The Starbucks Effect
An American coffee retailer launched itself in the year 1971 by the name of Starbucks and simply used the combination of great coffee and great experience to quickly establish itself as a globally acclaimed iconic brand. Present in 62 countries and territories as of October 2013, Starbucks had attempted to break into India’s huge coffee market in the year 2007 in a joint venture with Kishore Biyani of the Future Group but the deal never worked out. But in October 2012 Starbucks announced a 50:50 joint venture with Tata Global Beverages called Tata Starbucks and started operating from its first store in India in Mumbai. In a short span of just one year Starbucks India has 31 stores in the country and a loyal following of several dedicated coffee lovers. EE speaks with Ms. Manmeet Vohra, Director – Marketing and Category, Tata Starbucks Limited for a closer analysis of the Starbucks affliction.
EE: When Starbucks entered the Indian market, there were already several domestic and international players (CCD, Barista, Gloria Jeans, Costa, Coffee bean and Tea Leaf, Dunkin) that existed. What was the strategy to differentiate?
The Starbucks Experience is built on three primary components: our products, our places and our people. Customers come for coffee, stay for the inviting warmth and return for the very human connection. This is what our customers come back for and this requires an unwavering commitment, strong brand values and responsible business practices.
Our stores are designed to provide customers new opportunities for discovery, a high level of engagement with Starbucks partners (employees), and a deep connection to Starbucks coffee heritage. We provide more than high-quality coffee but that distinct Third Place, between work and home, and opportunities to connect with others over handcrafted beverages prepared by passionate partners that make Starbucks unique and a destination for our customers. We feel that this is something that is very special with Starbucks.
We have received an overwhelming response from customers; a lot of people have made Starbucks a part of their routine and we hope to see this grow. With 31 stores across Mumbai, Delhi NCR, Pune and Bangalore we are confident in our ability to build and grow the Starbucks brand in India, and we firmly believe that we can bring the Indian consumers an unparalleled customer experience while earning their trust and respect.
EE: Starbucks perhaps stands for different reasons in India as opposed to elsewhere in the world. This calls for different marketing strategies. What strategies have you proposed to reach out to your Indian consumer?
The discerning Indian consumer appreciates a quality experience delivered at the appropriate value. We believe this offers tremendous opportunities for us to offer the high-quality arabica coffee, handcrafted beverages, locally relevant food, legendary service and the unique Starbucks Experience to customers in India consistent with the high quality our brand is known for and trusted by consumers around the world.
One of our strengths is the passion that our partners (employees) have for our coffee and the stores. They are an instrumental part of our marketing strategy because word-of-mouth about our service and coffee is so important. The moments of connection that our baristas create with our customers, day after day, and the connections our customers create among themselves differentiate our brand and experience, making us so much more than just a coffee company.
We believe that we have a unique opportunity to be a part of the lives of where people live, work and play. Our store designs reflect Starbucks core mission as a gathering place for the communities we serve. Bringing people together, inspiring change and making a difference in people’s lives – it’s all part of being a good neighbour which helps establishing meaningful, human connections with our customers.
EE: Starbucks entered the Indian market with a bang. It instantly became a fad. Consumers took pride in getting their photos clicked in a store and were using social media platforms to engage with the brand. But every fad sooner or later dies out. What steps are you taking to establish a recall value?
We believe, a brand’s experience is not just about the medium — a store or a website. It is also about something less tangible — values. Today people have a deep interest in and knowledge about what companies stand for and how they are living up to their promises. Doing business with a conscience is the only way you can win the trust of people and it is a trust we must strive to earn every day.
We pride ourselves on creating a consistent, welcoming environment so our customers can enjoy their daily cup of coffee, exactly as they want it. This is what our customers come back for and this requires an unwavering commitment, strong brand values and responsible business practices. We are focused on a long-term, disciplined and thoughtful growth in this dynamic market, and committed towards exceeding expectations of our customers and building a strong presence in the market.
EE: Starbucks has a large offline customer base worldwide and huge number of fans & followers on social media. It is like a 'habit' for many people. But its entry into India is fairly recent, what are you doing for 'habit formation' within the Indian market?
Creating a unique and relevant experience for customers in our stores has been the foundation of Starbucks, and we firmly believe that maintaining a fantastic customer experience is critical not just for a company’s survival, but to its sustainable growth. Because of the sea change in consumer behavior, the challenge for any company is to continually create relevant customer experiences while staying true to the company’s values and historic brand promise. We understand that our customers expect the exact experience they are looking for each time they walk into our store.
We also understand and embrace the power of digital media and social networks. The seismic shifts in how our people and our customers communicate using digital communications have definitely heightened the need for more constant, interactive dialogue. If we want to continue to create relevant, meaningful relationships with our customers, we must do so beyond our store, which means extending the Starbucks Experience in the digital space which we refer to as the Fourth Place.
EE: Starbucks does personalization so well in its stores. Are you taking any measures to connect with your consumer outside the store?
Staying connected and constant engagement on virtual platforms has become an intrinsic aspect of everyday life, leading to greater awareness which leads people to make informed choices. We accept, understand and embrace the power of digital media and social networks. And, we believe that if we want to continue to create relevant, meaningful relationships with our customers, we must do so beyond our store, which means extending the Starbucks Experience through the Fourth Place. We care about giving our customers a personal experience in an engaging and transparent manner - both at our stores and online.
One of our strengths is the passion that our partners have for our coffee and the stores. They are an instrumental part of our marketing strategy because word-of-mouth about our service and coffee is so important. We provide a sense of place that fulfills the craving for human connection wherever our customers are—at home, in our stores, while travelling, or online. This is what differentiates our brand and experience, making us so much more than just a coffee company.
EE: What are your plans of expansion?
Since our foray in the Indian market in October 2012, we have launched 31 stores across Mumbai, Delhi NCR, Pune and Bangalore. We are overwhelmed by the way in which our customers have embraced us and how several of them have begun to make Starbucks Experience a part of their routine. We have just completed one year of operations in the Indian market and our business here continues to exceed our expectations.
We are focused on a long-term, disciplined and thoughtful growth in this dynamic market, and committed to work towards exceeding expectations of our customers and building a strong presence in the market.
EE: What are your thoughts on experiential marketing?
The changing marketing communication ethos has provided consumers the ability to take control of their own experiences with brands and extended opportunities to share their experiences within their own social networks. Experiential marketing is an apt example of how multiple platforms come together to bring customers closer to the brand and interact with the experience in different ways.
At Tata Starbucks Limited, we believe in our ability to respond to the constantly changing marketplace in ways that strengthen our connections with customers. When we are fully engaged, we connect with, laugh with, and uplift the lives of our customers – even if just for a few moments. Sure, it starts with the promise of a perfectly made beverage, but our work goes far beyond that. It’s really about human connection.
EE: Please share any other thoughts you have pertaining to marketing/experiential/consumer connect/live events.
The foundation of Starbucks is built on the experience we are able to deliver to our customers each and every day. The Starbucks Experience is built on three primary components: our products, our places and our people. We believe that we have a unique opportunity to be a part of the lives of people where they live, work and play. Bringing people together, inspiring change and making a difference in people’s lives – it’s all part of being a good neighbor.
We are in constant dialogue with our customers, allowing us to understand their needs and stay top-of-mind in this increasingly competitive retail environment. Coffee and connection will always be the heart of Starbucks, and we will continue to works towards earning the trust and respect of customers.
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