H1: There has been an impact learnt from model of Starbucks ideas in its expansion globally in China and UK. As a result, proper referencing of the information within the texts will be cited to avoid cases of plagiarism. On the other hand, research interpretivism remains more aligned to social science as it is based on the assumption that reality is created inter-subjectively, thus requires the better understanding of different variables and entities (Saunders et al. Ho: No impact can be learnt from model of Starbucks ideas in its expansion globally in China and UK. 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. 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. 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. Certainly, Starbucks choice of location remains an essential factor just as other entities in the food and beverage industry as exhibited in the Chinese and UK market thus influencing consumer choice of specific coffee shop. 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. Considerably, the approach used at Starbuck seeks to reinforce the concepts of control and management of quality, service reliability, and efficient operations in action as its key strategic aspect in operations management. Cite this page. Considerably, Starbucks management decision to locate in high footfall and high visibility regions in China’s major cities is based on  customer accessibility, rent costs, transportation cost, as well as human resource accessibility within the area. As a result, a distinctive feature based on unique products offered by individual companies seeks to attract consumers in the highly competitive market. After Howard Schultz took over the reins of the company, Starbucks experienced exponential growth expanding all over the US and also spreading to international markets like Japan, Europe and China. Premium Pricing involves setting the prices of products higher than comparable products. Their knowledge, organized way of business left a good impression on customers’ mind. It … More significantly, the use of semi structured research methods in carrying out this research would be feasible as compared to other research methods in analysing of the international marketing strategy of Starbucks in China and in the UK. 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. According to Kotler (2000), price is the only component that gives monetary value of the product as it used for exchange purpose. By 2007, many factors converged against the coffee shop chain exposing serious shortcomings, vulnerabilities, and problems derived from the way Starbucks was conducting business. Starbucks business strategy is based on the following four pillars: 1. 51 - 60 of 500 . 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. The answer may come as something of a surprise! As a result, suitable location makes business more efficient and effective as it ensures that the increasingly growing company achieves increased level of customer satisfaction because they can gain access easily to the coffee shops within different locations. Kotler (2009 uses the Rossiter and Percy grid in describing the company’s promotional mix during entry into the UK market. Jim co-founded tutor2u alongside his twin brother Geoff! Starbucks defended it pricing strategy in China saying that its higher prices were attributable to its higher cost of doing business in the country than in other markets. Indeed, Starbucks remain as one of largest and most recognized coffee industry in the global scale because of its efficient expansion and management approach, specifically in their market mix to suit the locations. Starbucks has positioned itself as the premium coffee brand in China. Considerably, the increased selection based on the right approaches in making decisions based on choice of suitable markets have made Starbuck Corporation one of the most recognised  and respected brand in the world. 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, 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. Cooper and Schindler (2003), indicate that positivism research philosophy is suitable as it remains factual based on law about the relationships between different extremes. Notably, Starbucks Company focus on using viable marketing strategy, management of quality, service reliability, and efficient operations. Starbucks incorporates another localize strategy in every country they go, by modifying the name of Starbucks to suit the local language, like in China they Changed the name to ‘Xing Bake’ where ‘Xing’ represents ‘Star’ and ‘Bake’ was pronounced as ‘bucks’. 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. Jim is a well-known Business writer and presenter as well as being one of the UK's leading educational technology entrepreneurs. 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. Notably, with company acquisition of Seattle Coffee Company the company decided focused on blending its prices  to its speciality coffee by not to increase the price of its products. More so, Starbucks operates globally through it branches and store that are widely distributed using standardized prices while it offers services that suits its promise of providing high quality and increased value of its coffee products and service through suitable price strategy towards its goods. Figure 1.4: Number of Starbucks stores in China from 2005 to 2013 (The Statistics Portal 2013). Much cheaper & more effective than TES or the Guardian. As a result, Starbucks outlets in the UK offer exceptional customer experience considered one way of providing exceptional services as a uniquely branded coffee service provider. More so, analysis of Starbucks management in China shows adoption of market mix strategies focused to reduce cost and increase customer accessibility in different locations. (2007) indicate that research strategy based on the choice of interpretivism, influence the achievement of the aim and the objectives of the study. It also added that its Asia-Pacific profit margin was for 14 countries, not just China. Starbucks has come a long way since it established its first store in China in January 1999. Furthermore, price is an adjustable component of marketing because it can increase or decreased based on the break even point and quality of product offered. APA MLA Harvard Chicago ASA IEEE AMA Entry Strategy for Starbucks in China. Carry out research on competition faced by Starbucks in China and UK market? Kotler (2000) describes place as the final location of the goods to the end consumer. 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. Figure 4.3: Marketing Mix Quantified of Starbucks in the UK (Author 2014). Starbucks products are sold at much lower prices in the US than in China, even with tariffs and transportation costs added. 