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Starbucks, Inc is an international company, operating under the brand name Starbucks Coffee. Originally based in Washington, DC, this company started in the year 1971 as roaster and retainer of grounded coffee, whole bean, spices and tea (DuBrin 2012, p. 258). Today, the company is present in more than 45 countries of the world. It has high reputation in terms of making coffee. For example, in the United Kingdom, Starbucks is reputed as a highly ethical beverages retailer. Starbucks has strategized itself to focus in diversifying its market to unexploited areas and market its product and services in new markets One of these areas is China, where, it hopes to position itself strong and compete with existing brands. This situational analysis of Starbucks evaluates its potential entrance into the Chinese market.
Starbucks Entrance into the Chinese Market
Starbucks is focusing on making an entrance into the Chinese market. Basing on its strength and sound management, its entrance will change dynamics of beverages retailing in China. Riley (2014, Para 1-12), states that in reality, Starbucks has presence in China, only that the company has not managed to use its position fully. Peterson (2014, Para 1-33), notes that the planned entrance into China may seem risky for Starbucks. Though the company has already made great strides in the Chinese market, it is yet to hit the foreseen heights it is known for in other markets such as in the United Kingdom and United States of America. Hence, it is paramount for Starbucks China to invest on the art of communication to succeed (Sandholm 2014, Para 1-15).
Starbucks Communication Models in Chinese Market
For success in the Chinese market, it is important for Starbucks to invest heavily in cultural based communication strategies. International marketing has to adhere to diversity of cultures. According to Tian & Borges (2011, p. 110-127), cultural factors have always played a part in designing a communication model. Failure to observe this would mean that the company is not cognizant of differences of cultures. As a starter in the Chinese market, several factors have to be put in consideration in international marketing and communication. These are: localized marketing, ethical communication, cross cultural communication and socio-political issues.
Starbucks ought to recognize that China is a highly cultured market. Hansen (2009 p. 1-52), acknowledges about Chinese challenge and notes that China is culturally locked, and the marketing practice in other countries may not apply in China. In this regard, it is critical that Starbucks strategise on how to conquer the highly cultured Chinese consumers. Essentially, it is important to apply localized communication models as opposed to internationally recognized models. Ethical compliance is also critical if Starbucks is to compete effectively with its Chinese rivals. Ethical adherence is relative and important for the company to invest in studying the ethics in China.
Starbucks should also focus on localizing marketing. While advertising, local elements should be utilized as opposed to using favoured international marketing strategies. Use of local workforce, local culture and local language should be beneficial for the company. Lastly, it is important for Starbucks to understand the socio-political issues in China. According to Lewis & Litai (2003 p. 926-943), interference of Chinese politics may spell doom for the company, especially if the company is internationally managed. The socio-political issues in China are based on the grip the ruling regime has on public and private companies. It is critical to first understand the levels of interference before designing a good marketing and communication model for the company.
Strategic Communication Model for Starbucks in China
A good communication model captures crucial elements of success and is characterized by longevity. A good communication model for Starbucks in China is shown in Appendix 1. This model involves such elements as: media advertising, online marketing, direct marketing and agency marketing, all of which are geared towards the prospective customer.
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Chinese Coffee Beverages Analysis
The coffee beverages market in China focuses on change of the culture. The country is rapidly turning into a huge consumer of coffee with many coffee and beverages companies entering the new market. According to Qin (Fall 2004 p. 66), companies like Best Coffee China (CCC) entered the Chinese market by focusing on this beverage alone. Starbucks is bound to succeed in this market if only it would bring in a different style of this beverage and focus on high level marketing. However, the company should be keen on the trends which have been already adopted in Chinese market and evaluate whether they conform to culture.
Consumer Analysis of Starbucks in China
It is important for any company to known its existing and potential consumers. Though, coffee is appreciated in China, it has always been associated with the western lifestyle (Hawkins & Mothersbaugh 2009, p. 265). It, therefore, means that the company must clearly understand behaviour of its both existing and potential customers . The following is an analysis of Starbucks consumers in China.
- Consumers in China enjoy eating.
- Coffee consumption is hugely associated with western ideals and lifestyle.
- Consumers in China prefer products made by local companies.
- The consumers enjoy sweat tasting beverages and food and desserts.
In marketing Starbucks in China, it is important that the company understands dynamics of the market. Mostly, this dynamics revolves around behavioural tendencies of consumers as well as their culture. Based on the consumer analysis, it is important for the company to consider integrating coffee in this market with other associated food products; for example, snacks. It is also important for Starbucks Corporation to localize management and production of coffee and try to diminish association of coffee consumption with the western lifestyle.
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