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INTERNATIONAL MARKETINGMKT 427

Starbucks in Asia

Prepared By

Saddam HossainID#072146025

Samir AshafID#083180025

Ashiqur RahmanID#072112025

Mr. K. M. Raziuddin Taufique

Course Instructor, MH School Of Business

Presidency University

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TABLE OF CONTENT1. Introduction.............................................................................................................3

1.1CASE SUMMARY......................................................................................…... 3 1.2THE COMPANY BACKGROUND………………………………………….. …..3 1.3 TIMELINE…………………………………………………………………... 4

2 .CHOOSING STRATEGY………………………………………………………………4 2.1 JAPAN………………………………………………………………………..4 2.2 CHINA…………………………………………………………………….….5 2.3 INDONESIA………………………………………………………………...…5 2.4 SINGAPORE………………………………………………………………..…6 CULTURAL DIFFERENCE @ A GLANCE BETWEEN THE USA & ASIA..................7 2.5 External Environment Analysis……………………………………………..8 2.5.1 Five forces analysis……………………………………………….……8-10

2.5 SWOT-MATRIX……………………………………………………………. .11 2.6 CONFRONTATION MATRIX…………………………………………………… 12 2.8 Market Prioritization Table………………………………………….......13 2.10 SWOT Matrix for China Market………………………………………...…14 2.11 Confrontation Matrix for China…………………………………….….….. 14

2.12 Choosing China…………………………………………………………….14 2.13 Grab the Market of China…………………………………………………. 153. IMPLEMENTATION PLAN…………………………………………………….……16 3.2 Positioning ……………………………………………………………………16 3.3 MARKETING PLAN………………………………………………………………164. CONCLUSION ………………………………………………………………………...18APPENDIX …………………………………………………………………………....19REFERENCE …………………………………………………………………………..20

1. INTRODUCTION

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In the paragraph 1.1 discusses the over all case summary. 1.2 presents the review of Starbucks Coffee Company. After that report task questions are answered accordingly.

1.1CASE SUMMARYStarbucks Corporation is a Seattle, Washington-based coffee company. It roasts and sells whole bean coffees and coffee drinks through a national chain of retail outlets/restaurants. Originally only a seller of packaged, premium, roasted coffees, the bulk of the company's revenues now comes from its coffee bars’s where people can purchase beverages and pastries in addition to coffee by the pound. Starbucks is credited with changing the way Americans view coffee, and its success has attracted the attention of investors nationwide. The firm’s senior executives have been considering international

expansion. Specifically, they are interested in Japan and other Asian countries, where Starbucks had little or no presence. Japan, the world’s third largest coffee consumer after the United States and Germany, represented both a challenge and a huge opportunity to the firm. To explore what changes in Starbucks strategy were required, and the questions that might arise during expansion, this case looks at the firm’s entry strategy into Japan and the nature of issues facing the firm during early 1997.

1.2THE COMPANY BACKGROUNDIn 1971, three Seattle entrepreneurs—Jerry Baldwin, Zev Siegl, and Gordon Bowker—started selling whole-bean coffee in Seattle's Pike Place Market. They named their store Starbucks, after the first mate in Moby Dick. By 1982, the business had grown to five stores, a small roasting facility, and a wholesale business selling coffee to local restaurants. At the same time, Howard Schultz had been working as VP of U.S. operations for Hammarplast, a Swedish housewares company in New York, marketing coffee makers to a number of retailers, including Starbucks. Through selling to Starbucks, Schultz was introduced to the three founders, who then recruited him to bring marketing savvy to the company. Schultz, 29 and recently married, was eager to leave New York. He joined Starbucks as manager of retail sales and marketing.

A year later, Schultzs visited Verona, Italy for the first time on a buying trip. As he strolled through the piazzas of Milan one evening, he was inspired by a vision. He noticed that coffee was an integral part of the romantic culture in Italy; Italians start their day at an espresso bar, and later in the day return with their friends. There are 200,000 coffee bars in Italy, and about 1500 in Milan alone. Schultz believed that given the chance, Americans would pay good money for a premium cup of coffee and a stylish, romantic place to enjoy it. Enthusiastic about his idea, Schultz returned to tell Starbucks’ owners of his plan for a national chain of cafes stylized on the Italian coffee bar. By April 1985 he had opened his first coffee bar, Il Giornale (named after the Italian newspaper), where he served Starbucks coffee. In 1987, the owners of Starbucks agreed to sell to Schultz for $4 million and The Il Giornale coffee bars took on the name of Starbucks.