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. The corporation has plans to open 500 new stores in China by the end of the year. As a result, Starbucks focus has been moving from being a profit-making business as it engages in corporate social responsibility within China in corporation projects in the country and district parts. In china, Starbucks adopts premium pricing strategy to set high price for its products which are more expensive than the local brands or even similar-type of western brands. 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. Christmas 2020 last order dates and office arrangements Plog (2005) explains how Starbucks in China has levelled the tea and coffee drinking culture by increasing the number of coffee drinkers and using the company’s worldwide branding, despite the critics’ assumptions of the company’s collapsing after its introduction into the market. More so, distribution channels influence placement of products through retailers wholesalers, as the end consumers access the goods easily. Add to that a sales tax of 17%. Loading... Unsubscribe from Linyan Wu? It is therefore essential to use research data collected comes from peer reviewed journals because they are audited before publication, and this improves the reliability of the research. 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. As a research study, which seeks to be rational on seeking an independent opinion on the international marketing strategies used by Starbucks, the research methodology and procedure should remain unbiased. They also changed their marketing and pricing strategies based on the needs of the Chinese market. To compare the marketing entry strategy that gives competitive advantage to Starbucks over its competitors in China and in the UK. As a remarkable company, Starbucks Coffee Company has grown into a global brand since its founding in 1970 in Seattle, the United States, concentrating on increasing customer satisfaction by treating each customer with respect and dignity. Starbucks defended its pricing strategy in China, saying that its higher prices were attributable to its higher cost of doing business in the country than in other markets. The China-Asia Pacific region led sales for Starbucks in 2012, and company is considering opening 600 new outlets in the region this year, targeting 1,500 stores in China alone by 2015. To literally investigate Starbucks international marketing entry strategy used both in China and in the 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. More essentially, the entire research will focus on peer reviewed secondary sources from officially audited publications based on Starbucks international marketing strategies. Considerably, choice of relevant research methodology gives an in-depth appraisal of diverse research methods that suitably seeks to achieve the study’s aim and objectives. 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. Considerably, Starbucks marketing efforts, increased customer satisfaction in the Chinese market and made consumers choose Starbucks as the coffee outlet of their choice. Saunders et al. In addition, qualitative secondary research study remains favourable in the collection of quantifiable data than quantitative comparative analysis of the research as it gives more in depth information (Saunders et al., 2007). More considerably, the main debate on this subject is on the impact faced by Starbucks Corporation in its expansion globally into china and UK based by regulations, international marketing strategy to increase profitability and increased competition. 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. 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. More importantly, the use of secondary data analysis in carrying out this research would be viable as compared to other research methods. Escalation of Trade Tensions Between China and US Could Significantly Boost China’s Retail Stocks ; Starbucks’ China growth story. As a result young, urban Chinese, who solely started to associate visiting Starbucks or being seen with a Starbucks cup, as a symbol of social status. Starbucks Coffee Outlet, which focused on building its market share, competitiveness and efficiency, started in the 1970s as a single shop offering high-quality coffee and brewing goods. It also added that its Asia-Pacific profit margin was for 14 countries, not just China. This is despite the coffee cups being made in China and sent to the U.S. Saunders et al. 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. $35.80 for a 2-page paper. However the results have sometimes, unexpectedly appeared to be more challenging thus, it is worthy to examine the causes and their effects. In most cases, it is necessary for business to consider the selection of their location to ensure that it is easily accessible to its customers. Even as, the management decided to maintain its standardised coffee blends as it faced competition from Costa coffee as it introduced other flavours than the Americanised coffee drinks (Witkowski 2005). 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. 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). H1: There are expected changes with Starbucks competition in its expansion globally in China and UK. China is currently the second largest market for Starbucks outside of the U.S. Price Strategy of Starbucks. 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. 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. It was mostly depended on the people to spread goodwill through word of mouth than commercial advertisements and media products. Carry out research on Starbucks international marketing entry strategy used both in China and in the UK? 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). As a result, Starbucks has increase market opportunities as it invested five million US dollars in the year 2005 spent on China Education Project through corporate social responsibility in China western and central areas in September 2005. In this research, secondary research gives. Communicating price increases effectively is crucial to a successful price hike, and managing customer perception is a key part of the Starbucks strategy. More so, Starbucks management offers a guaranteed promise to its customers to offer fully satisfying services as its promise states that the customers can get a coffee drink the way they want it (Knowles 2000). Starbucks is known for its premium service and premium products. More remarkably, the increased levels of establishing a strong brand loyalty allows for the company to sustain competitive advantages as compared to its competitors and give them the market opportunity to charge a premium price for its coffee products to their clients. 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. In addition, the company has developed a positive effect on its clients by influencing customer choices from its brands as compared to that of other competitors in the industry by use of the sales promotion strategy thus retaining its customers and attracting new customer. 