More considerably, promotion uses public relationship campaign as a way to build strong brand as it seeks to influence customer choices from competitor brands through sales promotion strategy. More significantly, location decisions in China remain closely tied to expansion to the Southern and Northern areas based on organization’s strategies, especially the increased convenience to attract market share, based on the increased levels of capacity and flexibility, operating costs, revenues, operations, competitive advantage, and importance to supply chains (Fackler et al. More so, use of promotion seeks to establish increased market presence  through personal selling, direct marketing and promotion (Mullin 2010). During the company entry into the UK market, the market was highly potential as Britons prefer coffee contrary to alcoholic drink thus, Starbucks gave a suitable substitute to the market (MacDonald 2007). To promote themselves in China the company chose a different way. Notably, Starbucks Company focus on using viable marketing strategy, management of quality, service reliability, and efficient operations. It charges 20% higher prices in China compared to other parts of the world. As a topic that has been reviewed, research case study on Starbucks Corporation marketing strategy using secondary research would deem suitable to carry out this research, because it give explanatory study by focusing on marketing strategies applied in China and UK. Nevertheless, the establishment of clear distribution channels with more efficient and effective order processing time limit ensures that the Corporation achieves increased level of customer satisfaction because Starbucks gain easy access through its coffee shops within different locations. Carry out research on Starbucks international marketing entry strategy used both in China and in the UK? Figure 4.1: Marketing Mix Quantified of Starbucks in China (Author 2014). Remarkably, Starbucks management have been able to introduce a relaxing and friendly environment for its clients away from workplace and home wherein their can relax or conduct business. More notably, use of secondary research, remain viable in this research as it gives valuable information based on research studies conducted in an ethical manner as per Coventry University guidelines to avoid cases of plagiarism. H1: There has been an impact learnt from model of Starbucks ideas in its expansion globally in China and UK. However, there are also some other related products dealt with by the company such as handcrafted beverages and foods available in their coffee houses’ menu. Over the years, Starbucks has enriched its service in offering roasted coffee sold out to customers its enriched Italian style espresso coffee beverages in all Starbuck stores and branches along with pastries and other coffee-related products. As Starbucks struggled with its entry into China it focused on attracting more customers as it offer increased outstanding roast of high quality whole coffee beans that was highly recommended by its consumers. More than often, Starbucks considers the placement of the coffee outlet in its growing market to be influenced by its sales level in China as it can easily reach its consumers who are widely distributed. Boston House, Even so, Starbucks Corporation seeks to carry out pricing differentiation because of its varied target market as it faces increased strong price competition from the other competitors and substitute. Starbucks Pricing Strategy - Introduction The pricing strategy of Starbucks has become dynamic in the recent years as it attempted to adjust its pricing to meet changes in the cost of raw materials as well as shifts in the purchasing power of the market during the … As a result, Starbucks management and staff portray very strict principles of service delivery and quality management has flexibility to suit customer satisfaction because it allows for the customer to receive full satisfaction. Noticeably, the choice of market location by Starbucks in the UK depended heavily on the high degree of management control based on the nature of the business as it determines the most critical aspects for business enterprise success in highly competitive market based proximity and strategic location for customers to access products and services. With the increased use of promotional strategy, Starbucks Corporation has created a brand image to differentiate itself from its competitors, through internet advertisement and coffee shop advertisement where it gains access to internet users as the increased technology makes it the best channel to introduce and increase sales levels of new and existing products and service. 2003). Saunders et al. Kotler (2000) describes place as the final location of the goods to the end consumer. Cite this page. Indeed, there will be an increased market performance even as Starbucks strive to remain competitive in the beverage industry and ensure marketability, by providing high quality products with increased provision of affordable cost, timely delivery and flexibility amongst its competitors. Notably, there is establishment of over 570 business stores, in different cities within China depict Starbucks use of most successful market access approaches it has ever applied. Indeed, Starbucks has won over the young and old perception of the coffee drinking culture in the country known for tea (The Wall Street Journal 2010). It is usually used to boost profits in areas where the customer is happy to pay more. Indeed, it is choice of suitable strategy determines reliability and feasibility of the study as multi-method strategy, remains the best strategy for the nature of this study. Starbucks marketing strategy in China was based on customization in response to diverse Chinese consumer target segmentation. Starbucks business strategy is based on the following four pillars: 1. The prices of imported goods in China are often raised because of the effects of import taxes (tariffs) - in this case the customs duty on roasted coffee beans is 15%. Notably, price remains as an essential component that gives the firm an