INTERNATIONAL MARKETING MANAGEMENT

Globalization Vs Customization

Frappuccino

Non fat milk, soy based products, Confectionary, ice cream

Italian StyleEspresso

Caffè Latte Cappuccino

Barista

Starbucks Products• Gourmet Coffee– 18-34 year old coffee

drinkers want something more than just coffee

– Unique and Different, Starbucks Exclusive

– Eg: Caramel Macchiato and Gingerbread Latte

• Brewed Coffee– Older in Age– Generally just want coffee for a

caffeine fix– People that are in a hurry.

• Image– Well known brand– Work fast– Status

• Bottled Coffee– People on the go– Mid-day pick me up– Usually found at Grocery Stores.– Examples:• Double Shot• Caramel Frappuccino• Vanilla Frappuccino• Mocha Frappuccino

• “Skinny Platform”– Lower in Calories– Sugar-Free Syrup, Skim Milk

and no Whip Cream– Enjoy great coffee without

the calories (only 90 calories!)

– Examples: • Skinny Cinnamon Dolce

Latte• Skinny Mocha• Skinny Caramel latte

Starbucks in the Boston Consulting Group Matrix

Other MerchandiseCoffee, sold in Starbucks

Home ProductsCoffee products, sold as retail

High Market Share Dominance Low

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Rate

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Pizza Hut Products

India: Opened in India in 1996 in Bangalore Extensive range of internationally renowned pizzas like

The Italian, the proprietary Pan Pizza and Stuffed Crust Offers the option of a complete meal including

appetizers and Salad Bar First pizza chain to open a 100% vegetarian restaurant

in India

China: Started in 1990, more than 700 Pizza Hut restaurants

in 120 cities currently High on non veg items like Escargot, octopus with

quail egg Salad consist of giant towers of vegetables that they

construct with the engineering precession of a bridge collapse

Wine is served in China Pizza Huts

UK: Started in 1973 with over 700 restaurants currently Provide less salt in the pizzas removing about 5% YoY Provide separate children menu free of artificial colors

and hydrogenated fats i.e. high on nutrition Buffet during the week with unlimited salad bar

Germany: Opened in 1970 in Munich, with over 60 restaurants

currently Germany rolls salami into their stuffed crust In the evenings there is a popular All-You-Can-Eat

buffet for only (5 EUR)

USA: Opened first pizza hut worldwide in 1958 in Kansas,

more 7500 units currently Provides same taste in every store in every state Sells variety of traditional pizzas like “Stuffed

Crust”, “Hand Tossed”,”Thin N Crispy” and “The Edge Pizza”

Experiments regularly including size as well such as the 16” Big New Yorker

Australia: Opened in Belfield, Sydney in 1970 with over 350

outlets at present Use both vegetarian cheese(mozzarella) and non veg

cheese(cheddar) based on customer preference Introduced new signature range menu to revitalize

the brand Australians have pretty similar taste to the U.S.,

except their sausage is called “cabanoissi”

Brazil: Opened in 1989 at Sao Paulo, currently working from

15 locations Crust specific to Brazilian taste ( Borda Catupiry)

introduced in additions to the regulars Brazilian topping with corn ,carabresa and catupiry

added as local flavor Local deserts like Nha Benta also added to go with

the weekend meal

Pricing Globalization – Star BucksPremium Price strategy, Leader in the coffee selling market India• 50:50 venture with Tata beverages• Premium Pricing Strategy across all outlets • 80 for a small offering and 165 for a large

offering

Australia

• Premium pricing strategy after initial set back• Australia – Rich Coffee Culture• Highly Competitive Market• $4.5 - $5 (Australian Dollars) for large

Offering

USA• Premium pricing strategy across all outlets• Star bucks experience• Fair Trade movement – an integral part of their mission

statement• Lattes 12-ounce: - $2.40 and $3.40

UK• Large number of Varieties• Personalized customer interaction• Nutritional awareness programs and Corporate tie ups• 2 pounds – 3 pounds for Tall offering

MexicoPremium pricing strategy across all outlets

Star bucks experienceHigh Coffee Consumption

Lattes 12-ounce: - $2.40 and $3.40

BrazilHigh Growth Region – Untapped Market

Star bucks experienceTall Offering: - $1.27 and $2.40

GermanyStar bucks experience

Nutritional awareness programs Corporate tie ups

Tall Offering - £4 - £9

ChinaStrong association with Tea – Starbucks Changed it

Introduced beverages using local ingredients – Green teaExceptional ambience - Tall Offering 35-50 CNY

Highly customized products East meets west Blend for heterogeneous Chinese market

Pricing Customization – PizzahutDifferent for various countries according to their taste, culture and economic

conditionsIndia• Mixed Pricing Strategy• Price skimming for new products • For established products – Value for

money• Large Pizza Rs 350-400

Australia

• Low price offering to drive sales• Highly Competitive Market• $10- $12(Australian Dollars) for large size

USA• “A High/Low Pricing” strategy •gradually lowers the price below the competitor’s prices•Restructures itself at regular intervals to gain maximum market share• Large Size $14 - $16