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 … 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 an analysis, this study is qualitative in society. More significantly, it is through the establishment of marketing channel that the company seeks to make its products accessible and available to its consumers in the growing market. It charges 20% higher prices in China compared to other parts of the world. The customers were willing to pay a higher price for the brand name. LS23 6AD, Tel: +44 0844 800 0085 214 High Street, 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%. West Yorkshire, Promotion through advertisement introduces brand awareness and induces consumers as a way of retaining its customers and attracting new customer (Kotler, 2000). According to analysts, compared to other countries in … Boston House, Learn more ›. As a result, they’ve developed a premium pricing strategy as well. Indeed, Starbucks expansion in the UK ensured that the global brand remain competitive in the beverage industry as, Starbuck’s management always continuously seek to provide high quality products with increased provision of affordable cost, timely delivery and flexibility amongst its competitors. Despite increased criticism in 1999 during Starbucks entry embracing of strategies to handle cultural and structural issues lead to fulfilment of the company’s mission, vision and objectives. More significantly, this study wants to emphasize the strategic thinking about all the factors involved in applying and analyzing the increasingly enthusiastically satisfied customers served by Starbuck’s management unlike its competitors in the international market. Ho: No changes with the international marketing strategies used by Starbuck Corporation internationally. 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. To promote themselves in China the company chose a different way. More significantly, the company has used competitive market mix strategy of market entry into the markets in China and the UK. Starbucks responded that its pricing strategy was based on local market costs, including infrastructure investment, real estate and labour costs. The company aimed at creating a standardised coffee that is of high quality by designing an integrated supply chain management to ensure that customers will enjoy the best coffee in the market especially the roasted coffee with enriched Italian style espresso coffee beverages. Increased success was achieved through company efforts to introduce coffee drinks faced stiff competition from tea consumption, which is an immediate substitute for coffee. As a result, the operations manager’s decision in the choice of an outlet location in the entire UK market was also influence by operations management costs, rent costs, transportation cost, as well as human resource accessibility within the area. When Starbucks started in China, one of the biggest challenges it faced was to make the consumers accustomed to drinking and appreciating coffee. Hire a subject expert to help you with Entry Strategy for Starbucks in China. More significantly, the marketing mix based on pricing, promotional, placement and product of the marketing environment ensures increased market accessibility as the products and services are sold to final consumer. 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. The premium pricing strategy of the company aimed at improving its brand positioning in the Chinese … Figure 4.1: Marketing Mix Quantified of Starbucks in China (Author 2014). 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. Considerably, the choice of market location depends on the nature of the business based on proximity and strategic location for customers to access products and services. More than often, Starbucks Company’s pricing strategy is discretionary to suit individuals from both the low and high income earners. 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. 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. The figure below shows the number of Starbucks stores in China from 2005 to 2013. Ho:  No expected changes with Starbucks competition in its expansion. Notably, use of positivism research philosophy ensures that research information used can be quantified because researcher ensures adequate evaluation of different methodologies and methods so as to identifying the limitations of different approaches during research. PRICING STRATEGIES Starbucks products are priced higher than most other brand coffees due to the image its brand carries. (2007) defines case study methodology as one suitable such research study as it gives an in-depth understanding of Starbucks international market entry strategy. Notably, the analysis above shows that the Starbucks Company seeks to focus on marketing strategies used in the Chinese market through efficient marketing mix that have a high degree of standardisation, localisation achievement to influence values of quality and economical purchasing behaviour. More considerably, Starbucks Corporation uses public relationship campaign and promotion to increase its strong brand as it seeks to ensure customers understand the products that the company is offering in the UK market. The company currently have locations in 90 Chinese cities and employ over 25,000 people in China. 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. They tri… 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. Notably, Starbucks is the only global brand that has dedicated itself to the expansion within China and has focused greatly on offering favourable prices for their different coffee flavours (The Wall Street Journal 2010). 2003). This is because, the use of secondary data analysis in this research will explore the international marketing strategies used by Starbucks; through an explorative study that suit the research. The case is about Starbucks' pricing strategy in China under which the company charged higher prices for its products than in Western countries. 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. Where would you expect a Starbucks latte to be cheaper - in a coffee store in downtown New York or in a Starbucks store in China? Considerably, Starbucks stands out as a distinct outlet internationally that allows various people in the different market segment to choose freely from the stores broad range of coffee products. 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. ... Growth Strategy and China - Duration: 7:37. Bloomberg Markets and Finance 4,112 views. Boston Spa, As a result, Starbucks strategy seeks to reduce cost and increase customer accessibility as the management selection of their location of coffee shop ensure they remain accessible to its customers. Indeed, Starbucks remains exemplary in its wide expansion as the exportation brand of international coffee worldwide. As of 2020, there are several marketing strategies like product/service innovation, marketing investment, customer experience etc. Indeed, focus on relevant marketing strategy used by Starbucks that has contributed to the company’s strong financial performance and the company’s enhanced competitive advantage among its competitors in its global expansion. 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.