Starbucks International Marketing - Case Study Example

REFLECTION IN INTERNATIONAL MARKETING Student’s name Course title Instructor’s name Date of submission Introduction Starbucks is an American multinational food company that was founded in 1971 with a primary focus on providing the highest quality coffee to consumers in the United States of America (Starbucks Coffee Company, 2015). The company started out on a high note with a focus on providing the finest fresh-roasted whole bean coffees. Starbuck’s Chairman and Chief Executive Officer, Howard Schultz, brought the Italian coffee experience to America through Starbucks, “one that not only celebrated coffee and the rich tradition, but that also brought a feeling of connection” (Starbucks Coffee Company, 2015). The company’s mission to inspire every customer they serve by serving their diverse tastes and preferences, highlights the cultural dimensions it integrates while coming up with its menus. The company has expanded over the years, with a bid serve consumers not only in America, but also in other parts of the world. The global expansion drive has seen the company open operations in more than 65 countries with over 21000 stores (Starbucks Coffee Company, 2015). This paper will provide an in-depth reflection on Starbucks Company with a focus on its diverse menu on offer across various global outlets and the effect of culture on its menu and its international marketing. Boeing (2013) quotes Theodore Levitt’s words, “Companies that do not adapt to the new global realities will become victims of those that do.” The globalisation of markets is a reality that companies have to accept and face steadfastly. I note that cultural differences exist from one global market to another. Companies need to take note of such differences in order to tailor their products and services in line with the underlying cultures. The consideration of cultural perspectives sets the stage for companies to achieve successful roll-out of their products and services in new markets with the help of various international marketing techniques. One of the greatest obstacles that companies face while marketing products internationally lies in the existence of cultural differences. Every culture boats of its own individual values, behaviours, lifestyle, languages, and way of thinking which make it unique (Boeing, 2013). Consequently, companies may use either of two strategies to deal with the obstacle that culture imposes on them. First, standardisation involving the employment of a standard marketing plan across various cultures served by a given company. Second, adaptation involving making the necessary adjustments to fit the specific cultural environment of the target market. Marketers, therefore, need to take note of such differences and employ a set of international marketing tools to present new products across different cultural business environments (Boeing, 2013). In order to obtain great insights, the cultural theories of Edward T. Hall and Geert Hofstede provide a suitable base of knowledge. Cultural differences have profound effects on the marketing mix employed by companies and determines the effectiveness of using standardisation or adaptation in rolling out products to different markets. Cultural theories reflect on the importance of considering various facets of culture while undertaking international marketing. In this context, international marketing refers to “the multinational process of planning and executing the marketing mix (product, place or distribution, promotion, and price) to create exchanges that satisfy individual and organizational objectives” (Onkvisit and Shaw, 2009). Culture consists of a number of elements such as aesthetics, values and attitudes, education, personal communication, religion, social structure, manners and customs, and physical environments. An incisive look into these crucial elements of culture provides perspectives for international marketers to consider. Certainly, Starbucks needs to take note of these factors in order to guarantee success in its global markets. Values refer to ideas, beliefs or customs that individuals have some emotional attachment such as honesty and responsibility. Attitudes refer to positive or negative feelings or points of view that people hold toward ojects or particular concepts like work or cultural change. Customs look at the traditional behaviouor mannerisms during differing circumstances. Companies such as Starbucks need to ensure that they do not commit language blunders or cultural blunders as they roll out their products. For example, Starbucks needs to ensure that it does not tarnish the aesthetic values or beliefs of the society it targets in international markets. My personal reflection and Starbucks’ actions discussed in the next section highlights international marketing strategies