Marketing strategy: meaning

Marketing strategy consists of the analysis, strategy development, and implementation activities in: Developing a vision about the market(s) of interest to the organization, selecting market target strategies, setting objectives, and developing, implementing, and managing the marketing program positioning strategies designed to meet the value requirements of the customers in each market target. Strategic marketing is a market-driven process of strategy development, taking into account a constantly changing business environment and the need to deliver superior customer value. The focus of strategic marketing is on organizational performance rather than a primary concern about increasing sales. Marketing strategy seeks to deliver superior customer value by combining the customer-influencing strategies of the business into a coordinated set of market-driven actions. Strategic marketing links the organization with the environment and views marketing as a responsibility of the entire business rather than a specialized function. Because of marketings boundary orientation between the organization and its customers, channel members, and competition, marketing processes are central to the business strategy planning process. Strategic marketing provides the expertise for environmental monitoring, for deciding what customer groups to serve, for guiding product specifications, and for choosing which competitors to position against. Successfully integrating cross-functional strategies is critical to providing superior customer value. Customer value requirements must be transformed into product design and production guidelines. Success in achieving high-quality goods and services require finding out which attributes of goods and service quality drive customer value.

Marketing Strategy: Process

The marketing strategy analysis, planning, implementation and management process is described below. The strategic situation analysis considers market and competitor analysis, market segmentation, and continuous learning about markets. Designing marketing strategy examines customer targeting and positioning strategies, marketing relationship strategies and planning for new products. Marketing program development consists of product, distribution, price, and promotion strategies designed and implemented to meet the value requirements of targeted buyers. Strategy implementation and management consider organizational design and marketing strategy implementation and control.

Stage 1: Strategic Situation Analysis

Marketing management uses the information provided by the situation analysis to guide the design of a new strategy or change an existing strategy. The situation analysis is conducted on a regular basis after the strategy is under way to evaluate strategy performance and identify needed strategy changes. Market Vision, Structure, and Analysis. Markets need to be defined so that buyers and competition can be analyzed. For a market to exist, there must be (1) people with particular needs and wants and one or more products that can satisfy buyers needs, and (2) buyers willing and able to purchase a product that satisfies their needs and wants. A product-market consists of a specific product (or line of related products) that can satisfy a set of needs and wants for the people (or organizations) willing and able to purchase it. The term product is used to indicate either a physical good or an intangible service. Analyzing product-markets and forecasting how they will change in the future are vital to business and marketing planning. Decisions to enter new product-markets, how to serve existing product-markets, and when to exist in unattractive product-markets are critical strategic choices. The objective is to identify and describe the buyers, understand their preferences for products, estimate the size and rate of growth of the market, and find out what companies and products are competing in the market. Evaluation of competitiors strategies, strengths, limitations and plans is also a key aspect of the situation analysis. It is important to identify both existing and potential competitors. Competitor analysis includes evaluating each key competitor. The analyses highlight the competitions important strengths and weaknesses. A key issue is trying to figure out what each competitor is likely to do in future. Segmenting Markets. Market segmentation looks at the nature and extent of diversity of buyers needs and wants in a market. It offers an opportunity for an organization to focus in business capabilities on the requirements of one or more groups of buyers. The objective of segmentation is to examine differences in needs and wants and to identify the segments (sub-groups) within the product-market of interest. Each segment contains buyers with similar needs and wants for the product category of interest to management. The segments are described using the various characteristics of people, the reasons that they buy or use certain products, and their preferences for certain brands of products. Likewise, segments of industrial product-markets may be formed according to the type of industry, the uses for the product, frequency of product purchase, and various other factors. Each segment may vary quite a bit from the average characteristics of the entire product-market. The similarities of buyers needs within a segment enable better targeting of the organizations capabilities to buyers with corresponding value requirements. Continuous Learning about Markets. One of the major realities of achieving business success today is the necessity of understanding markets and competition. Sensing what is happening and

is likely to occur in the future is complicated by competitive threats that may exist beyond traditional industry boundaries. For example, CD-ROMs compete with books.

