You have a global brand. But, to maximise its strength in global markets, you need to take account of the local customer needs and wants. That is the essence of the concept of “localisation” and this approach is helping Starbucks from a global brand to local markets!
Starbucks represents number one global coffee company. Then what are the factors that makes Starbucks an successful global firm. Well, there are a lot of factors, however, I think the most important part that makes them to be a global coffee leader is brand localisation.Starbucks started their international expansion by entering Japan and followed by many other Asia like Korea and China in the later years and made a huge success!
At the first time when they entered into international market, Starbucks was challenged with some serious setbacks due to home country’s pressure and insufficient understanding
of international culture. For example, Chinese market was one of the hardest markets to crack for Western companies because they do have own tea culture!
But, think about now! In 2014, there were 1,367 Starbucks stores in China.Starbucks has different menus for each country as well as offering more options among its international offerings. Starbucks in China, one can find traditional Chinese cookies on the menu. This example shows the Starbuck’s obvious effort to offer customers more options in localization.Also in China, customers tend to come to Starbucks in large groups. Store designers have accommodated by adding more movable furniture that customers can rearrange to sit together. In contrast with Americans, who tend to favour fast service that allows them to quickly get on with their day, the Chinese like to sit and relax for a while. So Starbucks is now building larger stores in China!
Some people say that localization of adding local food and drinks to the menu would lower Starbucks’s brand image as McDonald’s or any other ordinary cafe.However, by brand localisation, Starbucks also succeed in winning business in many different countries!
What do you think about it?
Does brand localisation play a key role in Starbucks’ success in other countries?
Is brand localisation important for global brand?
Thank you very much for your sharing and comments here!
Marketing Management Blog T1 2015 
I love this topic. In my opinion, brand localization is important when entering a new market, and more critical to success in a market where language and culture is different, i.e, marketing a western brand in Asian countries.
There is plenty of evidence that offerings adapted to local language, requirements, and tastes are much more successful:
56.2 percent of consumers say that the ability to obtain information in their own language is more important than price. (Common Sense Advisory, Can’t Read, Won’t Buy: Why Language Matters on Global Websites, 2006)
65 percent of multinational enterprises believe localization is either important or very important for achieving higher company revenues. (California State University at Chico, 2007)
95 percent of Chinese online consumers indicate greater comfort level with websites in their language. (Forrester Research, Translation and Localization of Retail Web Sites, 2009)
A critical success factor for cross-border merger and acquisition deals is the ability to communicate information clearly and accurately in multiple languages. (Merrill Corporation, How to do Better Multinational M&A Deals, 2008)
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Thank you for your reply.
The figures offered above are very impressive.95% percent of Chinese online clients indicate comfort with websites in their language,which shows how important to identify local culture and demand to meet potential customers’ needs.This is the core value of global brand localisation.Most importantly,as you have mentioned,when entering into a new business place,to adjust brand for fitting local customers better is a key driver for business success.Brand localisation provides a more flexiabile approach to achieving the companies’ business targets as well as reaching new potential clients in the market.
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Think global, act local. Interesting!! Before an organization entering a new market, they should adapt local preferences. This might have to do with culture, religion, lifestyle or other reasons that might affect the efficiency of a product or service. For example, McDonald’s needs to adapt its menus to local wishes and preferences. Their hamburgers and fries are very popular, although in some countries the menus look completely different. In Morocco and other Islamic countries, McDonald’s has localized their menu by serving halal burgers.
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Thank you for your reply.
Think global and act locally is a very good ponit.McDonald is really a good example for brand localisation,whose global business is very successful in the global markets.The company identifies its brand differently based on local customers’ needs and wants and most importantly the brand localisation stimulates local individuals’ desire to purchase as well as enhancing their loyality for branding development of the company.
I think that brand localisation is essential for every global brand when entering into new business market.How about you?
