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International Marketing - Starbucks

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Hannah Beraud

on 12 November 2014

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Transcript of International Marketing - Starbucks

Where? Pike Place Market
When? 1971
Who? 3 academics: English teacher Jerry Baldwin, history teacher Zev Siegel, & writer Gordon Bowker Why "Starbucks" ? In honor of Starbuck, the coffee-loving 1st mate in Herman Melville's Moby Dick story

Because they thought the name evoked the romance of the high seas & the seafaring tradition of the early coffee traders

The new company's logo, designed by an artist friend, was a 2-tailed mermaid encircled by the store's name "To inspire & nurture the human spirit – 1 person, 1 cup & 1 neighborhood at a time" MISSION VISION "To establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow” Future Opportunities Latin Countries SWOT Weaknesses Threats Strengths Opportunities Growing presence in key Asian market places:
China & India

Entry into the Health & Wellness space:
40% of Americans prefer natural ingredients
38% prefer F&B without artificial additives
Starbucks also entered the US health food market with the opening of its 1st Evolution Fresh store in Washington 1)Lower supply of raw materials in the near future & rising prices may increase company’s costs:
Heavy rainfall in Colombia &Brazil harvest affected Arabica beans

2)Verissimo machines could affect
in-store traffic and additional food sales.

3)Competition at the International Level:
Dunkin Donuts & McCafé
4) Competition at the US Level
Caribou Coffee & Panera Bread Saturated market in the US:
2010-2011, 70 stores closed
Starbucks is vulnerable for unforeseen changes: recession

Product recalls adversely affect brand image:
Department of Agriculture's Food Safety found Listeria bacteria in samples taken from chicken in ready-to-eat meals box
This has lead to boycotts and increasing membership of sites like "ihatestarbucks.com" 1) Building strong customer connect through value-added services:
Provide a coffee-drinking experience to its in-store customers
Value-added services such as entertainment on premises

2) Leveraging technology to build a robust distribution channel strategy:
Internet/mobile applications
Starbucks Card Mobile App "barcode"

3) Consistent strong financial/operating performance ENTRY MODE STEPS Before entering a market, Starbucks or any other company, has to identify the EXTERNAL & INTERNAL factors that will affect their decision when it comes to the ENTRY MODE INTERNAL FACTORS EXTERNAL FACTORS Country Specific
Product Specific
Industry Specific
Firm Specific Highly dependent on the decision maker in this case, Starbucks Management in its Headquarter.
This information needed for such analysis is unavailable for us. Starbucks' International Presence Products
Coffee, frappuccino, tea, pastries, sodas, salads, sandwiches, box meal, ice cream... Place
15'000 stores
55 countries
149'000 employees Promotions
1. In Store promotion
Seasonal & weekly beverage, pastry
"Buy 1, get 1 free"
2. Street tasting & special event
3. Airline (ex: Easyjet)
4. Loyal customer card & Mobile App
5. Social Media
mystarbucksidea.force USA COMPETITORS MAP Terrace
Beach locations
Wide range of fresh drinks
Coffee and fruit Ice creams Quiz time! Where does the brand come from?
1 country where they have failed to enter the market?
How many coffee cup sizes are there?
What is the average consumption of coffee in China/year and per person?
Is there "green tea latte" in Starbucks, Switzerland? Questions? High Price High Quality Low Quality Low Price The Logo Before After Starbucks opened its 1st Costa Rica shop in San Jose's posh Escazu neighborhood in 2012

Starbucks plans to open "several hundred stores" in Brazil in the next 5 years

Starbucks & joint-venture partner Alsea (ALSEA.MX) expect to add more than 300 new stores in Argentina and Mexico by 2015 Thank You For Your Attention TODAY'S AGENDA 1. Introduction: Company Background & History

2. Situation Analysis: 4 P's, SWOT, Competitors' Map

3. International Entry Strategy
4. Cases

5. Future Opportunities & Recommendations CASES SWITZERLAND Starbucks Coffee Switzerland AG is responsible for setting up & running Starbucks coffeehouses in Switzerland.

Business operations are managed by Starbucks Coffee Switzerland AG, a 50/50 Joint Venture of Starbucks Coffee International & Marinopoulos Brothers SA.

Positioning: High scale, exclusive coffee shop United Kingdom Acquired Seattle Coffee Company, UK's leading specialty coffee company.
There are together 675 stores in the UK. Positioning: mid-scale, popular, affordable FRANCE "Failures Bring You To Success" - Reasons for its failure:

Pastries - part of the French gastronomical culture
Espresso taste - too strong, not sweet enough
Atmosphere - not adequate for families with children Overall atmosphere - friendly/relaxed
Pastries - by analyzing the French preferences they have been able to reposition their pastries, offer a wide range of cheesecake variety
Espresso taste - France is the only country where the espresso has been modified for sweetness According to these failures Starbucks decided to modify some of these by making it more "French" - Reasons For its Success: "Failures bring you to success" - Promoting the new Espresso:

Free samples given away
The promotion was very successful
The brand declared 15 new openings before 2014 all around France Italy, Entry Failures

Too expensive

Quality/service: perceived as fast-food due to the brand's uniformity

Waiting behind a counter to be served to get a coffee in a plastic cup is disliked

Italian's go to coffee shops to discuss with waiters

Despite its wifi access/lounge place atmosphere Italian's are not so enthusiastic about the concept “ The closures were a part of the transformation strategy being under taken to revive the company’s performance” – by Howard Schultz Exit Strategy Starbucks' Growth Strategy Subsidiary Joint Venture
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