Starbucks Keeps It Brewing in Asia Essay

934 Words Aug 31st, 2010 4 Pages
Case 2-1 – Starbucks Keeps it Brewing in Asia
1. There are several barriers facing Starbucks as they try to “teach” people to change their consumption habits from tea to coffee. The most obvious being that tea is the most common drink in China. The Chinese view tea to be both medicinal and beneficial, whereas coffee does not have the same value to the Chinese. In addition to this, one has to take into consideration the vast area of China; it would be very difficult to get coffee to the more rural areas of the country. Not only that, they have less familiarity with coffee and don’t have as much money to spend on the more expensive beverage. Lastly, the vast majority of the Chinese market who drink coffee are accustom to instant coffee.
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6. To develop an effective marketing strategy for taking Starbucks into smaller Chinese cities and communities, we have to look at the 4 P’s; Product, Price, Place and Promotion. For the product, they should emphasize on great taste as well as several tea options. As far as price is concerned, Starbucks needs to lower their prices, have good promotions and more regional focus. Location is most important for placement, so setting up stores in areas with a lot of traffic would be ideal. Lastly, for promotion, they need to stress awareness of coffee and heavily advertise the product. Even with an effective marketing strategy, there could still be several barriers. These barriers would be the price of the product itself, operating on lower profit margins and the potential lack on people willing to try coffee. With all of this in mind, there is still potential for success in smaller Chinese cities and communities. However, they would have to prove to be successful in larger cities and areas before committing to such an extensive operation in more rural areas.
7. There are many demographic, cultural and media factors that make India more attractive for Starbucks to pursue rather than China. Although there are similarities, such as tea having a larger consumption rate over coffee, the Indian and Chinese markets are very different. India has a large coffee drinking population and has more acceptance of western ideas, products and

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