In 2012, when Starbucks launched in India, everyone thought theyโd fail
Why? Because India is a price-sensitive market
But despite being so expensive, Starbucks has become really successful in India
Hereโs how Starbucks' partnership with Ratan Tata proved everyone wrong:
Why? Because India is a price-sensitive market
But despite being so expensive, Starbucks has become really successful in India
Hereโs how Starbucks' partnership with Ratan Tata proved everyone wrong:
It all started when the world's leading roaster & retailer of specialty coffee joined hands with the company that built India.
Starbucks in India is:
Starbucks Coffee - A TATA Alliance.
Starbucks in India is:
Starbucks Coffee - A TATA Alliance.
Howard Schultz and Ratan Tata brewed a JOINT VENTURE together to serve the Indian population.
The philosophies and vision of the 2 companies โ TATA Group and Starbucks Inc. complement each other.
So, their strategic alliance reaped extraordinary results for both of them.
The philosophies and vision of the 2 companies โ TATA Group and Starbucks Inc. complement each other.
So, their strategic alliance reaped extraordinary results for both of them.
Starbucks has been built by Howard Schultz with a vision to bring the Italian coffeehouse tradition to the US and then to the entire world.
The company is building neighborhood gathering places โ to develop human connection, conversations, and community.
The company is building neighborhood gathering places โ to develop human connection, conversations, and community.
It portrays itself as the "third place between work and home".
And this philosophy worked like a charm
โ even in INDIA!
Before understanding HOW Starbucks captured the Indian market, let's see WHY Starbucks came to India in the first place.
And this philosophy worked like a charm
โ even in INDIA!
Before understanding HOW Starbucks captured the Indian market, let's see WHY Starbucks came to India in the first place.
Simply put โ Starbucks recognized the Indian subcontinent as a plethora of opportunities and an ideal destination for its products.
- Huge population,
- High economic growth,
- Rise in per capita income & purchasing power,
- Rapidly changing tech infrastructure,
- Huge population,
- High economic growth,
- Rise in per capita income & purchasing power,
- Rapidly changing tech infrastructure,
- Large pool of cost-efficient skilled workers, and
- Open regulatory environment
make our country very attractive to every international company.
Moreover, they realized that Indian consumers embrace brands with relatable, relevant, and aspirational products.
- Open regulatory environment
make our country very attractive to every international company.
Moreover, they realized that Indian consumers embrace brands with relatable, relevant, and aspirational products.
After getting the answer to "Why India?", let's hop on to another question:
Why did Starbucks form a joint venture with TATA?
See, India offers a diverse consumer base with unique requirements, so even after possessing exceptional products.
Why did Starbucks form a joint venture with TATA?
See, India offers a diverse consumer base with unique requirements, so even after possessing exceptional products.
โ Indian market is not accessible to global players.
Understanding the consumer base along with an assessment of the market is challenging for international brands.
This makes it crucial for co.s to join forces with domestic players who are well acquainted with local markets.
Understanding the consumer base along with an assessment of the market is challenging for international brands.
This makes it crucial for co.s to join forces with domestic players who are well acquainted with local markets.
Moreover, entering an emerging market is risky. So the internal motive of Starbucks, to get in bed with TATA, was to reduce the overall risk.
๐ TATA has been OPERATING in India for more than 150 years.
๐ It's a WELL ESTABLISHED CO. with a STRONG FOOTHOLD in Indian households.
๐ TATA has been OPERATING in India for more than 150 years.
๐ It's a WELL ESTABLISHED CO. with a STRONG FOOTHOLD in Indian households.
๐ It understands the INDIAN MARKETS and CUSTOMER REQUIREMENTS better than any other company.
๐ It also got STRATEGIC NETWORKS and INDIA-SPECIFIC resources.
So, Starbucks agreed with TATA GLOBAL BEVERAGES to form a Joint Venture โ to roll out its cafes nationwide.
๐ It also got STRATEGIC NETWORKS and INDIA-SPECIFIC resources.
So, Starbucks agreed with TATA GLOBAL BEVERAGES to form a Joint Venture โ to roll out its cafes nationwide.
Under this agreement, both companies pooled their resources for generating innovative, low-cost, and high-value-for-money products.
๐ธ TATA COFFEE, a unit of TGB, started sourcing homegrown coffee beans to Starbucks outlets, GLOBALLY.
๐ธ TATA COFFEE, a unit of TGB, started sourcing homegrown coffee beans to Starbucks outlets, GLOBALLY.
๐ธ Starbucks has minimized the high cost of real estate by leveraging the eco-system of Taj Hotels and TATA's retail outlets.
๐ธ TCS team set up India's first INTERACTIVE ORDERING SYSTEM โ a cloud-based infrastructure for Starbucks.
๐ธ TCS team set up India's first INTERACTIVE ORDERING SYSTEM โ a cloud-based infrastructure for Starbucks.
Moreover, this venture has strengthened its global partnership by co-branding.
๐ธ Starbucks expanded the availability of HIMALAYAN WATER โ a Tata brand.