Stage 2: Designing Market-Driven Strategies

The strategic situation analysis phase of the marketing strategy process identifies market opportunities, defines market segments, evaluates competition, and assesses the organizations strengths and weaknesses. Market sensing information plays a key role in designing marketing strategy, which includes market targeting and positioning strategies, building marketing relationships, and developing and introducing new products. Market Targeting and Strategic Positioning. Marketing advantage is influenced by several situational factors including industry characteristics, type of firm (e.g., size), extent of differentiation in buyers needs, and the specific competitive advantage(s) of the company designing the marketing strategy. The core issue is deciding how, when, and where to compete, given a firms market and competitive environment. The purpose of the marketing targeting strategy is to select the people (or organizations) that management wishes to serve in the product-market. When buyers needs and wants vary, the market target is usually one or more segments of the product-market. Once the segments are identified and their relative importance to the firm determined, the targeting strategy is selected. The objective is to find the best match between the value requirements of each segment and the organizations distinctive capabilities. The targeting decision is the focal point of marketing strategy since targeting guides the setting of objectives and developing a positioning strategy. The options range from targeting most of the segments to targeting one or few segments in a product-market. The targeting strategy may be influenced by the markets maturity , the diversity of buyers needs and preferences, the firms size compared to competition, corporate resources and priorities, and the volume of sales required to achieve favorable financial results. Deciding the objectives for each market target spells out the results expected by management. Examples of market target objectives are desired levels of sales, market share, customer retention, profit contribution, and customer satisfaction. Marketing objectives may also be set for the entire business unit and for specific marketing activities such as advertising. The marketing program positioning strategy is the combination of product, value-chain, price, and promotion strategies a firm uses to position itself against its key competitors in meeting the needs and wants of the market target, the strategies and tactics used to gain a favorable position are called the marketing mix or the marketing program. Marketing Relationship Strategies. Marketing relationship partners may include end user customers, marketing channel members, suppliers, competitor alliances, and internal teams. The driving force underlying these relationships is that a company may enhance its ability to satisfy customers and cope with a rapidly changing business environment through collaboration of the parties involved. Relationship strategies gained new importance in the last decade as customers became more demanding and competition became more intense. Building long-term relationships with customers and value-chain partners offers companies a way to provide superior customer value. Although building collaborative relationships may not always be the best course of action, this avenue for gaining a competitive edge is increasing in popularity. Strategic partnering has become an important strategic initiative for many well known companies and brands. Many firms outsource the manufacturing of their products. Examples include
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Motorola cell phones, Calvin Klein jeans, Pepsi beverages, and Nike footwear. Strong relationships with outsourcing partners are vital to the success of these powerful brands. The trend of the 21st century is partnering rather than vertical integration. Planning for New Products. New products are needed to replace old products because of declining sales and profits. Strategies for developing and positioning new market entries involve all functions of the business. Closely coordinated new-product planning is essential to satisfy customer requirements and produce products with high quality at competitive prices. Newproduct decisions include finding and evaluating ideas, selecting the most promising for development, designing the products, developing marketing programs, use and market testing the products, and introducing them to the market. The new-product planning process starts by identifying gaps in customer satisfaction. The differences between existing product attributes and those desired by customers offer opportunities for new and improved products.

Stage 3: Market-Driven Program Development

Market targeting and positioning strategies for new and existing products guide the choice of strategies for the marketing program components. Product, distribution, price, and promotion strategies are combined to form the positioning strategy selected for each market target.

The marketing program (mix) strategies implement the positioning strategy. The objective is to achieve favorable positioning while allocating financial, human, and production resources to markets, customers, and products as effectively and efficiently as possible.

Strategic Brand Management. Products (goods and services) often are the focal point of positioning strategy, particularly when companies or business adopt organizational approaches emphasizing product or brand management. Product strategy includes: (1) developing plans for new products, (2) managing programs for successful products, and (3) deciding what to do about problem products (e.g., reduce costs or improve the product). Strategic brand management consists of building brand value (equity) and managing the organizations portfolio for overall performance. Value-Chain, Price, and Promotion Strategies. One of the major issues in managing program is deciding how to integrate the components of the mix. Product, distribution, price, and promotion strategies are shaped into a coordinated plan of action. Each component helps to influence buyers in their positioning of products. If the activities of these mix components are not coordinated, the actions may conflict and resources may be wasted. For example, if the advertising messages for a companys brand stress quality and performance, but salesperson emphasize low price, buyers will be confused and brand damage may occur. Market target buyers may be contacted on a direct basis using the firms sales force or by direct marketing contact (e.g., Internet), or instead, through a value-added chain (distribution channel) of marketing intermediaries (e.g., wholesalers, retailers, or dealers). Distribution channels are often used in linking procedures with end user household and business markets. Decisions that need to be made include the type of channel organization to use, the extent of channel management performed by the firm, and the intensity of distribution appropriate for the product or service. The choice of distribution channels influences buyers positioning of the brand. Price also plays an important role in positioning a product or service. Customer reaction to alternative prices, the cost of the product, the prices of the competition and various legal and ethical factors establish the extent of flexibility management has in setting prices. Price strategy involves choosing the role of price in the positioning strategy, including the desired positioning of the product or brand as well as the margins necessary to satisfy and motivate distribution channel participants. Price may be used as an active (visible) component of marketing strategy, or, instead, marketing emphasis may be on other marketing mix components (e.g., product quality). Advertising, sales promotion, the sales force, direct marketing, and public relations help the organization to communicate with its customers, value-chain partners, the public, and other target audiences. These activities make up the promotion strategy, which performs an essential role in communicating the positioning strategy to buyers and other relevant influences. Promotion informs, reminds, and persuades buyers and others who influence the purchasing process.

