ESSAY TEST OF GLOBAL MARKETING

Name: Cao Phan Nhat Truong – Code: SB61240

1) Why Starbucks failed in Australia?
1. Starbucks overestimated their points of differentiation and customer perceived value of
their supplementary services.
 Australia's people see that Starbucks cannot offer the special experience that is offered
by other chain or cafe.
 Australians do not perceive that the value-adding service worth the money the pay.
 Competition began replicating Starbucks in-store experience.
 Labels do not describe a coffee, and that label which is Starbucks is said to the most
over-priced product.
2. Declining service quality
 The quality of baristas declined in order to widen pool of applicant for new stores.
 Did not offer better experience and product than emerging direct competitors.
 Wi-fi internet access has become commonplace across all types of cafe.
 Card-based is no more sophisticated and is not better than any other cafe.
 Staff morale and customer service levels declined due to the target and wide range of
complexity of coffee.
 Cannot deliver on their core promise but still charge at a premium price.
3. Starbucks ignored some golden rules of international marketing
 It offers the same products all around the world, when it came to Australia, it brought
its "American" offering.
 Do not really understand the local market.
 Their focus is on global domination rather than the needs of local customers.
 May Australians are simply not interested nor want his icon of America - Starbucks.
4. Expanding too quickly and forcing themselves upon an unwilling public
 They quickly engaged with multiple store openings in every city following the U.S. model
which lead to the bad effect of violating the economic principles of cultural scarcity and
the novelty wore off.
 Lost its initial appeal status.
 Reliant on less affluent consumers making Starbucks more vulnerable.
5. Entering late into a highly competitive market
 They lacked the first-mover advantage like in America or Asian.
 They entered a very competitive market with many independent cafes and coffee
chains.
6. Failing to communicate the brand
 Starbucks maintained their stores as the main way to deliver experience and generate
revenue, awareness through word-of-mouth. But it failed to achieve the goal as
Australia is a very competitive market.
 Lack of advertising made Starbucks gone worse and customers cannot point out why
they should choose Starbucks.
7. Unsustainable business model
 Product line is limited to coffee which make people associate Starbucks with coffee and
generally seek food elsewhere.
 The average transaction is lower, therefore, need more customers to increase sales and
profit.
 Ignore the need of people that want to buy quickly and leave while have to pay
premium price.
 Not franchising make it more costly to open outlets. Not to mention that franchising can
increase more localization because of investors in Australia will know more about the
market than Starbucks.

2) Build a marketing strategy for Starbucks in Vietnam to help them succeed based on
this article and your understanding of Vietnamese consumer behavior.
I. Introduction
- Founded on March 30, 1971.
- Founders: Jerry Baldwin, Gordon Bowker, Zev Siegl.
- Headquarters: Seattle, Washington, U.S.
- Locations: >18000 stores in 62 countries.
- The logo was made by using Greek mythology.
II. Market analysis:
- The population in HCM City is more than 8 million people
- Coffee market with the usage of 1101 thousand (with a pack of 60kg)
- The market is dominated by 3 biggest brands now: G7, Nescafe, and Vinacafe with many
stores to compete and got their reputation in Vietnam.
- History of brands in Vietnam: Gloria Jeans in 2004, Coffe beans in 2008 with Effoc and
Starbucks only arrived in 2013.
- More coffee stores on the rise: Coffee House, Passio with many franchised stores.
- Culture of Coffee in Vietnam:
+ Strong and slow.
+ The trend of using luxury products in Vietnam
+ Usually sit at the stores for a long time
+ Wi-fi is a key element for customers to choose a coffee stores.
III. Competitions:
- Directly from Trung Nguyen (The largest domestic coffee brand), Highlands, Coffee Bean
- They share the same target customers
- Serving many kinds of coffee
- High brand recognition
- Many stores in HCM and Ha Noi.
IV. Products:
- Offering a range of exceptional products in stores, at home, and on the go.
- More than 30 blends and single – origin premium coffees.
- Handcrafted Beverages with fresh-brewed coffee, hot and iced espresso
- Fresh foods: Bakery, yogurt, fruit cups.
- Ice cream: Coffee flavors.
- The service is good with customer relationship.
- Should change the policy of using wi-fi to increase the incentives because most of
Vietnamese stays long in a store.
V. Positioning:
- A premium product.
- A high standard
- Innovative products
- An excellent service.
- High price but offer a high quality with add-value to be appreciated.
VI. Place:
- People get coffee from the shop
- They want to enjoy the atmosphere.
- Build in crowed districts like District 1, District 3 and District 7.
VII. Pricing:
- Average from 60,000 VND to 100,000 VND
VIII. Promotion:
- Member cards
- Free wi-fi
- Quick process and quick response
- Fanpage on Facebook.
- Billboard
- Marketing through newspapers.
IX. Public Relation:
- Cooperate with other brands like CGV.
- Party with celebrities.
X. Recommendation to some adjustment:
- Products should be researched and created base on Vietnamese taste which is strong
and offer them the service to ensure they can stay at the stores as people tend to spend
a lot of time at coffee working, talking, or relaxing.
- Remain the price level to not jeopardize the brands image.
- Attack the market slowly to get more expectation.
- Analyzing competitors before launching any strategies as Vietnam has a very
competitive market with many players that have long history, or meet more people’s
demand.