Discuss the Reasons Why Starbucks Adapted to the Chinese Market
The largest coffeehouse in the world these years may be Starbucks, and Starbucks Company have the most multiple coffee shops around the world. The success of Starbucks is from not only the quality of coffee beans which attracts consumers to pursue this kind of coffee spirit, but also its globalization strategy which embraces different cultures to extend the life circle of the corporation. It is an excellent example for other coffee companies that Starbucks can adjust itself to international business. In addition, the market of China is one of the most vital markets for Starbucks where there have been 3,300 coffee shops in more than 140 cities since 1999(Starbucks China, 2018). In summary, the reasons why Starbucks can adapt to the Chinese market are extremely important for people to have a further understanding of cross-culture management.
There are two main challenges for Starbucks found in the dimensions: the one is the drinking culture, and another one is the cultural behaviors.
1.1 Drink Culture
China has a long tea culture of history which is different from the coffee culture in western countries. In China, tea is only regarded as a kind of beverage for people. There is non-differentiated among diverse tea houses. For example, only where the tea produces are people concerned about, but it is the same where they drink tea. It is the tea origin which is the most important thing for Chinese people. However, the brand of coffee have influences on western people because of brewing techniques, and Starbucks, which it distinguishes itself from other coffee brands, offers good coffee tastes. In this case, it is necessary for Starbucks to strengthen its brand meaning it creates to change Chinese people’s ideas towards tea-drinking and coffee.
1.2 Cultural Behaviors
Chinese culture is profound, and the cultural tradition has a major impact on the lives and consumption habits of Chinese consumers, mainly in the family, the relationship between people and people, face, human feelings and reciprocity. Anh Hoang P.(2015) stated that “When an individual was born in a typical society, his thinking and actions should be resonant with what the society believes are its core values and principals.” (Anh H.P., 2015)
Therefore, it is difficult for Starbucks to adapt to Chinese market unless they change their some original elements. For instance, people prefer to enjoy time drinking tea or coffee in the group in China because China is a collectivistic society(this kind of description is right or?) which is different from western countries focused on individualism. In China, face-saving is crucial for people to do business easily. Whereas, gaining advantages is the basic approach to build up relationships in the United States. (Hofstede, 1994) This kind of different action refers to a distinctive consumption for Chinese people. In this case, they pursue a high quality of coffee to maintain their faces involved (in?) the indigenous designs for products and shops. Hence, Starbucks may pay more attention to these things.
The globalization Strategy
To achieve success all over the globe what one needs to do is that they should “Think globally and act locally”. In order to maximize Starbucks’ strength, meeting the needs and wants of local customers is necessary for a global brand.
2.1 Chinese Consumers
Compared with North America, Starbucks’ consumer groups are mainly office workers and students, tending to consume immediately. However, in China, Starbucks has determined that its market aims at the white-collar class, who may be at middle-class. Most of these consumers are high-level intellectuals, and they have higher incomes and high loyalty for consumption.
Wang (2012) claims that “…carrying a Starbucks cup in China is a status symbol, which shows that an individual has a strong financial power to pursue a luxury lifestyle.” (Wang H., 2012) The middle-class will become the mainstream of consumption groups in China. Starbucks which brings oriental people with the western culture has revolutionized how Chinese people treat and drink coffee.
2.2 The Diversified Products
Starbucks does not copy the American model in China. For China, which has a long history of drinking tea, Starbucks has established a product research and development center, and has continuously developed localized restaurants to cater to Chinese tastes.
Starbucks has launched a number of products with Chinese characteristics, such as green tea frappuccino with black tea, black sesame matcha, iced latte tea and so on. What’s more, Starbucks also introduced sesame biscuits, mango chicken rolls and other foods that could meet Chinese tastes. At the same time, Starbucks pays great attention to Chinese traditional culture. For example, Starbucks plans to launch Starbucks mooncakes to celebrate the Mid-Autumn Festival, and create the sweet dumpling celebrate the Dragon Boat Festival during the traditional Chinese festival time. (Starbucks China, 2018) Stephen and Jason(2015) support that “Chinese market was one of the hardest markets to crack for Western companies because they do have own tea culture…Starbucks has different menus for each country as well as offering more options among its international offerings. Starbucks in China, one can find traditional Chinese cookies on the menu. This example shows the Starbucks’ obvious effort to offer customers more options in localization.” (Stephen and Jason, 2015)
This strategy not only maintains Starbucks’ brand advantage but also conveys Starbucks’ respect for Chinese traditional culture.