Stage 4: Implementing and Managing Market-Driven Strategy

Selecting customers to target and the positioning strategy for each target moves marketing strategy development to the action stage. This stage considers designing the marketing organization and implementing and managing the strategy. Designing Effective Market-Driven Organizations. An effective organization design matches people and work responsibilities in a way that is best for accomplishing the firms marketing strategy. Deciding how to assemble people into organizational units and assign responsibility to the various mix components that make up the marketing strategy are important influences on performance. Organizational structures and processes must be matched to the business and marketing strategies that are developed and implemented. Organizational design needs to be evaluated on a regular basis to assess its adequacy and to identify necessary changes. Strategy Implementation and Control. Marketing strategy implementation and control consist of: (1) preparing the marketing plan and budget; (2) implementing the plan; and (3) using the plan in managing and controlling the strategy on an ongoing basis. The marketing plan includes details concerning targeting, positioning, and marketing mix activities. The plan spells out what is going to happen over the planning period, who is responsible, how much it will cost, and the expected results (e.g., sales forecasts). The marketing plan includes action guidelines for the activities to be implemented, who does what, the dates and location of implementation, and how implementation will be accomplished. Several factors contribute to implementation effectiveness including the skills and commitment of the people involved, organizational design, incentives, and the effectiveness of communication within the organization and externally. Marketing strategy is an ongoing process of making decisions, implementing them, and tracking their effectiveness over time. In terms of its time requirements, strategic evaluation is far more demanding than planning. Evaluation and control are concerned with tracking performance and, when necessary, altering plans to keep performance on track. Evaluation also includes looking for new opportunities and potential threats in the future. It is the concerning link in the strategic marketing planning process. By serving as both the last stage and the first stage (evaluation before taking action) in the planning process, strategic evaluation assures that strategy is an ongoing activity.

Starbucks coffee TATA Alliance

Introduction to Starbucks coffee :

In 1971, the Starbuckscoffee company opened its first location in Seattle's Pike Place Market. Inspired by the espresso bars in Milan, Italy, Howard Schultz wanted to introduce the coffee bar culture to America. Now Starbucks has over 7, 500 locations in over 30 different countries. Whats the next step? Starbucks India! The probability of Starbucks successfully introducing its coffee bar culture in India is relatively high for many reasons. There is a new consumer culture emerging in India. Indias young are becoming world-class consumers, and multinationals are taking note, reads the sub header for an article titled Hey, Big Spenders! in the August 2003 issue of TIME Magazine. This change can be attributed to many factors. For one, the Indian economy went through a massive liberalization under the new minority government of P.V. Narasimha Rao in 1991. This revolution opened the economy to foreign investment and trade: it dismantled important controls, lowered customs duties, and devalued the currency: it virtually abolished licensing controls on private investment, dropped tax rates, and broke public sector monopolies. This was good news for both foreign and local entrepreneurs (Das 3). Multinational companies such as Citibank, McDonalds and Motorola have been taking advantage of these new policies and finding a new home in India. These companies owe their success to the rising young elite due to the mass outsourcing by foreign companies especially from the US. Jyoti Thottam in her Time Magazine entitled Where The Good Jobs are Going, writes, U.S. companies are expected to send 3.3 million jobs overseas in the next 12 years, primarily to India according to a study by Forrester Research. This trend of offshore outsourcing is expected to accelerate in the upcoming years. Thottam continues in her article: Those relatively low-skilled jobs were the first to go, starting in 1997. But more and more of the jobs that are moving abroad today are highly skilled and highly paideducated Indian workers are quickly adjusting to their new status as the worlds most sought-after employees. They have never been more confident and optimisticFive years ago, computer-science graduates had one career option in India: routine, mind-numbing computer programming. Anything more rewarding required emigrating. Until three years ago, the first preference was to go overseas. Nowadays [these educated Indians] are interested only in business trips to the U.S. People are pretty comfortable with the jobs and pay [in India]. As job opportunities increase in India, money stays in the palms of the Indian consumers enabling them to reinvest in the Indian economy. Time Magazine journalist, Michael Schumann, asserts that with the changing Indian economy, Attitudes towards money are also changing. The mantra for the average Indian family, as in most of Asia, has always been save, save, save, but young Indians today, inspired by job opportunities, have switched to spend, spend, spend. Pramod Saxena, president for Motorola in India, backs him up stating, The attitude of the young generation is to enjoy life and spend money. Were looking at India as a major growth market. In addition, Indias pop culture shows a heavy desire to follow western trend. As put simply by Indian entrepreneur Ravi Deol, Indian consumers want to do what the
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rest of the world is doing. The young Indians buyers want everything from McDonalds, to Levis Jeans, and Brittney Spears CDs, but whats more is that they are willing to pay for it. Indian consumers will definitely welcome the internationally popular Starbucks Coffee Company to its country, as thirty-nine other countries have. The two new proposed locations for Starbucks Coffee shops are strategically picked to ensure their success. Both Mumbai and New Dehli are home to many call centers where these younger spenders work, and many colleges and Universities are also located here. This will allow Starbucks to target the younger consumer generation with the advertisement campaign. These two cities are also major hot spots for tourists, who recognize a multinational brand such as Starbucks. The new Starbucks menu must cater to the India taste, mixing traditional menu items with those that a customized for the Indian tastes. According to the Harvard Business School, after Starbucks first entered one of the most tea loving countries (England) in 1998, tea sales fell even as coffee sales rose rapidly. By 2008, annual sales of coffee in Britain had exceeded sales of tea. India, where Starbucks plans to penetrate this year, is also not a habitual coffee drinking nation. The current paper aims to propose a strategy for entering the Indian market while the taking into account local tastes and lifestyle. The analysis begin with an overview of the Indian Coffee Retail Market; continues with examining the strengths of the Starbucks brand and the benefits of a joint venture with the India's largest coffee producer and exporter. The report will finally propose the most effective marketing strategy for Starbucks to enter the Indian coffee industry and get a piece of the 'market pie'.

