NZSSCC Case 1 Indian Market Penetration Strategy for Starbucks

Introduction:
Starbucks is a provider of high-end coffee
products and more importantly, a relaxed
experience. Starbucks as it is known today was
purchased in 1987 and has seen tremendous
amounts of growth over the years. We believe
that what sets Starbucks apart from other
coffee companies is their uniquely highquality products, service and environment
for the consumer. Our strategy arms are
based around these key factors and to form
horizontal growth strategies in India. How these
differentiation strategies will motivate Indian
consumers to purchase Starbucks products, in
descending order of importance: the feel good
among peers factor for being westernized and
being a part of the new experience. We have
done this through identifying 2 key issues:

- Purpose:
To create more of a Starbucks culture in India
and to instill a sense of the Starbucks
community -Customization
Many Indians are vegetarians and love to drink
tea. So a menu that is more considerate and
which focuses more on vegetarian foods and
tea would likely succeed. Many Indians like
filtered coffee so we could push that and then
slowly introduce new flavors that the younger
generation would be more receptive to. Pushing
out daily menus or daily discounts would also
encourage more sales and increase customer
loyalty.

Key Issues:
There is a saying across India, India has two
religions: film and cricket. We are choosing to
sponsor 5 Bollywood movies a year as movie
culture is prominent in India; there are 5200
theaters across the country and numerous film
festivals occur periodically throughout the year.
14 million people go to watch movies in India on
a daily basis. Additionally, we are opted to
sponsor the national cricket league in India
because of its prominent presence in Indian
Culture. Over 50% of Indians know how to play
cricket or have played it at some point in their
life - it is almost a tradition for boy to learn to
play cricket. Over 1 billion Indians tuned in to
watch the Cricket World Cup live and there are
cricket fixtures almost every week. Furthermore,
Starbucks will have the exclusive rights to sell
coffee in these cricket fields and set up portable
coffee stations on game days. Starbucks will
become a part of the Indian entertainment
culture and have a greater recognition.

1. Starbucks culture is new to India

Analysis: India has a prominent
tea-drinking culture, but coffee is
not a popular beverage among
Indians. Indians tend to drink
sweeter beverages and the only
coffee they do drink regularly is
filter coffee. Coffee has not
seemed to be the preference of
most Indians; however there have
been signs that the youth are
open to drinking western
beverages such as coffee.

2. Younger generation are the most

important demographic growth driver for
Starbucks to expand in India
Analysis: It is crucial to identify
the youth of India to be the
beachhead market for Starbucks
as over 50% of the Indian
population is under 25 years old.
Cafe stores have been proven
popular among the youth in India,
not as a coffee store, but as a
hangout place.

A series of subcategories is to be introduced

by the penetration arm, including:

Strategy Arm ONE

- The concept: Our strategy will solve the

problem of Starbucks awareness by using
superior service to provide a culture conducive
to more sales (since Starbucks abhors
advertisements). We will also, using this
method, acquire a loyal customer base. This is
an important issue because without a consumer
culture for Starbucks to generate awareness for
itself, Starbucks in India will have severely
stunted sales without new customers.

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Form partnerships with national Indian

retail companies to set their foot into the
local community
Inquire contact with local manufactures
to produce products that are more
favorable to Indian taste.
Monthly training process for the
employees to make sure Starbucks is
maintaining their good reputation for
service
Initiation of the Starbucks credit card
every time one cup of coffee is
consumed, you earn a certain amount of
credit. This will make consumers feel
personalized for their experience at
Starbucks.

NZSSCC Case 1 Indian Market Penetration Strategy for Starbucks

Key issue 1 addressed: introduced a sense of

Starbucks company culture in India and their
unique service Consumers will be attached to
Starbucks and the eccentric experience at the
store Increases the brand awareness and
engages Starbucks with Indias culture More
sales and interests to expand the outlet stores
(bigger market)

passive television commercials, printed

advertisements, and such; teenagers as well as
young adults are interacting with brands and
products everyday, often inevitably and
unwittingly. Furthermore, younger people are
more malleable and receptive to new notions,
resulting in customers easier to convert; in
India, over half the population is under the age
of 25.

