Starbucks' Entry into India: Marketing Strategy and Market Analysis

This report examines Starbucks' potential for achieving instant success in the Indian market. It begins with an overview of marketing principles and the importance of international strategy, particularly for Starbucks' entry into India. The report explores Starbucks' brand image, existing international strategies, and its joint venture with Tata Global Beverages. It analyzes the competitive landscape of the Indian coffee market, including key players like Café Coffee Day and Barista. The research investigates consumer behavior in India, assessing whether Starbucks' existing brand image and marketing strategies will resonate with Indian consumers. The report is structured with an introduction, literature review covering international strategy, competitor analysis, and consumer behavior, followed by a research methodology chapter. The subsequent chapters include data analysis and findings, and conclusions with recommendations for Starbucks' success in India. The research questions address Starbucks' potential for instant success, its current international strategy, the competitive environment, and consumer behavior in the Indian coffee market. The report utilizes various methods for data collection and analysis to provide insights and recommendations.

TABLE OF CONTENTS
CHAPTER 1 – INTRODUCTION...................................................................................................................1
1.1 Overview........................................................................................................................................1
1.2 Chapter structure............................................................................................................................3
1.3 Focus and Purpose.........................................................................................................................4
1.4 Research question..........................................................................................................................5
1.5 Framework and analysis................................................................................................................5
1.6 Potential Significance....................................................................................................................6
REFERENCES.............................................................................................................................................8

CHAPTER 1 – INTRODUCTION
1.1 Overview
The term marketing is defined as science and art of exploration, creation as well as
delivery of value for the purpose of satisfying the needs of target market at a profit. It thus
pinpoints those segments of a firm that has a capability of serving the best via promotion of
appropriate products and services (Andrews and Kim, 2007).
Marketing strategy on the other hand is that long term course of action undertaken by
any firm so as to utilize the scarcely available resources for the ultimate delivery of superior
consumer experience as well as promoting the interest of stakeholders. This concept of
marketing strategy plays an all the more essential role when any firm decides to expand its
business in other nations (Herrera, 2007). Here there is a need on part of the firm to apply
marketing principles across the national boundary. Any firm is likely to experience a wide
range of challenges if it plans to enter a new market. In this respect the requirement is to be in
tune with the needs and preferences of consumers and other factors that vary on moving from
one country to another (Sharma, 2011). Achievement of instant success is not easy as firms
needs to unify their international sales as well as marketing efforts. This can take place by
integrating the concept of culture, language and marketing principles so as to achieve synergy
with the present business strategy. There is also a need to analyze the competitor which is
defined as a strategic marketing as well as management tool for assessing the strengths and
weaknesses of current and potential competitors (Schiffman, 2005).
Consumer behavior in the new market is all the more important which is an attempt to
develop understanding about the decision making process undertaken by buyers both as
individuals and in groups. It thus helps in developing a clear cut understanding about the
wants of consumers so as to devise strategies with respect to the same (Mital, 2007). It is
only after undertaking a thorough market research which is in accordance with the principles
of competitor analysis and consumer behavior that a suitable market entry mode van be
decided.
The concept of international strategy is all the more important for an organization like
Starbucks who has planned to make an entry into the Indian market and aims to achieve
instant success (Lancaster and Massingham, 2010).
Starbucks coffee chain, is a big name in the world and also famous for its retail coffee
business. It offers a wide variety of coffee, tea, pastries and other treats to please its
consumers (Fornell, Mithas, Morgeson, and Krishnan, 2006). It has created a brand image of
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serving the best coffee to clients by maintaining good quality of operations. The consumers
consider the stores to be clean and are overtly satisfied by the product range offered by
Starbucks (Starbucks 'not late' to Indian market, 2010). It is also recognized amongst the
consumers as being a premier roster and retailer of coffee all over the world. Starbucks
opened up its first store in 1971 in Seattle’s Pike Place Market (Heritage, 2013). During the
year 1982, Howard Schultz joined the store as a director of retail operations and marketing.
From then, it began offering coffee to fine restaurants and espresso bars. At present, it is in a
position to boast of its operations by opening up 15,000 stores in more than 50 countries in
the world (Our Company, 2013).
More than the coffee, the firm has been known for its locations, brand image as well
as wide distribution network. It also provides the consumers with Wi-Fi facilities using hot
spot technology that gives clients advanced features as well as professional touch. Recently
the firm opened its first Indian store in central Mumbai during October, 2012. Just a few days
after its opening, the Young Mumbai crowd became attracted by brand and flocked in the
store in large numbers (Coffee success: Starbucks buy Teavana, 2012). Hence in this respect,
the need is to develop a deep understanding about competitors of retail coffee in the Indian
market which happens to be Café Coffee Day, Barista, Caffe Pascucci, The Coffee Bean &
Tea Leaf, Costa Coffee etc.