Later on, from 1987, Starbucks now has 5689 stores in 28 countries in the world.

1.3 TIMELINE

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Figure 1: Timeline of the Starbucks Lunch in internationally specially in Asia

2 .CHOOSING STRATEGY

2.1 JAPAN

Political

Despite geographical distance, Japan and the USA have similar political structures. The modern Japanese political structure was designed by the American Occupational Force after the WWII, and while the emperor is the head of state the real power is distributed through parliament and mainly held by the Prime Minister (House of Councilors, 2008). In the USA, different states have the power to regulate business; whereas in Japan regulations are made by the Diet and enforced on a country-wide basis, which implies there are less complicated and conflicting regulations to be considered when international businesses enter the Japanese market (House of Councilors, 2008).

Economical

Japan and the USA are two of the largest economies and are arguably the most sophisticated consumer cultures in the world (Rose, Bush, and Kahle, 1998). The USA has a GDP of more than $13 trillion constituting over 25.5% of the gross world product at market exchange rates (CIA, 2008). After spectacular economical growth in the 1980s, Japan became the third largest economy after the USA and China, measured by purchasing power parity (NationMaster, 2008). However, the Japanese economy suffered a decade of recession from the early 1990s, shrinking its GDP as well as purchasing power (CIA, 2008).

Cultural

Individuals from different backgrounds are exposed to different traditions, rituals, 6 customs, and religions and all of these factors provide human beings with various learning environments, which cause significant variations in standards, behaviours, attitudes, and beliefs (David, 1998). As a result, a comparison of the subsidiary and parent countries‟ national cultures is quite important for the success of a business looking to expand into the host country.

Social

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The two countries have very different groupings in terms of ethnic background and religion. The USA has a population consisting of diverse ethnic groups including White, Black, Asian, American Indian and Alaskan native, Native Hawaiian and Pacific Islander (2003 estimate) (CIA, 2008)1. Key religions include Protestant, Roman Catholic, Mormon and Jewish (2007 estimate) (Wikipedia, 2008). In Japan the population consists of mainly Yamato, Koreans and Chinese (July 2008 estimate) (Wikipedia, 2008). Over 84% of the population is either Shinto or Buddhist (Wikipedia, 2008). The USA has a healthier age structure with a median age of 36.7 years, while the median age of Japan is 43.8 years. Japan has the most aging population among the developed countries (Wikipedia, 2008), meaning an older than average sort of typical consumer compared to other developed countries (Neal, Quester and Hawkins, 2006).

2.2 CHINA

POLITICAL ENVIRONMENT

China is a one-party state with the Chinese Communist Party (CCP) Controlling the government. The nine-person Politburo Standing Committee is the top decision making body in China. President Hu came to power in 2002 and will step down in 2012 following his second and final term. The succession plan is already being developed as the CCP plans power transfers well in advance to avoid any destabilizing surprises.Although China never entered into recession, the downturn did curtail economic growth and left millions of workers unemployed in late 2008 and early 2009. As a result, there was a marked increase in incidents of unrest, such as protests and riots, in regions most affected by the economic slowdown, primarily the export-focused manufacturing hubs of coastal China. Although these localized incidents posed no threat to the CCP’s overall hold on power or to the country’s general stability, the concern within government is that these localized events could coalesce into a widespread anti-government movement. The Chinese government’s 4 trillion renminbi (USD 586 billion) appears to have succeeded in enabling the Chinese economy to resume growing and in the process avert much of the social unrest that had been anticipated in the event of a prolonged period of downturn. With China showing strong signs of exiting the downturn, Premier Wen’s address at the Annual National People’s Congress in March 2010 was not solely focused on the economy but also addressed other ‘major problems’ in the areas of education, healthcare, housing, and income distribution. Wen also mentioned the need to improve living standards of ethnic minorities, a clear sign of the government’s concern over simmering ethnic tensions in Tibet and Xinjiang.