employed by the company. The cultural context integrated by Starbucks comes out quite clearly. Personal reflection and Starbucks’ menus across the globe Jolliffe (2010) notes the failure of Starbucks to sustain growth in the Australian market as a result of a number of factors. These factors included the existence of dominant market players such as McDonald’s McCafe and Gloria Jeans leading to the reduction of the number of stores from 84 to a mere 24 (Lutz, 2015). The company had tried to impose itself on the Australian market without taking into consideration the underlying culture for coffee consumption. For example, I felt that company failed to capture the Australian culture in coming up with its menu for the region. The menu that Starbucks brought to Australia failed to develop an organic brand that is authentic for this region. I reckon that Australia has a rich coffee culture that requires stronger coffee than the flavoured and sugary syrups served to Americans. Verbeke (2013) notes that “even in countries with a deeply engrained coffee drinking culture, local tastes are sometimes different from what Starbucks offers.” I believe that independent cafes that have a more efficient mechanism to give Australians taking coffee to feel a sense of belonging and a community culture (Verbeke, 2013). On the other hand, my friends who moved to America note that Starbucks is doing very well over there. The company managed to build a culture of coffee drinking that borrows from the Italian culture. The menus in America are laden with flavoured coffee drinks including chocolate and expresso beverages. The success of the Starbucks in the US illustrates the importance of culture in the establishment and growth of a brand (De Kluyver, 2010). The company introduced a coffee culture that works and it has managed to sustain its menu to fit to the demands of the American market. In fact, I have a feeling that suppose Australians moved to the US and experienced the coffee culture that chains such as Starbucks have managed to develop, they would be immersed. The coffee culture is a pivotal marketing aspect that Starbucks has managed to cash on over the years (Onkvisit and Shaw, 2009). In Austria, Starbucks came up with its own menu with little consideration of the underlying coffee culture that locals were accustomed. Verbeke (2013) pointed out that Starbucks’ coffee seemed bitterer than the classic Italian expresso and milder than the usual Austrian brew. I once visited Austria and my main observation was the locals had a staunch loving for coffee that was prepared in a particular way. One dominating factor lies in the strong coffee blend that Austrians partake. In fact, history books indicate that Vienna boasts of some of the oldest coffee houses in Europe portraying the unending love for coffee portrayed by the citizens. A restaurant chain aiming to start operating in the area needs to integrate the Austrian culture in coming up with an appropriate menu that is poised to succeed in the area. The marketing team of restaurant chains such as Starbucks need to conduct a thorough feasibility study with a focus on culture (Onkvisit and Shaw, 2009). Austrians have a variety of coffee blends to choose from, such as the melange, konsul, mazagran among others, and Starbucks also needs to come up with an array of items on their menus to complement the Austrian culture. Moreover, some Austrians feel that Starbucks’ coffee damages European values more that Coca-Cola (Verbeke, 2013). The European café traditions display a different perspective from those in North America. However, I have observed that Starbucks has managed to succeed in some Asian markets such as China. The most important feature of cultural distance for Starbucks lies in consumers’ relative preference for coffee vis-à-vis other drinks. Japanese and Chinese consumers are so used to drinking tea that it was not easy to cultivate a preference for coffee. Nevertheless, Ferrell and Hartline (2011) observe that it is hard to ignore the Chinese market that numbers 1.4billion consumers in size thanks to the fact that China is the world’s most populous and second-largest economy. Starbucks quietly entered the Chinese market in 1999 and announced its presence in 2005 by donating $5million to charity projects within the country (Ferrell and Hartline, 2011). I realized that Starbucks made a strong commitment to the Chinese market despite the numerous challenges it faced in the market. Zinzius (2004) highlights Starbucks’ main obstacle in the Chinese market by stating that “the Chinese simply do not drink coffee” and they preference tea to coffee. As a result, Starbucks faced the challenge posed by culture head on and developed appropriate marketing strategies. The Chinese tea drinkers mainly consisted on the older adult population as compared to the