Question

*Answer the 3rd question ONLY* Read the case study Italy Defied Starbucks—Until It Didn’t, i only left the other questions becasue they are related:

“We arrive with humility and respect in the country of coffee,” Howard Schultz, the former longtime CEO of Starbucks, told Corriere della Sera, Italy’s leading daily, last week. He was about to inaugurate, in Milan, the first Italian outpost of the global chain that supersized coffee and now vies with McDonald’s and Coca Cola as a symbol of American gastronomic imperialism. Even, of course, if Italy has one of the world’s most developed coffee cultures, which in fact is what inspired Schultz to convince the founders of the small Starbucks coffee company to open its first coffeehouse in 1984.

Italy is a country where the pumpkin is generally found in the ravioli, not the latte, and so the Milan Starbucks isn’t just any Starbucks branch. It’s a huge “Roastery” in the former Milan outpost

of the Poste, the Italian postal service, and is meant as a full “experience,” Starbucks said in a press release that has already been mocked by Eater. (“Eight Ridiculous Things Starbucks Is Saying About Its New Store in Milan.”) The Roastery, the first in Europe after others in Seattle and Shanghai, will offer coffee and food and also illustrate Starbucks’s roasting process.

Okay. But a question leaps to mind: Does Italy need Starbucks? “Che tristezza,” one Italian friend told me when I asked her about it opening in Milan. “How sad.” I called the Tazza d’Oro, one of Rome’s most historic coffee shops—they’re called bars in Italian—and Laura Birrozzi, a manager, offered some thoughts. “We and Starbucks sell something completely different. We have quality Italian espresso,” she said. I asked her if she’d ever been to a Starbucks, and she said she had on one occasion, on a visit to London. “It wasn’t the coffee I’m used to,” was all she’d say.

At the Milan Roastery, an espresso will cost 1.80 euros “sitting or standing,” Corriere della Sera noted, since in Italian coffee shops, the price changes depending on whether you have table service or gulp your drink down at the bar. A cappuccino will cost as much as 4.50 euros. This has already prompted Italy’s consumer association to file a complaint with Italy’s antitrust authority, saying the prices were far above average for Milan. Online, Italians are already complaining that Starbucks could drive up prices elsewhere in Italy. (Still, from the coverage, it seems the Roastery piqued people’s curiosity; the lines were around the block for the musical-gala opening party.)

The announcement last year about the opening did not go over well. The columnist Aldo Cazzullo wrote in Corriere della Sera then that “as an Italian,” he considered the opening of Starbucks in Italy nothing short of “a humiliation.” Though he conceded that the arrival of the chain might make some Italian coffee shops step up their game: Starbucks “represents a philosophy, as well as a sort of office for people who don’t have an office,” he wrote. “Maybe our bars will also become more hospitable.”

But, he ended on a discordant note: “I wonder how many of the 350 jobs announced in Milan will go to young Italians and how many to young immigrants,” Cazzullo wrote. It’s unclear what kind of immigrants he had in mind, or why hiring immigrants would be an issue. What is clear is that in Italy, coffee seems to connect in unexpected ways to national identity. There were polemics last year after Starbucks sponsored a garden of palm trees in Piazza Duomo, to drum up enthusiasm ahead of its opening this year. This prompted Matteo Salvini, then only the leader of the far-right League party and now Italy’s interior minister and deputy prime minister, to decry what he called the “Africanization” of Italy, and to call for the defense of the “Italianness” of coffee. “All that’s missing are the sand and camels, and the illegal immigrants will feel at home,” he said then.

Schultz has been trying to open Starbucks in Italy for decades, and the fact that Italy has such excellent coffee everywhere—even the coffee at the average highway rest stops in Italy is better than much of what’s served in good restaurants elsewhere in the world— was no doubt a major issue. In 1998, Michael Specter wrote in The New Yorker about Schultz’s efforts to open Starbucks and said a branch of the chain would open in Italy “next year.”

So why the delay? For one thing, Italians don’t drink coffee the way Starbucks serves coffee. In Italy, coffee—espresso—is drunk generally standing up, at a coffee bar. Cappuccino or caffè latte is drunk in the morning or sometimes in the late afternoon if you haven’t had a proper lunch, and never after meals, because who can digest milk after a meal? Italians are very attuned to proper digestion.

Also, Italy has a market economy with some protectionist elements. In her interview with Schultz for Corriere, the journalist Daniela Polizzi noted that the context had changed in the past 20 years, from one of adjusting to globalization to one in which trade barriers have become an issue. Starbucks now has 30,000 stores in 77 countries, including 3,400 stores in China, with 45,000 employees, Schultz answered. Italy hasn’t given up quite so much ground, but the chain has now established a beachhead there.

Some saw the arrival of Starbucks as a window into the challenges to the Italian economy. “The lack of Starbucks indicates a double anomaly: On the one hand, the biggest coffee chain in the world wasn’t present in Italy, and on the other, the biggest coffee chain in the world isn’t Italian,” the journalist Luciano Capone wrote in Il Foglio, an intellectual daily, this week, citing the economist Luigi Zingales. It seemed a sign of how Italy’s economy is based on smaller businesses with more modest ambitions. More than 90 percent of Italian companies have fewer than 15 employees.

