Starbucks Entering into a Global Market

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a corporation has spread itself too thin, there are relatively fewer options available for the customer, product quality drops, and people start talking. A third risk can be attributed to the generations to come and how they will relate to the brand. There is a risk of future Starbucks being looked at by the new consumer as a place where their parents went to get coffee and are no longer relevant to a particular generation. There is always the risk of consumer ethnocentrism within a culture where American products will not sell as well when put next to domestic products. “Consumer ethnocentrism (CET) resulted in negative attitudes against foreign goods in studies such as Sharma et al. of 1995 and Zarkada-Fraser and Fraser 2002. Empirical support for a positive relationship between CET and purchase intention of domestic products is found in studies such as Han and Herche.” (Shankarmahesh 2004). Global expansion poses large amounts of risk for any company, but with today’s globalization, it almost has to be done due to the potential profits to be made.

Solutions

There was a risk the Seattle coffee company faced when markets were slowly becoming saturated, and business was slowing down, and this is why they made the international leap into new markets which has brought the company tremendous success over the last 15 years. There is a time when all markets are saturated, and this is when a company needs to consider reevaluating price, promotion, place, and position while considering strengthening customer service and quality of products. The inevitable hostile reception from its future consumers entering the coffee market will have to bring change to the marketing team through repositioning and rebranding according to new consumer needs. A possible product expansion such as a healthy smoothie line could line up well with millennial brands such as Juice Generation and Juice Press. As Starbucks is going abroad to expand its business with local partners of that region, they are at the risk of self-reference criterion and ethnocentrism. This American culture barrier can be overcome through proper adjustments to products, prices, locations, and service.

Coffee Issues in Japan

Starbucks might start to improve profitability in Japan by repositioning the brand to fit into the hyperlocal culture. The Japanese are less conscious about price as the upper and middle classes continue to grow, but the younger generation is persuaded towards spending their time in a constructive manner giving microscopic leisure time to sit in a Starbucks.

It might help Starbucks to adapt into the fast-paced Japanese lifestyle by implementing more robotics and machinery to serve coffee promptly. Online ordering and apps can have a consumer’s coffee ready within a minute of their chosen pick up the time to convenience the buyer Starbucks can introduce various cultural campaign or entertainment campaigns such as a Pokemon Go activation within all of the stores to drive more foot traffic into locations. In times of economic recession extra activities are necessary to boost up sales. So, for attracting the Japanese market in addition to coffee, the arrangement of internet facility and other amenities should also be provided.

Conclusion

What makes international marketing interesting is the challenge of molding the controllable elements of marketing decisions (product, price, promotion and distribution) within the framework of the uncontrollable elements of the marketplace (competition, politics, laws, consumer behavior, level of technology and so forth) in such a way that marketing objectives are achieved. Starbucks is a perfect example of a thriving business that was hit by the recession, but bounced back by implementing adaption and cultural responsibility within their business endeavors. The company knows their saturation issues, their café per person numbers and continues to respect and study the cultural differences within new markets.

References

Aragwal, S., & Ramaswami, S. (1999). Choice of Foreign Market Entry Mode: Impact of Ownership, Location and Internalization Factors. Journal of International Business Studies, 1st ser., 1-27. Retrieved September 14, 2016, from Springerlink.com/business_journals.

Guari, P., & Cateora, P. (2009). International Marketing. Edinburgh Business School, 1st ser., 1-52. Retrieved September 14, 2016, from http://www.exmi.se/Portals/0/Dokument/International_marketing.pdf

Shankarmahesh, M. (2004). Consumer ethnocentrism: An integrative review of its antecedents and consequences. Consumer Ethnocentrism, 1-27. Retrieved September 14, 2016, from http://iba8010kelly.alliant.wikispaces.net/file/view/Session