Answer

Starbucks Coffee has been serving top quality coffee in much of North America since 1971. The company has maintained a culture of using specific types of coffee berries for the production of their signature product. The use of specific coffee berries and type has maintained the unique factors associated with the company’s organization. Over the years, Starbucks has expanded its locations and in turn, emerged to be an international brand with locations in different parts of the world. Primarily, the expansion of the business was with the aim of ensuring that the business is profitable and highly competitive in the market.

Essentially, Starbucks unlike its competing rivals classifies itself highly and is often associated with the affluent in the society. The company prides itself with top quality brewed coffee to the satisfaction of the clients. Therefore, Starbucks’ pricing and branding is often assumed to be for the wealthy. Even in the company’s expansion to various regions, Starbucks has maintained its organizational culture and approach to service delivery regardless of its location. Among the main factors that Starbucks has had to acknowledge has been the cultures of the regions that it has expanded to. This is such that, while regions in North America such as Canada are liberal and culture is not a barrier to business success, other regions of the world hold their cultures dear and businesses have to respect these cultures in order to thrive. Starbucks’ expansion to China faced the cultural challenge even as it penetrated the Chinese market (Hollensen, 2017). Cultural barriers may affect business performance but with an understanding of the people’s culture, it is possible for companies to thrive.

Cultural Dimensions

Canada is considered to be a hub of cultural diversity based on the numerous cultures that are accommodated in the country. This makes it possible for businesses to comfortably penetrate the market as much of the restrictions have been absorbed in diversity and the people appreciate the various differences. Ideally, with the large numbers of people from different parts of the world, the population is more liberal to the ideas that are brought up and even develop a unified culture from the diversity. In this regard, Starbucks in Canada is not restricted to adhere to certain cultural standards or norms as it is a free environment to establish the business (Babad, 2014). Over the years, the company has thrived and enjoyed massive profits from the Canadian market.

The Chinese on the other hand are very different from the Canadians in terms of culture. The Chinese culture dates back to the period prior to the civilization of China when dynasties ruled the region. The Chinese people have always placed strong value in their culture which involves the consumption of tea. Chinese tea is prepared in a manner that is taught and shared through the generations. The culture of taking tea hence posed as a challenge to Starbucks penetrating the Chinese market. Practically, it would appear as though Starbucks was challenging the deep history of the Chinese tea culture and degrading it for the promotion of its quality coffee. Therefore, the penetration into the Chinese market by Starbucks had to conform to the culture where communism is at the core and tea is highly regarded (Devault, 2018). The cultural dimension in this regard led to Starbucks adopting to the norm and upholding the values of the tea culture even as it promoted its coffee in the region.

Marketing

Starbucks Coffee has incorporated a variety of marketing strategies in the different regions that it has expanded to. The various marketing strategies are based on the cultural diversity of the regions. In this regard, the marketing strategy used in Canada is not particularly the same that is used in China. However, one of the common marketing approaches used by Starbucks is the use of social media to reach out to the target markets. Ideally, the company makes use of the emerging trends and takes advantage of the trending topics to use as part of their advertising (Kolm, 2016). This has been an approach that has been used in the company’s social media channels such as YouTube, Facebook, Twitter and Instagram (Kolm, 2016). Aside from the use of social media that is applied in both Canada and China, Starbucks has used charity campaigns to market in the Canadian market. Primarily, the charity campaign involved Starbucks teaming up with Foursquare to help with the spread of awareness of AIDS. Starbucks would donate $1 for every individual that checked into the coffeehouse.

In China however, the marketing strategy does not involve the blunt advertising methods of setting up billboard or print media. On the contrary, Starbucks had to reconsider its approach to marketing in China. This is because, loud advertising would have been perceived as an attack to the Chinese tea culture. Therefore, Starbucks set up their coffeehouses in the high-traffic and visibility locations (Qian & Xing, 2016). Further, in a bid to blend with the Chinese culture and to increase the marketing of Starbucks coffee, the company introduced beverages in the coffeehouses with local tea-ingredients (Zakkour, 2017). Practically, the marketing in China though different from the preferred methods still served to render Starbucks among the top restaurants in the Chinese region.

Comparative Analysis

These differences reveal the manner in which cultural dimensions can impact the performance and growth of a given product. In Canada, Starbucks is at liberty to maintain its originality and exude its dominance in the production of top quality coffee. However, in China, Starbucks has to duly pay attention to the culture of the people and even while maintaining its dominance, the company has to incorporate some of the cultural preferences in its menu to suffice the target market.

Consumer behavior is thus influenced by how much value the company places on the preferences of the consumers. The differences in the communication materials reveal that in Canada, the liberal nature of the population makes it possible for Starbucks to maintain its originality. However, in China, in order to appeal to the target audience, the population’s culture in the preference for tea has to be duly considered and hence the introduction of culturally brewed beverages. This value on the Chinese culture ultimately encourages consumers to purchase the products from Starbucks.

References

Babad, M. (2014) How Starbucks has conquered Canada. The Globe and Mail (May 27, 2014) Retrieved from https://www.theglobeandmail.com/report-on-business/top-business-stories/how-starbucks-has-conquered-canada/article18865907/

Devault, G. (2018). How Starbucks brought coffee to China:  A market research case study. The Balance (October 29, 2018) https://www.thebalancesmb.com/market-research-case-study-starbucks-entry-into-china-2296877

Hollensen, S. (2017). Global Marketing, 7th edition, Pearson

Kolm, J. (2016). Starbucks shares the spirit of the season. Strategy, (November 11, 2016) Retrieved from http://strategyonline.ca/2016/11/11/starbucks-shares-the-spirit-of-the-season/

Qian, Y. & Xing, T. (2016). Starbucks vs Chinese tea—Starbucks brand management strategy analysis in China. International Business and Management, 12(1): 29-32

Zakkour, M. (2017). Why Starbucks succeeded in China: A Lesson to all Retailers. Forbes (August 24, 2017) https://www.forbes.com/sites/michaelzakkour/2017/08/24/why-starbucks-succeeded-in-china-a-lesson-for-all-retailers/#57e4f9fc7923