1. Starbucks in China and Vietnam
Theory of Cross-Culture Branding
by
ANH HOANG PHAN ‘15
Capstone Course Research Paper
Program in Corporate Communication
Department of Communication
Lycoming College, Williamsport, PA 17701
April 23, 2015

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ABSTRACT
Although Starbucks is a multinational beverage corporation with a strong brand value and
culture, the author of this research believes that Starbucks, likewise other international
companies, must acknowledge the differences between the customers’ references of a foreign
market and a home market. Failure to adapt and meet certain requirements in term of cultural
values will be fatal to the survival of the company in that market. Through examining Starbucks’
performances and the entry model to China and Vietnam, the author wants to further analyze
how Starbucks has been so greatly successful in its cross-culture branding strategy.

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CONTENTS
ABSTRACT......................................................................................................................................................2
INTRODUCTION.............................................................................................................................................4
LITERATURE REVIEW.....................................................................................................................................5
METHODOLOGY ............................................................................................................................................7
THEORY OF CROSS-CULTURAL BRANDING....................................................................................................7
Culture and understanding national cultures...........................................................................................7
Globalization and brand management ...................................................................................................10
STARBUCKS: PHILOSOPHY, IDEAL, AND VALUE ..........................................................................................13
Coffee and coffee culture around the world ..........................................................................................13
Starbucks: The leader of the global coffeehouse trend..........................................................................15
STARBUCKS EXPERIENCES IN MARKET WIOUTH AN EXISTING COFFEE CULTURE: CHINA..........................19
Starbucks in China...................................................................................................................................19
Starbuck Case Study................................................................................................................................23
STARBUCKS EXPERIENCES IN MARKETS WITH AN EXISTING COFFEE CULTURE: VIETNAM........................28
History of coffee in Vietnam...................................................................................................................28
Starbucks in Vietnam ..............................................................................................................................29
SUGGESTIONS FOR STARBUCKS VIETNAM .................................................................................................33
APPENDIX....................................................................................................................................................36
BIBLIOGRAPHY ............................................................................................................................................37

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INTRODUCTION
“Culture is the name for what people are interested in, their thoughts, their models, the books
they read and the speeches they hear, their table-talk, gossip, controversies, historical sense and
scientific training, the values they appreciate, the quality of life they admire. All communities
have a culture. It is the climate of their civilization.”
Water Lippmann (Quotes 2015)
Taking this quote from the Father of Modern Journalism in the United States emphasizes
the importance of understanding cultures in order to develop a proper approach toward different
environments. During the 20th
century, with an advancing civilization and a superior
technological base, Western models had dominated on how businesses should be conducted
globally. However, many East Asia countries advance quickly and require Western corporations
to reevaluate their previous business approach. Starbucks is an excellent example of how
adapting to the different cultures will benefit the company in the long term. Through analyzing
the performances of Starbucks in China and Vietnam, it is believed that the company’s cross-
culture branding strategies in these nations are the key to the success for multinational
corporations in the future.
The coffee industry is quite young in comparison with other types of drinks. The growth
of the industry is substantial and coffee has become part of many cultures and societies.
Starbucks, an American beverage corporation, has contributed largely to such expansion. There
are many papers that examine the success of Starbucks in embracing the coffee culture globally.
Nevertheless, there is a lack of analysis that focuses specifically on Starbucks’ performances in
the East Asia market. The study would like to further analyze this topic to examine Starbucks’
branding practices from other perspectives. Each country in this market is a unique segment with
rich cultural diversifications that should be treated differently.

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LITERATURE REVIEW
There are many research studies that emphasize the role of culture on business and how
corporations should adjust their strategies to improve overall performances in a foreign market.
Talking about cross-cultural management, there are several well-known authors that developed
their model for further understanding of national cultures. Geert Hofstede (2015) established his
model on cultural dimensions that attempts to understand cultural variables in measurable
components. Although facing many criticisms and other models, which are designed by Fons
Trompenaars and Hampden-Turner (1997), Schwartz (1999), and Robert J House (2002),
Hofstede model is the most popular that is used by business management to understand about the
new foreign market. Hofstede (2015) also established charts that indicate the score of each
dimension for a specific nation. Furthermore, When Culture Collide: Managing Successfully
across Culture by Richard Lewis (1997) is a research work on trying to explain major cultural
differences of each country. He discusses the use of time, status, organization, communication,
and mindset of individual from many countries, such as Germany, France, and China. Jean
Chanlat, Eduardo Davel, and Jean Dupuis (2013) gathered major research works and composed
them in the book that acknowledges strategic approaches, issues, and practices of cross-cultural
management.
Cross-cultural branding strategy is a crucial subset of cross-cultural management. It
appears that there are not many works that deliberate specifically this topic. However, there are
many books about branding strategy and how to improve and empower a brand in both existing
and new markets. In his book, How Brands Become Icons: The Principal of Cultural Branding,
Holt Douglas (2002) proposes the symbolic interactionism as a mechanism to understand human
behavior when an individual interacts with symbols. Matt Haig (2003) presents the idea of brand

