The Strategic Entry of Starbucks in India

28th July 2014 Marketing Strategy Assignment

A Marketing Strategy Assignment
28th July 2014
Presented by:

Mohammad Imad Shahid Khan
Section A, 3
rd
Semester
Bachelor of Business Management (2013-2016)


28th July 2014 Marketing Strategy Assignment
Company Overview

Tata Starbucks Ltd. is a 50:50 Joint Venture Company announced in January
2012 and debuted in October of the same year, is owned by Starbucks Corporation
and Tata Global Beverages that operates Starbucks outlets in India. The outlets are
branded Starbucks "A Tata Alliance". Starbucks, through an agreement with Tata
Coffee, serves coffee that is 100% locally sourced and roasted in its Coorg facilities.
The joint venture that occurred under Avani Davda, the youngest CEO in TATA
Group, had recently celebrated opening its 50
th
outlet in India.

The Seattle-based Starbucks Corporation under its CEO Howard Schultz is eyeing a
big slice of India's $300 million cafe chains market that's growing annually by 20%
and is currently dominated by the local chain Cafe Coffee Day that operates more
than 1,000 outlets nationwide.

Starbucks had previously attempted to enter the Indian market in 2007, with a
joint venture involving its Indonesian franchise and Kishore Biyani of the Future
Group. However back then, the joint venture had withdrew its foreign investment
proposal with the Indian government. Starbucks did not cite any reason for the
withdrawal. Besides Future Group, Starbucks was also in talks with Reliance and
Jubilant for an entry into India, but none of those discussions fructified.
Marketplace

Target market
The Primary target market for Starbucks in India is the young both male and
female from the ages of 16-38. This market is well educated and comes from
middle class to upper middle class population. Therefore, the locations are close to
the urban areas where well educated and highly paid consumers work.
The secondary target markets are the tourists in the areas.

Geographic Positioning
The geographic of the target market are mainly consumers who live or work
in the vicinity of the proposed locations for the Starbucks Coffee shops.

It has opened stores in premium locations like Horniman Circle, Colaba and
Bandra in Mumbai, Connaught Place in Delhi and Koregaon Park in Pune,
where it will have high visibility to customers.

Starbucks wanted its stores to be as appealing as possible while giving
consumers a unique "Starbucks experience", as according to it, most
consumers spend about 45 minutes in a cafe, using it as a spot to meet
friends and relatives rather than to order takeaways.
28th July 2014 Marketing Strategy Assignment
Major Competitors

Caf Coffee Day
Barista Lavazza
Costa Coffee
Coffee World
Small-time Cafs
Business value
Market demand
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Expected revenue stream
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Market growth potential
While India only represents 1.4% of global demand, the subcontinent's coffee
market is forecast to grow almost 9% to $486.6 million this year, according to
market-research firm Euromonitor International. That would follow growth of
almost 80% over the past five years.
Risk evaluation
Strengths
Strong Market Position and Global Brand Recognition
Products of the Highest Quality.
Location and Aesthetic appeal of its Stores
Strategic relationship with Suppliers.
Effective utilization of Technology (Starbucks App)
Weaknesses
Expensive Products.
Laisse-faire management style.
Starbucks refuses to guarantee that its products are free of GMO
ingredient.

Opportunities
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Threats
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28th July 2014 Marketing Strategy Assignment
References

India's Taste for Coffee to Affect Bean Prices. (2013, March 17). Retrieved from
Wall Street Journal:
http://online.wsj.com/news/articles/SB100014241278873240777045783624
12457518992