Starbucks Keeps It Brewing

Determine and discuss the barriers facing Starbucks as they try to reach people to change their consumption habits from tea and instant coffee.

Starbucks, a business that has strong popularity in the U.S., has decided to enter a new market in Asia. As result, they are facing barriers in an attempt to persuade customers to consume Starbucks coffee. The barriers that Starbucks are facing are: coffee and tea competitors, customer perceptions of coffee, price comparison, customer preferences, customers habits, and culture.

Competitors will be a barrier due to fact that “instant coffee is the major player.” Research has determined that coffee is a new item entering the market in Asia. Nescafe holds “nearly half the market share and has become the Chinese generic term for coffee.” Nescafe brands of coffee are often instant, and offers the convenience of making coffee within the confines of a person’s home. Starbucks is based in a coffeehouse setting where the coffee is made to order. Consider the fact that despite a 90 percent growth in coffee sales in China in recent years, per capita consumption is still under one kilogram per person compared with four kilograms in the United States. Tea is still the number one beverage in China (by volume), is a part of China’s national heritage, and is strongly embedded in their culture. (Hawkins & Mothersbaugh, 2010)

Another barrier is customer perception. Most consumers in Asia may associate sometimes with Western lifestyles and cultures. As a result, the marking strategy that may have worked in the United States would not work in Asian markets. The Asian consumer have high regards to “notion of balance” which is a concept derived from the concepts of yin versus yang. (Hawkins & Mothersbaugh, 2010) Starbucks must market themselves as a fashionable drink with its emphasis on the unique taste it offers, and that they care about the customer.

Customer preference is a barrier that can be changed by researching...