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failures and the reasons behind these wrong doings. He discusses several examples, including the
failure of New Coke. An excellent PhD dissertation that was written by Ivana First (2009)
describes in details on cross-cultural branding strategy of famous corporations. In additional,
Asian historical and cultural books will be studied for general information. Scott Morton and
Charlton Lewis (2005) wrote a book on China, informing about this country history, geography,
and culture.
Case studies are an important part of literature that reflects how theory can be applied in
actual context and practice. A case study that was written by David Bell and Mary Shelman
(2011) examines how KFC has adapted to become one of the most successful fast food chains in
China. Another case study about Starbucks’ performance in China will be an excellent source of
information for further analysis. Additionally, information about Starbucks’ performances in
Vietnam is not fully completed due to the fact that Starbucks entered Vietnam two years ago.
None major research on this market has been conducted besides newspaper articles and
Vietnamese local journals. Bob Batchelor and Kaitlin Krister (2012) from Kent State University
wrote a Starbucks case study that debates on the corporation’s symbols, logo, and language.
On the other hand, many studies have been conducted to understand about Starbucks
excellent performance globally. Howard Schulz (2009) explained his vision, philosophy, and
values of Starbucks to the readers. The two books are similar to biographies that inform the
process of how Starbucks adapts to survive without losing its core signature values. Articles on
Starbucks’ successful stories from Forbes, Wall Street Journal, and The New York Times, are
also good sources to examine the company’s brand values.

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METHODOLOGY
This capstone used secondary research, which involves existing information and data
from other resources. A principal source of information came from Starbucks’ website, which
contains information about its culture, values, and brand. I will examine the Starbucks’ corporate
original ideas and philosophy by reviewing two books of Howard Schultz, Starbucks President
and CEO. These books will have fundamental information of how Schulz desired to create and
maintain Starbucks’ core culture and values. Furthermore, the author also accessed Business
Source Premier and Harvard Business Review databases for research papers on cross-culture
branding strategy that will be examined to identify its decisive influence on the corporate
performance in the foreign market. Moreover, a PhD dissertation of Ivana First (2009) on global
and national cultures will be reviewed to study about individual behavioral patterns in each
country that Starbucks entered. Articles from well-known newspaper, such as Forbes, The New
York Times, and Wall Street Journal, are also a good source for updating the current performance
of Starbucks in China and Vietnam. From the information, it is expected to find the relationship
between how cross-cultural branding strategy can influence the behaviors and thinking of local
customers.
THEORY OF CROSS-CULTURAL BRANDING
Culture and understanding national cultures
Culture is a broad definition that is difficult to understand physically. Instead, it is a
combination of experiences and beliefs that create significant impacts on an individual’s
characteristics and behaviors. According to Hofstede, culture is the collective programming of
the mind, and it describes the process of to which each individual has been subjected
immediately after birth (Lewis 1997). When an individual was born in a typical society, his

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thinking and actions should be resonant with what the society believes are its core values and
principals. For instance, individualism is a strong element in Western countries while
collectivism dominates the Eastern countries. Culture therefore imposes itself on individual
behaviors, and those who have the tendency to obey the rules of our society will be more popular
(Lewis 1997). In her book, Tucker (2011) stated that “as water is for fish, culture is for
humanity” (p. 6). Multinational corporations, which are entering a foreign market, are similar to
a fish that is swimming in strange water. If the fish does not adapt to the water’s conditions, it
cannot survive.
Recently, there are many changes in how culture should be viewed and explained. In the
past, while the world was not well connected due to the lack of technological advancements,
national and regional cultures predominated in defying individual’s behaviors and
characteristics. With many inventions created, especially the Internet, the world is now
connecting far more than ever before. It is easier for people from different backgrounds to access
information of other countries. Exchange between countries becomes interdependent on national
economies, human interaction, and trade. Such interdependence is called globalization (Chanlat
et al. 2013). National and regional cultures are neutralized by the impact of globalization. On the
other hand, as the United States is the world economic and political leader, an American-style
capitalistic business culture significantly influences commercial activities on global scale
(Chanlat et al. 2013). With Western cultural domination for the last two hundred years, local
markets also adapted to these new practices and models. For instance, English is an international
language that foreign citizens must learn to understand Western knowledge and technologies.
Western business practices and models are therefore widely accepted globally.
Nevertheless, there are limitations on how Western-style civilization can influence a

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foreign market. As many third world nations are emerging, it is crucial for Western corporations
to understand cultural differences since there is no indication that these third world countries
adapted the similar capitalism model of the United States (Chanlat et al. 2013). Instead, the
development of capitalist in China shows that problems cannot be solved similarly as how they
were handled in America. There are currently three different views on how intercultural
management theory should be developed (Chanlat et al. 2013). Cultural convergence is famous
among economists and businessmen who believe that local reference points will be replaced by
Western or transnational practices. Second, cultural divergence argues that there are mutually
exchanges between the West and the rest of the world. Third, the focus on cultural hybridization
of management practices means that while cultures will be radically changed by globalization,
each nation will integrate such changes in its own way (Chanlat et al. 2013). As the third
approach offers a rich study on national cultures, it will be further analyzed in the boundary of
this research.
When analyzing national cultures, there are cultural dimensions that different from
individual countries. According to Hofstede (2015), there are six dimensions which each culture
differs. First (2009) believes that Hofstede’s theory is valuable in capturing behaviors and
cultural values in South-East Asia. Six dimensions are as follows (Hofstede 2015):
 Individualism vs. Collectivism: the degree to which individual opinion should be
value more or less against group opinion.
 Power distance: the degree to which the less powerful members of a society
accept or expect that power is distributed equally.
 Masculinity vs. Femininity: gender oriented dimension in which defines tough
societies as masculinity, while tender societies as femininity.
 Uncertainty avoidance: describes the level of comfortable level when dealing
with uncertainty and ambiguity.
 Long term orientation vs. Short term normative orientation: the degree in
which the society wants to maintain some links with its own past while dealing
with the present and future.

