Ben Cavender of Seeking Alpha recently lamented his difficult experience trying to find a Dunkin’ Donuts in China. The majority of his complaints centre on his difficulty finding the website online and the “inconvenient” locations of their stores. He then compares the efforts of both Starbucks and Dunkin Donuts in their separate attempts to enter the Chinese market, praising Starbucks for effectively reaching out to the Chinese consumer by personalizing their stores and products to suit the local market.
One of the notable differences between DD and Starbucks, according to Cavender was Dunkin’s strategy, or apparent lack thereof. In order to appeal to the consumer, Starbucks initiated an online campaign, redesigned their stores to be more of a destination, and emphasized their tea products over coffee. While Starbucks is an apparent success in China, with 360 stores in 26 cities, their efforts in China raise questions concerning the long-term effectiveness of their strategy.
Companies entering foreign markets are frequently lectured about the importance of tailoring their services to the local customer. But this begs the question: how much can a brand compromise the basic brand promise to accommodate new markets? While inherently contradictory, Starbucks’ mission is to provide customers with a consistent, universal product in an atmosphere that feels local and personalized. Starbucks’ emphasis on tea over coffee may alienate those already familiar and loyal to Starbucks, although, in the short-term, China’s vast market potential certainly warrants the effort.
In contrast, many other brands have taken a completely opposite approach, focusing instead on maintaining the same standard behind their products across the globe. Particularly in the luxury brand sector, eagerness to tap into the Chinese market has been tempered with a rational desire to maintain consistency of purpose, and product, across markets.
In a globalized world, where travel abroad becomes increasingly more frequent, a Chinese citizen will find their Starbucks experience in Europe or the United States completely different from that of a Chinese location. By changing their core product emphasis – and with it, their brand proposition – Starbucks compromises its consistency, for which it is known.
While there is little doubt that Dunkin’ Donuts must improve marketing strategy in China, however they must decide what they want from the Chinese market.
After finally reaching DD, Cavender stated, “I enjoyed the coffee and the donuts…two other foreigners in the store also seemed to be enjoying their snacks…” thus there is some legitimacy to maintaining the integrity and consistency of the product and brand. Donuts, according to Cavender are already popular in China, which is a plus for Dunkin’ – they don’t need to alter their product emphasis, they just need to convince the Chinese why Dunkin’s are the better donuts…