opportunity for a competitive advantage because choice of suitable pricing strategy from competitors achieves increased market presence. As of 2020, there are several marketing strategies like product/service innovation, marketing investment, customer experience etc. More considerably, Starbucks seek to serve diverse customers from its changes in packaging, pricing, special offers besides the establishment of convenient stores that provide latest trends in the coffee market to meet changing needs and demands of their consumers in different countries. This is despite the coffee cups being made in China and sent to the U.S. As a result, Starbucks promotes cultural diversity in different regions through its workers who aim to connect with different cultures and thus grow consumers with that enthusiasm. More so, Starbucks both in China and UK remains focused in meeting to the needs of their clients, as a way of increasing the greater possibility to gain customer loyalty. In carrying out of research it is essential to ensure that the entire research process is conducted in an ethical manner to suit the research topic. More so, its baristas offered the roasted coffee to customers with enriched Italian style espresso coffee beverages together with confections and pastries and other coffee-related products (Fackler et al. As differences in geographic location, culture, tradition and other factors affect market profitability, it is necessary to adjust and adapt diversified strategy in each country. According to analysts, compared to other countries in … Notably, there are peer reviewed journals that focus on Starbucks expansion market strategy in China and UK, which has led to the creation of competitive advantage. Considerably, the choice of market by Starbucks is based on the suitability of the location, which depends on the favourable nature of the business and strategic location for customers to access products and services. Promotion is describe as a marketing communication concept  used by marketers that influences the information about a product in  convincing customers to shift their consumer behaviour. As an entity with increased exclusive culture open to innovation, creativity and quality management and employees considers its customers as esteemed, because each Starbucks store ensures that it gives customer satisfaction as they use comments availed through customer comment cards available at the condiment stations. Saunders et al. Price. As a company, focused on building increased customer satisfaction the operations of Starbucks Coffee outlet internationally seeks to provide great work environment and treat every customer with respect and dignity. Much cheaper & more effective than TES or the Guardian. As a company that seeks to establish strong international market, Starbucks entry into UK uses a pricing strategy that makes its products affordable for its consumers ranging from high level income and low level income earners. Prices are set after evaluating the brand position and market demand among the customers. Bloomberg Markets and Finance 4,112 views. More significantly, the company has used competitive market mix strategy of market entry into the markets in China and the UK. More so, distribution channels influence placement of products through retailers wholesalers, as the end consumers access the goods easily. As a result, a distinctive feature based on unique products offered by individual companies seeks to attract consumers in the highly competitive market. Kotler (2000), explains how marketing mix ensures use of product, price, promotion and price as marketing tools to engage target consumers ensures successful market growth. 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Starbucks has come a long way since it established its first store in China in January 1999. Considerably, use of multi-method research strategy focuses on use of different strategies in the research ranging from, case study and secondary research. Indeed, increased rapid expansion of Starbucks in the UK and China allows the business enterprise to become the number one choice of the coffee shop as compared to its competitors because customers choose to go to the coffee bars to relax from busy lifestyles. More so, the organization’s strategies have seen Starbucks Corporation expand to the Far East and United Kingdom being the key business driver as it established a foothold in China. As a result, Starbucks Coffee globally has been able to competitively stay as a preferable brand in business catering specifically to middle-class to high class consumers in UK. (2018, Feb 15). Jim co-founded tutor2u alongside his twin brother Geoff! Starbucks Corp. has a unique perspective after having gone through the same thing in China. Support your price increases using changes in the market such as higher commodity costs and ease the pain on the consumer by finding an attractive way to publicize the new prices. In research studies the choice of interpretivism in research philosophy determines the research approach, because it can be classified as either deductive or inductive research approaches. As a company that seeks to establish strong international market, Starbucks Corporation has a pricing strategy that makes its products affordable for its consumers ranging from high level income and low level income earners in their different market segment. “Starbucks Entry to China” Starbucks modified its menu and tried to localize its brand name by selling some food items. Starbucks responded that its pricing strategy was based on local market costs, including infrastructure investment, real estate and labour costs. More significantly, existence of French and Italian coffee markets made it essential for suitable location it is through Starbucks Corporation marketing channel in the UK  that its products in the conveniently located stores remained accessible and available to its consumers in the UK market (Giddens 2002). More significantly, Starbucks depended on independently developing its own network, within the local market because of established similar operation to Starbucks while developing