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Situation Analysis of the Indian Coffee Retail Market:

As coffee shops may be nearing saturation point in the US and Europe, Starbucks has identified the potential to expand in emerging markets like China and India. The coffee industry is expected to continue growing through at least the year 2015 and even longer in emerging markets . As there no framework that provides a full picture of the dynamics within a particular market, a more holistic approach will be adopted. Economic, Legal and Sociocultural factors will be examined from a PESTEL analysis and the Power of Suppliers, the Threat of Competitors and the Threat of Substitutes from the Porter Five Model.

Economic Factors: The Indian economy will expand an estimated 6.5 percent this year, the fastest pace among developing Asian economies excluding China, according to January estimates from the World Bank . The Reserve Bank of India projects seven percent growth for the twelve months ending March. As sales contribution in the US has declined in the past decade to less than 70% in the last fiscal year, Starbucks is expanding in fast developing markets like China and India. India is one of the emerging markets throughout the world that is becoming a spending oriented country. The personal disposable income per capita in India has doubled between 200001 and 200910 resulting in improved purchasing power . Thus, its upper and middle classes are more able to spend money on coffee, beverages and food in coffee houses that might not have been though of as a necessity in the past.

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 Legal Factors: Indias government on January the 10th raised the ownership limit to 100% for foreign retailers selling a single brand, a decision benefiting companies including Starbucks. However, Starbucks and TATA will possess equal shares in the venture as both companies will both benefit from such an alliance. SocioCultural Factors India is a traditional tea drinking nation (Vasudha 2011, pp. 2) which is proven by the fact that 69.9% of the hot drinks market is dominated by the tea industry ( Figure 1).

Even though in India tea was the common beverage for the upper and middle classes, now coffee is becoming a statement of wealth and prosperity among the traditional sector of the Indian population, i.e. people more resistant to changes (aged above 30) . This phenomenon might be explained by the fact that as more and more economies head towards industrialization, those economies also begin to be influenced by westernization. Westernization is also easily adopted by the younger generation in India (1825 years). Research shows that 72% of coffee shops customers are students and young professionals. The popularity of specialist coffee shops among youths as a place to socialise registered 18% growth in 2010; with average time spent on a table higher that in other countries. Spending capacity of youth of India is increasing, as well as their brand consciousness. 60% of Indias population is below the age of 30 leading to popularization of brands and products. As illustrated above, there is a market potential subject to dual economies, i.e. targeting both the modern sector (youths) and the traditional sector

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 Bargaining Power of Suppliers: The major threat in the specialty coffee industry is the power that suppliers have over the price of coffee. Arabica coffee prices soared 77% in 2010 which caused concerns to coffee retailers (Murphy 2011). Arabica coffee is one of the most sold brands of coffee in the specialty coffee industry. With prices for that type of coffee sky rocketing, it hurt the bottom line of competitors, especially those that thrive on a low cost strategy. However, Starbucks strategy can be regarded as charging premium price for premium product; and it is supplying coffee form their partner, so the power of suppliers can be regarded as weak.

Competitive Rivalry within the Industry: The second threat is from specialty coffee competitors that Starbucks will face when it enters the Indian market. Wellestablished coffee shops chains, such as Caf Coffee Day (CCD) and Barista, enhanced their panIndia presence in 2011. In 2010, CCD and Barista had 970 and 200 stores, respectively, and they aim to continue expanding in the next few years (Datamonitor 2010). Meanwhile, several relatively new players, such as Costa Coffee, Coffee Bean, Gloria Jeans and Java Coffee, are trying to get a piece of the pie in Indian coffee retailing. Both these factors drove ontrade consumption of fresh coffee beans in 2010, with volumes growing by 12% (Datamonitor 2010). Ontrade sales have emerged as the primary sales channel for fresh coffee beans, in the absence of any substantial offtrade consumption. However, the popular opinion was that with only about 1 500 cafes the INR 20 billion market provided enough room for growth and could accommodate more players. (Vasudha 2011) Even that major players started expanding, there is potential for further growth in the Indian Coffee Retail Market.

Threat of Substitute Products: A third relevant threat in the case of Starbucks entering India is the threat of substitute goods. For instance, consumers may opt to reduce their caffeine intake due to health concerns, which will influence coffee consumption somewhat. In such case, herbal tea and functional drinks can be potential substitutes. However, considering the increased consumption of coffee in recent years, it is unlikely that such substitution would substantially impact upon sales. Overall, the threat of substitutes in the Indian coffee market might be considered as moderate.

