Starbucks’ Digital Marketing Strategy Analysis of China Market

Starbucks’ Digital Marketing Strategy Analysis of China Market

Introduction

Starbucks’ most horrible frightening in China—contest from fast-developing beginners such as the Luckin Coffee Company—is becoming sure. Many years, China has been a fresh market border the Starbucks. At the beginning of the year 2019, Starbucks reported 3,522 shops in the country, which brought it to the second leading market following the U.S. in regards to (Krishna 2018). China’s market-leading edge is the desire of American coffee they enormous deficiently wants to act on a grave crisis in the country: market dissemination. Following the years of hostile development, Starbucks shops are nearly everywhere around the world.

And they’re starting to cannibalize the auction of every other. The problem is that contest from local beginners is infectious with Starbucks at a high-speed velocity. One of the beginners is Luckin Coffee. Starbuck was first established in Beijing city in the year 2017, whereby started opening the shop at a firing speed. A shop was being opened at an interval of less than 24hours. That’s how this business arrived in 2000 by the beginning of 2019 and anticipated to reach 4500 at the end of 2019, thumping Starbucks, which projected to have 4,121 shops (Chuang 2019). The china Luckin coffee has had financial scandals at the beginning of 2020 whereby the company had to fire some of it, bosses, due to this scandal. The bosses apologized for the accounting scandals, and the company had to innovate to get to its financial positions after the scandals.

Research objectives

  • To recognize and assess the methods that Starbucks has made in china coffee market and how it’s being affected by the digital marketing strategy.
  • To create awareness of the influence of the market study methods that Starbucks china has made to face their contestant in the coffee stores business as well as its competitor in the Chinese market, Luckin Coffee.

To demonstrate how the market study has aided Starbucks china to expand safety and a healthy relationship with its consumers in the coffee store business in China.

Research questions

What are the aims and objectives of Luckin coffee and other coffee companies?

What are the values of digital market research for coffee businesses?

What are the digital market research techniques used by the coffee business?

How Starbucks developed digital market research techniques in china?

How are the financial performances of Luckin coffee?

 

 

 

 

 

 

 

Literature review

According to Chuang (2019), Luckin Coffee’s fast development is revolving into a frightening situation for Starbucks in several of basis. Purkayastha (2019) demonstrates that Luckin had started to filch from Starbucks, whereby they began shops in elevated outline locations such as the prohibited City —where it had eminently been expelled a few years ago. Afterwards, there’s a view of Luckin Coffee demanding Starbucks for acting as a monopoly company, as Yang (2019) claims. Therefore that can stop incurring Starbucks an immense treaty of cash and moment, which had happened to other companies in America. In the meantime, there’s Luckin’s trade sculpt, that centres on minor shops, expertise, and quick liberation that call to the youths. Also, there’s further: cost contest—the nastiest frightening of all industries. Luckin Coffee yields sell a 20% lower than the ones of Starbucks .it is anticipated to place anxieties on Starbucks’ promotion dividends, auctions increase, and income limits, mainly due to Chinese financial system slow down. Financial scandals were recognized at the beginning of 2020, which were later settled when the bosses involved apologized to the company. It may affect the financial performance of Luckin coffee

Wall Street has noted that a couple of days ago, Starbucks’s view regarding the fortune of Apple has increased, which has given a caution on a deficit in China auctions. The industry demoted Starbucks to impartial from purchase and reduced its cost objective towards Starbucks for a lesser amount than its target (Chuang 2019). The analysts are not concerned with the Starbucks competition in China. They said that they already spoke to the corporation for a few days and as well touched on the growth of Luckin coffee that is demanding to go from no position to 4,000+ in just a few years ( Purkayastha 2019). Regarding the swap with the corporation, they suppose that China’s direction is very logical and even provides the possibility for benefit due to corporation plans, including liberation.  Additionally, Gupta and Malik (2018) found that they could argue that coffee, also the premium-costed coffee is not inexpensively receptive in the logic that a $1000 iPhone may be.

Yet, charming the brains and also the slips of Chinese customers can not be simple. It is considered to be a viral and not a consistent customer market, and it is comprised of three sections.–The substantially urbanized sections, where the Chinese clients exhibit comparable predilections and taste with customers in very industrial nations (Gupta and Malik 2018). The section expands over three regions in the east: The treasure River Delta, that consists of Shenzhen, Hong Kong, and Guangzhou; the Yangtze River Delta, that comprise of Shanghai and its close municipalities; and finally the Beijing-Tianjin area (Martinez 2017).–The substantially contained section, whereby the consumers retain their limited biases and the tastes. This section can be seen in the mainly isolated countryside regions of middle and western of the country.–The semi international market section, where customers exhibit a merge of global and confined predilections. This section is composed of municipals such as Zibo, Fuzhou, Shantou Dalian, Huizhou, and Qingdao.

Therefore up to date, Starbucks has already extended to a simple objective; the substantially urbanized section that needs slight localization for the items auctioned the home market (Martinez 2017). However, it may be enormously hard to accomplish the further two parts exclusive of considerable alterations to the trade sculpt. Therefore that may then demoralize the business scalability, income increase, and productivity.

 

 

Research methodology

Introduction

Two research methods will be used to collect data in this research the questionnaires and the secondary data. It will enable the researcher to acquire information from Starbucks in china.

Research methods

In this research, two methods will be used to get the required information, the questionnaire and secondary data.