๐ธ They jointly produced a premium tea brand โ TATA TAZO & made it available in all Starbucks locations across India as well.
๐ธ Starbucks expanded the availability of HIMALAYAN WATER โ a Tata brand.
๐ธ They jointly produced a premium tea brand โ TATA TAZO & made it available in all Starbucks locations across India as well.
Now, this venture has been proven as a win-win for both the co.
Starbucks not only shared its risk and costs while entering the new market, but it also obtained valuable insights into Indian customers' behavior as well as the business environment.
Starbucks not only shared its risk and costs while entering the new market, but it also obtained valuable insights into Indian customers' behavior as well as the business environment.
We can positively say that Starbucks could not have been this successful without this alliance of a lifetime.
vAnd this was a very sweet deal for TATA as well.v
First, they entered into an entirely new market โ Quick Service Restaurant (QSR), and disrupted it forever.
vAnd this was a very sweet deal for TATA as well.v
First, they entered into an entirely new market โ Quick Service Restaurant (QSR), and disrupted it forever.
Second, because of this deal, TATA became one of the largest publicly traded coffee growers.
And last but not the least, TATA excelled in creating more job opportunities for Indians.
It has been TATA's primary motive since the beginning of its time.
And last but not the least, TATA excelled in creating more job opportunities for Indians.
It has been TATA's primary motive since the beginning of its time.
Now after understanding "WHY TATA?", let's see how Starbucks lured
'chai pe charcha karne wale Indians' towards its coffee.
See, India is a price-sensitive market โ which means people reduce their demand as the price of the product goes up.
'chai pe charcha karne wale Indians' towards its coffee.
See, India is a price-sensitive market โ which means people reduce their demand as the price of the product goes up.
But on the other hand, people of our country love aspirational brands and products
โ a product or a brand, that a large segment of the target audience wishes to own, but can't (for economic reasons).
Starbucks realized this and portrayed itself as an aspirational brand.
โ a product or a brand, that a large segment of the target audience wishes to own, but can't (for economic reasons).
Starbucks realized this and portrayed itself as an aspirational brand.
People go out and have coffee in various cafes, but they aspire to go to Starbucks because
โ visiting Starbucks is a status symbol now.
Starbucks is not just selling coffee. It's selling a LIFESTYLE.
โ visiting Starbucks is a status symbol now.
Starbucks is not just selling coffee. It's selling a LIFESTYLE.
And all of this has been possible due to their exceptional marketing strategy, product positioning, and customer targeting.
It segmented its entire market on 4 bases.
1. DEMOGRAPHIC: the co. targets 22-60 years old male and female who are professionals, employees, and students.
It segmented its entire market on 4 bases.
1. DEMOGRAPHIC: the co. targets 22-60 years old male and female who are professionals, employees, and students.
2. GEOGRAPHIC: people living in urban areas.
3. PSYCHOGRAPHIC: people belonging to middle and upper-class families who are reformers, aspirers, explorers, and achievers.
4. BEHAVIORAL: customers with hardcore loyalty who enjoy a premium quality coffee with a relaxing ambiance.
3. PSYCHOGRAPHIC: people belonging to middle and upper-class families who are reformers, aspirers, explorers, and achievers.
4. BEHAVIORAL: customers with hardcore loyalty who enjoy a premium quality coffee with a relaxing ambiance.
This coffee giant is targeting the premium customer segment only.
This is called MONO SEGMENT POSITIONING.
Now, if we talk about marketing, Starbucks is selling an exceptional in-store experience, and also killing it on social media to target the modern & tech-savvy generation.
This is called MONO SEGMENT POSITIONING.
Now, if we talk about marketing, Starbucks is selling an exceptional in-store experience, and also killing it on social media to target the modern & tech-savvy generation.
They design their stores keeping the HERITAGE of the place & INNOVATION in mind.
They use bright, regionally inspired furniture and fabrics to create calm in this fast-paced world.
They use bright, regionally inspired furniture and fabrics to create calm in this fast-paced world.
Moreover, they've successfully created hype among millennials.
Now it's a "thing" to post pictures of the coffee you're drinking in Starbucks โ on social media.
They're also using community-based campaigns and festive marketing.
Now it's a "thing" to post pictures of the coffee you're drinking in Starbucks โ on social media.
They're also using community-based campaigns and festive marketing.
And at last, they introduced some of the Indian dishes on their menus like Konkani Twist, Reshmi Kebab Roll, Muffins, and Sandwiches.
This increased its overall revenue and brand loyalty. And that's how STARBUCKS is doing business
โ THE INDIAN WAY.
This increased its overall revenue and brand loyalty. And that's how STARBUCKS is doing business
โ THE INDIAN WAY.
If you liked this read do ReTweet๐ the 1st tweet
and follow us @FinFloww for such reads every Monday, Wednesday and Friday!
and follow us @FinFloww for such reads every Monday, Wednesday and Friday!
Join 14611 people who receive such stories daily on their WhatsApp:
chat.whatsapp.com
chat.whatsapp.com
Loading suggestions...