How to expand internationally without diluting your brand
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Apr 17, 2012

How to expand internationally without diluting your brand

By Tim De Chant

Starbucks Paris

Part of the pleasure of taking a trip to a foreign country is reveling in all the ways it is different from your own. But with the quickening pace of globalization, is that even possible any more? Once the world is filled with Coca-Cola, McDonald’s, and Starbucks, will there be anything to distinguish the United States from the United Kingdom or Canada from Costa Rica?

Well in many cases it’s already too late. Coca-Cola is practically defines ubiquity, McDonald’s has restaurants in 119 countries, and Starbucks is over halfway toward that mark. But success on that scale doesn’t come easy—and it isn’t achieved by carbon copying the original and distributing it around the globe. A recent New York Times article highlighted the challenges Starbucks has had with expanding internationally.

Now, Starbucks is embarking on a multimillion-dollar campaign to win over more of Europe’s coffee aficionados — with an upscale makeover of hundreds of stores to cater to an ingrained cafe culture, and adjusting beverages and blends to suit fickle regional palates.

Starbucks’ efforts in Europe aren’t unique to the company. “Many companies do tailor their products and services to local markets, although some only did so after finding it the hard way,” said Angela Lee, a professor of marketing.

Along the way, companies expanding internationally will be forced to make some tough decisions. The trick is to adjust to local tastes without overly diluting their brand. The key, Lee said, is focus. “They have to know what their brand stands for and conduct good market research to understand how that brand meaning could be executed in the foreign market.”

“It depends on what they change and how they manage that change,” Lee said. In Starbucks’ case, she thinks the coffee company is on the right track. Starbucks success can be traced to five things, she noted:

  1. A unique cup of coffee
  2. The “third place” after home and office
  3. Customer satisfaction
  4. Creating a Starbucks community
  5. Innovation (think Frappaccino, Green Tea latte…)

So long as Starbucks doesn’t lose sight of what makes them special, their efforts to adjust to local tastes should help, not hurt, the company. “I don’t see how having more seating area, lighter coffee, name tags, and chandeliers takes away from the essence of Starbucks if they add to customer satisfaction,” Lee said.

Photo by bizmac.