Starbucks A Global Brand Essay

Question:

How did the CEO make starbucks a global brand , Benefits of effective relationship marketing in international market and benefit of customer commitment toward the brand ?

Answer:

Brand that is popular and widely accepted by not only the local consumers, but by the consumers all over the world is known as a global brand. Organizations that are responsible for producing global brands always identify the relative attractiveness of each market for that brand. (Swoboda et al. 2012).

International marketing refers to a marketing strategy performed by transatlantic companies or across the border. Within this marketing, the companies are forced to extend their techniques that they use in the main country.

In the beginning, Starbucks was just a single caf? out in Seattle. They used to make great coffee but their structure was like any other coffee shop with no uniqueness and differences. Then the CEO of the organization implemented some strategies that allowed Starbucks not only to gain competitive advantage but also to become a global brand (Kotabe et al. 2014). Some of those major strategies were values for values, allowing employees the best chance to succeed and listen accurately before responding.

Relationship marketing includes several benefits for an organization that is planning to make their mark in global markets. Communication through social media, which is an important tool of relationship marketing, allows an organization to connect with the customers or the followers by sharing relevant content with them that is both educational and entertaining. On the other hand, customers want to feel special and important as most of the times they do not get to feel that way in other areas of life (Swoboda et al. 2012). An organization can fulfill those needs of the customers by providing something that is more than just a product or service such as an experience that they will remember for a long time. A memory that an organization can create with its customers by relationship marketing will drive them to come back more quickly and frequently, thus develops business opportunity.

The biggest benefits of customer loyalty comes from word-of-mouth advertising when existing customers of an organization such as Starbuck will recommend the brand to his friends and families. Besides, an organization will be able to keep its strong even in poor times, as loyal customers will never walk away.

The Chinese changed the tea drinking habit because tea is one of the oldest cultures of China. The Chinese are working towards, and researching to the method of effective tea drinking made them go with the change in the culture. The consumers of China even want to divert their traditional views about the drinking and are trying to be more western is also the reason of changing the tea habit of China.

China is an important part of the market in the Starbucks because, after 14 years of persuasion to China and make them buy the foreign coffee culture the Starbucks aimed to make the rapid expansion of the company. The company even aimed to capture a larger market with the strategy of going local rather cultural. It is expected that Starbucks will gain more success by targeting local preferences rather than cultural preferences.

A joint venture of the company is defined as the commercial enterprise taken up jointly by either two or more parties retaining the individual identities (Kotabe et al. 2014).

The advantages of the joint ventures in China are:

The class of consumers expands in a rapid sense. The middle and upper class of people can now afford to buy commodities beyond necessity.

Western brands are regarded as the most demanding because the brands provide good qualities of products and customer service. Also, the western franchises bring new and updated system is the business procedure.

China made effective measures for the business owners to come and establish their business or making a franchise or enter in the joint venture. The second and third tier cities are now open for the business as there is an increase of potential customers who would prefer expensive and Western commodities.

The disadvantages of the joint ventures in China are:

The intellectual property protection is not secured in the business with an inadequate legal framework. Many local companies take the name and logo to form a fake company which may adversely affect the goodwill of the qualified brands.

The local managers do not have management skills.

The evaluating license is a tough job.

Lots of markets increase the competition hence; sometimes the product has to be sold at fewer prices to survive in the market.

Intermediate market entry mode is applied when an organization can transfer some of their value chain into a foreign market where it is going to expand its business. Four primary types of Intermediate entry modes are contract manufacturing, licensing, joint venture and franchising (Wang et al. 2013).

Contract manufacturing entry strategy within intermediate market entry mode can be applied when an organization is planning to communicate with the foreign customers closely. Besides, if the foreign production costs are low including transportation cost, then companies deicide to transfer their manufacturing unit in that country. Biggest example of such decision is Apple as their biggest I-Phone manufacturing unit is located in China (Mukherjee and Tsai 2013). On the other hand, another intermediate entry mode strategy that is Discuss licensing is different from contract manufacturing as it contains long-term policies along with greater responsibilities to complete. One such example is the contract between Toyota and Witricity.

References:

Brown, M.A., Staver, B., Smith, A.M. and Sibley, J., 2015. Alternative Business Models for Energy Efficiency: Emerging Trends in the Southeast.The Electricity Journal, 28(4), pp.103-117.

Hattox, R.S., 2014. Coffee and coffeehouses: the origins of a social beverage in the medieval Near East. University of Washington Press.

Kotabe, M., Jiang, C.X. and Murray, J.Y., 2014. Examining the complementary effect of political networking capability with absorptive capacity on the innovative performance of emerging-market firms. Journal of Management, p.0149206314548226.

Mukherjee, A. and Tsai, Y., 2013. Technology licensing under optimal tax policy. Journal of Economics, 108(3), pp.231-247.

Swoboda, B., Pennemann, K. and Taube, M., 2012. The effects of perceived brand globalness and perceived brand localness in China: Empirical evidence on western, Asian, and domestic retailers. Journal of International Marketing, 20(4), pp.72-95.

Wang, K.C.A., Liang, W.J. and Chou, P.S., 2013. Patent licensing under cost asymmetry among firms. Economic Modelling, 31, pp.297-307.

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