In the present study, the researcher has tried to examine the question being will
Starbucks attain instant success in Indian market or not. The American iconic brand has made
a huge splash in Indian consumer market. For this, it entered into a joint venture with Tata
Global Beverages on a 50% ownership. Thus, in present report efforts would be made to
analyze if there is a potential in Starbucks to achieve success in India (Starbucks Hopes to
Replicate Its Chinese Success on Indian Soil, 2012). In order to gain a deep insight about the
subject, the researcher will move in a step by step manner. Firstly, there would be a
collection of information about various aspects of brand image. This will be followed by
linking the present success of Starbucks coffee chain with that of Indian coffee market. A
thorough study of Indian coffee chain market will also be carried out so as to find the
probable level of success that can be achieved by Starbucks coffee retailer (DiPietro, Parsa
and Gregory, 2011). This will help to develop a clear understanding about viewpoints
mentioned by different authors. It would further assist the researcher for pinpointing the areas
of improvement (Low and lamb, 2000).
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1.2 Chapter structure
While undertaking any topic it is a required that the researcher is able to adhere itself
with an appropriate structure so as to follow a sequential pattern in a well defined manner.
This would further be beneficial in the long run to undertake proper assessment of the steps
and also aid in the process of reaching to an appropriate conclusion. The following report on
whether brand image will help Starbucks to be successful in India will be represented by
following chapters that have been discussed in the below mentioned paragraphs.
 Chapter 1: Introduction – The given area will represent a well defined outline about
the chosen topic of the research. It will be sub-divided into overview section to define
the topic under study. This would help in establishment of a crucial link between
present operations of Starbucks and its potential of succeeding in the Indian market.
There will be a brief discussion regarding aims and objective along with questions
around which the research is most likely to revolve (Andrews and Kim, 2007). The
chapter will complete by discussion of research methodologies as well as significance
as to how the research would be beneficial for others.
 Chapter 2: Literature Review – The given segment will provide for a detailed outline
about the concepts of international strategy of Starbucks, consumer behavior,
competitor analysis of Indian market etc. There will also be a discussion about the
present strategies being used by Starbucks. The mentioned part would be followed by
discussion in regards with the Indian consumer traits with respect to consumption of
coffee (Divett, Crittenden and Henderson, 2003). Focus would also be given on
success parameters of coffee retailer in India. For this purpose various secondary
sources of literature on Starbucks and Indian coffee retail market will be referred so
as to have a thorough understanding about the areas of research study.
 Chapter 3: Research Methodology – The given chapter will present an overview
about various tools and techniques used in the research. For every method, a thorough
validation will be provided. This will further involve the study of limitations, ethical
consideration that were observed during the research (Merriam, 2009). Chapter 4: Data Analysis and Findings – The next chapter deals with carrying out an
in-depth analysis of collected data in order to reach at outcomes and recommending
further steps to ensure success of the company (Ireland, Webb and Coombs, 2005).
 Chapter 5: Conclusion and Recommendations – This is one of the most crucial
sections of any research study. In present case, there will be a brief outline about
major findings about success of Starbucks that have been arrived at after undertaking
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data collection followed by analysis. The recommendations part will aid for
suggesting appropriate recommendations for bringing an improvement in the products
and services offered by Starbucks retail coffee chain in India (Kitchen, 2013).
1.3 Focus and Purpose
The main purpose of this research study is to examine whether Starbucks can achieve
instant success in Indian market or not. This is essential on account of international plans
undertaken by Starbucks and its mixture of success in failures in various nations where it
made an entry. (Martinez and Pina, 2003). It would further assist in the process of
identification about areas of improvement followed by suggesting recommendations. In the
light of the above mentioned purpose various objectives have been outlined, which are as
follows;
 To examine whether it is possible for Starbucks to achieve instant success in Indian
market.
 To analyse the present international strategy of Starbucks.
 To assess the competitor environment in the Indian coffee market.
 To analyze the consumer behaviour focussing on customers of coffee shops in India.
A number of researchers have been carried out on international marketing strategies
as well as its crucial link with the success of any firm. In addition to this, many research
works have revealed that undertaking of marketing principles at international level plays a
key role in making a successful entry into any new market (Kitchen, 2013). The main
purpose behind carrying out the research study is to identify whether the Starbucks has a
potential to achieve instant success on basis of present scenario of Indian coffee market
(Cosic, 2007).
The idea is particularly essential for Starbucks as the firm has made a ride in Indian
market with a US$80 million joint venture with Tata Beverages on a 50 percent partnership
(Can Starbucks brew instant success in the Indian market, 2011). Revenues are rising for
Starbucks with a faster growth in Asia and it is hoped that the launch in Indian market will
give the firm some more profitability. Until now it has succeeded because if its global brand
image, which is of a premier roster and retailer of coffee, spread over the world (The
importance of marketing strategy: Gaining the competitive edge with Integrated Marketing
Communications, 2007).
In this respect, the main purpose of research is to help Starbucks firm to get an edge
over rival firms in India and establish a presence based on elements of marketing principles
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and research of competitors along with behaviour of consumers. It would further aid in
significant adherence to the strategies that will assist in maintaining future organizational
success of Starbucks in India (Vargo and Lusch, 2004).
