OWL Magazine Korea

“Benchmarking Starbucks” by Kim Young-han

Once upon a time, mentioning Starbucks might evoke negative images like “beanpaste girl” or “beanpaste boy.” However, Starbucks has successfully overcome such stereotypes, becoming the most famous and thriving cafe in South Korea.

“Why could Starbucks succeed in South Korea despite the recession?”

This book explores the reasons behind Starbucks’ success in the South Korean market, even during economic downturns, claiming the top spot in the cafe brand sector.

The author starts with the question, “How did Starbucks manage to succeed in South Korea even during a recession?” He answers this question by detailing 77 principles in the book.

“5P Strategy of Marketing? No, 5P Strategy”

In conventional marketing, the “4P strategy” is discussed, consisting of “Product, Price, Place, Promotion.” However, Starbucks introduces a “5P strategy,” adding “People” to the mix. The book delves into each of these five “P”s from a marketing perspective, making them the core focus of each chapter.

The book’s table of contents serves as a clear indicator of the content it covers, providing insights into each chapter’s key topics.

“Table of Contents for Benchmarking Starbucks”

PART 1. Capture the Emotional Generation

  • Target Young Women
  • Find the Goldmine of the Emotional Generation
  • Thoroughly Research the Target
  • Provide Customized Services
  • Let Them Taste Romance
  • People Are at the Center of Emotional Marketing

PART 2. Starbucks’s Emotional Marketing 5P

    • Create a Representative Product
    • Introduce New Flavors
    • Develop Your Own Know-How
    • Maintain Freshness Always
    • Tailor to Customer Tastes
    • Develop Seasonal Menus
    • Introduce Today’s Beverage
    • Create a Manual for Taste
    • Develop Region-Specific Menus
    • Capture the Morning Market
    • Accompany with Complementary Foods
    • Ensure Easy Portability
    • Develop Customer-Impacting Ideas
    • Premium Pricing Policy Is Also a Strategy
    • Stake Your Life on Quality
    • Sell Matching Additional Products
    • Price Discounts Are Not Everything
    • Sell the Brand Image
    • Fulfill Cultural Desires
    • Provide Recharge Spaces
    • Make It a Meeting Place
    • Maintain Consistency
    • Make It an Experiential Place
    • Make It Smell Good
    • Capture Tastes
    • Make the Eyes Happy
    • Make It Tactile
    • Let the Music Flow
    • Create an Emotional Store
    • Respect Local Culture
    • Capture the Digital Generation
    • Consider the Minority
    • Be Considerate Like a Chameleon
    • Develop a Local Multi-Store Strategy
    • Capture the Crossroads
    • Stimulate Customer Curiosity
    • Use Word of Mouth
    • Research Cultural Marketing
    • Invest in the Brand Name
    • Partner with Excellent Partners
    • Naturally Meet Customers
    • Research Public Marketing
    • Study Localized Marketing
    • Lead in Environmental Protection
    • Utilize Promotion Cards
    • Implement Limited Sales
    • Maximize Store Utilization
    • Use Various Publications
    • Create a Self-Sustaining Community
    • Make Them Compete
    • Research Symbiotic Marketing
    • Allow Free Tasting
    • People Are the First Element of Marketing
    • Select Emotional Employees
    • Turn Internal Employees into Customers
    • Instill Pride in Employees
    • Make Service People First
    • Say “Yes” to Customers
    • Make Customers Talk
    • Service Is Also a Skill
    • Baristas Are Made Through Training
    • Tame New Employees Well
    • Invest in Employee Education
    • Establish Service Standards

PART 3. Starbucks Emotional Leadership

  • Emotion Begets Emotion
  • Turn Vision into Mission
  • Operate Direct Outlets
  • Make Employees Colleagues, Not Just Workers
  • Collect Emotional Information with IT
  • Make Employees as Excited as a Shoe Shine
  • Tempt Customers with Concepts

In reality, there are likely various factors contributing to Starbucks’ success. However, by closely examining various marketing aspects, the author compiles these into the 77 principles.

“The Third Space That is Starbucks”

What resonated the most was likely the strategy of creating Starbucks as the “third space.” Turning Starbucks into an alternative for gatherings when there’s no other suitable place might have been a key strategy. Before Starbucks entered South Korea, cafes were often perceived as spaces for only certain individuals, and staying for an extended period felt somewhat uncomfortable. However, Starbucks completely transformed this atmosphere.

Apart from the taste of coffee or other factors, Starbucks’ ability to provide a comfortable space for customers, especially as the “third place,” might have been a crucial differentiator from other cafes in South Korea.

“Customer-Centric Operation at Starbucks”

One commonality among successful businesses is providing customer-centric services. In service industries like Starbucks, customer service is particularly crucial. Starbucks’ success can be attributed to its focus on providing services centered around customers and establishing systems to standardize these efforts.

This aligns with the approach of successful companies like Amazon, which consistently excels in prioritizing the “customer experience.”

“Employees as Partners…”

Viewing employees not just as workers but as partners who learn and grow together seems particularly impressive. Allowing employees to share in the profits through a stock option called “Bean Stock” even before Starbucks went public shows a commitment to instilling a sense of ownership and motivation among employees.

This practice, similar to Amazon’s approach of providing stocks to employees based on their tenure, demonstrates a parallel between the two companies.

“In the End, It’s About People”

For service industries like Starbucks, succeeding and thriving ultimately revolve around people. Although it might seem obvious, applying this understanding to business is challenging. Recognizing this early and effectively incorporating it into business practices is where Starbucks, by focusing on people, likely found its success.

“Benchmarking Starbucks”

  • Author: Kim Young-han
  • Publication Date: December 10, 2020
  • ISBN13: 9791191209297
  • Yes24: Link