Starbucks�Kiana Nakagawa, Cam Tetrault, Jeremy Brazda, Megan Barone, Ross Eisenberg, Mat Moschella, Danielle Walkerwicz, Mohamed Hussien, Kristina Giles

April 22, 2015

Rome, Italy

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AGENDA

1. Forward
2. Methodology
3. Perceptions and attitudes
4. Experiences
5. Expectations
6. Summary of findings
7. Final recommendations.

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1. FORWARD

1. FORWARD OBJECTIVE

Is the Italian market suitable for Starbucks to enter?

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If so,what plan of action should they go about entering?

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Where should the Starbucks be situated?

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Who should they cater their menus to?

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What types of drinks and food are best suitable for the Italian culture?

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How should they price their items?

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How should stores be laid out and decorated?

1. FORWARD

Market Potential- Population of 60 million

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Coffee Market-

• Highly saturated; coffee shop concentration/ million people 3,278 (compared to US 63)1
• 3.7 kg coffee / capita (compared to US 2.4kg/capita)2
• 47 million tourists / year 3
• 1.8 million university students 4

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Ease of doing business in Italy- 87th / 183 (US ranked 4th)1

1 Alon, IIan, and Meredith Lohwasser. "The Espresso Lane to Global Markets." Richard Ivey School of Business (2012): 1-16. Web.

2 Coffee consumption, World Resources Institute, viewed 8th February, 2011, <http://www.wri.org>.

3 "International Tourism, Number of Arrivals." International Tourism, Number of Arrivals. N.p., 2014. Web. 24 Apr. 2015.

4 Sedghi, Ami, and Paddy Allen. "European Students by the Numbers." The Guardian. N.p., 2012. Web.

2. METHODOLOGY

2. METHODOLOGY

The study was based on an integrated approach. The qualitative phase, in particular in-depth interviews, were carried out among two targets:

• American University of Rome students (9)
• Students that regularly visit Starbucks back in the United States and drink coffee here in Rome

• Italian university students (7)
• Students, from Italy, who attend Italian universities and have either been to/have knowledge of Starbucks

2. METHODOLOGY

In all cases, furthermore, respondents were:

• University students
• Had preexisting knowledge of Starbucks
• Aged between 18-25
• Around 50% women, 50% men
• ~30 min in length
• A qualitative interview featuring projective techniques, sentence completion and word/image associations

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2. METHODOLOGY

Sessions/interviews were distributed as follows:

Fieldwork was carried out:

• over 7 days (April 7-14, 2015)
• by 9, US-Native students
• in Rome

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Each student attempted to carry out one American interview and ever two students carried out one Italian intervew

2. METHODOLOGY

The quantitative phase was carried out by means of an interview questionnaire, made up of 16 questions, that was handed out to willing participants.

Fieldwork was carried out in Rome in between the 17 and the 22 of April 2015

3. PERCEPTIONS

AND ATTITUDES

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FIRST REACTIONS TO STARBUCKS

It was perceived as:

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FIRST REACTIONS TO STARBUCKS

It was perceived as:

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PERCEPTIONS

The image of Starbucks was homogeneous among both targets, US and Italian university students.

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• High end, quality coffee shop
• Relatively high prices
• Relaxed environment
• Place to meet up and socialize
• Large variation of products
• Very popular, well-known place
• Middle to upper class customers
• Starbucks coffee culture not similar to Italian coffee culture

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RESISTANCE

Main problems shared by both targets:

Very expensive compared to many other coffee shops and bars.

Very expensive compared to other coffee shops or bars.

Coffee may not be perceived to be as good as Italian coffee in some eyes.

Can be crowded and touristy. Some customers are pretentious.

ASSOCIATIONS

Throughout the two countries Starbucks triggered off similar associations, basically connected to two features:

High End

American

Starbucks Associations:

Other elements that activated negative associations and moreover feelings were:

Italian Bar Associations:

Other elements that activated negative associations and moreover feelings were:

Non-relaxing environment

Not a lot of drink variation

Stronger coffee

PROJECTIVE EXERCISES:

FOR STARBUCKS

Projective exercises portrayed a similar user image in both countries:

Volkswagen

Jeep

Mercedes

Hannah Montana Gilmore Girl

Typical American Mila Kunis

Working American James Franco

PROJECTIVE EXERCISES:

FOR ITALIAN BARS

Projective exercises portrayed a similar user image in both countries:

Fiat

Fiat

Lamborghini

Bernini George Clooney

Totti George Clooney

4. Starbucks: EXPERIENCES

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4.6 : EXPERIENCES

American Coffee / SBKS

• leisurely
• weak taste
• large
• to-go
• luxurious

Italian Coffee / bar

• fast
• strong taste
• small
• immediate
• affordable (commodity)

4.6 : Hypothesis Formulation

Overall, interviewees suggested

5. Starbucks: EXPECTATIONS

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5.1: EXPECTATIONS

Sentence completion results

6. SUMMARY OF FINDINGS

6. SUMMARY OF FINDINGS

Overall the research highlighted the following:

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1. The majority of tourists and study abroad students would go to Starbucks in Italy.

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• The majority of Italian students say that they would not go to Starbucks in Italy.

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• Generally, Starbucks’ prices would work in Italy for those who would buy their products.

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• The majority agreed Starbucks should be located in tourist and city centers, by universities, and at stations/airports.

6. Italian-University Students

Information on Italians

Objective 45

30 stopped

13 responded

response rate 43%

male 77%

female 23%

average age 22.8

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6. Italian-University Students

Of 11 respondents

6. Italian-University Students

Of 11 respondents

Of 11 respondents

6. Italian-University Students

Of 11 respondents

6. Italian-University Students

Of 11 respondents

6. American-University Students

Information on American-University

Objective 45

28 stopped

28 responded

answer rate 100%

male 57%

female 43%

average age 20.5

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6. American-University Students

Of 25 respondents

Of 25 respondents

Of 25 respondents

6. American-University Students

Of 25 respondents

6. American-University Students

Of 25 respondents

Of 25 respondents

6. American-University Students

Of 25 respondents

6. American-University Students

Of 25 respondents

6. Tourists

Information on Tourists

Objective 45

46 stopped

21 responded

response rate 46%

male 38%

female 62%

average age 31.7

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6. Tourists

Of 20 respondents

Of 20 respondents

6. Tourists

Of 20 respondents

Of 20 respondents

6. Tourists

Of 20 respondents

6. Tourists

Of 20 respondents

10. FINAL RECOMMENDATIONS

10. FINAL RECOMMENDATIONS

• Overall, the insight provided by the research, hints at the following:

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• If Starbucks were to come to Italy, they would have to heavily market other products and services other than coffee in order to appeal to an Italian audience.

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• If Starbucks were to come to Italy, they would have to position themselves in heavily populated tourist areas.

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• Overall, after research, Starbucks should not come to Italy based on opportunity cost and risk.

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10. FINAL RECOMMENDATIONS

American University Students

Italian Uni.

Of 20 respondents

Of 25 respondents

Of 11respondents

10. FURTHER MORE

• There are other, more appealing and less saturated markets Starbucks should consider entering first (i.e. India)

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• Starbucks may not be able to use the same strategies to enter Italy as it has in every other country (consider the failure in Australia)

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• Starbucks’s reputation will be under serious scrutiny by the media upon entering Italy

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Questions?

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Thank you for your time.