Starbucks in China

Topics: Coffee, Starbucks, Supply chain management Pages: 4 (1145 words) Published: December 2, 2014

Marketing in the host country
Before entering China, Starbucks decided to invest in market research to analyze the best approach to reach the Chinese market by entering joint with local companies in different regions across the country which allowed a direct access to the consumer for market research purposes. Several interesting findings were made regarding market behavior in China; first of all China is a tea-based consumption market so to generate acceptance to the Starbucks model products were created and adapted for the market by including typical ingredients such as green tea and red beans besides typical type food and pastries, also according to market research the local palate prefers sweet drinks and dislikes and is unaccustomed to the flavor of coffee. There are great differences between the American and Chinese business model for Starbucks, the greatest of them being that unlike the United States where people usually just stop at a store for a take-out coffee in China it has become a place to relax and meet people; in consequence stores in China are much larger and filled with comfortable seats that allows people to consume and stay a considerable amount in a store. Lots of time and effort have been invested in analyzing consumer behavior in China, the relatively recent opening of Chinese borders to foreign brands has had different reactions, for one the sudden variety of western brands has caused costumers to have a low brand loyalty as the offer is large and varied and all of them new causing consumers to have a larger acceptance to trying new and different brands. Also China has become an aspirational market, especially regarding younger generations where western brands are looked as luxurious and with higher quality as observed in younger generations who have higher incomes and seek a burgeois life style in China’s large cities allowing a premium pricing strategy that allows Starbucks to balance the cost of business and...
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