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globalization and its effects on marketing strategies
why culture is important at international marketing
cultural dynamics in international marketing
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Introduction
Marketing across cultures around the world is increasingly becoming a thriving business with the fast-speed globalisation nowadays. The Four ‘Ps’ of marketing, namely product, price, place and promotion, include most of the elements of marketing decision-making. However, socio-cultural factors, in considering the combination of marketing strategies, will always run through them. Socio-cultural factors have a huge influence in people's concept of product and buying behavior. Lack of cultural awareness not only can lead to a decrease of product sales, but can even collapse the company’s whole international image. In this sense, understanding cultural differences plays an incredibly significant role in process of developing marketing strategies.
Starbucks's success is considered as a miracle. It has developed into more than 15,700 stores in around 43 countries worldwide from a small Seattle company approximately 15 years ago. Since the first Starbucks entered into Beijing, China in 1999, it has expanded into over 200 outlets in several big cities so far, such as Beijing, Shanghai, Guangzhou, Hong Kong, etc.. With approximately 1.3 million population and tremendous ecomomic growth, China, after the United State, has become the second largest coffee-consuming country in the world. (‘Economy of China’, 2005). Though it has achieved huge success in China, starbucks also experienced a variety of obstacles during its rapid development, in particularly those resulting from cultural problems.
The purpose of this paper is to give a description of some relevant theories underlying cultural problems confronting Starbucks in China. My personal contribution to my small group will also be critically assessed in the last pa...
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Global marketing is defined as marketing on a worldwide scale, or taking commercial advantage of global operational differences, similarities and opportunities in order to meet global objectives. Marketing managers are also tasked with the responsibility of “wringing the pennies out of the activities.” Basically, they are responsible for and add value to their activities that will contribute to a higher value in the mind of their consumers. Managers must understand the role of their salespeople as marketers – they must collaborate and support them. They must work with their supply chain functional managers to accommodate international customer preferences. Communication must flow up and down the chain quickly in order to respond to emerging international marketing threats and opportunities. It is essential to monitor the firm’s global marketing efforts in a global market.
After all thousands of years of traditional tea drinking cannot easily be broken, for example, instead of offering flavored frappacinos and caramel macchiatos like we have here in the united states, Starbucks developed a range of Chinese tea’s flavors, such as green tea-flavored coffee drinks, that appeal to local tastes and began selling traditional desserts like Mooncakes. Another reason why Starbucks in China has become so successful is the cultural difference between American and Chinese consumers. The American consumers is always on the go and have the need to get their food and beverages as quickly as they can, Starbucks now lets consumers order their coffee with a mobile app and have ready to pick up in the store without waiting in the line. And the clients who do decide to have their coffee in the store are in a corner working on their laptops as a "Do Not Disturb Sign" going on with their business without interruption. In China however, Starbucks has a become a ideal social setting to meet up with friends and family. With chic modern interior, comfortable seating, and upbeat music, their locations appeal to the younger
Starbucks’ strives on expanding its name and reputation globally. It has opened outlets internationally, but with poor management and understanding of its global market, expectations were not achieved and resulted in outlet closures. Stores closures of most of Australia’s outlets and some US outlets resulted in “almost 6,000 job losses; n addition 700 positions were cute in corporate and support positions”. (Grant, 2012)
Schultz, H. (2011). Onward: How Starbucks fought for its life without losing its soul. New York: Rodale.
There have been some distinguished controllable and uncontrollable elements Starbucks has encountered when entering global markets. The strategies of any company’s goals are vital to its success. This is one area Starbucks has excelled in, just as McDonald’s has in recent years. Starbucks has paralleled its branding with the actions found at any Starbucks across the world. They have an excellent company vision, which they stick to, which in turn assists their brand image. Starbucks’ image has been achieved not only through this and their massive global entrance, but through their ability to provide honest quality service.
People saw China as a nation based strongly on traditional values and one being strong consumers of tea, not coffee. Starbucks saw something different and catered to the Chinese culture. They introduced certain types of teas and created an environment that appealed to younger generations who wished for the Western lifestyle. By withholding the need to force American culture on the Chinese, Starbucks ' new endeavor had very positive effects on their business. Starbucks now sees China as the largest market outside of the United States for their product. Forbes reported in an article that “Starbucks now has 570 stores in forty-eight different cities in China and planned for 1,500 by the end of 2015”.6 As the market for Starbucks continues to grow they have continued appeal to the younger generations who now view Starbucks as a way to feel connected to the Western lifestyle.7 This has allowed Starbucks to charge more for their products due to the trending demand and therefore has resulted in outlets in China to be more profitable per outlet than that of the United States.8 China has become an expanding market with great demand and promising return for profits. As Starbucks continues to expand globally to other countries such as India, they will continue to be successful as long as they can adapt to the culture. India resembles China in similar ways such as they have a large population with a
The purpose of this case study is to understand the globalization of Starbucks. Is Starbucks just a cup of coffee or is it more? Starbucks has taken a basic item and transformed it into a way of life. Individuals are no longer drawn out to savor coffee in the morning just to get the caffeine they require for the day; they can drink coffee any day of the year for entertainment purposes. Coffee is currently an agreeable affair that anybody can have whenever they please. What caused this intense change? Single word: Starbucks. When one purchases some Starbucks coffee, they aren 't purchasing only coffee; they are acquiring an experience. From the strong coffee smell, the laid-back climate, and the rich taste in any
Fletcher, R., & Crawford, H. (2011). International Marketing: An Asia –Pacific Perspective, 5th Edition, Sydney: Pearson Education Australia.
