Case 1.Starbucks
Global Fashion Industry
Starbucks: Repositioning the Coffee Bean
In 1971, the first Starbucks coffee shop opened on Seattle’s waterfront. Today, there seems to be a
Starbucks on every street corner at any major urban city. The brand has become a household name,
appearing on our grocery store shelves and influencing how many of us plan our mornings.
Ironically, this invasion was accomplished solely on the wings of word-of-mouth advertising. The
president of Starbucks Coffee International, Peter Maslen provides the following explanation, “It’s
about building one store at a time and one cup of coffee at a time. We’re not a mass marketer. This
business is based on repeat purchase and loyalty. Given that we don’t do advertising or traditional
marketing, we depend very much on the in-store experience and building loyalty that way” (Karolefski,
2002). This is the core of their successful strategy, when Starbucks decided to tap into the
international market in 1996.
Starbucks in Japan. Starbucks opened its first store in Tokyo, Japan. The Japanese coffee market is
the third largest in the world, falling behind United States and Germany. Starbucks was initially
challenged with an over-saturated market and a clientele that was used to instant, canned, or the
basic hot coffee beverage.
Their superior offering stems from their efforts towards fostering a creative store atmosphere that
provides consumer-oriented service. The Starbucks brand identity has been constructed by key
merchandising elements: store design, product packaging and regional merchandise assortment.
Starbucks in Japan is very successful and the sales were expected to reach 65 billion in 2005.
Starbucks in the United Kingdom. The same phenomenon occurred in the United Kingdom. In 1998,
Starbucks began its journey in the U.K., a country famous for its afternoon tea. Since 1600s, teadrinking has been a staple for British. Traditional Britons are so addicted to tea-drinking that they can
drink it before, during, after and in between meals. British coffee was almost solely consisted of
instant powder versions, making them ripe targets for Starbucks varied gourmet beverage menu.
The strategy was “to reposition coffee, as a luxury good, comparable to a good wine” (Business: The
company, 1998). Their store locations have also capitalized on the British propensity for long coffee
breaks by offering an extended food menu based upon the region. Starbucks’ coffee has invaded the
U.K. and influenced its tea industry. According to Mintel, a market-research firm, the tea sales in the
U.K. have declined 12% in the past 5 years.
How can Starbucks be successful in those tea-drinking countries? One key to Starbucks’ strategy is to
work with foreign partners to establish a marketing infrastructure. It helped Starbucks to learn and
understand local consumers faster and much easier. Starbucks CEO Orin Smith said, “ The biggest
lesson is no to assume that the market or the consumers are just like Americans, even if they speak
English or otherwise behave as if they were. They are not………We took to some of these Englishspeaking countries the same operating concepts and practices [as in the U.S.], and they just don’t
work the same way in all markets.
The other key success factor is their extensive research on the location of their stores. Starbucks
entered the intimidating European coffee market by recognizing the necessity of convenience to their
target consumers. They bring the value of a consistent product, appealing atmosphere and service,
and convenience of store locations to coffee drinkers worldwide.
Case 2. Gap Inc.
Global Fashion Industry
Gap Incorporated: Global Branding in Japanese Market
Gap Inc’s international expansion in the global market is one example of globalization. Gap Inc, U.S.
based apparel company, is one of the world’s largest specialty retailers.Gap Inc operates four famous
brand in the world—Gap, Banana Republic, Old Navy, and Forth & Towne. Currently, Gap Inc has
more than 3,000 stores around the word including America, Canada, France, and Japan.
In 1995, Gap retail stores were launched in Japan. This iconic American-brand of casual apparel was
not readily accepted. The sizes were not conducive to the Japanese consumers. Gap Inc. realized the
necessity of modifying their apparel lines to accommodate this region of consumers with “Japaneseonly fits.”
By 2005, they achieved a total of eighty-five Gap store locations.
After a decade of success in this fashion-forward market, Gap Inc. decided to introduce their higherend Banana Republic brand to Japan.
The president of Gap’s International division, Andrew Rolfe explains the market as “typically the
Japanese customer is more fashionable and stylish than their American counterpart they shop more
often, they spend a higher proportion of their disposable income on fashion. It’s a market that
appreciates quality, and it’s a market that’s not very forgiving if you get it wrong. It just means you
need incredible attention to detail in everything you do” (Yomiuri, 2005).
The competitive atmosphere is highly charged in Japan, where urban areas are so condensed. The
challenge will be to compete with fashion and quality, but with their superior price value. Banana
Republic offers this target market an affordable luxury brand that will expand the market share for
the overall company.