Starbucks and Tata Beverages, a relationship made in…India

Tom Dougherty, CEO – Stealing Share

13 February 2012

What Starbucks should consider

Increasing market share is not always the product of syphoning your competitors business. Occasionally, it relies on expansion to find new. This strategy is one that has served Starbucks well and one that, with its new venture with Tata Beverages of India, looks to be its goal moving forward.

There are few brands that are synonymous with the market they cater to than Starbucks and coffee. Usually, there is another competitor that garners enough of a competitive market share that a one-to-one correlation with the industry itself is difficult.

“Starbucks understands that its brand is not about coffee, but rather the emotional connection with the coffee experience.”

 

The equity that the brand has built has allowed it to recover from cannibalizing the market too heavily, expand to a global presence and bridge into new ventures (such as k-cups and merchandizing). The brand is what propels Starbucks forward.Tata Beverages

Starbucks understands that its brand is not about coffee, but rather the emotional connection with the coffee experience. As a result, it has become a destination for many. The process of getting a cup of coffee becomes more meaningful. This is why the venture with Tata Beverages is the right idea.

The key to any brand’s success is uncovering the highest emotional intensity in the category and claiming it. Decisions, direction, and strategy fall into place once you understand that intensity. The highest emotional intensity is not only what makes consumers covet a brand but it also provides a guide by which the company should focus. In the case of Starbucks, the only hurdle to success in India will be its understanding of the market and its ability to effectively transition the Starbucks experience appropriately.

Starbucks is not about grande macchiatos, lattes and cappuccinos. It is about the experience of ordering a drink, having it prepared, and the enjoyment the atmosphere provides. If it is able to capture the experience correctly in India, the new venture will be a slam-dunk win.

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