Starbucks

GLOBAL MARKETING

CHALLENGES

Starbucks is currently facing an array of global marketing challenges:

• Brand Identity

o Identity crisis in the company’s primary market: the United States

• Historically positioned as the “premium” coffee company

• However, recent dilution of the brand identity due to expansion of offerings beyond core products: music, VIA, etc

• No longer clear if U.S. consumers perceive the Starbucks brand as premium or mass market

o Identity crisis further exacerbates the challenge Starbucks already faces in trying to translate a coherent brand identity to international consumers. Key identity components that need to be communicated to new markets:

• Premium Brand

• Starbucks Experience/Third Place

• CSR Commitment –Greener, socially responsible, good to employees

• Cultural

o Starbucks not only faces the fundamental challenge of communicating their brand promise globally, but expansion is further complicated by inherent cultural differences in their targeted markets.

• Coffee tastes vary around the world, with stronger cultural preferences in some regions for darker roasts, bean sources, etc.

• Preferences for different types of these coffee offerings also vary: espresso, cappuccinos, lattes, instant, drip

• Different beverages can be seen as coffee substitutes, such as tea, smoothies, etc., which will both impact products offered on full beverage menu and nature of Starbucks’ competition

• The coffee experience itself can vary across cultures: what time of day coffee is typically purchased, the speed with which it is consumed, and the product’s usage (social, caffeine, thirst quencher, etc.)

• Acceptable price points also vary across cultures, depending on income level, competitors’ pricing, the cost of substitute products, and if the product is viewed as a necessity or primarily a discretionary purchase

• Logistical

o Starbuckss partnerships with local companies in many markets can further complicate their marketing...