With Starbucks 2008 US sales performance forcing the return of founder Howard Schultz to the company, we are seeing a similar performance for Starbucks in the European marketplace.
Although Starbucks is seeing profits grow in other markets, it is having difficulties meeting the needs of European consumers, which is evident in its lower sales over other markets.
In response, Starbucks has many plans for the European market to revitalise its stores. Soon we may see Starbucks products on planes, trains and vending machines. The brand will also open 300 new stores in the UK alone over the next five years. But what is most impressive, is Starbucks recognition of the importance of brand localisation. According to Louise Lucas in her recent FT article (5 Feb 2012), offerings will include “a lighter espresso in France, cheaper cappuccino in Greece and a double shot of espresso in lattes for the UK.”
But Starbucks isn’t the only one who is increasing efforts to localize product offerings in the European market. McDonalds will be offering a McBaguette starting this April in France. According to Daily Mail’s Jill Reilly, the Fast Food Brand is trying to “appeal to more upscale diners by mixing their famous beef burgers with French-made Emmental cheese and mustard.”
One of the key skills for today’s ever-flatter world of commerce is the ability to be both “on message” and credible in all the regions your organization does business. With the recent gaffes of BP, Toyota, Goldman Sachs and countless others, it’s very important executives can look and act local and “do” empathy in culturally-resonant ways. Take our Poll here below and tell us what you think are the key traits of an effective corporate diplomat …
According to the FT story that ran a few days ago, German car makers Volkswagen and Smart “microcars” (is this a new product category that’s been so tightly and strategically defined that you can automatically be the market leader?) have realized there’s money to be made in the USA. Driven by a steep fall in its sales, Smart’s CEO Deiter Zetsche admits the company “might not have done enough active selling” since arriving on American shores in 2008. Maybe the 20% drop in 2011 sales compared to 2010 is what prompted the realization. Surely the US consumer, screaming over gasoline prices above $3.50/gallon, is now ready more than ever to entertain a microcar. Turning up the marketing and sales loudness dial for the US must be something every brand traveller must know?