ECONOMICS ENVIRONMENT

On a y/y basis, real GDP growth accelerated in Q4-09 to 10.7% from 9.1%in the previous quarter, with a strong contribution from consumer spending as real retail sales and car sales gained strength. However, we estimate that on a seasonally adjusted basis, growth slowed for the 3rd consecutive quarter to a still-healthy 8.7% in Q4-09, as the initial kick-off impact of the stimulus wore off, inventory rebuilding eased and imports rose at a much greater pace than exports. PMI data suggest further weakening of Q/Q growth in Q1, as the key output, new orders and new export orders sub-indexes, as well as the headline figure, have all shown slowdown, even without the weak February data, but remain above the expansionary 50-threshhold.

2.3 INDONESIA

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ECONOMIC ENVIRONMENT The domestic recovery well entrenched and greater external demand, GDP growth is expected to continue in 2010 and 2011, rising to 5.2% and 5.8% respectively. Investor confidence and appetite for Indonesia remains strong, as indicated by the stock market performance, rebound in FDI and the declining sovereign bond spreads. However, bank lending remains subdued an issue the Central Bank is looking to address. Greater capital spending from the government will address some of the country's infrastructure deficiencies and support economic growth, but the overall deficit will remain manageable supporting solvency, despite the delays in removing energy subsidies. Inflation remains contained but is expected to pick up once base effects are over. External solvency and

Political Environment

Susilo Bambang Yudhoyono (SBY) won Indonesia’s first direct presidential elections in 2004, thus continuing Indonesia’s process of democratic transition. SBY remains popular largely due to his perseverance in pursuing his anti-corruption agenda and in implementing key economic reforms, often in the face of resistance. Legislative elections were held in April 2009 with the ruling party (Democratic Party – DP) led by President Yudhoyono faring best, winning approximately 20% of votes. Although the PD strengthened its position, it will still need to rule as the head of a coalition as it failed to win a Parliamentary majority. SBY further strengthened his position in July’s presidential election in which he won 60% of the vote with former president Megawati Soekarnoputri coming a distant second. SBY and the PD are now in control of both the legislative and executive wings of government and in a position to govern without the need for extensive external support as was the case during the previous mandate (2004-2009) where the Golkar political grouping figured prominently

2.4 SINGAPOREKiasu’ – The Singaporean concept of ‘kiasu’ literally means ‘fear of losing’ and is often used to describe the social attitude of Singaporean people. The concept refers to Singaporeans’ desire to always want to be the best, come first and never lose out. The word is so widely used by Singaporeans that it is incorporated into their English vocabulary. Kiasu has both npositive and negative connotations; some say it keeps standards high whereas others claim it leads to a graceless society. The concept of Kiasu reflects the value Singaporeans place on competitiveness and strong work ethics. Concept of Face – An important value in Singaporean culture is that of saving and maintaining ‘face’. To avoid losing face, Singaporeans control their behaviour and emotions in public, do not confront or criticise other people openly and employ an indirect communication style. Losing face has negative consequences on a person’s family and other social groups to which the person belongs as well as on individual reputation, credibility and authority.Diversity – With a diverse population of Chinese, Malay and Indians as well as guest workers, Singapore values the diversity of its people and stresses the importance of accepting differences. Religious and ethnic difference is embraced in Singaporean society and customs and traditions are respected. Despite the separation between some of the groups, Singapore serves as an ‘umbrella’ culture to which they all feel a sense of belonging.

