Barriers facing Starbucks as it tries to teach Chinese people to change their consumption habits from tea and instant coffee
Various barriers impede Starbucks’ expansion in China as it tries to change the population’s preference for tea and instant coffee. Some of these include the association of tea with medicinal qualities, tea’s and instant coffee’s lower prices compared to Starbucks’ coffee prices, tea’s status as China’s national heritage, and lack of appreciation for different blends of coffee among the population. As noted in the case study, the Chinese consider tea to have medicinal qualities absent in coffee (Hawkins, Mothersbaugh & Best, 2010, p. 264). Accordingly, changing the population’s tea consumption to encourage consumption of more coffee would require altering such perceptions.
Concerning cost, Starbucks’ premium coffee faces a challenge of penetrating a market where most of the population is in the low-income bracket (Hawkins et al., 2010, p. 264). Accordingly, such a population could prefer cheaper substitutes, such as tea and instant coffee. Additionally, the branding of tea as a national heritage (Hawkins et al., 2010, p.264) makes it difficult to change its consumption profile to encourage consumption of coffee. Such a change would face resistance for fostering a departure from a beverage the population considers one of its national identities. Finally, by the Chinese population failing to appreciate various blends of coffee, Starbucks faces a challenge of explaining why it prices its blends at a premium.
Make recommendations about what Starbucks can successfully do to encourage greater coffee consumption
To encourage greater coffee consumption, Starbucks can use the attributes revealed in the survey documented in the case study, which aligns with its brand’s identity. Since high quality was rated as a factor according to which the Chinese choose their brand (Hawkins et al., 2010, p. 265), Starbucks needs to stress that it offers the best coffee in the market. In this respect, Starbucks needs to highlight the core aspects that make its blends of coffee to have a different taste from the other brands in the market. Highlighting such features would encourage customers to try its coffee and, thereafter, Starbucks can use such features to establish a long-lasting consumer loyalty (Fournier, 1998)
Secondly, Starbucks needs to highlight the health benefits of coffee to attract people who consider such health benefits in its choice of the brand. Specifically, the entity needs to highlight the benefits similar to those offered by tea, thus position its coffee as an alternative to the tea, the national heritage of the Chinese. Starbucks also needs to highlight that it cares about its customers; for instance, it needs to accentuate its business principles and engage customers in the introduction of new products, in a similar way as the “my Starbucks idea” concept implemented in the United States. Finally, with self-image being a core cause of brand choice as noted in the case study (Hawkins et al., 2010, p. 265), Starbucks needs to imbue its brand with attributes with which its target market can identify (Barnes, 2003). Aligning its products with the self-image of its target consumers will enhance the entity’s brand personification, thus enhance consumer loyalty to Starbucks’ brands (Aaker, 1997).
An advertising campaign that not only encourages greater coffee consumption in general but also more demand from Starbucks
Starbucks needs to embark on a promotion campaign that enhances its brand’s awareness among the Chinese population and changes the population’s perception of coffee. Among the advertising approaches, Starbucks could employ is to develop an information-loaded advertising campaign that will help the population to appreciate the value of coffee. For instance, such advertising may involve the entity sponsoring programs on mass media that address the status of the coffee industry in the country and the region.
The key themes of the advertising campaign would be to highlight the benefits of coffee and conceptualize Starbucks’ experience as an exemplary lifestyle. In this respect, the entity needs to focus on the younger and professional population whose lifestyle aligns with Starbucks attributes. For instance, the entity needs to capture the clamor of such a population to identify with a well-off status. In this respect, the Starbucks’ message needs to bring out the suave nature of its average customer. It needs to depict them as individuals who know the real taste of coffee. Individuals who value a well-prepared beverage and who value to take charge of the quality of coffee that they desire. Such attributes would personalize Starbucks’ coffee as a lifestyle statement, thus encourage the middle class to try the offerings at various Starbucks’ coffee shops.
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Marketing strategy for taking Starbucks into smaller Chinese cities and communities
Starbucks’ marketing strategy needs to include a mission that resonates with the Chinese population in the smaller cities. In this respect, the entity needs to adapt a competitive pricing policy that will ensure potential customers evaluate its offers. For instance, the entity can offer discount vouchers to customers who introduce their friends to their coffee shops to enhance word-of-mouth promotion.
Despite such prospects, Starbucks faces various challenges in introducing its coffee in such smaller Chinese cities. These, as documented in the case study, include low-income population in such cities and the lack of knowledge on different coffee blends (Hawkins et al., 2010, p. 264). In this respect, overcoming such barriers may necessitate the entity to lower its product prices, and incur multiple costs to encourage the population to try its offerings. However, the entity can overcome such barriers by continual evaluation of customer preferences, and frequent modification of its shop’s settings to reflect region-specific contexts.
Discuss the demographic, cultural, and media factors that make India more attractive for Starbucks than it was 10 years ago
Various demographic, cultural and media factors make India more attractive for Starbucks in the current decade. Concerning demographics, the rise of the middle class to comprise a higher proportion of the country’s large population (Enderwick, 2009), provides Starbucks with an opportunity to market its premium coffee. This is the case since the increasing incomes of such a group can allow them to appreciate the value that Starbucks offers, thus be willing to purchase Starbucks’ coffee at a premium.
Concerning cultural aspects, the exposure to western ideals, following interactions with many Americans and Europeans doing business in India, has reduced the cultural resistance that Starbucks would have faced 10 years ago. For instance, Jacob (2005) notes the role that globalization has had in bringing various cultures towards a convergence through the concept of cultural learning. With India having formed a core market for international organizations (Enderwick, 2009), the interactions among diverse cultures has lessened the resistance that Starbucks would have encountered, were globalization not to have occurred.
Media factors also facilitate the entry and expansion of Starbucks in India. Among such media factors has been the rise of the Internet and its tools as a means of global communications. Specifically, the rise of social media presents the entity with new ways to engage customers directly (Pilch, 2009). In this respect, Starbucks has new tools through which it can enhance awareness of its brand to a larger proportion of the Indian population. Further, such social media offer a chance for the entity to obtain feedback, which it can use to customize its Indian shops.
References
Aaker, J. L. (1997). Dimensions of brand personality. Journal of Marketing Research, 34(3), 347-356, Web.
Barnes, J. G. (2003). Establishing meaningful customer relationships: Why some companies brands mean more to their customers. Managing Service Quality, 13 (3),178-186, Web.
Enderwick, P. (2009). Large emerging markets (LEMs) and international strategy. International Marketing Review, 26(1), 7-16, Web.
Fournier, S. (1998). Consumers and their brands: Developing relationship theory in consumer research. Journal of Consumer Research, 24(4), 343-73.
Hawkins, D. I., Mothersbaugh, D. L., & Best, R. J. (2010). Consumer behavior: Building marketing strategy (11th ed.). New York: McGraw-Hill/ Irwin.
Jacob, N. (2005). Cross-cultural investigations: Emerging concepts. Journal of Organizational Change Management, 18(5), 514-528, Web.
Pilch, C. (2009, Feb. 16). Social media marketing and web 2.0: what are they, and how they help you bring in more business? Sales & Marketing, 53-54.