International coffee chain Starbucks made its debut in India in October with its first store at Horniman Circle, Mumbai. Six months and six stores later (in Mumbai and Delhi), Starbucks is on the anvil of the launch of a second store in New Delhi. Campaign India caught up with Sushant Dash, Senior Director – marketing and category, Tata Starbucks Limited, on the eve of the launch to find out about the journey so far, digital initiatives undertaken, and more.
How important is digital as a medium for Starbucks in India?
Digital is very critical for us and is sometimes referred to as the fourth place (according to us, office is the first place, home is second, and the Starbucks stores is the third place for an individual where you can hang out with friends and colleagues). So keeping this in mind we feel that digital is the fourth place as it is where consumers spend a substantial amount of time. For us it is as important as the store when it comes to giving the consumers a Starbucks experience. If you look at the India specific site - starbucks.in has 1,25,000 unique visitors in the six months that we got the site up. It went live on 18 October when we launched.
Is there a measure of how the brand has grown in awareness and stature (a brand track) in markets where Starbucks has been launched? Mumbai and Delhi, that is.
Let me say that at the outset, we are overwhelmed by the response we have received. In some sense it is a humbling experience in terms of the kind of numbers we are seeing. The measure is in terms of the conversations people are having on the digital platform. We have nearly 5 lakh people viewing the starbucks.in page. We have got more than 27,000 fans on Facebook and around 1,500 followers on the Twitter handle. Overall, we are very happy with the response as we have not done any major campaign or given any freebies to generate awareness. It’s happened just because of the passion for the brand. In terms of an absolute tracker and awareness numbers, we don’t have any measure.
What are the marketing efforts that have led to this response?
The most important element in pushing our brand is the Starbucks experience that we offer. This comprises of the store, the ambience at the store, the kind of products that we offer; it is about the personalisation and your interaction with the person. The biggest advertisement for us is the partners who we call the Baristas - they take orders, brew the drinks and serve. The connection that we have with the consumer is actually our marketing effort. It’s that experience/ the moment of connect that we create with each of our consumers that helps get the consumers back to the store.
I think the advantage that we have is the huge awareness the brand already has. So for us trials have not been an issue and the returns have been because of the experience we manage to give the consumers.
Other than the Starbuck experience, the main marketing effort has been on the digital front. We have not undertaken any advertising in India so far.
There’s been some noise online about the deletion of a negative Facebook post. Would you like to give us an update?
First is we are very clear that we want to either through our store or the digital platforms give our consumers the best and personalised experience. I want to reiterate that as a policy, Starbucks does not believe in deletion of posts or comments on either Facebook or Twitter. Third, there was a service issue faced by one of our consumers for which we actually got in touch with him, apologised and we actually invited him to the store to enjoy the hospitality.
Which are the agencies Starbucks works with in India: creative, media, digital, social, PR and experiential?
We are working with three agencies primarily in India: they are JWT (for creative and digital) Edelman (PR) and Showtime (event- launches in Mumbai and Delhi). Apart from this there is a lot of work that gets done in house at Starbucks in Seattle (HQ). We have large teams that have understanding and exposure of working in international markets. That’s an advantage you have of a large network.
It has been seen that the pricing of the products sold at Starbucks in India is lower than across the world. Is that a deliberate attempt to woo the price-conscious Indian consumer?
The pricing decision is completely based on the value perception that we believe the consumer has for our products. It is not based on benchmarks; it is based on what we think is the value that we are giving to consumers and how much we can charge for the value.
Starbucks is present in different formats across Mumbai and Delhi. Could you explain the thinking behind this and is there a differential pricing policy across the formats?
Depending on the demand from the consumers, we open outlets in various formats. The flagship store at Horniman Circle is very different from the store at the Oberoi mall at Goregaon East which is a mall store. The store at India Bulls Finance Centre is situated amongst offices and hence is an office store.
So we are trying out different formats – there is a mall, an office, a standalone store in the heritage area of the city, a store in the touristy area (Colaba) as well and one in Powai which is a residential area. So within the five stores that we have in Mumbai we have five different formats. The prices across all the five stores are the same. There is uniform pricing across the stores. But the capacity of the store varies - the Horniman Circle store can accommodate 110 people, the one at India Bulls Finance Centre that can accommodate 38 people.
We are skimming the market, trying to be in as many markets the consumer wants us to be in.
The roll out plans: 50 stores by 2013, real estate issues, we’ve read about. Will the approach be region by region, maximising the marketing synergies?
We will grow keeping in mind the requirement of the markets which we obviously study. We do look at the demand and study what the consumer preference is. There are various factors that go into understanding where the store is required. We will open stores at all places where we believe there is a demand for the Starbucks experience and where the consumer wants the brand. There is no fixed policy in terms of 'this is where we will be' and 'this is where we will not'.
Could you comment on the digital initiatives undertaken by Starbucks in India?
For us digital is a very important and critical platform as it is a main pillar which we use to interact with our consumers. For the digital media platforms other than social media engagement through Facebook and Twitter, we have tried to do things that are creative and innovative. For the launch of our first outlet in Delhi, we had an app developed that you could share with your friends and family; it also allowed you to post in terms of what your views on Starbucks as a brand was and on your passion for coffee. It also allowed you to upload your pictures.
For the next outlet opening in Delhi we have placed a big LED screen outside the unopened store and for the three days leading up to the launch. People who tweet using the Starbucks handle speaking about their passion for coffee will have their tweets flashing on the LED screen in real time. This tweet is part of the pixel and helps build the siren (Starbucks logo) that will be revealed on the day of the launch.
This is unique and not been done in India, we are very excited about it as it beautifully integrates our brand with digital which is very crucial and critical for us. So these are some of the specific initiatives.
Is there an element of customisation that has gone into designing outlets for city / locality? How does the balance between standardisation of the brand and customisation for city / locality work for Starbucks?
The stores are a critical part of the Starbucks experience that we offer to consumers. Each and every one of our flagship store actually incorporate very significantly the culture and the tradition of the country. The designers marry the elements of Indian tradition and craftsmanship with the modernity elements of Starbucks. I give full credit to our designers as they balance the elements as there is a high expectation that people have from a Starbucks store that they have visited abroad.
The designers have worked across many markets and their understanding of the Indian ethos that they have incorporated well and it differs from store to store. There is no magic number saying that this much of Indian sensibility and this much of core Starbucks will be there. It’s a fine balance they maintain.