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 Indulgence vs. Restraint: the degree in which people are freely to follow their
natural human drives or not.
Each of these dimensions will define the role of individual within the society and how the
society as a whole will respond when interacting with foreign values and cultures. Hofstede
(2015) also evaluates each country on these dimensions so businesses can develop an appropriate
approach and entry model to the market. For instance, Asians usually have a high tendency of
collectivism. Individuals have a close relationship with their family members and friends.
Therefore, during the decision making process, an individual in Asian society is usually
influenced by others’ choices. If family member suggests something is good, it is likelihood that
s/he will try the product in the near future. Moreover, communication strategy that emphasizes
on the importance of family and relationships also receives welcoming attitudes from Asian
customers. As mentioned above, although there are influences from Western, these fundamental
foundations hold true for the majority of the population.
Globalization and brand management
Globalization requires corporations to research intensively to acquire knowledge and
information about regional, national, and local cultures, including perceptions, tastes, needs,
beliefs, attitudes, preferences, and values (First 2009). As a result, to be successful, a strategic
cross-culture branding must be initialized. According to First (2009), brand refers to those
processes included in a corporation’s attempt to make the product meaningful. Those processes
can be naming the product, positioning and targeting, and communicating the product’s benefits.
Kay (2006) argues that instead of relying on creating differentiation, the strength of the brand is
strongly based on the meaning that it creates. Effective branding strategy therefore must include
effectively managing the meaning the brand is communicating to consumers. Differentiation
itself will not ensure customers’ loyalty towards the brand.

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The expression of a brand can be found in its name, logo, and design (Douglas 2004).
However, without a product’s history, these markers are empty and meaningless (First 2009). For
instance, if a brand’s name is given to someone that has not yet used or heard about the product,
it will be difficult for her/him to understand what the brand stands for. Over time, the name,
logo, and design will be filled with individual customers’ experiences and ideas. That is when
the brand actually becomes meaningful (First 2009). Brand, therefore, does not belong to the
corporation, but the consumers. Its meanings cannot be predetermined, but rather must be
constructed in each individual’s mind (First 2009). Brand meanings can be experienced by the
same person in many different settings and situations. Each individual will interpret the product
in their own way. Consequently, brand is a combination of many meanings that are not universal
to the crowd. If a brand can create positive meanings in consumers’ minds, it is a powerful and
strong brand (First 2009).
When interacting with different cultures, brand’s original meanings that were created by
the corporation will no longer hold true. Instead, introducing brands to customers of a new
market requires reinterpretation and change in brand meanings (First 2009). For instance, when
translating a message in a foreign language or presenting a logo, it is necessary to seek advice
from local professional consultants to avoid misinterpretation from locals. Customers might be
misled into thinking that a message or a logo is disrespectful, inappropriate, or hostile. If such
negative feelings are built up, the author believes that the brand will suffer significant
reputational damages. These damages will eventually lead to brand failure (Haig 2003). When
the brand is disregarded by the consumers, it will be difficult to restore the lost values.
According to Haig (2003), there are several reasons that can explain why a brand fails (p. 4-5):
 Brand amnesia: problems arise when old, long-lasting brands attempt to create
new identity and outlook.

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 Brand ego: brands overestimate their importance and capability.
 Brand megalomania: brand desires to overly expand into every category
imaginable that none of the product will dominate the market.
 Brand deception: brand fictions can lead to lies. Corporations cannot face reality.
 Brand fatigue: an old brand can be tiring of creating creative values.
 Brand paranoia: the opposite of brand ego and happens when brand has to
compete against many players.
 Brand irrelevance: as market constantly fluctuates and changes, brand faces the
risk of being outdated and irrelevant.
In a business environment, there are many issues that can cause these failures. In fact,
these failures usually came from the ignorance of the corporate branding management (Haig
2003). Even multinational corporations with sales of billions of dollars cannot guarantee that
their brands will be successful. Haig (2003) believes that there are many myths that create an
illusion of brand success. One of the famous myths is that large corporations will have a strong
brand and therefore will succeed without acknowledging and analyzing carefully the market’s
needs and demands. New Coke is a well-known example of the brand failure that is associated
with new innovative product of a famous brand (Haig 2003). Moreover, the belief that a strong
brand is based on advertisements is dangerous. A well-advertised campaign will fail if customers
discover that the product’s values are overrated. Brand failures are perhaps one of the most
common reasons for disappointing performances in the market.
It is difficult to find a unique brand that does not need to understand its customers.
Creating a meaningful brand requires the participation of customers. Today, with millions of
brands, communication strategy emphasizes one way communication is no longer effective (First
2009). Infinite numbers of choices give customers more power to select what they want and
ignore what they feel as irrelevant. It is also believed that the Internet gives the power of rapidly
exchanging and searching for information in the hands of buyers. According to First (2009), Paul
Edwards, the Chief Strategy Officer of Publicis, French media and advertising conglomerate,

