Starbucks Company Entering New Iceland Market

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Starbucks is an American coffee company and coffee shop chain of the same name. It is the largest coffee company globally, with a network of coffee shops of over 19 thousand in 60 countries (Bilfield, 2022). The company sells espresso, other hot and cold drinks, coffee, hot and cold sandwiches, pastries, snacks, and mugs and glasses. There are absolutely all kinds of people drinking coffee at Starbucks. They include from business people drinking espresso on the go to young couples stretching their pleasure at a table. Freelancers are active at Starbucks, bloggers write their new posts, and podcasters edit sound files (Bussing, 2022). The atmosphere of this coffee shop attracts people with laptops. Even though the company already operates in many countries worldwide, there are still enough states that do not have this company in their market. This paper will provide an overview of the company’s plan to enter a new Iceland market and all the related strategic developments.

At the beginning of the development of the company’s strategy for entering a new market, it is necessary to create a new version of the brand for a new segment of consumers. The hook model will be used for this purpose. This model is a 4-phase process that companies use to form user habits. Areiza-Padilla et al. (2020) believe that the task of today’s designers is to help their users form beneficial habits through technology. The first step is to find external and internal triggers that make users act. An external stimulus can be an email, a link to a website, or an app icon on the phone. In the case of Starbucks, you needed to focus more on internal triggers, such as emotions and feelings. For example, one might be a customer’s desire for a warm, seasonal drink in a cozy place.

To get him to go to Starbucks, the company needs to run ads to make the establishment feel cozy. For instance, you could use warm, seasonal drinks specific to Iceland, such as coffee with mulled wine. In this way, people will follow the lead of the advertisement to where their inner trigger is pulling them – the need for a cozy place and tasty warm drinks (Waxman, 2022). The second step in the hook model is action. An action, in this case, refers to the minimum activity a user needs to perform to get the desired result from a product. For example, Starbucks might expand the range of coffee packs available at the establishment or the thermic cups relevant in Iceland (Felton, 2018). In this way, the customer’s actions are minimized because to get delicious coffee, coffee packs to choose from, and valuable souvenirs, you only need to do one activity – come to a Starbucks coffee shop. The third component of the hook model is the reward. The reward is the user’s emotional satisfaction from interacting with the company’s product.

Rewards fall into several basic types. There are “tribal rewards”; they reflect social recognition. As such an award, you could introduce a contest for the best photo of a Starbucks product and display the winner in the establishment every week. “Hunter’s Reward” works with a sense of excitement, the ability to find something or solve a problem (Chang, 2021). Such a reward could be a free brownie for every tenth cup of coffee or a free souvenir for every hundredth. “Personal” tips are like “tribal” rewards, only the feeling of satisfaction from one’s skill appears in the user regardless of social approval; he likes what he does. Giving out customised cups to regular visitors may be one such incentive. The last step of the system is an investment. This will keep the customer coming back to the brand again and again. In the case of Starbucks in Iceland, it could be the unique coffee, the assortment, and the atmosphere (Lombardi et al, 2021). Since chain coffeehouses are not famous or developed in this country, people prefer Starbucks for its novelty and broad offerings.

Starbucks can be a dual transformation in the Icelandic market by repositioning itself as an eco-brand. Iceland is a highly eco-friendly community that values caring for the environment (Richey & Ponte, 2021). By repositioning itself, the company can maximize the sustainability of the business while creating a growth engine for future development. One of Iceland’s main problems is the high level of greenhouse gases: the country has the fourth-highest emissions after Luxembourg, the U.S., and Singapore. The reason for this is hyper-consumption, which is common in high-income societies. According to the Lee (2020), Iceland’s total waste has also increased significantly due to hyper-consumption. The most reliable solution would be introducing a mass eco-brand into the market and promoting it. As for the long-term effect, by using Starbucks, Icelanders will be able to reduce the amount of plastic thrown away and get a quality and fast product.

I would recommend a considerable degree of adaptation for the Icelandic market and a slight degree of standardization. The latter is because the Starbucks system is already well standardized for international trade (Pei-Hsuan et al., 2020). As far as adaptation is concerned, the packaging would have to be adapted to the eco-concept in the first place. This is a self-colored adaptation since it requires abandoning the usual plastic cups. The second adaptation is to change the marketing strategies to be more eco-friendly, each one emphasizing the brand’s intention to be green. The third, easiest transformation would be to hire eco-friendly employees, but since they would be Icelanders, this would not be difficult. Hence, following the recommendations above, the Starbucks brand can enter a new commercial market in Iceland.

References

Areiza-Padilla, J. A., Cervera-Taulet, A., & Manzi Puertas, M. A. (2020). Ethnocentrism at the coffee shop industry: A study of Starbucks in developing countries.Journal of Open Innovation: Technology, Market, and Complexity, 6(4), 164.

Bilfield, A. (2022). Brewing sustainability in the coffee and tea industries: From producer to consumer. Routledge.

Bussing, M. A. (2022). Starbucks (2^nd ed.). Abc – Clio.

Chang, W. J. (2021). Experiential marketing, brand image and brand loyalty: A case study of Starbucks. British Food Journal, 123(1), 209-223.

Felton, E. (2018). Filtered: Coffee, the café, and the 21st-Century city. Routledge.

Lee, S. (2020). Study on digital transformation strategies: Starbucks case study. Journal of Digital Contents Society, 21(10), 1809-1816.

Lombardi, C. V., Chidiac, N. T., & Record, B. C. (2021). Starbucks coffee corporation’s marketing response to the COVID-19 pandemic. Innovative Marketing, 17(2), 177-188. doi:10.21511/im.17(2).2021.16

Pei-Hsuan, T., Guan-Yi, L., Yu-Lin, Z., Yi-Chong, C., Pao-Zhen, C., & Zheng-Cheng, S. (2020). Exploring the effect of Starbucks’ green marketing on consumers’ purchase decisions from consumers’ perspective. Journal of Retailing and Consumer Services, 56(1), 102-162.

Richey, L. A., & Ponte, S. (2021). Brand Aid and coffee value chain development interventions: Is Starbucks working aid out of business?World Development, 143(1), 105-128.

Waxman, L. K. (2022).Designing coffee shops and cafés for community. Routledge.

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Starbucks Company Entering New Iceland Market

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