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Globalization and its effects on marketing strategies
Why culture is important in 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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This case study revolves around Starbucks ability to launch an aggressive expansion in China, a coffee frontier steeped in nearly 5,000 years of tea, Starbucks location-scouting skills and marketing savvy will be put to the test. This case study involves three questions: 1) Should Starbucks continue its expansion in China? 2) Will the Chinese be persuaded to drink coffee instead of tea after 5000 years of no consumption of coffee? 3) Will Starbucks current marketing plan work in China without advertising?
For the international location, StarbucksÂ’ store can be found in 34 countries outside of the United States and 1,049 stores are company owned operated in Australia, Canada, China, Germany, Singapore, Thailand and the U.K. and 1,734 are joint ventures and licensed operation (Company Fact Sheet, 2005). Starbucks goes International 1996 Starbucks open in Tokyo, Japan. Nowadays, there are more than 500 retails shops in Japan. Furthermore, Starbucks also open in Hawaii and Singapore. 1997 Starbucks open in Philippines 1998 Starbucks open in U.K., Taiwan, Thailand, New Zealand and Malaysia.
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
Schultz, Howard, and Joanne Gordon. Onward: How Starbucks Fought for Its Life Without Losing Its Soul. New York: Rodale, 2011. N. pag. Print.
...nal locations in the heaviest coffee drinking countries. This has to be done quickly as to get the jump on other that may also be considering this type of a move. At the same time they should be selling franchise right for the coffee carts. This will provide an increased cash flow as well. During all of this Starbucks should be looking at coffee producers who are in financial trouble or are looking at selling their farms. This has to be done discretely as not to cause unnecessary bad press. After they run a couple of these coffee producing farms for a few years they should be able to see how the whole operation works and determine its viability. Once it’s proven viable they should send out simultaneous offers to the biggest producers as to catch them and other coffee companies off guard. Starbucks also should be getting into the bottled Frappuccino as soon as possible. They should leave the introduction of the product up to Pepsi because of their past experience. They should leave their entry into the grocery store market until some of these other strategies are implemented. This will prove to be the best strategy for Starbucks being able to reach their long-term gaol.
Starbucks is the world’s leading retailer of specialty coffee beverages and accompanying confectionery items. Starbucks was established in 1971 in Seattle by Jerry Baldwin, Zev Siegal and Gordon Bowker. Currently, Starbucks has over 21,000 stores and operates in more than 63 countries. The company’s mission is to provide an opportunity for people to enjoy a good cup of copy and engage in a good conversation. The following situational analysis provides a detailed look at the current business situation of Starbucks Corporation by providing an in-depth qualitative analysis of the company’s current product, market, opportunities, and challenges.
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
Regardless of the success of your company on a national scale, to engage yourself in a successful venture outside of your borders requires several critical elements that one must acknowledge and apply with great care. One of those requirements would be to thoroughly research the cultural environment in which you wish to launch your product no matter how popular and indispensable you believe it might be. In the past, many national giants have hit the wall when introducing a foreign market or launching a new marketing campaign because of the cultural gap they encountered on the other side of their borders. Another way of preventing a flop on an international market is to carefully study the economical past of this country, which might differ quite a bit from the one the company flourished in. In addition to the previous precautions, it Would be advise to make sure that your product will blend seamlessly within the spending habits of the consumers. Overall, meticulous market studies and patience often constitute the way to success on a foreign soil.
Schultz, H. (2011). Onward: How Starbucks fought for its life without losing its soul. New York: Rodale.
Czinkota, M.R. and Ronkainen, I.A. (1995), International Marketing, 4th ed., The Dryden Press, Hinsdale, IL.
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).
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.