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SWOT analysis will be used to evaluate Starbuckss Strengths, Weaknesses, Opportunities and Threats. Strengths Leading retailer and roaster for brand specialty coffee in the world; Brand image with the motto The Starbucks Experience; 17 000 stores across 57 countries; 1 500 in China alone; Strong balance sheet; One of the strongest franchises in the world with more than 6 500 licenses shops in the world; Starbucks is known for providing superior products and services; Have loyal customers in every country that has entered; Sophisticated atmosphere, music, interior design and artwork; Have a lot of flavours variation; Limited number of strong competitors; High market share and market growth. Opportunities High consumerism in emerging markets; Easier to penetrate market because Starbucks is selling as experience, not just a simple product; Many of Starbucks coffee are using organic beans; Some of Starbuckss beans are harvested in Indonesia island of Sumatra and Sulawesi. Starbucks are purchasing at premium prices to support local community and sustainable production. Starbucks pays an average price of $1.20 per pound against the commodity average price of $0.40 0.50 per pound; Fair Trade Products can be offered Weaknesses High pricing which not everyone can afford; Starbucks refuses to guarantee that milk, beverages, chocolate, ice cream, and baked goods sold in the companys stores are free of geneticallymodified ingredients; Focused more on US domestic market; Starbucks Workers Union was made because some employees complain about the management style within the company; No experience in countries like India.

Threats Global financial crisis made people spend less on good that are not regarded as necessities; Increasing health concern of the negative effect of coffee; Starbucks domination is driving small cafes out of the business; Threat of substitute products in cultures where there is a strong preference for tea, like China, India and UK

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The Joint Venture with Tata: Starbucks entering into the Indian market will be in the form of 50/50 joint venture with the TATA Global Beverages Group. Share prices of both companies soared following the announcement of the pact. This is the first time Starbucks is entering the market with a local partner and will be cobranding their stores and products with their counterpart. The Indian outlets will be called Starbucks TATA Alliance. The partnership will enable an expanded range of beverage offerings for Indian consumers. One of these being the Starbuckss premium tea product Tazo that will be available in Indian outlets renamed as TATA Tazo Tea. The major advantage of the alliance will be that the knowledge and understanding of the Indian market can be brought by TATA Global Beverages. Entering into a strategic pact with the worlds largest integrated coffee plantation company should enable Starbucks to ensure sustainable profit growth in India. Also, TATA Tea is the tea market leader with 18.4% share. Starbucks will also benefit from TATAs experience in the Indian market regarding different tastes in different regions; thus making sure it offers the most preferable blend of both tea and coffee to customers. Apart from product and local preferences knowledge, Starbucks will benefit from TATA Globals infrastructure. In India, there is the challenge of balancing higher rentals and profitability given the lack of infrastructure in India along with inflating real estate prices. Starbucks is a step ahead of competitors due to their alliance with TATA Global Group. TATA has a local knowledge on the real estate market and they have opportunities to leverage their capabilities in this area. Starbucks will be able to use TATAs current infrastructure to effectively grow the business. TATA Group will also benefit from the pact. TATAs experience in retailing is not sufficient to open a coffee retail shop on their own; so, by entering in such alliance they will gain a vast amount of knowledge. Also, TATA Global Beverages produces bottled Himalayan water which might be offered in Starbucks stores around the world. Starbucks should also consider the possible disadvantages of such joint venture. After gaining enough knowledge in retailing industry and knowing the Indian market better, TATA might decide to compete with Starbucks instead of working with them. In addition, potential conflict might occur regarding the strategy of the alliance and how it should be managed. Such joint ventures might also accrue significant costs of control and coordination; and on top of that, profit is shared with a partner.

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MARKETING STRATEGY:
The Harvard Business School Framework will be used as a model to explain the marketing strategy in the current proposal.

Market Segmentation:

Apart from the demographic characteristics presented in part one of the analysis, marketers should also consider psychographic variables such as interests and lifestyles. In general, Indias coffee culture has changed the way young Indians socialise. In a country where there is a limited bar culture, and where drinking alcohol is still not allowed in many circles, it has provided an acceptable and safe outlet for people, particularly young Indians, to share a drink. As mentioned earlier, coffee is becoming a statement of wealth and prosperity among people with high disposal income, i.e. individuals in employment.

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Target Market Selection:

The marketing strategy will focus on targeting both groups college and university students (aged 1825) in the short term and working professionals (2540) in the medium to long run. Also, tourist and frequent flyers will be a target audience in the longrun. Product and Service Positioning:

It is essential to have a unique selling point to position Starbucks above competitors. In TATAStarbucks customers will be able to rely on genuine service, an inviting atmosphere and a superb cup of premium coffee or tea every time. Set Marketing Objectives:

In order to make the marketing communications objectives as comprehensive as possible,the SMART approach has been used, to ensure the objectives are specific, measurable, achievable, realistic, timed and targeted: The proposed strategy provides a plan for TATAStarbucks to open 50 stores by the end of 2012 in major metro cities and secondtier towns offering premium coffee experience to the primary target group of students (aged 1825) and working professionals (aged 2540).