a strategic alliance with a local partner (Evans et al. In a report on coffee prices that has caused something of a stir across social media platforms, the state-owned broadcaster CCTV reported that a medium-sized latte cost Rmb27 ($4.43) in China compared with Rmb19.98 in Chicago, Rmb14.6 in Mumbai and Rmb24.25 in London. Research studies always increases the reliability of the findings and improve authenticity of the research finding thus, the choice of research methodology leads to research limitation. Indeed, Starbucks remains exemplary in its wide expansion as the exportation brand of international coffee worldwide. Starbucks charges 27 yuan ($4.42) for a Grande Latte (16 ounces) in China but the price for it in the US is about $3 including consumption tax, Shanghai-based China Business News reported Monday. With increased profitability in Chinese market the focus shifted from expansion in the US to China  leading to continued store openings and establishing new coffee bars in Beijing, Tianjin, Shanghai, Guangzhou and Shenzhen as the largest market outside of the US (Starbucks Corporation 2014). As of May 2016, the world’s … More significantly, both companies focused on cultural promotion of selling coffee based on its unique brand and gaining competitive advantage over its competitors (Starbucks Corporation 2014). Hire a subject expert to help you with Entry Strategy for Starbucks in China. Loading... Unsubscribe from Linyan Wu? As a globally recognised coffee outlet brand, Starbucks seeks to enjoy a high level of brand awareness and recognition even for its newly innovated products in its Chinese markets as it is set to grow its market. Depending on its target market in the location use of strong price competition in competitive areas saw Starbucks price the speciality coffee at a premium price varying as a way to effectively compete with its competitors Costa coffee that retailed coffee to its consumers at an affordable and competitive price. Ho: No changes with the international marketing strategies used by Starbuck Corporation internationally. However, Starbucks Coffee Outlet has grown to be the largest international roaster with more than 19,000 outlets, as it offers a high standard of excellence in all areas of buying, fresh coffee distribution and roasting, as it provides improved customer satisfaction. ... Growth Strategy and China - Duration: 7:37. Strategy Clock: Starbucks. Considerably, use of secondary research, remain viable in this research as it gives valuable information in the marketing strategies used by Starbucks. This is because, the choice of the coffee outlet by the customers is based on the variety of coffee offered, the experience gained in the stores and the employees who give the customers exceptional services. Starbucks pricing strategy can be described as a hybrid of premium pricing, geographical pricing, psychological pricing strategies. Some brands, such as Starbucks can charge a premium price because their entire brand image is based around luxury.Starbucks sets its prices on a simple idea: high value … As a business entity that seeks to continuously attract more customers and grow its market size and profitability, Starbuck Corporation choice of innovation of some of their coffee products in the market to suit its customers needs as compared to their competitors remain essential. Ho:  No expected changes with Starbucks competition in its expansion. As a result, Starbucks remains highly considered as an entity that focus on its niche market based on the values of quality and purchasing behaviour. When Starbucks started in China, one of the biggest challenges it faced was to make the consumers accustomed to drinking and appreciating coffee. Additionally, research shows the inductive approach is mostly used in exploratory studies, because it provides more understanding of a successful marketing mix used by Starbucks in the UK and Chinese markets. As a result, there was a change in the Chinese culture, the middle class used coffee as a better substitute to tea as it was brewed by highly trained baristas who bring the product to life from high-quality gourmet coffee beans, as they are able to make a coffee drink, understand and explain the diverse coffee varieties. As a company that seeks to establish a strong regional market, research on Starbucks Corporation is based on its consumers ranging from high level income and low level income earners. More signicantly, Starbucks market entrance involved public relations through increased use of promotional strategy, leading to improved market position. Figure 4.2: Rossiter and Percy grid – Starbucks (Kotler 2009). More significantly, the company’s new pricing was decided during the rebranding of the coffee stores as it faced competition within the popular Kings Road, and Chelsea area in London. Starbuck’s main market is the UK is influenced by the company offers employees who are considered partners in the well structured company stock plan even as Starbucks coffee shops management offer increased as job opportunities in the UK. More than often, the placement and distribution of Starbucks stores in its worldwide market as a global brand influence its sales level as it can easily reach its consumers who are within the market locality. which have helped the brand grow. Starbucks is considered a success story in China as it was able to convert the traditional tea drinkers of the nation to coffee lovers through its premium offerings. More significantly, this research seeks to provide a critical explanation on the international marketing strategies used by Starbucks in its expansion in China and UK. Remarkably Starbucks plans to expand its coffee shops through its ambitious expansion to sustain marketability and market share by creating more jobs and increasing revenue. The case is about Starbucks' pricing strategy in China under which the company charged higher prices for its products than in Western countries. Boston Spa, Indeed, an analysis on secondary sources for the purpose of understanding the topic of this research meets the aim and objective of the study, as it critically