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believes that customers are now empowered and corporations must therefore take on an active
“receiver” approach rather than a “transmitter” in a communication channel. This type of
communication management is called co-creation (First 2009). Furthermore, First (2009)
believes that social settings, rituals, mass media images, product symbolism, language, gender
roles, religious, and ethnic traditions are other cultural factors that have a systemic influence on
individual’s experiences of the product. Eventually, brand will be recognized in social context at
a particular moment through “collective interpretation” of various stakeholders (First 2009).
Consequently, brand must be a combination of all efforts in order to shape positive
images and meanings of the product inside consumers’ minds. Gregory (2007) proposed a
concept of ‘negotiated brand’, which means the co-creation of various stakeholders, a type of
spiritual development. She argues that this approach will start when a corporation identifies its
core values, which are based on management vision and internal stakeholders’ views. After these
values have been established, a brand will be introduced to external stakeholders to be fully in its
final form (Gregory 2007). As a result, cross-culture branding strategy is a well-organized map-
plan to understand perceptions, tastes, needs, beliefs, attitudes, preferences, and values of
customers, who have different backgrounds, ethnicities, history, geography, and cultures. From
these understandings, corporations will build appropriate and resonant communication
approaches to position in customers’ minds.
STARBUCKS: PHILOSOPHY, IDEAL, AND VALUE
Coffee and coffee culture around the world
Before talking about Starbucks, it will be interesting to examine coffee and its influences
on society. Coffee origin can be traced back to the Middle East (Yemen) and Africa (Ethiopia)
(Tucker 2013). Substantial growth of coffee consumption globally is an evidence of the human’s

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long-lasting affection on coffee drinking. In the United States, coffee has become a daily
beverage as a morning ritual (Tucker 2013). People come to agree that coffee is associated with
social activities and helps us to stay awake (Tucker 2013). However, coffee culture developed in
the U.S. around half of the century ago (Tucker 2013). Many countries have maintained a strong
coffee culture for years, such as Brazil, Columbia, Germany, and Vietnam (Tucker 2013). Each
of these nations has their own view on how coffee can be made and what the standards for an
excellent coffee cup are. Meanwhile, soft drinks remain a major sector of the U.S.’s beverage
market (Tucker 2013). The competition between coffee and soft drinks in the U.S. became
intensive as new coffee corporations entered the market. Coffee culture has been promoted by
these corporations through mass media in an attempt to change customer’s perspective about
coffee. Moreover, customers are invoked by the media to either drink a certain coffee brand, or
to consumer more coffee. As a result, coffee is becoming more popular than it used to be.
There are three reasons for an expansion of coffee (Tucker 2013). First, it has caffeine.
Drinks that contain caffeine will usually be at the top beverage consumption lists, such as tea and
soft drinks (Tucker 2013). Second, there are coffee cultures that are perceived by people as “our
own” (Tucker 2013). The ideas and feelings that are associated with drinking coffee create a
unique context of an individual’s life. Third, which is the most important aspect, the coffeehouse
appeal attracts customers to come. The popularity of coffee drinks has significantly increased
after coffee shops become a global phenomenon (Tucker 2013). These shops are the place for
social interaction with others. Based on the “small world” theory, which talks about how
individuals’ connections could only be through some degrees of separation, Tucker
acknowledges that coffeehouse offers something familiar from the globe and from our own
hometowns (Tucker 2013). Although coffeehouse can be a symbol of Western cultural influence,

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it combines with local coffee and drinking culture to create a unique environment for individuals
to perceive and create their own small worlds, alone or with their fellows.
Starbucks: The leader of the global coffeehouse trend
The first Starbucks was opened in 1979 in Seattle, Washington. At the beginning,
Starbucks was only a simple coffeehouse. During that period, coffee consumption was declining
due to the fierce competition from soft drinks (Tucker 2013). However, Howard Schultz has
transformed Starbucks into one of the biggest beverage corporations that contributed to the
revival of coffee around the world. On his trip to Milan, Italy, Schultz discovered that the Italian
coffeehouse model with small shops could create a perfect community for people to connect
(Schultz 2011). The combination of coffee craftsmanship and human connection is the vision
that Schultz had for his company. He then summarized his vision in an ambitious mission
statement: “To inspire and nurture the human spirit – one person, one cup, and one neighborhood
at a time” (as cited in Batchetor & Christer 2012, p. 1). The major concern of Howard Schultz is
his passion about coffee and wanting to share the experience to others. An experience created by
inspirations of exceptional baristas is perhaps the basic foundation of Starbucks culture. Schulz
(2011) believes that besides home, the “primary place”, and work, the “second place”, a public
space like Starbucks is considered as the “third place” (p. 13). It is both a social and personal
place for customers to connect with others and reconnect with themselves. What Starbucks
provides is more than an art of making coffee and beverages. It provides an invaluable
opportunity for social interactions and connections.
Starbucks establishes its own culture and atmosphere that can hardly be found anywhere
else. Starbucks is different from other brands as it is “creating an experience that comes to life, in
large part, because of how we treat our people, how we treat our farmers, our customers, and

