Global Marketing Environment: A Case Study of Starbucks in India

Running head: GLOBAL MARKETING ENVIRONMENT
Global marketing environment
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1GLOBAL MARKETING ENVIRONMENT
Introduction
The current business scenario demands the foreign market expansion for the business
organizations. Thus, more organizations are opting for expanding their business beyond the
national boundaries. However, it is also important for the business organizations to have the
proper understanding about the local market trends to have the proper and effective marketing
strategy in the host country (Akaka, Vargo & Lusch, 2013). In addition, the marketing mix
strategies should be designed accordingly and the strategic efforts should be made in accordance
to major marketing drivers in the international scenario. This essay will discuss about the factor
considerations for Starbucks in entering in the Indian market. In addition, the marketing mix
strategies for them will be amended in accordance to the Indian business situations. The key
drivers in the international market will also be identified and the role they played in
implementing the strategic efforts (Skarmeas, Zeriti & Baltas, 2016).
Expansion approach of Starbucks
It is reported that Starbucks entered in the Indian market in 2012 through the joint
venture entry mode strategy with Tata Global beverages. Initiation of the joint venture strategy
further helped Starbucks to have the lower involved risks in foreign business operation. In
addition, they also got the expertise of Tata in the Indian market for their host market business
expansion (Gopalahrishna, Victor & Fleischmann, 2016). However, one of the major advantages
being gained by them in entering in the Indian market is largely untapped market. This is due to
the reason that prior to the entry of Starbucks in the Indian market, an only few coffee chains
were operating with having low penetration. At that point of time, the concept of coffee chains
was not much popular and India is traditionally a tea drinking country. It is identified that prior

2GLOBAL MARKETING ENVIRONMENT
to the entry of Starbucks in India, home grown brands such as Café Coffee day and Barista were
the major players. In addition, the Indian Coffee House was there with their traditional and old
school service concepts (Berger & Balke, 2016). Thus, Starbucks faced a moderate intensity of
competition in their Indian operation in the initial stage. However, in the following stage till
now, they are facing huge onslaught of the major competitors in terms of product and market
development strategy.
One of the major trends being identified in the coffee chain business in India is majority
of the brands are being positioned as premium in the market. However, it is also identified
Starbucks is having the position of most premium brand in the Indian market (Kolah, 2014).
Though this positioning strategy is restricting their sales volume, but the coffee chains in India
are limited only in the urban areas. Thus, the premium positioning is acceptable for Starbucks in
doing business in India. On the other hand, in dealing with the popularity of tea in India,
Starbucks is having own brand of Tea named Teavana (Rajasekaran, 2015). Under this brand,
there are different varieties of tea being sold by them. This helped them in catering to both coffee
and tea drinking population.
Recommended marketing mix
Product
It is already identified that Starbucks is already having both tea and coffee brands in the
Indian market. However, it is recommended that the taste and approach of the products of
Starbucks should be made more applicable to the Indian customers (Dutta et al., 2014). This is
due to the reason that it is identified that majority of the flavors of Starbucks in India are in
accordance to their global portfolio and is not adhering to the mainstream social trend and