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Thinking globally and acting locally to tailor your offerings to the local market makes good business sense. It really comes down to what the core business is offering. For Starbucks that means adapting the menu to meet the food preferences of the local population then their core business offering is “a place to meet and eat” with the menu containing food items the local diners recognise and enjoy. I think brand localisation is important for the global brand, but I would say to a point. I understand one of the strengths of the McDonald’s brand is that one can go into any store anywhere in the world and have their food expectations met – that is they can buy a burger and fries that match those they are used to back home. So I am thinking that if a global brand becomes too localised it could backfire on them at some point – being hard to maintain all those different varieties and maintaining the quality, etc if they become too diversified.
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Thank you very much for you reply.
Brand locatisalition is very essential for global company to meet local customers’ needs,yet it is a very difficult task like what you have mentioned,especially in terms of cutural conflicts.Moreover,once the products become too diversified,the quality should be controlled better,otherwise it will affect the brand value and image,however,if the companies do not act their business locally,the local clients will not come that will reduce business market share,which may be worse than spending money on ensuring products’ quality.
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I think Starbucks does not have strong brand localisation as much as McDonalds and KFC. Starbucks only use store design concept localisation to mix with the each countries culture and they still sell the same foods and drinks in every country. Starbucks in Australia is not as successful as other countries. Since they opened in Australia about 14 years ago, they have made loss at least $143 million and they only have 60 stores across Australia with only 22 stores are remaining (Abboud, 2014). Starbucks brand localisation in Australia is not strong enough to penetrate Australian market. “Australians take coffee really seriously. Which could be why Starbucks has struggled to crack the Australian market” (Abboud, 2014). Starbucks loss the competition with the coffee local shops. Starbucks need to develop different brand localisation in Australia, the design store concept is not enough to compete in Australian market.
I agree with you brand localisation is important to open a business in a country. However, Brand localisation in one country might not work in the other country thus each company have to study each market properly to get an effective brand localisation.
http://www.sbs.com.au/news/thefeed/story/why-starbucks-just-cant-crack-australian-market
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Very nice comments.Thank you very much.
First,I agree with you that McDonalds and KFC are very good and successful examples for brand localisation,however,in the coffee industry,Starbucks is a positive role model for its branding localisation,even though Starbucks does not perform well in Australia.As mentioned,taking China as an example,when entering into Chinese market at the beginning,Starbucks was struggling a lot with Chinese culture and to meet local customers’ needs and wants,it launched different types of coffee and snakes to statisfy the clients.Moreover,the design of the stores are totally redesigned for enhancing customers’ satisfaction.Second,brand localisation is one of the most crucial marketing strategies when entering into new business market,which does not mean brand localisation can bring the global companies to win the competitions in the local market.As all we know,there are lots of local small coffee shops with very high quality and good tasty in Australia that directly make the competition become more competitive in the market and also local customers’ loyalty is pretty high.The external business environment leads Starbucks’s bad performance significantly rather than its weak brand localisation.
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I would like to share some thoughts about an article on Disneyland.
http://knowledge.insead.edu/blog/insead-blog/the-fine-lines-of-brand-localisation-3391
When Disneyland Paris opened in 1992, it went with its standard tried and tested theme park formula assuming customers would be seeking the authentic American Disney experience. In doing so it miscalculated European preferences. Among the cultural ‘can’t haves’ were a no alcohol policy, in a country where a glass of wine with lunch is often a given; the misallocation of staff at peak times according to American habits; and small breakfast restaurants, based on the assumption that Europeans don’t normally eat breakfast. The park’s initial performance was disappointing, and the reason was due to Disney’s failure to localise the brand experience. After readjusting to suit the European consumer needs and fine-tuning certain cultural aspects, Disney eventually enjoyed its success.
Success for brands moving into new markets relies on neither complete adaptation nor standardisation, rather, a fine balance is needed. This is one of the biggest challenges for brands seeking to expand to foreign countries.
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Thank you so much for your reply.