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how we give back to communities” (Schultz 2011, p. 27). Comparing to an example of how the
Beatles was one of the most successful bands in the history, Schultz (2011) argues that Starbucks
must be able to reinvent itself while preserving its core values and stature. To achieve such a
desire, he summarized parallels as challenges that Starbucks must overcome to protect its
signature icons (Schulz 2011). First, icons have meanings during tumultuous period of time,
which offers people with resolutions. With many political, social, economic, and environmental
concerns in the country, Starbucks must find a way to bridge with these issues. Second, “cultural
authority” is asserted by icons that frame people’s perspective about the world (Schultz 2011).
Starbucks must use its soft power to influence people. Third, icons can classify heritage and
history, while preserving and protecting their values. Starbucks must sustain the growth while
holding its values regarding ethical behaviors, global responsibilities, and human connection.
Forth, before being disrupted by competitors, icons must disrupt themselves. The company must
be able to be relevant to what customers’ needs and wants. Fifth, icons demand great sacrifice on
short-term benefits for long term relevance (Schulz 2011). To change existing values of a group
of people, Starbucks must sacrifice short term financial loss to achieve the long term objectives.
Consequently, for Howard Schultz, answering these profound questions relating to icons
explains how to make customers’ experiences better and maintain Starbucks’ true core values
and soul.
These icons can be considered symbols for Starbucks, and serve as the signs that will be
recognized immediately by the public. Charon acknowledges that the majority of our social
interaction is heavily dependent on symbols (as cited in Batchelor & Krister 2012). He calls such
dependence “symbolic interactionism” (as cited in Batchelor & Krister 2012, p. 4). Every symbol
has its meanings, although the interpretations of these meanings vary among different individuals

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(Batchelor & Krister 2012). From these symbols, identities will be established because it
explains why people do something, how people communicate, and how people establish
impressions of each other (Batchelor & Krister 2012). From a business perspective, the way
how corporations interact and communicate with the society and customers is an evidence of
symbolic interactionism (Batchelor & Krister 2012). It creates corporate identities that
differentiate a particular company from others. For instance, Starbucks provides a warm
atmosphere with a high quality coffee. An individual customer will memorize those experiences
to define for what Starbucks stands.
The first noticeable symbol of Starbucks is its logo, a green mermaid. In the past, the first
logo was a two-tailed mermaid in brown color (Wang 2014b). The logo has been redesigned
twice, with the change in color and the siren’s image. According to Phillips and Rippin (2010),
when they emailed Starbucks asking about the reason behind the logo, the company replied that a
mermaid is a nautical creature that existed in classical literature and art. A two-tailed siren
represented strength and power in medieval adventure tales (Phillips and Rippin 2010).
Interestingly, Phillips and Rippin (2010) argue that mermaids have power to seduce sailors on
the sea. They are an iconography that embodies Aphrodite and Venus, the Greek and Roman
goddesses of beauty and love. If we recall back to many nautical adventure stories, mermaids
had beautiful voices that could make sailors lose their caution and judgement. These creatures
bewitched seamen so they could not return home to their beloved wives (Phillips and Rippin
2010). As a result, mermaids represent seduction that ensnares humans from their normal duties
to chase forbidden fruits, which represent either pleasure, or knowledge and wisdom (Phillips
and Rippin 2010). Likewise, since Starbucks’ objective is to become a third place that neither
home nor work, it must be able to “seduce” customers to come and return in the future. Phillips

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and Rippin (2010) believe that mermaids are seductive and dangerous, and these characteristics
also describe coffee correctly, because coffee offers pleasure and addiction. In their writing,
Howard Schultz and Jones Yang (1997) state a customer’s experience about Starbucks:
“A typical customer might say, ‘Wow! I come in here and I’m treated so well. And when
I come back the next day, they know my name and they know my drink! And there’s a
seat here, and I’m listening to jazz, and I can close my eyes and have five minutes of rest
away from work and away from home. I can do it every day, and it’s for me, and it’s only
a dollar fifty or two dollars. I can’t afford a vacation to Hawaii, but this is something I
can treat myself to! And I can afford it every day” (p.257).
Starbucks not only designed its mermaid logo, but also developed its own language
system, shown through the customizing drink order. With a variety of menu choices, Starbucks
created a flexible framework and the language to describe that framework for customers
(Durham 2007). The four main categories of Starbucks drinks are espresso drinks, drip coffee,
Frappuccino, and tea drinks (Starbucks 2015). However, these categories can be further divided
into subcategories. For instance, espresso drinks include espresso, latte, cappuccino, and
Americano (Starbucks 2015). Another major option is the sizes of the drink, which are tall,
grande, and venti, and trenta (Starbucks 2015). Although these can be difficult for new
customers to learn, it does not take much time for them to familiarize with the language. With a
savvy customer, customization can be more complex to include milk type, syrup type, amount of
coffee, and many others choices. According to Durham (2007), Starbucks framework already
offers 200 types of drinks with only one type of syrup. Adding a second type of syrup produces
up to 1.3 billion drink options, which basically means Starbucks can offer every customer in
China a unique order (Durham 2007). To make it more familiar, after customers order their
beverages, the name of the drink will also be repeated three times by the barista (Durham 2007).
It is considered a learning process and creates a connection between baristas and customers.
When customers interact with others and the brand, they have a sense of belonging to Starbucks.