analyses best practices of market entry strategy used by Starbucks in its internal and the external business environment. For example, the Grande size latte is sold at 30 RMB in China but only $3.95 in the state, and the Starbucks cup sold at 10-14US in us but 18 US in china. More significantly, case study research methodology give a high degree of depth of research as it is conducted on feasibility of focused data analysis of the research. According to the choice of the Chinese people and selling a different kind of tea. Without a doubt, the issue of cultural influences that affects all aspects of life ranging from social, political, and economic perspective in nature affect company global expansion. More significantly, Starbucks penetration to Chinese market seeks to establish increased market presence through increased customer awareness as, the company carries out advertisement of its product in its diverse target market to increase its market presence. Notably, Starbucks expansion into UK has been successful as a leading retailer, roaster it remains focused on providing costa coffee in the world the choice of location at Lambeth, London in 1971 lead to the rapid expansion into Vauxhall Bridge Road in London in 1978 with the opening of first Starbucks Costa espresso bar. West Yorkshire, No one could have guessed that Chinese would ever drink coffee instead of tea. Nonetheless, the use of research study based on secondary sources assists in exploration of new insights, through carrying a detailed deductive and explorative study that can be structured more suitably to suit the research. More so, Starbucks Association meet community needs through promotion across China through coffee ground environment program, construction of school buildings and participating in beach cleaning. Carry out research on competition faced by Starbucks in China and UK market? Notably, the product variation strategy favoured Starbucks as it faced competition from its competitors perceived to have  the best Arabica coffee beans in the market. 2003). According to a study by Kotler (2000), distribution channels influence placement and distribution of products in the market thus influence sales level depending on marketing channel that products remains accessible and available to target market. The establishment of a unique product as Starbucks expanded its operation into the UK was essential even as it maintained its main product which is premium blended coffee. Starbucks pricing Strategy Linyan Wu. More than often, Starbucks Company’s pricing strategy is discretionary to suit individuals from both the low and high income earners. More significantly, as Starbucks Corporation seeks to establish increased market presence of its products, the company carries out advertisement of its product in its diverse target market so as to create high level of brand awareness and recognition even for its newly innovated products in its key markets as it is set to grow its market. As a result, majority of Starbucks coffeehouse are strategically located within the reach of its customers especially in distinct locations within, Taiwan, Beijing, Hong Kong, and Macau in China within shopping malls and areas near the commercial centres. Starbucks pursues premium pricing strategy and its products are generally more expensive compared to the competition. As the leading coffee outlet in the UK, Starbucks enjoys a high level of brand awareness and recognition even for its new coffee brands to suit customer needs. As a result, this paper will discuss the way Starbuck Corporation in China and UK was created and how it changed over time especially with increased competition in a marketing environment based with cultural differences. Speciality coffee is an example of one of the key products offered by Starbucks as it seeks to offer it services at a high standard of excellence in all aspects of purchasing, fresh delivery of coffee and roasting in all its outlets worldwide. This research paper aims to provide a basis for the effect of Starbuck Corporation’s international marketing policy in its global expansion into China and the UK by looking at market share, competitiveness and productivity-based management strategies. Starbucks products are sold at much lower prices in the US than in China, even with tariffs and transportation costs added. It also added that its Asia-Pacific profit margin was for 14 countries, not just China. Unlike its competitors, Starbuck’s management always seeks to provide high quality products in all their international market with increased provision of their products based on affordable cost, timely delivery and flexibility. The figure below shows the number of Starbucks stores in China from 2005 to 2013. APA MLA Harvard Chicago ASA IEEE AMA Entry Strategy for Starbucks in China. Howard Schultz, CEO of Starbucks, saw China as a primary growth market and had ambitious growth plans at a time when there was worldwide anxiety over the country’s sluggish economy and market turmoil. As a result, Starbucks successful entry into the UK market gave an increased expansion of Starbucks international market as the company entered the UK market in May 1998. Notably, use of qualitative secondary research study is more suitable over the collection of quantifiable data in this research as it uses quantitative comparative analysis of the research thus providing depth information (Saunders et al., 2007). Figure 1.4: Number of Starbucks stores in China from 2005 to 2013 (The Statistics Portal 2013). Indeed, market expansion of Starbucks in China and the UK is a great opportunity to learn how embracing cultural diversity leads to increased success and expansion. Starbucks releases details about how it confronted disruption to its business in China and guidance for other companies to prepare as COVID-19 continues to spread. Unlike its competitors, Starbucks acquisition of Narino supreme Bean Corporation in 1992 led to high standard of excellence in all aspects of purchasing, fresh delivery of coffee and roasting in all its outlets in the global market. 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