Recommendations for Starbucks

It’s time for my final blog post (sniff). After extensive analysis of the target market and Starbucks’ marketing strategy and capabilities, and an amount of coffee that will surely keep me awake for the rest of 2012, it is time to reveal my ultimate plan for Starbucks’ entry to Finland.

*anticipative drumming*

And here it is!

Market entry strategy – Starbucks in Finland

Entry: My recommendation for Starbucks in entering the Finnish market is to use a combined joint venture and licensing strategy, as I earlier mentioned in my blog, since this structure has been proven very effective for Starbucks in the past, and it minimizes risks.

Brand strategy: Starbucks brand is known worldwide and people go to Starbucks for its brand. That is why the neighborhood store concept that I talked about earlier would not work in a new market like Finland where the name Starbucks is likely to attract people most. Starbucks needs to establish itself here as a strong well-known brand before considering “unbranded” stores.

Product portfolio: Starbucks should introduce some localized products from the beginning already. Finns are fond of their rye bread sandwiches and cinnamon buns, and this is what Starbucks should offer in its store as well. Regarding drinks, a basic selection of special coffees, Frappucinos and teas is good in the beginning. Of course, for Starbucks, a basic selection means around 30 items. This is the usual number of products offered in other European Starbucks stores that I have visited. A small selection of Starbucks branded mugs and coffee tumblers should be introduced in addition to drinks and food, since merchandise is a solid part of Starbucks stores worldwide. Once Starbucks has established itself in Finland with more stores it can expand its selection.

Target group: My recommended target group for Starbucks in Finland is young urban adults, Starbucks’ “core customers”, as previously mentioned in my market segmentation post. An interesting group within this segment is students, as my survey also revealed, and Starbucks should keep this in mind when considering locations. Oh wait, I already did the thinking for them!

Locations: Considering our target customers, Kamppi shopping center would be an excellent choice for the first Starbucks store in Helsinki city. University of Helsinki and Aalto School of Economics are located in the city center and in addition many other students and young adults traffic through Kamppi every day. Another store could be opened in the renewed fashionable Kluuvi shopping center, where many urban adults and students spend their time. Furthermore, it’s just next to the Helsinki University main building. The Central Railway Station would also be a good location with its steady stream of commuters as well as travelers. Other locations in Helsinki could be the Esplanade park (popular among locals and tourists in the summer) and a seasonal store Linnanmäki theme park (young adults, students as well as tourist enjoy this amusement park in the summer time).

Outside Helsinki, potential store locations could be in Espoo and Vantaa (the satellite cities of Helsinki), Turku and Tampere (both student cities), and the big ski centers in Lapland such as Levi, Ylläs and Ruka.

Communication channels: Starbucks should continue in its path of utilizing social media in communicating with customers. As I wrote in my blog post, the interactive social media strategy does not work without all the elements (Facebook, blog, “My Starbucks Idea”) in it. This is why my recommendation for Starbucks is to use all these elements in building its communication strategy in Finland.

Distribution channels: Since Starbucks already has airport locations in Norway and Sweden, Starbucks should establish a centralized warehouse for all Nordic countries in order to reduce costs. As the company is known for using multiple distribution channels, this would also be the case in Finland. They would import coffee and other products to the centralized warehouse and then further distribute them to be sold under the Starbucks brand in their own stores. However, Starbucks could also make distribution agreements to sell their products in grocery stores and shopping centers as well. If things go well, distribution could be further developed to sell their products in hotels and office buildings as well in Finland.

Conclusion: Considering all the above mentioned aspects, my overall recommendation for Starbucks is to use a standardized strategy in Finland.

There you go.

*applause*

You’re most welcome, Starbucks. Now get in here quick!!

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As final words I want to say that I have enjoyed writing this blog and I hope you have enjoyed following it. My work here is done.

Over and out (for coffee).

Love, Kosti.