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Therefore, Starbucks’ language framework design is crucial in creating its culture and experience
that customers would like to know more about.
The combination of a meaningful logo and a unique language system creates a strong
brand name for Starbucks. Whenever customers see these symbols and hear the language, they
immediately visualize Starbucks experiences. All of these elements combine to become the
culture that Starbucks disseminates around the world. As mentioned above, the cultural
hybridization theory will be the primary focus of this research (Chanlat et al. 2013). According
to this theory, Starbucks culture represents values of globalization that is standardized
throughout all markets around the world. When contradicted with national and local values, it
will be interesting to examine how Starbucks changes to adapt with new markets without losing
its core values.
STARBUCKS EXPERIENCES IN MARKET WIOUTH AN EXISTING COFFEE
CULTURE: CHINA
Starbucks in China
With a population of more than 1.3 billion, China is the largest market in Asia (Barton
2013). The Chinese inherited one of the richest cultural values in art, architecture, literature, and
cuisine. For the most part of its history, China has been an isolated land because it is surrounded
by seas, mountains, and deserts. Until Marco Polo traveled to China in 13th
century and
published his travelling memoirs, Chinese civilization was almost unknown to the West (Morton
and Lewis 2005). However, China has significant influences on their philosophical and cultural
values because the Chinese court had maintained its tributary system for centuries over its
neighboring nations, such as Vietnam, Korea, Japan, and Mongolia (Morton and Lewis 2005).
Confucianism values can be considered as the root of Eastern Asian cultural basis that identifies
Asian characteristics (Lewis 1997).

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In 1949, after the Communist Party took over the country, China had become mostly
isolated from the world. As the Communist Party strictly controlled the society and commercial
activities, the private sector was undeveloped (Morton and Lewis, 2005). However, in 1978,
Deng Xiaoping became the leader of the country and started the reform era by proposing a
combination of a capitalist market and a single party government (Morton and Lewis, 2005).
This model created an opportunity for private sectors to expand and develop. After proposing
such pro-private business policies, China resumed the relationship with the West and opened up
the country for foreign investments and commercial trades.
Starbucks’ mainstream coffee entered the Chinese market in 1999 when the company
opened its first store in Beijing (Jeffrey 2013). The fundamental issue was that Chinese inherited
a tea-drinking culture. According to Nestle research, in mainland China, on average, the Chinese
drink only five cups of coffee a year and coffee has not yet become a popular drink (Doland
2015). Tea is an obstacle for Starbucks to surpass. According to Chinese legend, tea was created
in 2737 B.C. by Emperor Shennong (Wu 2015). For thousands of years, tea played an important
role in commercial trading between China and other nations. Wu (2015) believes that tea
embodies the spirit of civilization because it has become an art, as well as an indispensable drink
to everyone. The art of drinking tea in China is quite similar to the art of making coffee in Italy.
Chinese teashops are famous for hot tea that is served with snacks, making the habit a joy for
many generations. There are a variety of Chinese teas, such as green, black, oolong, and
medicinal tea (Wu 2015). Tea is therefore a cultural ambassador that spreads Chinese values
around the world.
Starbucks probably learned essential lessons from its predecessor, KFC, a famous
American fast-food chain, when facing such sophisticated cuisine in China. KFC opened its first

21. 21
restaurant next to Tiananmen Square in 1987 (Bell & Shelman 2011). At that moment, the
Western-style fast-food restaurant was unknown to the Chinese. Currently, KFC opens
approximately one restaurant every day with an intention to reach 15,000 outlets (Bell &
Shelman 2011). The company archived such a goal because the executives understood the
importance of food as “the very heart of the society” (as cited in Bell & Shelman, p. 138). The
core strategy of KFC is to embrace both Chinese national and regional food cuisines. Unlike
American’s menu, KFC invented Western food options that are infused with Chinese
characteristics (Bell & Shelman 2011). For instance, the Chinese menu includes 50 items, while
American menu only includes 29 items (Bell & Shelman 2011). With a variety of both traditional
and the Western-style food, KFC becomes more appealing to Chinese customers.
For Starbucks, instead of trying to implement the entire American drinking menu with
whipped cream-covered frozen coffee concoctions into the new market, the corporation
compromised with the tea culture by adding more tea options to the menu (Rein 2012). Product
development is essential for Starbucks to survive in China. For instance, Starbucks created green
tea-flavored coffee drink, such as Black Sesame Green Tea Frappuccino, a twist version of the
Green Tea Frappuccino in Japan (Schultz 2011). During his trip to China, Schultz was told that
“green tea is an essential ingredient in Chinese culture. And black sesame is another ingredient
that the Chinese use in cooking” (as stated in Schultz 2011, p. 307). The different cultural
perception of the Chinese about food and drink is that they must be healthy to the customers.
That is why tea and sesame are popular in China (Schultz, 2011). Starbucks also offers hot teapot
with traditional snacks that are made in Western style, which is quickly become a best-selling
item (Peterson 2014). Moreover, many Starbucks stores in China are built according to Chinese
teashop architecture style, with curved eaves and stone walls, which turned these stores into a

