A Localization Example: Starbucks to Launch in Italy
It is difficult to walk down a New York City block without spotting a Starbucks! The Seattle, Washington-based coffeehouse chain and coffee company has over 25,000 global locations! What do all of these locations have in common? None of them are located in Italy!
Coffee is very much a part of Italian culture. In fact, a lot of Italian words related to coffee have made their way into English vernacular. Such words include barista, cappuccino, espresso, latte, and macchiato. Why has it taken Starbucks so long to expand into Italy? Let’s take examine this further. DETERMINE DEMAND Going global is part of most brand’s long term strategy. No one wants to miss out on growth potential! However, it is important to assess whether or not your product or service will translate (pun intended) in your intended target market. We’ve already established that Italians love coffee. In fact, this article in Fortune states that Italy has the seventh highest coffee consumption per capita in Europe! Just because Italians like coffee does not mean that they will love Starbucks. In a previous blog post on expanding your business in Mexico, we touched on Taco Bell and their failure to achieve success South of the Border. Taco Bell in the United States is fast food with a “Mexican” flair. However, the concept did not resonate with a Mexican market either time they tried to enter due to a lack of authenticity. Our advice? Do some research and determine how your product will be received. CUSTOMIZE YOUR APPROACH We often say that localization is not “one size fits all.” This is very true in this case. For their first Italian location, Starbucks has decided to open a high-end Roastery in Milan. The only one in the world is in Seattle (with more locations to open in 2018). They have also partnered with an Italian baker to provide food for this location. They are incorporating local flavor and are hoping to appeal to the sophisticated cafe culture in Italy. Of course, part of customizing your approach involves your content. Think about language when you expand into new markets. How will you appeal to your new customers? Take a look at your global marketing initiatives. Beyond your content are your customers. It is all about knowing what they like, don’t like, their spending patterns, and trends. Target failed in Canada, because they were unable to re-create Target in the United States. For now, we will see what happens with Starbucks and their Italian launch next year.