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Marketing Mix (4 Ps):

The marketing mix will be examined to determine StarbucksTATA unique selling points, i.e. the unique qualities that will differentiate their products and services from those of competitors. Product: Anil Dharker (2012), a Mumbian columnist and social commentator in India, points out that when a foreign player sees a commercial opportunity and enters the new market; and then it adapts giving McDonalds as an example. However, this should not be the case and Starbucks should have a clear strategy about their product range (both drinks and food) it is going to offer prior entering the Indian market. Costa Coffee Shops in India, for instance, offers products like Apple Pie Latte, Latte Caramellato, Coconut Hot Chocolate, etc. suited for Indian taste. Therefore, Starbucks should adapt their drinks in order to cater local preferences. Ice coffees should also be included in Starbuckss menu as Indians have a strong preference for them because of high temperatures during summer. However, one should not ignore the fact that India is a tea loving country even though people prefer to consume tea at home because finding a perfect cup of chai outside is really tough," said Smiti Singh, a Bangalorebased software engineer, who drinks at least four cups of tea a day . TATA Tea (a unit of the softwaretosteel TATA conglomerate) is the worlds secondlargest branded tea company, so their premium tea products should be also offered to customers apart form the Tazo Tea. The biggest distinction is north India's preference for bread, meat, and chai (tea), compared to the south's preference for rice, pulses, and coffee. Foodwise, paninis, sandwiches and wraps with meat but not with beef. The cow is considered sacred by most Hindus and hence beef is considered taboo in the majority of Indian states. Predominant food option in the south should be the bistro boxes with rice and pulses.

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 Place: The first Starbucks locations are scheduled to open in August in New Delhi and Mumbai. TATA Starbucks might consider the option of opening on the 15th of August, Indias Independence Day. StarbucksTATA partnership is expected to open 50 stores in the country by the end of 2012. Starbucks also plan to explore the retail properties of Croma, Star Bazaar, Trent and Indian Hotels belonging to the TATA Group to open stores and also to rope in another franchisee for standalone cafes in the future. (Vasudha 2011) This is an efficient way of targeting individuals on business trips in New Delhi, for instance, who prefer to go to a place which is familiar for a cup of coffee; or tourists, who do not want to experience the local culture. As an international brand, Starbucks should also open kiosks at airports; thus, not depending solely on Indian tastes and preferences as airports are occupied with people from all over the world, who will recognise the Starbucks logo. In Mumbai (most populous city in India) Starbucks should position the stores mainly in shopping centres, cinemas, near universities or cultural venues as it is commercial and entertainment capital of India. Coffee shops normally close around eleven oclock at night, so Starbucks should consider the option of closing at midnight or even one oclock in the morning; thus, becoming the preferred venue for young people. Also, providing some guitar for jam sessions or karaoke nights on Friday or Saturday may attract even more people. As coffee chains are seen as places to socialise and people aged 2540 will be also a target group of the Indian population, Starbucks may consider opening a new type of Starbucks coffee called Starbucks Lounge, for example. The atmosphere in the lounges will be more relaxed and the interior more expensive; thus wealthy individuals will be able to show their class. In general, experts felt that largest caf chains in India like CCD, Barista Coffee and Qwikys are targeting the same locations, mainly the large cities. Geographical expansion has huge possibilities as cities are not saturated and the market is not limiting at all. Therefore, StarbucksTATA should aim to gain competitive advantage in smaller cities as well in the medium to long rum as people there are more likely to be brandloyal as opposed to customers in cosmopolitan cities.

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 Promotion: Promotional activities will not be analysed in details as they should be in line with Starbucks promotions worldwide. Besides, retailers in India rely heavily on wordofmouth (personal communication). The Starbucks Card will be introduced a convenient way to pay for your drinks and earn rewards for your purchase. Furthermore, instore promotions accompanied by new products such as drinks and accessories sourced from the regions should be present in India as well. Even though it is highly unlikely for a coffee chain in India to advertise on TV, Starbucks might consider that idea. In the US, there are three places that the average American spend his time during weekdays at home, in the work place and in Starbucks. So, they should somehow show the western lifestyle to the Indian and a TV advertisement at the day of the launch should do the job. Furthermore, it is the first 50/50 joint venture for Starbucks; so, both Starbucks and TATA Group will benefit from comarketing activities. Price: Historically Starbucks has retained it US pricing model in almost every market they have entered, but should they follow the same pattern in India? Starbucks should adopt their pricing based on the demand form the Indian consumer. After analysing analysed the Indian market for hot drinks and the price elasticity of products, probably the prices of products should be at least 30% lower than in the US.