UK

•Diverse and trying for deeper penetration into the market•First mover advantage – premium pricing strategy•Places lot of emphasis on high quality and excellent customer service• Large Size - £10 - £14

MexicoPremium pricing strategy across all outlets

High volume of salesDominant among competitors

Large pizza: - $12

BrazilHigh Growth Region – Untapped Market

low price strategyNot considered as a fast-food – different cultural concept

Large Pizza: - $5 - $7

GermanyHigh Pricing Strategy

Consumers consider it as a BreakfastHigh nutritional content

Large pizza- £15 - £19

ChinaCustomized pricing strategy to hold maximum

market shareCasual Dinning Brand – More affordable

Diversified menuLarge Pizza 100-150 CNY

• As part of its promotion strategy, Starbucks prefers products whose quality is fully awake, instill a strong brand image through a company logo, as well as the use of merchandise.

• It targets to become the third place for the consumer after their home and their workplace. Providing Wifi to consumers for the same is part of the strategy.

Starbucks Promotion(Globalization)

The 5 Point agenda of its promotion strategy is 1. Consistent Branding2. Web is the content

hub3. Content is

integrated across Channels

4. Mobile Experience5. Engages Customers

• Pizza Hut, for their Full Service Restaurants the primary customer segment are families with the need for a special place to share those little everyday moments.

• For the Home Delivery Service the primary customers are teens and young adults who seek convenience. This is uniform through out the world.

• Keeping in mind the changing world they have also launched mobile apps through out all countries now.

• IN UK it is focused more as an in-dining experience. And the entire concept is known as dine at the “HUT”. This is because they want to create the feel of a whole some experience.

• Also, looking at the Victorian style continuing from ages, a special focus to newer and greener menus was anticipated and carried out since 2009

• Similar strategies are also followed in Germany

Pizza Hut Promotion - Customization

• In USA, the company has a high yielding market.

• It tries to live up to the AMERICAN way of Life and gives the best of experience to its customers in all front. (Change Ambience)

• Also, by introducing Drinks along with Pizza it extended the dining experience to a whole new level.

• In India, Pizza Hut focuses on giving special offs on weekdays and provide complete meal packages, enabling a comprehensive outing for the customer

• Also, it is currently looking to retain old clients by celebrating its 15 year celebration and helping loyal customers glimpse their journey through Pizza Hut’s Pizza

• Going with the Australian Culture, Pizza Hut showcased the PARTY side of its marketing blitzkrieg out here and even delivers and serves pizza late in the night.

• It also showed how hard and cool its PIZZA’s are, keeping in mind the attitude of the Public in Australia. This helped it in creating a connect with the people and establish itself in Australia.

• The Chinese strategy is more of volume driven growth

• The company also focuses on expanding weekend sales as, unlike western peers, China has long working hours and the family culture or teen culture to enjoy is mainly on weekends

• Pizza Hut’s present promotion in China is focused on high responsiveness, depicted by their logo

Distribution Channels

http://www.starbucks.com/whatmakescoffeegood/good_coffee.html

• Packaged Coffee is stored in Distribution Centers • Picked up by Partners filling store orders

Stores• Starbucks Partner or Barista is the company’s contact with the customer• The process ends at the store where customers enjoy freshly prepared coffee drinks

Distribution Strategy• Starbucks’ level of distribution is intensive via retail stores• Starbucks has Direct Retail System through operation of its own

Retail outlets Accomplishes direct marketing of product while maintaining

marketing strategy and mission statement Maintains high level of customer service via product offerings and

vast number of locations

STARBUCKS DISTRIBUTION

INTERMEDIARIES• Starbucks depends upon both outside brokers and its direct contact with exporters

for the supply of green coffee• Channel Members are part of a “Dependent channel arrangement” • Starbucks operates its own distribution system• Coffee is traded on a negotiated basis, usually quite a bit higher in price• Reduce risk of unpredictability of coffee price and supply, Starbucks enters into long-

term fixed price contracts with its suppliers • Starbucks sells a wide variety of whole and ground bean coffees in grocery and

warehouse club stores as well as Frappucinos and coffee-flavored ice creams• Other channel of delivering coffee is through direct distribution, the selling and

distributing product to account members in airports, hotels, schools, restaurants and hospitals

PIZZA HUT DISTRIBUTIONThe type of distribution channel used by Pizza Hut is the direct channel, which is successful when there is an extremely large market that is geographically dispersed or when there are a large number of buyers, but a small amount purchased by each.

Pizza Hut uses three different methods of selling its products directly to the marketThe market coverage for "The Extreme" will be nationwide. Customers all over the country will be able to order "The Extreme" by one of the three distribution methods.