22. 22
part of China. Wang (2012a) argues that Starbucks’ intelligent strategy was to select high-
visibility and high-traffic locations to project its brand image. This combination creates a
familiar feeling when stepping into Starbucks’ stores.
Although Schultz considered Starbucks as a third place besides home and work,
American coffeehouses usually have a take-away culture, which customers will quickly buy the
drink and then leave for their work (Rein 2012). However, it is different in China. Before
opening up the country in 1979, China was a strict society. There were not many third places for
social interactions as people were banned from social gatherings (Morton and Lewis, 2005).
Additionally, Violet Law states that: “Instead, coffee shops here are a destination. People sit
back and chat with friends and family. Some come to meet with clients or do business” (as stated
in Peterson 2014, para. 4). The level for social interaction in China is much more than such need
for interaction in Western countries. In his writing about the Chinese market, Schultz (2011)
believes that Starbucks stores with a clean, spacious, and comfortable environment, are better
place for social interactions in comparison with Chinese’ apartments, which are usually small
and tight. Customers come not only for drinks and snacks, but come for the space. As a result,
Starbucks stores in China are larger with more seats for customers to stay for hours. Instead of a
take-out order system, Starbucks adapted to local customers’ desire for a dine-in service (Rein
2012).
Another controversial practice that Starbucks implemented in China is to increase the
price of coffee. According to Peterson (2014), Starbucks charges 20 percent higher for its
products in comparison with other brands. The given reason is that the cost of doing business in
the country is higher (Rein 2012). However, Wang (2012a) believes that carrying a Starbucks
cup in China is a status symbol, which shows that an individual has a strong financial power to

23. 23
pursue a luxury lifestyle. After opening up the country, the middle class of China emerged
rapidly (Barton 2013). According to Barton (2013), by 2022, the Chinese middle-class will
become a new mainstream that account for more than 54 percent of urban households and
approximately 50 percent of total Chinese private consumption. With more financial capacity,
people can obviously afford buying more expensive and luxury items. Overall, the operating
margin of Starbucks in China is 34.6 percent versus 21.8 percent in the United States (Rein
2012). By increasing the price, Starbucks improved its status and brand meaning to the crowd.
Wang (2012a) believes that Starbucks has a strong appeal to younger generations since the brand
represents Western-style coffee as a symbol of modernization. Therefore, instead of selling more
coffee, Starbucks basically changed the message of a cup of coffee: it is the sign of wealth and
power. The ‘Starbucks Experience’ becomes a trend that everyone would want to follow (Wang
2012a).
Starbuck Case Study
Reviewing these practices shows how Starbucks’ cross-culture branding strategy has
been effective for the Chinese market. First of all, when adding new drinks and snacks options to
the menu, especially tea-based ingredients, as well as building stores that are similar to Chinese
teashops, Starbucks enriched its language and created familiarity so Chinese customers can
understand the connection. Perhaps when Starbucks first entered China, likewise KFC, people
did not have any knowledge about the company because they did not have previous idea of
coffeehouses and a coffee culture. Therefore, it was necessary to change the original brand
meanings. In the United States, Starbucks is a take-away coffee chain store that emphasizes on
the importance of the third place for social interactions (Starbucks 2015). The store design and
structure are standardized throughout almost every store in the United States. Starbucks changes

24. 24
this original meaning by leveraging the store into the place for extreme social interactions in
China (Rein 2012). Chinese want to be served with their traditional foods and drinks, and they
have the habit of sitting for hours in the teashop (Rein 2012). As a result, Starbucks stores are
renovated into a combination of Starbucks’ Italian coffeehouse style and the teashop atmosphere
in Chinese history and culture. The unique environment invites local customers who want to new
tastes without losing Chinese traditional values.
Moreover, this practice shows other meaning to the public: Starbucks embraces Chinese
cultures and values. As China is emerging after many struggles of the previous century, the
author believes that nationalism is strengthened that the Chinese might have a hostile standpoint
on Western values. When the Chinese public understands that national cultures are being
embraced and respected by a foreign corporation, it will have a positive attitude towards that
specific company. In their writing, Bell and Shelman (2011) acknowledge that the critical point
to do business in China is to show that you are part of the country. Therefore, unlike Donkin
Donut or Burger King, which are famous brands in the U.S. that thought their brands would be
effective in China, Starbucks did not have a blind faith that is based on a brand ego by ignoring
the needs and wants from the new market (Peterson 2014). According to DeVault (2015),
Starbucks has chosen the right decision by not taking the conventional approach through
advertising and promotions because it could be seen by potential Chinese customers as a threat to
their tea-drinking culture. This approach is perhaps based on Schultz’ fundamental philosophy
when he created Starbucks. Schultz (2011) argues that the success of Starbucks is built on the
trust relationship between the company and its customers, employees, farmers, and communities,
but not through marketing and traditional advertising. We have not seen Starbucks’
advertisements on the TV. For Starbucks, it is believed that if the brand is well-developed with

