Starbucks Keeps it Brewing in Asia
International Master of Business Administration
University of International Business and Economics
Starbucks started its business in 1971 in Seattle, Washington. It is a long journey spread to Asia particularly China and India which is well known for its massive population which is a potential market. Although China is clearly a tea-drinking society-unlike Japan, which drink a lot of tea and coffee, Chinese people lack knowledge of coffee is problematic for Starbucks to be a success. Educating Chinese people to change their habit regarding drinking coffee will be hard due to their heritage, medical qualities that tea has while coffee does not have. Furthermore, the existence of many type of teas in China to cure many diseases cause them to keep drinking it so that they can be healthy. Although the number of varieties of coffee is quite a lot, lacking its purpose destroy its potential market within China which believe that everything need to have purposes.
Type of group
| The youth, the highly educated, trendy, and wealthy people.
| Type of decision
| High quality cares about customer, fit self-image showing off their affordability of the products.
| Marketing effort
| Put their shops in typical clustered high traffic and high visible location as office building, airport, and school etc.
| Fulfillment of felt need
| Coffee's appreciation in China is very low. Therefore the need for coffee is limited.
| Still tea has more compatibility with Chinese common sense about beverages.
| Relative advantage
| The price competency is inferior to other bland but the sense of fashion by Chinese and comfort in the store are their competency.
| One of the concepts of Starbucks is "expect more than coffee" which means coziness of the shop is as important as coffee's taste and quality.
| Both the logo of Starbucks and the name of it in Chinese are popular. The coffee is served with "Starbucks cup".
| For the majority of Chinese people, it is still expensive.
| Perceived risk
| No risks for human health. The quality of the product is higher than the one in outside.
The grid above is the 10 factors that affect the Spread of Innovations. Starbucks’ target market is young people, highly educated, and trend group. The life-style in China also evolves after the economic reformed and new policies regarding having child. This causes young Chinese people to not have the same strong mentality as the old generations. They are easily manipulated by western culture. They believe that Chinese culture has been outdated and not fashionable anymore. As a result, it is easy for Starbucks to influence them from many western movies to drink coffee and be fashionable. Starbucks also continues on encouraging Chinese people for greater coffee consumption with its communication and precise target on Chinese market. This is because Chinese people give a lot of importance to self-image and expect social recognition. This causes Starbucks to associate its image to famous young and trendy Chinese actor/actress. Therefore, by drinking Starbucks coffee, it will increase your social status while you are also being fashionable and modern in cohesion with one’s epoch. Starbucks also starts on educating them regarding the good effect of coffee benefits and how to enjoy its delicacies for each of its products. This causes Starbucks to broaden its market to young-old generations who have more money than the youngsters. Starbucks also put their shop in typical clustered high traffic and high visibility locations. Varying store size and chairs’ comfort also allows Starbucks to be situated in various...
Bibliography: China and Luxury written by Jacqueline Tsai
Please join StudyMode to read the full document