STARBUCKS: Staying Local While Going Global Through Marketing Research Named after the first mate in the novel Moby-Dick, Starbucks is the largest coffee- In the past few years, Starbucks has been aggressively expanding its global house company in the world. As of 2010, there were more than 16,700 stores in over footprint by entering newer markets and strengthening its position in countries 50 countries including more than 8,850 company-operated stores and more than in which it already has a presence. Growing a brand overseas, however, can be 7,850 licensed stores. The company's objective is to establish Starbucks as the most different from doing so in Starbucks' home market. According to Thomas Yang, recognized and respected brand in the world. It expects to achieve this by continuing former senior VP of International Marketing, this difference in growth behavior in with rapid expansion of retail stores and growing its specialty sales and other different countries can be attributed to Starbucks' different stages of development operations. It will also continually pursue other opportunities to leverage the in the United States and different parts of the world. In international markets, Starbucks brand through new products and new distribution channels that meet Starbucks is at the brand development and establishment stage, allowing ONLINE VIDEO CASE 7. 1 consumer needs determined by marketing research. Over the last two decades, consumers to discover what the brand is about and what the Starbucks experience Starbucks has revitalized the coffee industry. The inspiration behind Starbucks was is about. In contrast, Starbucks has had a presence in North America since 1971. In conceived when CEO Howard Schultz visited Italy. At that time, Starbucks was a the United States, the Starbucks experience is pretty well-known and understood coffee company, and people were very passionate about the coffee, but in Milan and thus it is in a different stage Howard saw the passion around the coffeehouse experience. In Milan, Howard went Starbucks has been extremely successful in achieving its objectives. It has from one espresso bar to the next and saw how people at the coffeehouses knew each been able to maintain a local feel despite massive growth around the globe. It has other. These people were getting their daily coffees, but they also were making daily done this by stressing its culture and placing the focus on its employees and connections with other people, with the baristas, and with the artistry; the folks customers through marketing research. Starbucks hopes to continue staying local making the drinks were connecting with their customers and knew them personally. while going global through marketing research From this experience, Howard recognized that although Starbucks was passionate about the coffee, it also had the opportunity to be Conclusion equally passionate about the coffeehouse experience. Starbucks has gone from a small local coffee startup in the 1970s to the largest Marketing research determined four strategic coffeehouse company in the world. This success has largely been due to the strong STARBUCKS pillars for expressing the Starbucks brand. The four connection it has been able to foster with its consumers and to maintaining a local pillars are (1) the coffee, which is Starbucks' founda- charm and feel in its stores even as it continues to expand globally at breakneck tion and which gives Starbucks its credibility; speed. This strong connection has also enabled Starbucks to gather useful feedback (2) some of the finest products that are associated and marketing research information from customers, leading to the introduction of with the coffee experience; (3) the warm, welcoming, several successful new products and penetration into new global markets. and inspiring environment; and (4) community involvement. Even though the coffee and the products are important, the key to Starbucks' success has been the latter two. It has designed an environment that is Questions warm and welcoming and provides an experience that makes the company a part 1. Use the Internet to identify secondary sources of information pertaining to of the community or local culture. It has been able to achieve this success by coffee consumption in the United States emphasizing the Starbucks culture. 2. What are consumers looking for in a coffeehouse experience? How do they Starbucks also draws upon customers for ideas by conducting extensive mar- view the Starbucks coffeehouse experience? How can Starbucks determine keting research. Many of its products and services are a direct result of suggestions answers to these questions? from patrons or local employees. Much more than most companies, consumers 3. A survey is to be conducted to determine the image coffee drinkers have touch and influence the corporation. Many innovations and retail items resulted of Starbucks and other coffee chains. Which survey method should be used directly from customers' feedback obtained by conducting marketing research and and why? by suggestions made to the baristas. From customized CD music collections 4. Social Starbucks is thinking of introducing a new gourmet coffee with a to sales of sandwiches, gums, and chocolates-all were a result of customer Media strong aroma. Can a social media survey be used to determine recommendations. Many stores even offer wireless Internet access in response to the consumer reaction to this coffee prior to national introduction? customer demand. Through its baristas, Starbucks found that people were interested f so, which method should be used? in an iced Starbucks and the blended Starbucks, and thus the Frappuccino was 5. Starbucks is thinking of introducing a new gourmet coffee with a strong born-an idea that came from customers and the baristas rather than corporate aroma. Can the observation method be used to determine the consumer headquarters. reaction to this coffee prior to national introduction? If so, which observation This local connection with customers and the consequent brand building method should be used? have allowed Starbucks to move into other successful venues-from coffee bean sales at grocery stores to partnership with United Airlines, Marriott, Pepsi, Kraft, References and others. Starbucks has some of the best coffee in the world, but it was missing 1. www.starbucks.com, accessed February 15, 2011. from grocery stores, which is where most coffee is purchased. Syndicated data from 2. Steven Gray and Kate Kelly, "Starbucks Plans to Make Debut in Movie Business," The Nielsen Company showed that grocery stores sell two-thirds of the coffee in the Wall Street Journal (January 12, 2006): A1, A8. United States, and Starbucks has been able to enter this lucrative market. It has also 3. Bob Keefe, "Starbucks to Offer CD-Burning Capabilities at Stores in Future," used partnerships in other industries to increase revenues. Knight Ridder Tribune Business News (June 28, 2004): 1