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CULTURAL DIFFERENCE @ A GLANCE BETWEEN THE USA & ASIA

USA Japan, china, (Asia)

Individualistic culture; essence of supremacy Collectivistic culture; essence of harmony

Low-context society High-context society

Highly heterogeneous population Highly homogenous population

Flexible ties to family and group Strong ties to family and group/country

Respect immediate family Respect family (especially elders)

Direct, frank communication norm Indirect, implicit communication norm

Individual decisions valued Group decisions (consensus) valued

Behavior is governed by self-interest Behavior is governed by group norms

Individual accomplishments valued Team accomplishments valued

More negative view of advertisements More positive view of advertising

Hard sell orientation (logic appeal) Soft sell orientation (status/emotion)

Official language is English Official language is Japanese

2.5 External Environment Analysis

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2.5.1 Five forces analysis

Customers: Customers look for not only quality coffee but also a relaxing environment where they can enjoy their time away from work and home. They also like to carry out their business meetings as it provides a comfortable ambience. Lastly, the diversity of the coffee flavors are more appreciated by the customers each time they go. Since they can switch the supplier easily (with no cost and risk) and still meet their needs they have a high bargaining power.

Competitors:

Spinelli Coffee Company, long-regarded by many as San Francisco’s best coffee retailer, has been licensed by Equinox for expansion into Southeast Asia. Equinox is a joint venture between Golden Harvest, a Hong Kong film company, and Singapore Technologies Industrial Corp., a Singapore Conglomerate. Seven outlets were opened in Singapore’s central business district by the fall of 1997, with up to forty locations targeted for the region by the year 2000. In addition, Spinally is also in the process of setting up roasting factories to supply the Asian Market. Spinelli brings to Asia years of experience in sourcing, producing and selling premium coffee drinks and whole bean coffee.

SUNTEC DOME Holdings

Dome Café is a cafe modeled on European lines and was discovered by a Singaporean lawyer. It is best known for its distinctive sidewalk and atrium cafes, where the food menu is longer than the coffee list. They serve light snacks and full meals served all day, from sandwiches made with foccacia (a flat, Italian bread) to exotic entrees like duck and pumpkin risotto.

Suntec Dome Holdings was formed in 1996 when Suntec Investment, an investment vehicle for a group of Hong Kong tycoons, bought 51 percent stakes in the Dome Chain. Ronald Lee and Sebastian Ong, founders of Dome, imported the European-style Dome concept from Australia. They are expecting to increase the numbers of outlets from seven to seventeen within three years, an estimated $7 million is expected to be allocated for the expansion of outlets. Plans to build more roasting plants to distribute Dome’s coffee in Asia are to follow, though roasting factories in Singapore and Australia exist already. Their growth strategy is to expand into several Asian countries, with six outlets within two years in Malaysia and plans for further expansion into Indonesia, Thailand, Hong Kong, and China are in the development stage.

COFFEE CLUB

Established coffee trading company Hiang Kie, now sixty years old, sniffed out the gourmet coffee trend and whipped up its first outlet in Holland Village in 1991. There are thirty-seven variations, from the humble Kopi Baba to the spicy, vintage tones of Aged Kalossi Coffee. The best attraction is the Iced Mocha Vanilla—Macciato coffee and milk topped with vanilla ice cream and a drizzle of chocolate syrup. In addition, they serve light meals of cakes, salads, sandwiches, and home-made ice cream.

COFFEE Connection

Coffee Connection is the latest, trendier incarnation of Suzuki Coffee House, started in the 1980s by Sarika Coffee to showcase its Suzuki Coffee Powder. So far it is the mothership of coffee bars, with sixty-nine different drinks ranging from cool coffee jelly to Bleu Mountain Chaser. The best attraction is the Cappuccino Italiano—espresso infused with hot milk, topped with a frothy milk cap and dusted lightly with chocolate powder. They also serve ice cream, pasta, pizza, and foccacia sandwiches.

Burke’s Coffee

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The origins of Burke’s Coffee started from four Singaporean students who studied in Seattle, liked the espresso bars, and brought back the concept. Burke’s Coffee is a Seattle-styled cafe, bringing the lifestyle of the Pacific Northwest to Singapore. Burke has made a name for itself as a friendly and inviting place in the midst of the hustle and bustle of downtown Singapore. The store has established a loyal customer base of young professionals who visit the store frequently. Burke’s serve sandwiches, soups, and desserts. There are seven basic coffee drinks, plus twelve Italian syrups that you can add on request. The best attraction is the Mocha Freeze and Hazelnut Latte.