1.4 Research question
The purpose of given research study has been to identify whether the present brand
image will help Starbucks to become successful in the Indian market. In the line of this,
several research questions have been formulated, which would be answered in the given
research study.
 Whether it is possible for Starbucks coffee chain to achieve instant success in Indian
market?
 What is the present international strategy of Starbucks?
 What kind of competitive environment is prevalent in the Indian coffee market?
 What is the present consumer behaviour of customers that visit the coffee shops in
India?
All the stated questions would play a helpful role in achieving the above mentioned
aim as well as its subsequent objective.
1.5 Framework and analysis
The given step is very essential for collecting the information from varied sources.
This aids in the process of making the right decision and arriving at conclusion and
recommendation. In this respect, there has been a usage of specific methods that pertain with
the collection of facts and figures followed by analysis. Various steps in this regard have
been mentioned below;
 Research approach – In the given study on Starbucks coffee chain, emphasis have
been laid on qualitative as well as quantitative method of research. This will help in
studying as it to will Starbucks achieve instant success in Indian market? The
approaches will also aid in doing a deep research how can Starbucks succeed in
Indian coffee market. It will further help in gaining an understanding about tastes,
preferences and requirements of Indian consumers (Vargo and Lusch, 2004).
 Design of research – In the present research, there has been a usage of exploratory
research design as it is based on the process of inquiry on success of Starbucks in the
Indian coffee retail market. The exploratory research design will help to determine the
percentage of population that prefers Starbucks coffee because of its existing brand
image (Barr, 2004).
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 Primary method for data collection – Primary collection will be gained by use of
open and close ended questionnaire set carried out on consumers as well as staff
members of Starbucks India. Structured interview will be made a part of study. Secondary method for data collection – Secondary data collection will be based on a
thorough study of scholarly work carried out on the given topic. Besides this, there
would be a usage of text books on branding, strategic management, expansion and
diversification, journals articles, online newspapers, blogs and many other research
papers. Sampling technique – The method for sampling is probabilistic so as to ensure
provision of equal chance so that every strata of Indian consumer population is
included by researcher. A sample size of 50 is selected for the given purpose, which
includes consumers who visit the Starbucks retail coffee chain India, Mumbai and
New Delhi in particular. The respondents would belong to different genders, age
range, professions, income groups etc. Analysis of data – Technique of data analysis will involve use of different software in
the form of SPSS, MS excel, SAS etc. This will aid in the process of proper arrival at
conclusion as well as suggestion of appropriate recommendations.
1.6 Potential Significance
The given research plays a key role in helping out the Starbucks coffee chain in
determining if Starbucks outlet in India has a potential to succeed or not. The firm entered
India with an initial investment of $80 million to respond on the basis of existing competition
in retail Indian coffee market (Dedeke, 2003). In this regard, it is very essential for Starbucks
to understand, what are the strategies that can contribute to success of a given venture? It will
also aid in the process of understanding the consumer, trends, taste and preferences of Indian
coffee retail market. Other than Starbucks it will act as valuable source of input to;
 Similar organization who wish to reap benefits of success on the basis of brand
image.
 Rival firms for formulating the competitor strategies in accordance with the Starbucks
firm.
 The academicians who are preparing thesis for getting Ph. D and other scholarly
degrees. The research will help in development of a deep understanding about the
concept of brand image and its link to successful organizations.
 The experts, as the research paper may act as a source of income.
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 To thinkers and philosophers, it may present an innovative insight to the techniques
and ideas that is an essential component of research.
 To analysts for getting an overview about the concept of success for Starbucks. It will
help to analyze how the present international strategies have contributed to attaining a
competitive advantage for Starbucks in comparison to other outlets that provide for
similar offerings (Burke, 2007).
 To men and women who are a part of field of literature. The research study can foster
for development of a new direction, styling as well as creative approaches to literary
works of similar origins (Fink, 2000).
In this respect, the given study will act as an essential source and the major basis for
solving queries and developing a deep insight about the branding strategies undertaken by the
Starbucks.
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REFERENCES
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Andrews, M. and Kim, D., 2007. Revitalizing suffering multinational brands: An empirical
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Barr. P.S., 2004. Current and potential importance of qualitative methods in strategy
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Burke, M.E., 2007. Making Choices: Research Paradigms and Information Management.
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Mital, 2007. Case In Strategic Management. Tata McGraw-Hill Education.
Pahl, N., 2009. The Idea Behind the Starbucks Experience: The Main Elements of Starbucks'
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Sharma, K., 2011. Impact of recession on buying behavior of Indian Consumers.
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Vargo, S.L. and R.F., Lusch, 2004. The Four Service Marketing Myths: Remnants of a
Goods-Based, Manufacturing Model. Journal of Service Research. 6(4). pp. 324.
Wood, E., 2009. Facets of Corporate Identity, Communication and Reputation. Journal of
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