Global CEM: Lessons from India and Starbucks

As Starbucks plans to open about 50 new locations in India, the world may have to make way for 1,189,172,906 more caffeinated people . Earlier this year, Starbucks and Tata Group (the international conglomerate responsible for Jaguar, Tata Motors, and even Eight O’Clock Coffee) teamed up to pave the way for Starbucks to enter the Indian marketplace.

Starbuck’s entry into the Indian market provides a lens to focus on some of the key trends in global customer experience. While Starbucks has not announced its pricing strategy, its main competitor, Café Coffee Day, sells drinks for about $1. The implication of this point is that we are moving away from the Four P’s of marketing and into a holistic measure of “price,” one that measures the intangible, experiential aspects of customer experience.

Starbuck’s expansion into India illustrates this point. We hypothesize that even if Starbuck’s drinks are more expensive than Café Coffee Day, Indian customers will be willing to pay the price. Our Global Survey explains why this is the case.

First, Starbucks, like most large foreign brands, is deemed a luxurious status symbol for the Indian Elite. For this reason, Tata Group plans to place Starbucks retail locations in Taj hotels—also known as the “crème-de-la-crème” of the hospitality industry. Second, increased international travel is encouraging the appetite for “foreign” products and services. Ashwin Shinde, a 38 year old marketing manager at an international bank says that his, “occasional visits abroad have made me addicted to Starbucks.” In the world’s 2nd largest market outside of China, Shinde is far from alone in his sentiment.

For more valuable information about the emergent global nature of customer experience, see our most recent webinar.