 100 in UK• 700 in China
Present
General facts about Starbucks
Why China? – the land of tea
Developing market – over 30% every year
Opportunity of positioning Starbucks as a leader
Possibility to educate the market
Assimilation with better lifestyle
Demand for fresh coffee in disfavor of instant coffee
Introduction & Objectives Practical aspectsTheoretical aspects Conclusions
Starbucks’ growth strategies in China
Introduction & Objectives Practical aspectsTheoretical aspects Conclusions
Elaborate and
aggressive strategy
Keep its intelectual property
Keep its personal
characteristics
Deicded not to adapt in
the first instance
Same products sold
Teach Starbucks
experience
Plant brochures
Create a relationship
Starbucks changes its strategy and adapts
Change the strategy
Adapt
Beverages that suit the Chinese tastes
Food with drinks and music
Measured great success
Introduction & Objectives Practical aspectsTheoretical aspects Conclusions
Branding Starbucks in China
Introduction & Objectives Practical aspectsTheoretical aspects Conclusions
• 60% buy a different brand than the one that they initially wanted to purchase.
• 53% have confidence in foreign brands.
One of the most
popular brands
Culture of China
TEA- Festivals
and holidays
The Forbidden City
Efforts were
appreciated
Officials were in favor
Western products
2000 opened small coffee shop
Introduction & Objectives Practical aspectsTheoretical aspects Conclusions
Starbucks goes instant in China
Introduction & Objectives Practical aspectsTheoretical aspects Conclusions
Took the challenge to the
next level
2009 – sell instant coffee
$ 100 million decision
2011 expanded in China
Direct attack against Nestle
-75% market share
Conclusions
1500 stores by 2015
Chinese market great
opportunity
Second largest market
Fastest growing
global brands
88th global brand
700 present stores
Introduction & Objectives Practical aspectsTheoretical aspects Conclusions
Recommendations
Introduction & Objectives Practical aspectsTheoretical aspects Conclusions
Promote its brand for what it isStart differentiate according to the product
First educate the consumersDevelop a culture of coffee in China
Take into account specific habitsTranspose them into coffee experience
Try to innovate moreBring customer loyalty and recognition