Then there’s the flip side. “Operating in Italy, in competition with Italian coffee bars, it’s probable that Starbucks will soon learn to make excellent espressos and cappuccinos,” Capone continued. “But will the Italian system manage to learn from Starbucks how to create a global chain? It would be a small step for us, but a great step for mankind: Finally the rest of the world would discover that coffee and pizza aren’t the kind on offer at Starbucks and Pizza Hut.”

So if the wheel is coming full circle, does Olive Garden have any plans to open in Italy? I asked its spokeswoman, Meagan Mills. “We do not have any plans,” she wrote back. “Thanks for thinking of us, though!”

Questions to answer

1. What are the main marketing environment factors affecting Starbucks business in the Italian market? Why are these factors affecting the Italian market?
2. Explain the impact of these factors on Starbucks’ marketing. Give a specific example for each factor.
3. Based on your analysis of the two previous questions, discuss the promotion strategies of Starbucks in the Italian market. What modifications to the company’s product components might be necessary?

Answer 1

[NOTE – Answered the 3rd question only as you have asked for. And if you liked the answer please give it an Up-vote, this will be quite encouraging for me. Thank you!]

[Q] Based on your analysis of the two previous questions, discuss the promotion strategies of Starbucks in the Italian market. What modifications to the company’s product components might be necessary?

In spite of the fact that Starbucks took its motivation from Italy, it is totally different from a normal Italian bar. While Starbucks attempts to make a customized culture by composing the name of the proprietor of the espresso on the espresso cup, they don't focus on the client. Along these lines, in contrast with composing the name on the cup, an Italian coffeehouse improves advertising. This isn't even comprehensible in Starbucks because of their different client base just as the evolving baristas. The promotion strategies of Starbucks in the Italian market incorporates:

[a.] Doing advertisements: Starbucks doesn't put accentuation on advertisements. In any case, in the Italian market, Starbucks isn't notable by numerous Italians, and it has numerous contenders. Along these lines, putting a few expenses for promotions is fundamental. In fasting moving shopper great promoting, publicizing can be utilized to bring issues to light, make intrigue and urge buyers to buy. Advertising as a promotional strategy is one of the most obvious types of correspondence and regularly the most significant piece of the entire system for shopper items in nations with an all-around created media industry.

[b.] Sponsoring big events: Sponsorship includes a firm [the sponsor] giving money, assets or other help for an occasion, movement, structure, individual, service or product. Consequently, the support would hope to increase some bit of leeway, for example, the presentation of its image, logo or promotional message. Being a support is a helpful route for Starbucks to grow its image impact in the Italian market. As McDonald's is the supporter of the Olympic Games, its image picture is upgraded extraordinarily.

[c.] Accessing Membership: In the Italian market, the initial step of Starbucks is to extend client gatherings. Starbucks can give some particular approaches to participation, for example, basic trade, birthday exercises, etc. It's a decent method to keep steadfast clients and pull in new clients.

[d.] Retrieving American style: Starbucks demands possessed chain technique and the enrichment style of Starbucks everywhere throughout the world is nearly the equivalent, yet in the Italian market, American style beautification and American style music may make Starbucks get the worry of Italians and contrast from other Italian cafés [coffee houses].

[e.] Providing Convenient administrations: Convenient is a significant factor in the deal system. Utilizing cellphones or computers to arrange beverages and nourishment can spare time to line. Furthermore, espresso administrations conveyed to a huge range as could be expected under the circumstances. These must be invited by most Italians.

In spite of the fact that Starbucks could get the visitors and the youth as their clients, the test is the Italians. Italians are known to be defensive of their tasty espresso [coffee] and it appears as though it will be an errand to persuade them to change to another brand. Starbucks faces furious rivalry from the little and scattered coffeehouses well known around Italy. In this manner, the modifications to the company’s product components might be necessary are:

[a.] Selling American espresso as the primary product: In Italy, a great many people incline toward drinking coffee. It is important for Starbucks to sell coffee in the Italian market, however, there are a huge number of cafés [coffee houses] in Italy sell similar products. Starbucks has no preferred position right now Italian espresso is the root of espresso culture. In this way, Starbucks needs to offer extraordinary products to be exceptional in the market. In spite of most Italian are not used to drinking American espresso, it's new to certain individuals who like difficult new things, particularly some youngsters. Step by step, they'll love this flavor, and their ideas will be changed.

[b.] Selling Italian one of a kind cups: One of Starbucks' highlights is the cups of different examples. Numerous individuals are keen on gathering Starbucks cups. They invest a lot of energy and cash to gather a lot of Starbucks cups, particularly some restricted versions. In the Italian market, if Starbucks discharges a lot of Italian fortes cups, it will get many gathering coffee devotees' consideration.

[c.] Selling healthy products: Coffee is an unhealthy beverage for the most part. Numerous shoppers who need to get thinner or stress overweight may decline to drink espresso. It's an enormous loss of shoppers. In this way, Starbucks can sell some low-calorie espresso or nourishment. It would be a character in the Italian espresso advertise. For a customer, the acquisition of an item isn't to claim the item, however, to appreciate the advantages of a product.

[d.] Selling extraordinary holiday products: Starbucks consistently announces Christmas limited items [products] that are famous among customers. In Italy, there are plenty of holidays. Starbucks can sell some exceptional holiday products to the Italians.