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Marketing strategy analysis:

In the past, Starbucks has been able to maintain sales and increase growth even facing such problems as cost fluctuations and a weakening economy. This success has been a product of Starbucks business and marketing decisions. Starbucks has created not only a successful marketing mix, but an entire business strategy mix that has enabled the corporation to soar. Such factors that have contributed to the current success of the company include employee morale, customer loyalty, and strategic positioning. One of the major appeals of Starbucks is the friendly environment, which can be attributed primarily to employee morale. According to one employee, Working with the people that Starbucks hires is one of my favorite aspects of the job . Starbucks also offers a wide range of benefits and flexibility to keep employees happy. The corporation has been able to put into modern practice the classic adage; a happy worker is a productive worker. Customer service standards in retail and service industries seem to decline daily, with many employees demonstrating a lack of concern for the customer. Starbucks employees defy this current trend with their enthusiasm and consideration for customer needs. Peter Murane, CEO of BrandJuice branding consultancy, sums up Starbucks effective approach to customer satisfaction through employee morale: Everyone behind the counter was smiling They know my drink and my name, and they differentiate themselves based on that. Exceptions to the rule will always exist, but the typical Starbucks employee can be found in high spirits, ready to bend over backwards to serve the customer. In all likelihood, the service level exhibited is a direct result of employee job satisfaction, as demonstrated by the fact that Starbucks is listed as one of Fortune Magazines 100 Best Places to Work. Starbucks has found that keeping employees happy translates to keeping customers happy. It can be argued that the level of customer loyalty Starbucks is able to maintain stems from such successful practices as the aforementioned customer service. Regardless of the cause, the demonstrated ability of Starbucks to generate repeat-business is another powerful asset. I would say more than 60% of the business we get is from returning customers. With such a significant portion of business being that of returning customers, Starbucks has been able to clearly identify those factors of its operations that contribute strongly to customer satisfaction. According to Starbucks, this repeat-business is generated because of a combined focus on people and product quality. A typical Starbucks regular has a specific store that he or she frequents, but when geographically abroad, this loyal customer will tend to seek out another Starbucks location, rather than settle for a substitute. According to Starbucks spokesperson Lara Wyss, most loyal customers visit 18 times a month . This phenomenon is likely a direct result of the satisfaction achieved from previous experiences. Although Starbucks store-location strategy has been the object of criticism and satire, it seems to be a key factor in bringing in business. While the original source of the phrase A Starbucks on every corner is unclear, the joke is becoming more of a reality as each new location opens its doors. A store-location search of Los Angeles suburbs, provided by the Starbucks website, can reveal more than forty stores within a ten mile radius. It does not take a market analyst to realize that Starbucks is saturating the market and gaining more exposure every day. While other businesses and critics might see these real estate practices as predatory (intended to keep out competition), customers see convenience. If the closest Starbucks has no available chairs, drive a mile in any direction, and you will find one that does. This location strategy serves Starbucks in two ways: first, loyal.
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Marketing strategies that are vital to Starbucks success:

Over the past few years, Starbucks has been able to use a variety of marketing strategies to achieve profits and expansion. No single strategy sets Starbucks apart from other companies, but rather a combination of successfully executed strategies has propelled Starbucks to the forefront of the retail coffee market. The diverse combination of strategies and marketing mix decisions leading to the success of Starbucks can be found in the areas of consumer relations, store operations, and corporate decision making. Strategies in place in the area of direct consumer relations at Starbucks have been highly successful as demonstrated by the continual profit growth and expansion as a result of customer satisfaction. Relationship marketing has propelled Starbucks success by driving home the concept of added value. Employees interact with customers on a first-name basis, and know what the customer will order before he or she walks through the door. This type of customer relationship management delivers more than an overpriced cup of coffee: Starbucks is selling satisfaction. The situational variables of each store also contribute to satisfaction through direct customer interaction. Furniture, music, cleanliness, and ambiance do not vary to any great degree between stores. This situational consistency creates a sense of familiarity in the mind of the customer. Over the past few years, Starbucks has been able to use a variety of marketing strategies to achieve profits and expansion. No single strategy sets Starbucks apart from other companies, but rather a combination of successfully executed strategies has propelled Starbucks to the forefront of the retail coffee market. The diverse combination of strategies and marketing mix decisions leading to the success of Starbucks can be found in the areas of consumer relations, store operations, and corporate decision making. Strategies in place in the area of direct consumer relations at Starbucks have been highly successful as demonstrated by the continual profit growth and expansion as a result of customer satisfaction. Relationship marketing has propelled Starbucks success by driving home the concept of added value. Employees interact with customers on a first-name basis, and know what the customer will order before he or she walks through the door. This type of customer relationship management delivers more than an overpriced cup of coffee: Starbucks is selling satisfaction. The situational variables of each store also contribute to satisfaction through direct customer interaction. Furniture, music, cleanliness, and ambiance do not vary to any great degree between stores. This situational consistency creates a sense of familiarity in the mind of the customer. two major ways: first, with Hear Music, second with T-Mobil Wireless Internet. In 1999, Starbucks partnered with Hear Music to expand its in store product offerings as well as offer customers a variety of easy listening, thereby enhancing the customer experience. Through this mutually beneficial relationship, Starbucks plays Hear Music selections, and offers customers the convenience of purchasing Hear Music CDs on site. T-Mobile provides another mutually beneficial relationship recently gained by Starbucks. By offering T-Mobile Wireless Internet access in store, Starbucks further conveniences its customers while providing T-Mobile with added business.