Suppliers: The main suppliers in coffee shop chain business are: coffee beans suppliers, equipment suppliers,

real estate sellers and renters, and employees. The price of coffee beans has plummeted because of a rise in the global coffee production, due largely to the emergence of Vietnam as a coffee supplier. This has reduced the cost of beans as a proportion of the total cost of coffee drinks. The current market players have not locked up a large portion of bean suppliers, and any apparent supplier loyalty is likely just the result of economic considerations. Although there is price advantage for buying large quantity as Starbuck does, the massive surplus in supply makes this effect negligible. Moreover, Starbucks’s mere 1% of the world’s total coffee purchases limits its ability to influence the coffee purchase price. It is hard for Starbucks to strike a purchase price war with a potential entrant in the coffee drink business. Although the high-quality Arabica coffee counts for only 10% of the world’s coffee purchases, the oversupply and the lack of concentration in coffee purchase parties eases the challenge in procuring high-quality coffee beans.

New entrants: The threat of entrants is high because the general investment needed to be a new player in the coffee store market is low and, in the long run, the product differentiation can be imitated by competitors easily. As far as we can tell, vending machines offering coffee, cappuccino and hot chocolate might be used more and more. Also, tea rooms and internet cafes are popular. However, Starbucks has an advantage in being known worldwide with a strong market in this segmentation as well as a diversity of products and quality service.

Substitutes: Starbucks can suffer from a reduction in its demand for coffee during the summer season due to the many fruit juices as an additional alternative to refreshments. We see that the combination of low or medium quality coffees and mediocre customer service is typical of the competitors, but not of Starbucks. The agreeable ambience,great service, and high quality coffees we see in Starbucks all over the world will serve as the Asia.

2.5 SWOT-MATRIX

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Strengths

S1: Established logo, developed brand, copyrights, trademarks, website and patents.

S2: High visibility locations to attract customers & customer base loyalty

S3: Valued and motivated employees, good work environment

S4: Strong Board and Strong financial foundation

S5: Industry market leader & Globalized.

S6: Good relationships with suppliers

Weaknesses

W1:Lack of internal focus (too much focus on expansion)

W2: Ever increasing number of competitors in a growing market

W3: Self cannibalization

W4: Cross functional management

W5: Product pricing (expensive)

Opportunities

O1:Expansion into retail operations

O2:Technological advances

O3:New distribution channels (delivery)

O4:New products and brand extension

O5: Emerging international markets and distribution agreements

O6: Continued domestic expansion/domination of segment.

Threats

T1:Competition (restaurants, street carts, supermarkets, other coffee shops, other caffeine based products)

T2:Coffee price volatility in developing countries

T3:Negative publicity from poorly treated farmers in supplying countries

T4:Consumer trends toward more healthy ways and away from caffeine

T5: Cultural and Political issues in foreign countries

T6:Alienation of younger, domestic market segments

2.6 CONFRONTATION MATRIX

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O1 O2 O3 O4 O5 T1 T2 T3 T4 T5

S1 + ++ 0 ++ + ++ 0 0 ++ 0 +10

S2 ++ 0 + 0 0 ++ 0 - ++ 0 +6

S3 0 0 0 + 0 0 0 0 0 0 +1

S4 ++ 0 + ++ + + + 0 + 0 +9

S5 ++ + + + ++ ++ 0 0 + 0 +10

W1 + 0 + - - - 0 0 0 - -2

W2 + 0 + + - -- - -- 0 - -4

W3 0 0 0 + + - - + 0 0 +1

W4 0 0 0 0 + + 0 0 0 0 +2

W5 - 0 - - - -- -- - ++ 0 -7

2.7 Conclusion

According to the confrontation matrix of the SWOT analysis, Starbucks has the biggest strength with their established logo, developed brand copyrights, trademarks, website and patents as well as for their being globalized and being the market leader. They also have some weakness for having lack of internal focus but increasing number of competitors in the growing market.

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2.8 Market Prioritization Table

Serial No. Market Reasons

1. Japan High per capita income Not Care about the price Love to take coffee Mainly focuses on the quality These segment has less competitors Like to follow the western life style

2. Indonesia Have the roasting facilities 4th largest coffee producer in the world Not too much compotators in the market Availability of the efficient labor.