Starbucks is an international coffee house and it was created in 1971 when they opened the first store in Seattle, Newcastle. Currently, they own 21,000 stores in 65 different countries of the world, and their passion for the great coffee, excellent service and community interaction exceeds cultures and languages (Starbucks, 2014). This company is the number 1 brand coffeehouse chain in the world due to the best roaster, marketer and seller of speciality coffee. Its main slogan: “Our mission: to inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time” (Jurevicius, 2013).
Over the past few decades, Starbucks has become a household name. Headquartered in Seattle, Washington, Starbucks is one of most lucrative coffee chains in the world. As of 2015, the company has chains in 50 countries with more than 22,500 stores in operation (Starbucks Corporation, 2017). The 70 stores located in Australia are focal point stores, which focus/tailor to improving the marketing strategy, customer service, and testing of new products to differentiate the company from the competition. Coffee is their primary business, so obtaining high-quality coffee beans from the nations that produce this product is important. Not only does the company sell hot coffee beverages, but they also offer a variety of cold drinks. The menu consists
The smell that wakes most people up combined with friendly service is guaranteed to be a game changer. Around most corners in big cities worldwide, there is a Starbucks waiting to welcome in a customer. It has become one of the brands most cherished not only in America but across the globe. Why is that? Globalization, not happy with simply spreading across the United States Starbucks decided to branch out into the unknown. Let’s take a look at how this all happened and what is occurring right now with popular brand.
Starbucks has identified high value opportunity in China, India, Brazil and Japan. The large expansion opportunity of twelve billion in China alone is enough to drive Starbucks to expand globally. The organization has planned to double its footprint to 3000 stores in China by 2019 ("Starbucks Details Five-Year Plan to Accelerate Profitable Growth", 2014). Starbucks realizes that eventually there will be a diminishing return on their existing market within the US due to market maturity and there are only two ways to expand through diversification in their offerings and entering new markets. Given the international opportunity for growth and expansive tea market in Asia, the company will enjoy the benefits of the growth opportunity. Management’s decision to continue to grow globally is a driving force that has yielded
With clear core values towards providing quality coffee, the best service, and atmosphere, Starbucks has enjoyed great success since it was founded 30 years ago. The company has being doing very well for last 11 years with 5% or more store sales increase, even with the rest economy still reeling from the post-9/11 recession. However recent research, conducted to Starbucks, have showed some concerns regarding company’s problem meeting customers’ expectations.
Drinking coffee has always been a strong culture in Malaysia.There was a survey that showed that Malaysian drinks 2.38 cup of coffee daily. Drinking coffee used to be an early morning routine, but now it is an all-day activity. As Malaysian’s drinking coffee habit is rising significantly, the coffee house business is also grown along with the drinking habit. Coffee house in Malaysia was started from a traditional chinese coffee house that called as kopitiam. As the west culture started to influence the market, they introduced Malaysia to a “cafe” concept. International coffee shops chains started to enter the Malaysia coffee shop market with the cafe concept applied. In fact, this concept seems to attract generation Y as the customer. Starbucks coffee is one of the most famous and successful international coffee shop chain in Malaysia. Starbucks was first opened in Seattle in the year of 1971. It grew very intensely and now it owns 16,635 stores all over the world, included 115 stores in Malaysia. Starbucks got in to the Malaysia market through the mode of licensing. Berjaya Corporation Berhad obtained the license to operate Starbucks Coffee. Just like another coffee shops, Starbucks Coffee sells coffee-based drinks, non-caffeine beverages, tea-based drinks, coffee-related souvenirs, equipments, and coffee beans. Starbucks coffee is now one of the most successful coffee shops among the competitors. Even there are lots of international coffee shop chains such as coffee bean and San Fransisco coffee, also other new independents local coffee shops with cafe concept, starbucks still able to manage the loyalty of their customer. But in the other hand, there have been some words of mouth that said that for a coffee shop tha...
Starbucks is a worldwide company, known for is delicious brews of coffee and seasonal varieties of tasty drinks for any occasion. Starbucks opened with two main goals, sharing great coffee with friends and to help make the world a little better. It originated in the historic Pike Place Market of Seattle, Washington in 1971 by Jerry Baldwin, Zev Siegl and Gordon Bowker. The creation of Starbucks’ name came from the seafaring tradition of early coffee traders and the romance evoked from Moby Dick. At the time, this individual shop specialized in the towering quality of coffee over competitors and other brewing services enabling its growth to becoming the largest coffee chain in Washington with numerous locations. In the early 1980s, the current CEO Schultz saw an opportunity for growth in the niche market. After a trip to Italy he brought back the idea of a café style environment of leisure and social meetings to the United States we now see in Starbucks locations today. Schultz ultimately left Starbucks to open his own coffee shop, Il Giornale which turned out to be a tremendous success. Fast forward a year later, Schultz got wind that Starbucks was going to sell all their components of Starbucks including their stores and factories, he immediately acquired the funds to buy Starbucks and linked both operations. Within five years he was able to open more than 125 stores starting in New England, Boston, Chicago, and gradually entered California. He wanted Starbucks to be a franchise system based on the mission of telling the truth and emphasize the quality,