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Problems or weaknesses with the company and suggestions for improvement:

While Starbucks has had a great deal of marketing success, it is important to recognize and deal with weaknesses. Two major areas of weakness for Starbucks lie in the realms of customers, and in-store worker relations. In the market for gourmet coffee, there are two groups of people: those who love Starbucks and those who hate Starbucks. Of the latter, justification is typically attributed to the idea that Starbucks takes business from the traditional coffee house, is overexposed, overpriced, and the company takes away from the coffee shop culture. This is a weakness for Starbucks in that the image the company has built is the very reason this segment of the consumer market chooses to reject the organization. While this untapped market segment is a weakness, should the consumers become aggressive, a serious threat can emerge. If the antiStarbucks crowd gains a following and hones its protest, the company can potentially suffer severe damage. Negative publicity can deter even the most loyal customer, and Starbucks must keep a close eye on these disgruntled citizens and pay attention to their complaints. The aforementioned website, www.ihatestarbucks.com, is an example of damaging publicity that can hurt a business. The site is not merely a forum for a single individual to spout anti-Starbucks sentiments, but a message board giving anybody the opportunity to voice their opinion. One fact, discrediting to the site, is that anybody can write anything and post it. However, negative publicity, even if false, can damage business. In the same respect, many people place pro-Starbucks messages onto the board that are quickly removed by the Webmaster. Justification for this act is given with comments such as Post your squishy ideas somewhere else, for example, try to find an ilovestarbucks.com website, or get off your mocha decaf booty and make one (www.ihatestarbucks.com). Because pro-Starbucks messages are being filtered, it is difficult for the non-partisan researcher to develop an idea of the respective volumes of pro- and anti- messages. Even these discredits to the site do not obliterate the potential damage that can be caused. Starbucks would be wise to follow the complaints of this and similar forums for protest, and truly investigate themselves if valid areas for criticism are addressed. By dealing with constructive criticism and addressing complaints, business can actually grow from this weakness. Starbucks has been publicly criticized by its own employees. Similar to the customer scenario, a sort of two-party system has arisen: those employees who love Starbucks and those employees who hate Starbucks. Starbucksgossip is an online message board that does not filter the pro- and con- comments (http://starbucksgossip.typepad.com). The site is, however, designed to attack the company. Attached to certain employee-related news articles can be found a distinct mix of those employees who love the company, and those employees whose sentiments are a bit less comforting. Common complaints are in the areas of necessary availability, benefits, and having to do work to make money. It is not unreasonable for a company to expect employees to be available and it is surely necessary for employees to work hard for a paycheck. Starbucks might have fallen victim to a common business problem: young people are hired and are expected to conduct themselves in a mature manner. Many Starbucks employees are up to the task but the disgruntled employees, who seem to be lacking in work ethic, are quick to voice their complaints. This is a difficult situation for the company because young people are a major segment of society willing to work for the wages offered by the coffee service position. Starbucks has combated the issue to a certain extent by compensating employees extremely well compared to industry standards: employees receive healthcare, stock options, 401K, discounts, etc.

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Possible strategic directions for the future, which may include international pursuits :
Starbucks main focus in the future should be continued international pursuits. The company has gained a successful following in the U.S., and would benefit to continue focus on its already successful multi-domestic strategy. In such a pursuit, it is important for Starbucks to recognize the difference between global and multi-domestic strategies. If Starbucks were to pursue a global strategy in the coffee market, they would likely fail, as tastes, substitutes, and cultures vary considerably from place to place, especially in a food and drink industry. Using a multidomestic, or international, strategy, Starbucks will be able to adapt its product and service market by market. For example, in Japan and the U.K., more tea drinks would be acceptable. The motif and ambiance of the stores will have to adapt to cultural acceptability. The company must also recognize local loyalty to other coffee retailers and beverage shops, and pursue an entrance strategy accordingly. In certain markets, for example, they may have to use penetration pricing to gain market share from competitors. Starbucks already has representation in more than thirty international markets, and would surely benefit by continued international expansion Starbucks is currently using more media advertising than it had in the past. Recently, more and more television commercials and billboards have sprung up, advertising new Starbucks drinks. In the future, the company should have analysts continually monitoring the successes of such advertising. One of the major complaints about Starbucks is the commercialization and culture degradation of the traditional coffee house. Customers may be deterred if they feel as though Starbucks advertising is becoming too overwhelming. Because the mere presence of stores is enough promotion, Starbucks should pay careful attention as to not over advertise and scare off the consumer. Pricing strategy is another area in which Starbucks might be able to increase market share. Many non-customers feel that paying so much for a cup of coffee is absurd. As such, Starbucks might consider offering special discount days for certain drinks, or giving out free samples. Such pricing activities might bring in those people who would typically steer clear of the company on a purely price basis, and create new customers.

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Conclusion:
If Starbucks can adapt to the peculiarities of the Indian market, coffee may soon become many Indians cup of tea. Based on the analysis presented above, the current proposal contradicts Levitts globalisation theory suggesting that companies must learn to operate as if the world were one large market ignoring superficial regional and national differences. In India F&B and retail typically is very close to local culture and taste thus, the so adaptation or glocalisation strategy should be adopted. Glocalisation will serve as a mean of combining the successful Starbucks strategy in providing the emotional needs around the world while taking into account local tastes.

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