3. Singapore Diversified lifestyle Competitive market High standard living Coffee market is growing

4. China One of the booming economies in the world. Huge market potentiality Try to make them update with the changing world Efficient & very cheap labor Very low competition in the market

2.9 DECISION OF MARKET PRIORITY

As we know that Chinese are a tea drinking nation, so it’s a weakness for Starbucks to enter into this market. But if we assume this market as an open market for coffee business, then it’s a great opportunity for a multinational coffee seller like Starbucks.

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2.10 SWOT Matrix for China Market

Strengths

S1: Starbucks provides quality coffee.

S2: Starbucks have many varieties of coffee

including snacks.

S3: Starbucks has strong distribution

channel.

Weaknesses

W1: Starbucks has high cost for

products

W2: Starbucks have a niche segment

in Chinese market

W3: They have very poor

Promotional campaign

Opportunities

O1: There is a lots of potential customers in

China

O2:China has huge population

Threats

T1: High preference for subsidiary

goods

T2: Low demand for coffee

T3: The market is not huge

2.11 Confrontation Matrix for China

O T Total

S1 ++ 0 +2

S2 ++ + +3

S3 0 0 0

W1 -- -- -4

W2 0 0 0

W3 - - -2

+2 -2

2.12 Choosing China

Over the last two decades, the People’s Republic of China has had the fastest growing market and GDP growth rate. China’s growth, spurred primarily by domestic demand, has attracted numerous investors with potentially the largest consumer market in the world. China is hailed as one of the most important consumer markets of the 21st century, with a 9% GDP growth rate in 2003.Also, they have near about 1.3 billion people which is 1/5th of the worlds population.

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2.13 Grab the Market of China

SHANGHAI -- To familiarize Chinese people with Starbucks coffee. Most of China's 1.3 billion people don't care for the chain's signature product. Coffee is so unpopular in China's tea-drinking culture that until recently many Starbucks didn't brew regular drip coffee unless a customer ordered it. Now Starbucks is betting a new generation of Chinese with growing spending power and an appetite for high-status brands will flock to its stores. "Coffee represents the change The patio was packed with young adults fidgeting with cell phones as they sipped lattes and Frappuccinos topped with whipped cream.”The disposable income is concentrated on the young people and this is the place they want to come."Starbucks's aspirations here underscore a dilemma facing many Western companies chasing the nation's huge market: Should they change their offerings to have more local appeal, or attempt to change Chinese tastes?The coffee giant is pursuing the second approach. It's trying to draw in Chinese customers with a new type of informal gathering place. Once captive, that's when consumers' coffee education begins. The chain stacks cream and sugar counters with brochures titled "Coffee Brewing Wisdom" and others that answer questions like "What is espresso?" Workers float through stores passing out small cups of pumpkin-spice latte and other drinks. Good-for-you messages about coffee are sometimes part of the pitch.

Starbucks has competition from a new generation of Chinese teahouses -- some of which offer both traditional beverages and a social, laid-back coffeehouse culture. China's tightly regulated business environment also throws up hurdles. Financial rules prevent the chain from offering a Starbucks payment card. The country's fragmented government and currency-conversion limits make banking generally difficult.

Book bags and coffee mugs barely made it out of customs in time for Starbucks to pass them out at a rural charity effort. Poor water quality in some cities means Starbucks has to install elaborate filtering systems.

Most of Starbucks's 436 locations in mainland China, Taiwan and Hong Kong offer morefood and seating than its American stores. About 90% of orders are consumed on the premises. The U.S. average is about 20%, Starbucks says. Crowds peak in Chinese Starbucks during the afternoon. Mornings are so slow that employees spend the early hours restacking displays of coffee mugs. The drinks menu focuses on the same coffee-based beverages as in the U.S., with tea playing only a minor role. But stores also sell green-tea cheesecake and Chinese moon cakes. The latter is a special pastry served during the Mid-Autumn Festival. The company surveyed Chinese consumers and came up with a list of the top 20 reasons they visit cafes. Coffee-drinking ranked sixth. Consumers said the No. 1 reason they go to cafes is to have a place to gather.Starbucks will not disclose sales or profit details for its China stores. The company cites its expansion in Japan as proof it can carve out a market in a tea-drinking country – even though the chain has struggled to raise sales there. Starbucks says China stores have lower sales than U.S. stores. That's offset by cheaper labor and other lower operating costs.

