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1、Market Research Case Study - Starbucks Entry into ChinaThe Fine Art of Market Entry - Coffee for Tea-Drinking ChinaStarbucks has developed an internationalization strategy to enable the company to open stores and franchises in countries across the globe. Market research is at the core of many of the
2、market entry strategiesStarbucks is employing. This case study will consider how market research has strengthened Starbucks entry into the Chinese markets.Starbucks articulated an entry strategy that would address the dominant Chinese markets and that was designed to be as inoffensive with respect t
3、o the Chinese culture as possible. Instead of taking theconventional approach with advertising and promotions- which could have been seen by potential Chinese consumers as attacking their culture of drinking tea-they positioned stores in high-traffic and high visibility locations. Moreover, Starbuck
4、s very deliberately began to bridge the gap betweenthe tea drinking culture and the coffee drinking culture by introducing beverages in the Chinese stores that included local tea-based ingredients.Market research supported the development of Starbucks competitive internationalization strategy. The o
5、verarching competitive strategy was to create an aspirational brand. Prospective Starbucks customers in China could look forward to what Starbucks refers to asThe Third Placeexperience. The Starbucks experienceconveys status that is highly appealing to those aspiring to Western standards or to climb
6、ing the ladder in their own culture. Market research indicates that brand consistency is important to Starbucks customers. When Starbucks opens a new store in an emerging market like China,the best baristasare sent for the launch and to conduct training of the baristas who will carry on when once th
7、e launch has completed.Market Research Addresses the Emerging Market Political EnvironmentMarket research helped to identify the attributes of capitalism in thePeoples Republic of China (PRC). The middle class in China has rapidly accepted Western standards as an acceptable standard of the bourgeois
8、 class. Moreover, Chinese consumers accept purchases of luxury goods as a means topursuing quality lifestyles, and no longer consider it to be decadent or indicative of a lack of a nationalistic orientation.Capitalismin The Peoples Republic of China supports the status conscious population that mani
9、fests its interest in keeping up with the Jones through excessive luxury consumption.The Chinese governments support of luxury consumption is particularly apparent in certain cities in China. The second-tier city of Chengdu serves as a market research case study in Chinese governmental support of ca
10、pitalism. Chengdu promotes capitalism at a level evidenced by the presence of stores likeLouis VuittonandCartierin its downtown. According to Chengdu Retail Industry Association, stores selling 80 percent ofinternational luxury brandsare located in Chengdu, and the city ranks just third in luxury sa
11、les after Beijing and Shanghai. It is easy to see how this national orientation toward luxury goods extends to the Starbucks brand, which is characterized by a certain degree of exclusivity.Market Research Reveals Attributes of Emerging Market Legal EnvironmentIt is essential to understand the intel
12、lectual property rights laws and licensing issues when planning market entry in an emerging market. Starbucks has used intellectual protection laws to prevent its business model and brand from being illegally copied in China. Four years after opening its first caf in China - in 1999 - Starbucks had
13、registered all its major trademarks in China. A number of Chinese businesses have overstepped legal bounds in their efforts to mimicthe successful Starbucks model.The organization and structure of Starbucks global operations was informed by market research. The organizational strategies employed by
14、Starbucks were derived fromStarbucks experiencesin other emerging markets supported an early recognition that China is not one homogeneous market. The organizational strategies employed by Starbucks addressed the many Chinese markets. The culture dominant in northern China differs radically from the
15、 culture in the eastern parts of China, as reflected in thedifferences in consumer spending power inland which is considerably lower than the spending power in in coastal cities. The complexity of the Chinese markets led to regional partnerships to aid in Starbucks plans for expansion in China; the
16、partnerships provided consumer insight into Chinese tastes and preferences that helped Starbucks localize to the diverse markets. Northern China - joint venture with Beijing Mei Da coffee company Eastern China - partnered with Taiwan-based Uni-President Southern China - worked with Maxims Caterers in Hong KongStarbucks competitive advantage is built on product, service, and brand attributes, many of which have been shown throu