Implementation of Strategy ONE:

1. Through product endorsement of around 5
Bollywood movies annually. Film productions
will apply for this fund, removing any need
for us to go in and conduct market research.
2. Selling/advertising Starbucks in Bollywood
movie theatres/cinemas. (Setting store
addresses close to these places) Due to the
huge amount of people involved with
cinema culture, there will be a big stream of
consumers. Why is this important? This is
because the more ubiquitous Starbucks
products.
3. Sponsoring national Indian sports such as
Cricket teams and Field Hockey teams as a
means of advertisement so more people are
aware of it and to create more of a buzz.
4. Research on favorite Indian beverage
ingredients and include such in the
Starbucks drinks sold in India. Change the
Starbucks snacks flavors according to the
local taste. There maybe a difference of
taste between the different areas in India, so
we should partner with food companies from
several distinct areas.
5. Design customized Starbucks cups and
drinks according to traditional Indian
festivals and selling them at around the time
of the festival (e.g. Diwali- festival of lights).
6. Sponsoring national non-profit organizations
and having a one page spread campaign for
the organization (e.g. Deepalaya and Red
Cross in India) on local and national
newspapers and websites to show
awareness for issues in India

Purpose: Social Media Marketing

Our primary concern is not the price of the

coffee in India. Starbucks coffee is an inelastic
product and one of our main targeted
customers, middle class and above teenagers
and young adults, would most likely not care
about the price about a cup of Starbucks coffee.
If we do not address the younger generations
first and win them over to the Starbucks culture,
then some of our competitors will do so first,
making it considerably harder for us to win
them over from a competing brand.

A series of the following steps should be

taken
Awareness: Open stores in popular
locations such as the mall, around
schools and workplaces, and parks.
Create big campaigns on Indias
biggest social network, Starbucks, and
create an active account on Instagram
as @StarbucksIndia etc.

Interest: Building on the younger

generations access to different social
media and their wittedness for the
spread of word, more and more people
will simply visit the store due to the
trend among their peers

Desire: A popular trend among the

younger generation will often create a
buzz. Starbucks will not only be known
in India by then as a coffee company
but as the place to be as people
desperately want visit the store and
consume the drink. They would not
want to be left out.
Action: Starbucks original consumers,
who came here firstly because of
curiosity, will initiate more gatherings
of friends and family in Starbucks. The
trend will keep on expanding.

Finance for Strategy Arm ONE:

- Current state:
- Cost: $
- Revenue: $
- Time length:
- Total amount of money raised: $
[the rest is optional depending on what case
you are doing]
- Estimated number of customers/clients:
500
- Approx $ from each client:

Key issue 2 addressed: ?

Strategy Arm TWO:

Implementation of Strategy TWO:

7.
Exploit the youths obsession with social
media as a marketing strategy (e.g. with a
certain amount of Starbucks credits, you

- The concept: Young peoples relationship

with the media is no longer limited to the
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NZSSCC Case 1 Indian Market Penetration Strategy for Starbucks

9.
10.

may gain membership online) to create

further awareness and hype among the
younger population of India

Finance for Strategy Arm TWO:

- Current state:
- Cost: $
- Revenue: $
- Time length:
- Total amount of money raised: $
[the rest is optional depending on what case
you are doing]
- Estimated number of customers/clients:
500
- Approx $ from each client:

8. We will offer selected children the chance of

visiting Starbucks headquarters creating
awareness as well as improving the brand
image and sales. During a 3 month period,
people under the age of 18 will receive one
entry into the draw for every $5 they spend
at Starbucks. At the end of the 3 months, 10
people will be drawn from the raffle and will
get the opportunity to visit Starbucks
headquarters and receive a full tour of the
operations in the headquarters. This will
improve the brand image among Indians as
well as create awareness as more people
will be aware of the competition and
additionally, it will also improve sales as
people will be spending more money and
purchasing more products in attempt to win
the raffle.

[If there is still space, add simple graphs

explaining trends in profits/revenues +
explanation for them at the same time,
dont overload in graphs; try to keep
everything simple and informative.

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