Questionnaire method

Considering the research objectives, we can see that this study targets Starbucks’ Digital Marketing Strategy Analysis of China Market. It is supposed that the questionnaire study technique will consent to the investigator to objectives of reaching a vast study area, so significant results may be conducted. Suzianti and Larasati (2019) demonstrate that the questionnaire study technique can have benefited since it approves technical study tools; results seem to be much dependable; therefore, the purpose is met. Additionally, attracting a questionnaire techniques idea into consideration, it can be noted that one of the study objectives tackles the effects of Starbucks’ Digital Marketing Strategy Analysis of China Market. It declares that questionnaire technique contests with the study requirements, and therefore it can be appropriate for the research. This method will help the researcher avoid contact with people, especially this time of the epidemic. The researcher will upload the questionnaires online, and the participants will be required to respond to these questionnaires.

Secondary data method

Secondary facts are conducted and documented by somebody else earlier. It may be for other reasons, apart from the current research project. Secondary information generally is chronological and previously gathered. They need no access to the study area or subject matter. There several advantages of collecting data by the use of this method. It may be acquired fast, in disparity to gathering primary data that can take some months from start to end (Forer 2019). It is economical when contrasted to collecting primary data. It is always obtainable. Also, it enhances accessible primary data and finally helps the researcher avoid close contact with the participants. Because investigators use secondary data, it does not mean that they cannot gather primary data. The researchers will acquire primary data from the questionnaires, which will guide them to use the secondary data.

Data analysis

Because this research gathers information from questionnaires, current software like SPSS and Microsoft Excel may be used to evaluate and present data results. The data that will be evaluated is the performance of the company, how does it compete with other companies in the industry. The software can allow the investigator to enter the arithmetical figures, and it may illustrate them in the outline of a number or a diagram (Clements 2019). Therefore questionnaire information can be easy to comprehend, analyze, and finally present. It is also supposed that SPSS and Excel can improve the independence and dependability of the study results since the mistake can be successfully shunned. Therefore it is considered the best method of data collection because it eases the work for the researcher.

Possible limitations

The participants may have ignored the questionnaires since they were sent to them through the internet. Information provided could be invalid or not according to the researcher’s objectives.

Timeframe

As for this section, the Gantt chart is attached in appendix 1, which provides a timeline for all activities that will be involved in research work and completion of the thesis.

Ethical statements

The research collects secondary data from the people operating the Starbucks, and they are human representatives. Therefore, principled and moral issues must be taken into consideration. This study will reflect on some of the principled research subjects. The research will defend participants’ confidentiality and the business by not asking them for information they consider private about the company. The second moral issue is that informed sanction will be provided to the intended illustrations that will clarify their privileges to take part in the research (YANG 2016). The analysis cannot compel any person to respond to the survey. Lastly, hurt prevention may also be attended to. For instance, online questionnaire presentations can avoid the physical hurt to participants, and discerning questions may not be partial to prevent psychological harm to respondents.

 

References

Chuang, H.J., 2019. Starbucks in the World. HOLISTICA–Journal of Business and Public Administration10(3), pp.99-110.

Clements, M., 2019. Strategic Audit: Starbucks.

Forer, G., 2019. China’s Online Retail Market in an Era of Technological Innovations. Beijing L. Rev.10, p.698.

Glowik, M., 2017. 4.7 Case study: Starbucks. Global Strategy in the Service Industries: Dynamics, Analysis, Growth, p.156.

Gupta, P., Nagpal, A. and Malik, D., 2018. Starbucks: global brand in emerging markets. Emerald Emerging Markets Case Studies.

Krishna, C.G., 2018. Starbucks Communication Strategies–More Than Just a Cup of Coffee. IUP Journal of Soft Skills12(3), pp.23-53.

Liu, Y. and Gui, P., 2017, April. An Analysis of the Problems and Countermeasures in the Application of Experiential Marketing-A Case Study of Starbucks. In 7th International Conference on Education, Management, Information and Mechanical Engineering (EMIM 2017). Atlantis Press.

Martínez Puente, R., 2017. Starbucks Corporation valuation.

Purkayastha, D., Sahu, B., Seshaiah, S.V. and Tripathy, T., 2019. Can Starbucks Sustain Its High Prices in China?. In China-Focused Cases (pp. 103-118). Springer, Singapore.

Sakal, D.V., 2018. COMPANY ANALYSIS OF STARBUCKS CORPORATION.

Suzianti, A., Avianto, L.H.D. and Larasati, N.A., 2019, November. User engagement analysis on mobile application starbucks I.D. study case. In Proceedings of the 5th International Conference on Communication and Information Processing (pp. 54-59).

Wang, Y., Chowdhury Ahmed, S., Deng, S. and Wang, H., 2019. Success of Social Media Marketing Efforts in Retaining Sustainable Online Consumers: An Empirical Analysis on the Online Fashion Retail Market. Sustainability11(13), p.3596.

Yang, M. and Lv, Y.Y., 2019. The strategy and financial analysis of Luckin Coffee. Economics and Management Science1(1).

YANG, Q. and T.U., X., 2016. Starbucks VS Chinese Tea—Starbucks Brand Management Strategy Analysis in China. International Business and Management12(1), pp.29-32.

Ziliani, C., 2019. GETTING LOYALTY RIGHT: BARILLA AND STARBUCKS. Loyalty Management: From Loyalty Programs to Omnichannel Customer Experiences, p.18.

 

Appendices

Appendix 1; the Gantt chart

 

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