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Starting with Franchising

The franchise sector has seen huge successes in China. Franchising has become the latest craze amongst China’s rapidly growing entrepreneurial class as it appeals to many business people with enough capital to take on a franchising operation. China currently has 1,900 franchise systems, with 82,000 outlets, and is growing 49% annually. Today, there are nearly 200 franchise brands in China ranging from supermarkets and drug stores to fitness centers

3. IMPLEMENTATION PLAN

3.1 SEGMENTATION

Base Category Sub Category

Geographical segmentation Asia Pacific

Demographical segmentation Income

High income

Moderate income

Social Class

Upper class

Upper middle class

Working class

Behavioral User Rate Regular drinker

Benefits Quality and service

3.2 POSITIONING Global Consumer Culture Positioning (GCCP) & Foreign Consumer Culture Positioning (FCCP)

should be followed because Japan & Singapore is very keen to adopt the image of the country of

origin (USA) & global customer. Indonesia has a very good political relation with USA & they are

also having a reputation for producing world class coffee.

3.3 MARKETING PLANProduct:

We can make change in packaging module:

By offering difference in size of packs.

Offering different price for that different pack.

We can also offer changes in service module:

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By offering better, easier & faster order & delivery process.

By setting up some vending machines in order to increase the availability of the product.

Price:

We can make changes in pricing module:

We can offer odd pricing for the different packs.

We can set a high price for Japan and Singapore.

We can set a moderate price for Singapore, China and Indonesia.

Place:

The changes we make in the Place module are:

We can set up some stores in office areas, hospitals and clinics.

We can target the airports, railway stations and bus stops where crowd is available.

Promotion:

Finally we can also make change in Promotion module:

These Asian countries has diversified language, religious and culture, so we should perform our

promotional activities according their cultural issues.

We can do some merchandising such as: offering gifts (e.g. mugs, T-shirts, musical CDs), sponsoring

any concert or social work.

We can use television as well as radio commercials as means of communication or, promotional

activity.

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4. CONCLUSION

Starbucks is leading the world in the and Chinese; however, it still has room for improvement. A decentralized structure accompanied with a mixed global/international strategy has helped the company to find a balance between reaching economies of scales and respond to the local market. By establishing a joint venture with local retail has reduced their risks of being unfamiliar with the market; and Starbucks successfully gained the knowledge and channel of distribution from its partner. Starbucks‟ strong brand image and customer loyalty contributed in maintaining their leading position in this market, together with their enduring commitment to the community, Starbucks Japan has already built their reputation in this market. However, despite being regarded as one of the best place to work in China, Starbucks suffered from its employee’s low productivity. Starbucks Japan was running under loss before they finally turned things around last year, but sales growth was weak. Further risk includes their over reliance on global coffee prices. But Starbucks‟ introduction of new drinks into their menu offers new opportunities in pursuing a large share of the market.

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APPENDIX

Legend for confrontation Matrix

-- The two opposites have a high negative interactive effect

- The two opposites have a low negative interactive effect

0 The two opposites have neither positive nor negative interactive effect

++ The two opposites have a high positive interactive effect

+ The two opposites have a low positive interactive effect

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REFERENCE

Cateora R. Philip, Graham L. John, International Marketing, 13th edition, McGraw-Hill International Edition

Kotler Philip, Marketing Management, 11th edition, Pearson education

Taufique Raziuddin K. M., Course instructor, Case: Starbucks Market Expansion Strategy in Asia

http://www.starbucks.com/aboutus/pressdesc.asp?id=831http://www.starbucks.com/aboutus/internationaldev.asphttp://www.mhhe.com/business/management/thompson/11e/case/starbucks-2.htmlhttp://homepages.wmich.edu/~l2tripp/projectVpart2.htm

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