Very nice and meaningful sharing.
Making brand localisation is an essential step when entering into a new business market for a global company,yet it is a very complex and difficult process to achieve,which should spend lots of time and resources on by companies.The fine lines of brand localisation is very practical,especially going local.Unlike local brand,a global brand has to enter into international markets with products and services that address local sensitivities to meet local customers’ needs and wants.In addition,cultural differences have huge impact on branding.Specifically,as brands enter different cultures,it becomes imperative for them to carefully tread the standardisation to retain the inherent brand identity which is the key reason for the acceptance by underlying customers across the markets while adapting brand elements to appeal to local preferences.
Brand localisation is one of the biggest challenges for global company to expand its foreign markets.I can not agree with you more.
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Think global, act local, companies have to adapt to local cultures and tastes to compete globally, it is really good to alter menus to cater to local needs of the areas, one such move was also undertaken by mcdonalds in India as compared to other countries, in India mcdonalds does not serve any items containing beef or pork due to religious considerations and instead has a lot of variety in chicken burgers and veggie burgers and mcdonalds has left a mark of success in India.
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I am responding to the post of tinahuawang of 24 April in response to discussion on the apparent failure of Starbucks to make any market penetration in Australia it was stated ‘The external business environment leads Starbucks’s bad performance significantly rather than its weak brand localisation.’. In not responding to the established coffee culture in Melbourne didn’t Starbucks fail in its attempts to localise the brand? To simply attribute this to the external business environment is not sufficient. Why could Starbucks succeed in China with its established Tea Culture and not in an established coffee culture like Melbourne. I suggest further consideration could be given to whether there are limits to brand localisation. What attributes of the Brand can be changed to fit with the local culture and what cant? How might we determine what these are. Is the Starbucks brand about the delivery of the coffee or the coffee itself. It seems to me that understanding the real components of your brand is key to localisation.
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Thank you so much for your reply.
Very good questions.Thanks.
As mentioned in the previous post,’The external business environment leads Starbucks’s bad performance significantly rather than its weak brand localisation.’Starbucks is trying very hard to win market by brand localisation in Australia,however,since the external business environment such as strong competitors,customers’ preferences and loyalty cause the failure.It is essential to make brand locational when entering a new market,yet it does not mean brand localisation can help company to perform well in the markets and more external and internal factors should be considered.It is true that the external business environment is not the only reason that why Starbucks is making huge loss in Australian markets.
For the reasons why Starbucks succeed in China,I would like to share with you the article below.
http://www.forbes.com/sites/helenwang/2012/08/10/five-things-starbucks-did-to-get-china-right/
I agree with you that when thinking about brand localisation,the companies should considers what attributes of the brand can be changed to fit with the local culture yet some can not for making business strategies,and also understanding the relative components of brand is a very essential step for companies to make success in the foreign markets.
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A brands ability to identify and service its market is going to be critical to it’s success, so the principles of localisation are a no brainer to me. Every country has a different culture/needs and if the business doesn’t adjust to the culture they are entering they are setting themselves up to fail.
As others have mentioned McDonalds are a good example of a global business, that tailors their offering to different markets. They seem to understand that Australian consumers are looking for a more bespoke offering and so they are now offering a custom made burgers and table service….here is an interesting article http://concreteplayground.com/sydney/food-drink/food-2/mcdonalds-is-introducing-gourmet-burgers-and-table-service/
For me this doesn’t make me want to eat at McDonald’s, because the brand identity in mind is so strong, McDonald’s = quick, consistent, the good kind of bad, and perfect homeward bound meal after a big night.
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Hi, really interesting blog. I agree with your view that brand localisation has helped Starbucks, though I think this is commonsense when you think about it. It is not too dissimilar to communicating a message to two different groups of people, even if the groups are similar you will need to modify your message slightly to tailor it to each group. I am interested to know whether there are successful examples of companies not localising their brand for a new market. I would assume that they have not been very successful.
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