2.3 The Positioning of Stores
When Starbucks is launched in a new country, the company works with local coffee companies to build stores that meet local need, except studying culture, history, and local tastes. Starbucks’ localization strategy needs to combine local products with ingenious store design. According to the Chinese tea shop architecture style, many Starbucks stores in China are built with curved eaves and stone walls, which mixes with some oriental elements. (Anh H.P., 2015)
Moreover, Starbucks is a small store in the United States, and office workers usually buy a cup of coffee and sandwiches at Starbucks in the morning. The size of the Starbucks store in China is large commonly because the Chinese value space and the sofa for them to relax for one afternoon with a group of people. Jack F. (2014) investigates that " the country’s American café culture was all wrong for the Chinese, who would rarely go to a café alone. Market research showed that they would prefer to go in groups of up to 10 people, and this would strain western coffee stores built to accommodate single drinkers and two-person groups. Chinese stores were adapted so they could accommodate these larger groups of people. ” ( Jack F., 2014)
Starbucks deliberately expands the store area, widens the seating area, enhances the softness of the sofa, and strongly advocates American culture. In brief, all those methods appeal to Chinese consumers.
2.4 E-Commerce Marketing
With the development of e-commerce in China, Starbucks has improved its online operations.
In China, Weibo and WeChat are currently the mainstream social interaction platforms. In 2012, Starbucks launched the ;Nature Wake Up; music series on WeChat. If customers send WeChat expressions to Starbucks, they will immediately receive music from Starbucks. This motivation enabled Starbucks to interact with customers and increased user stickiness(engagement). During this event, Starbucks public fans rose by more than 100,000. ;Starbucks has launched a Wechat campaign, and there are over 500 million users on Wechat QR codes are embedded in the content being shared online. By scanning the QR code consumers have access to exclusive content with coupons and customized alarm tones. Digital promotion across different platforms is employed with Weibo posts including QR codes. The HYPERLINK ;http://china-market-research.blogspot.com/2015/07/wechat-is-so-popular-in-china-but-not.html; Wechat?QR code has even been featured on the Coffee cups themselves.” (Marketing to China, 2015)
On Weibo, Starbucks not only promotes product information and event information but also introduces coffee knowledge to the public and conducts public welfare activities. In this way, Starbucks not only improves communication with consumers but also implants a good image of its concern for public welfare. (Starbucks China, 2018) “Starbucks have an official Weibo account and market themselves on this popular social media platform. With over 500 million users it is vital to have a presence here. Interestingly what Starbucks is promoting online is often not the ‘traditional’ coffee products we expect in the west.; (Marketing to China, 2015)
Starbucks online sales have combined product sales, brand marketing, and customer management to enhance customer loyalty effectively.
To conclude, Global thinking and localization are a very good attitude, and Starbucks provides lessons for all companies entering difficult foreign markets, such as China.
The company identifies its brand differently according to the needs of local customers. “That among Chinese Starbucks HYPERLINK "https://phys.org/tags/consumers/" consumers, Starbucks’ standing as an iconic Western brand is a significant asset rather than a liability.”(Phys.org, 2014)
The most important thing is that localization of the brand stimulates the desire of local individuals to purchase and enhance their loyalty for the company’s brand development.
Furthermore, Successful brand positioning is a major factor in Starbucks’ success in so many countries. Starbucks has an accurate positioning strategy in the Chinese market, and Starbucks has adopted a savvy market entry strategy. It cleverly avoids the conflict between coffee and Chinese tea culture and is committed to choosing a high-profile and high-traffic area to establish a brand image. Starbucks integrates the advantages of Chinese tea culture and introduces green tea and other beverages produced by local popular products.
Reference(informal)1.Anh Hoang P.(2015) Capstone Course Research Paper. Program in Corporate Communication.Department of Communication. Lycoming College, Williamsport, PA 17701
2.Hofstede, G. (1994). The business of international business is culture. International Business Review, 3, 1-14.
3. Jack F. (2014) How Starbucks adapts to local tastes when going abroad, Available at: HYPERLINK ;https://realbusiness.co.uk/any-other-business/2014/08/21/how-starbucks-adapts-to-local-tastes-when-going-abroad/feed/; https://realbusiness.co.uk/any-other-business/2014/08/21/how-starbucks-adapts-to-local-tastes-when-going-abroad/feed/ (Accessed: 30th July 2018).4. Marketing to China (2015) How STARBUCKS is different in China, Available at: HYPERLINK ;https://www.marketingtochina.com/category/business-china/; https://www.marketingtochina.com/category/business-china/ (Accessed: 30th July 2018).5. PHYS.ORG (2014) Study: Starbucks symbol of class status in China, Available at: HYPERLINK ;https://phys.org/news/2014-01-starbucks-class-status-china.html; https://phys.org/news/2014-01-starbucks-class-status-china.html (Accessed: 30th July 2018).6. Stephen T. and Jason C. (2015) Starbucks develop in the different countries, Available at: HYPERLINK ;https://mpk732t22015.wordpress.com/2015/09/06/starbucks-develop-in-the-different-countries/feed/; https://mpk732t22015.wordpress.com/2015/09/06/starbucks-develop-in-the-different-countries/feed/ (Accessed: 30th July 2018).7. Wang, H. (2015) Five things Starbucks did to get China right, Available at: HYPERLINK ;https://www.forbes.com/sites/helenwang/2012/08/10/five-things-starbucks-did-to-get-china-right/#fadb7d553af2; https://www.forbes.com/sites/helenwang/2012/08/10/five-things-starbucks-did-to-get-china-right/#fadb7d553af2 (Accessed: 30th July 2018).