Delivery• Customers can call Pizza Hut ahead of time, place an order, and the order is

delivered to the customer's home

Dine-in• Customers can go to the nearest Pizza Hut, place an order, and either leave with

the order or eat at the restaurant. One of Pizza Hut's largest competitive advantages is its restaurant style facility. Pizza Hut offers a clean place to sit down and enjoy the variety of pizzas, salads, and sandwiches in a fun, family atmosphere

Online Ordering• Customers can now go on the Internet and place an order. This method is useful

because it allows customers to view the entire menu, download any special coupons, and order without having to disclose any credit card numbers

Direct SuppliersPepsiCremica Group (Buns)

Indirect SuppliersMeat market : Chicken from BrazilVegetable market : Potatoes from AustraliaSauce companies

http://www.domain-b.com/companies/companies_f/facebook/20120813_advertising.html

http://find.mapmuse.com/brand/starbucks

• International Market Entry is either via Wholly Owned Subsidiary or via Joint Venture

• Competitor elimination is done by securing premium locations for setting up retail stores

• Prime markets are saturated by opening multiple stores on the same street

• Promotion done via Internet and mobile apps, along with huge billboards

STARBUCKS – Global Retail Stores

AUSTRALIA• Americanized Products failed to sensitize market• Undifferentiated products being charged premium• Hyper-growth resulted in less experienced staff• Perceiving Australia as an inexperienced Coffee market

UNITED STATES OF AMERICA• Home Country – huge brand image & loyalty• Card membership to retain customers• Baristas, personally connecting to customers• Enthralling ambience; creatively attracting people

INDIA• 80% more coffee consumed over 1990s• Planning to set up 50 stores by end of year• Premium locations being targeted as of now• Set to teach Indians how to drink Coffee

CHINA• Established a strong base over 13 years• Bid to grow western is key to growth• Offering unique experience to visitors• Loyal customer brings triple penetration

• Premium prices charged on products tend to enhance customer’s perception of product towards high quality• Huge variety of products offered, allowing customers to make their own choice• Trained and engaging Baristas at each retail store• “Partners” are taken care of by sufficient salaries and options• Customers preferring home-made coffee are also being taken care of by selling Starbucks-processed coffee beans /

powder• Backward integration (having own warehouses for storage of coffee beans and own roasters for processing them) resulted

in a reduced cost of production, leading to higher margins

PIZZA HUT – Global Retail Stores

AUSTRALIA• High recognition among market• One of the first exponents of Big

Dinner Box

UNITED STATES OF AMERICA• 1st exponents of Hot Dog Pizza• $10 pizza with a variety of options

INDIA• Weekday special meals at Rs.99• 2nd most promising market for Pizza Hut• Best Dine-in experience in the market• Target – 300 PHD outlets by 2015

CHINA• Lower cities showing better

enthusiasm & low costs• Low Competition • Targeting 1000 branches to tap

growing markets• Most promising market for Pizza

Hut

• International Market Entry is either via Wholly Owned Subsidiary or via Franchising• Has differentiated its dine-in channel by introducing specific deliver-oriented brand, PHD• Local choices adapted to suit pizzas to customer’s food and tastes• First QSR to display calorie information about products and move towards healthier preparation of pizzas• Packaging is made to be of 75% recycled material, supporting green awareness• STAR (Supplier Training And Recognition) is followed and international markets’ supply chains are handled individually• Television Ads target all age groups in all markets

PIZZA HUT

• http://knowledge.asb.unsw.edu.au/article.cfm?articleid=1192• http://online.wsj.com/article/SB10001424052970203922804578080072469407526.html• http://www.brandchannel.com/careers_profile.asp?cr_id=47• http://blogs.wsj.com/chinarealtime/2012/12/06/starbucks-china-will-be-second-largest-market-by-2014/• http://businesstoday.intoday.in/story/starbucks-in-india-how-other-cafe-chains-would-react/1/22481.ht

ml• http://forbesindia.com/blog/business-strategy/what-starbucks-brings-to-india/• http://asianist.wordpress.com/tag/starbucks-india-strategy/• http://articles.economictimes.indiatimes.com/2011-01-15/news/28423447_1_starbucks-coffee-coffee-ret

ailer-retail-stores• http://www.forbes.com/sites/helenwang/2012/08/10/five-things-starbucks-did-to-get-china-right/2/• http://www.cnbc.com/id/46186635/Rein_Why_Starbucks_Succeeds_in_China• http://www.businessinsider.com/starbucks-strategy-in-china-2012-10• http://www.ausfoodnews.com.au/2008/07/31/starbucks-what-went-wrong.html• http://starbucksgossip.typepad.com/_/2004/08/starbucks_strug.html• http://theshot.coffeeratings.com/2008/07/starbucks-australia-closures/• http://seattletimes.com/html/businesstechnology/2003455194_webbrazil30.html• http://www.pizzamarketplace.com/article/193328/Pizza-Hut-China-continues-to-drive-big-profits• http://online.wsj.com/article/SB10001424052748703292704575392962594974960.html• http://www.ukessays.co.uk/essays/management/history-of-pizza-a-breakfast-cereal.php• http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10800321• http://www.collegetermpapers.com/TermPapers/Economics/Pizza_Hut_in_Brazil.html• http://www.yum.com/responsibility/pdf/yum08csrrpt.pdf

BIBLIOGRAPHY

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