Monday Metcon 26: Starbucks’ hard lesson in Market Localization
Monday Metcon is weekly newsletter on dgajsek.com covering marketing, productivity and music. Sometimes with borderline inappropriate humor.
Marketing: Starbucks is such a powerful brand it has to succeed just because of the name, right? I mean, it’s like McDonalds, people to about them and their service.
Well, in Australia Starbucks bombed bad.
Why?
Because they failed to address the importance of local market. Their playbook of rolling out the business model works in majority of locations/markets. In fact in China they open a new Starbucks café every 15 hours.
However, the Australia is already known as one of the hardest markets to get into in the first place and they are very proud of their coffee culture. The flat whites, coffee art in ceramic lattes has been served for dozens of years at beloved local baristas who know what they have been doing.
What Starbucks did in US was introducing the coffee culture in the new market because it was non-existent before. It’s the classic “bring the old product to the new market” approach. In their case, Starbucks brought the Italian coffee culture (with heavy localization and adjustment) to the US market. But in Australia this model didn’t fit in at all.
In 2008, Starbucks close 2/3 of all the stores. The prices of Starbucks’ relatively common tasting coffee was pricier than the local solutions and managed by young students who didn’t have the level of appreciation tot he culture as much as established baristas.
Interesting enough, Starbuck opened its first Starbucks coffee shop in Milan, Italy couple of months ago. The representatives are saying they are approaching the market with humility and respect. I wonder what they can do to get closer to them and what is their main value proposition.
Speaking of McDonalds, did you know that the biggest market is Middle East. McDonalds, Burger King, Dominos and other fast food chains are stacking up mad revenue from MENA region — McDonald’s makes $6 million dollars per day in the Middle East [and Africa] selling their products, and $2.2 billion annually. And they plan to increase that figure by 60 percent by 2020, which is only a few years from now.
Good for them but on the other side the Arab countries are struggling with obesity related diseases. Coincidence?
Music: Y’all ready for another country hitter? Here’s Whiskey Myers (as made famous by series Yellowstone). A great example of influencer marketing. The band received massive attention after they appeared in episode 4 starring Kevin Costner. The band received 2 million people searching more about them.
Here’s the live acoustic versions of the song “Stone”.
Reddit Awesomeness:
“The CEO of Starbucks technically runs one of the worlds largest drug empires”
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