younger individuals. Zinzius (2004) notes that Starbucks developed a strategy in order to deal with the cultural aspects. Starbucks offers a quiet, unobtrusive atmosphere that targets a younger generation that consists of students, office employees, and young managers (Zinzius, 2004). The company has done much work in order to integrate the Chinese culture as a marketing dimension by developing its first China-sourced coffee, called the Clouds Blend (Ferrell and Hartline, 2011). Additionally, Starbucks made another move to cater for the Chinese market by establishing coffee classes to provide explanations about coffee drinking. The inclusion of tea in Starbucks product line in China shows the great desire for the company to excel in the region. I observed from a documentary about China that Starbucks acknowledges the Chinese tea-drinking culture by creating a brand name Tazo to offer green tea and herbal tea to the consumers. Thus, Starbucks has made significant strides to achieve tremendous success in China and the Asian market in general. De Kluyver (2010) gives further insights about Starbucks’s success in the Asian market by focusing on Japan. Interestingly, I noted that the expansion in Japan was Starbucks’ first foreign move outside America and it entered into a joint venture with Sazaby, Inc., operators of an upscale retail and restaurant chains. The company’s decision to enter the Japanese market by using a joint venture paid off as it managed to wade off local competition and achieve instant success (De Kluyver, 2010). Sazaby, Inc. boasted of vital experience that was needed for Starbucks to succeed in the Japanese market and integrate cultural perspectives in its marketing strategies. Puget Sound Business Journal (2015) states that “China and the Asia Pacific region is Starbucks’ fastest growing market, psoting revenue growth of more than 20 percent every quarter for eighteen of the last quarters.” Conclusion I feel challenged and inspired by the magnitude of culture on international marketing and the general operation of businesses. The globalisation of markets along with technological advancement has changed the business landscape. However, cultural aspects still rank as important aspects that companies need to take consider. In light of technological advancement, I reckon that multinational companies, and small business alike, may use technological advancement as a mechanism for dealing with cultural differences. For example, social media marketing through platforms such as Facebook and Twitter would be effective (De Kluyver, 2010). Starbucks could undertake vigorous social media campaigns to promote cultural diversity and present its products to the millions of social media users from different cultures. In fact, cultural diversity could be used as an opportunity to undertake international marketing that allows different consumers to acknowledge and look forward to trying out foreign menus. Such campaigns would help in creating positive perceptions that would help in generating more sales. I am motivated to develop a business idea and implement the immense amount of knowledge I have gained in this course to achieve both local and international success. References Top of Form Top of Form Boeing, M. (2013). Analysis of cultural differences and their effects on marketing products in the United States of America and Germany. Hamburg: Anchor Academic Pub. De Kluyver, C. (2010). Fundamentals of global strategy. [New York, N.Y.] (222 East 46th Street, New York, NY 10017): Business Expert Press. Ferrell, O. C., and Hartline, M. D. (2011). Marketing strategy. Australia: South-Western Cengage Learning. Jolliffe, L. (2010). Coffee culture, destinations and tourism. Bristol, UK: Channel View Publications. Lutz, A. (2015). Starbucks Has Failed In Australia. [online] Business Insider. Available at: http://www.businessinsider.com/starbucks-closing-stores-in-australia-2014-5 [Accessed 5 Sep. 2015]. Onkvisit, S. and Shaw, J. (2009). International marketing. London: Routledge. Puget Sound Business Journal, (2015). All the tea in China: Starbucks' biggest market isn't where you think - Puget Sound Business Journal. [online] Available at: http://www.bizjournals.com/seattle/blog/2015/03/all-the-tea-in-china-starbucks-biggest-market-isnt.html [Accessed 5 Sep. 2015]. Starbucks Coffee Company, (2015). Company Information. [online] Available at: http://www.starbucks.com/about-us/company-information [Accessed 5 Sep. 2015]. Starbucks Coffee Company, (2015). International Stores. [online] Available at: http://www.starbucks.com/business/international-stores [Accessed 5 Sep. 2015]. Verbeke, A. (2013). International business strategy. Cambridge: Cambridge University Press. Zinzius, B. (2004). Doing business in the new China: A handbook and guide. Westport, CT: Praeger. Bottom of Form Bottom of Form Read More