25. 25
meaningful messages and excellent quality product, the company does not have to invest into
advertisements. Moreover, this approach shows a new type of communication channel. Instead
of traditional one way communication, the author reasons that Starbucks respects its customers
by letting them to give feedbacks in a two-way communication process. As customers interact
with baristas through the customization order system, the brand is meaningful to them and makes
them feel as part of it. Therefore, ‘familiarity’ should be a new meaning that Starbucks wants
Chinese customers to perceive when they experience the brand. That is the feel of being ‘home’.
Second, further analyzing these practices by comparing their correspondences with
Hofstede’s cultural dimensions of China will provide a deeper understanding of Starbucks’
brilliant executives. According to Lewis (1997), Chinese society is a reactive culture, which
means the Chinese are usually good listeners and well-adept at non-verbal communication. The
preferred mode of communication in this type of culture is monologue – pause – reflection –
monologue (Lewis 1997). People live in a reactive culture need silent time to think before
responding. This type of listening environment creates a web society in which individual
receives information from many external sources before accommodating in a decision (Lewis
1997). Additionally, in term of individualism vs. collectivism, Hofstede (2015) gives China the
score of 20, which indicates that Chinese society is highly collective, and individuals act on the
interests of the group rather than themselves. Family members, friends, and society have a
momentous influence on individual’s decision making process. Lewis (1997) states that: “We are
members of a group, not individuals” (p.81). In one way communication with traditional
advertisements, there is a risk that Chinese customers will not be persuaded if public opinion is
unfavorable. Therefore, communication through words of mouths is more effective to attract
public interest in China (Lewis 1997). Before making a decision, Chinese customers will gather

26. 26
information sources. If a new product is introduced to the market, there are not many risk-takers
who are willing to purchase immediately. Customers have a tendency to wait for public reviews
or family members’ references before trying the product.
On the other hand, Starbucks might not have been rushing to occupy the market share.
Instead, the author believes that Starbucks was patient in a renovating progress to make the brand
relevant to new customers. As first Chinese customers come into the store and have interesting
experiences, they will spread the words to family members and friends. The impact of the words
spread will be multiple because of strong social networks between individuals in China. In
additional, the emphasis of “them” and “us” in traditional Confucius philosophy makes it
difficult for an alien resident to integrate with the Chinese society (Lewis 1997). When Starbucks
creates a familiar environment, the company becomes the part of the group “us”. If an individual
has shared values with the group, s/he will become member and trust by others. In this case, as
Starbucks changed toward embracing the Chinese culture, the company becomes part of Chinese
society.
As a ‘third place’ which provides people an interacting platform, Starbucks influences the
Chinese society with the value of sharing. After the Communist Party took over China, the
society had been strictly and closely managed and supervised by the government (Morton and
Lewis 2005). The people lost many of their rights, including the freedom of gathering and the
freedom of speech (Morton and Lewis 2005). Therefore, besides home and work, there were not
many third places for social interactions in China. However, when the country opened up, many
multinational corporations immediately established new values for China. KFC and McDonald
created a fast-food chain, while Starbucks created a third place for people to interact and share
their stories.

27. 27
Third, Starbucks logo has been changed throughout the time to adjust and adapt with new
markets and new challenges. At the beginning, as a myth of siren is well-known to many people,
Starbucks designed the logo with a two-tailed siren in brown color. The color could be easily
associated with the coffee color. Although the mermaid logo is complicated to immediately
understand, Starbucks wants to convey a message that the brand is cultured and classical (Wang
2014). The logo has been redesigned for three times in 1987, 1992, and 2011 (Wang 2014). In
1987, the logo color changed to green. According to Wang (2014), in the theory of colors, brown
is associated with dirty subjects. On the other hand, green represents clean and fresh, which are
more appropriate to describe foods and beverages. When thinking about green, we immediately
visualize subjects such as leaves and mint, which create a feeling of fresh. Moreover, the color
indicates that Starbucks expanded its menu with more food and beverage choices. The company
did not want to sell coffee only, but other products in the future. Furthermore, the term
“Starbucks Coffee” was printed on the logo until 2011, when it was finally removed (Wang
2014). As a result, Starbucks conveyed a new message through the new logo that the company
no longer holds to coffee, but expands to many other fields with foods and beverages. The
simplification of the logo also shows that Starbucks is now can be recognized easily without
even mentioned its name.
However, there is another critical issue with the logo. The author believes that the image
a two-tailed siren can be disrespectful for countries that hold strong to their traditional values
against nudity. In the original logo, the image of a nude two-tailed siren is immediately
noticeable. To resolve this situation, for instance, in Saudi Arabia, Starbucks had to modify the
logo into a raising-star on the sea because Islam deemed the naked siren “morally inappropriate”
(as cited in Fox 2011). Hofstede (2015) identifies China as a restrained society, which suppresses

28. 28
gratification of needs and regulates it by means of strict social norms. Confucius traditional
values are strongly against nudity as an inappropriate image (Michigan State University 2015b)
.Therefore, if Starbucks had introduced its original logo in China, the public would have reacted
aggressively towards the brand. After the redesign, the image of a siren is more suitable as
details of human body are not fully revealed. Therefore, Starbucks avoids a critical issue by
avoid being irrelevant in its message in the logo and trademark.
In conclusion, China is a great success for Starbucks in terms of how the company
implemented a cross-culture branding strategy. With many new practices in order to satisfy the
market, Starbucks surely will have a decent amount of loyal Chinese customers for many years
to come. Perhaps, China will replace the United States as Starbucks’ major market in the future.
STARBUCKS EXPERIENCES IN MARKETS WITH AN EXISTING COFFEE
CULTURE: VIETNAM
History of coffee in Vietnam
Vietnam is a small nation that is located in the South East Asia, with its border next to
China. Since Vietnam was colonized by China for more than one thousand years, there are
similar values that are shared between these two nations (Michigan State University 2015a). Tea
can be considered as a vivid example of historical influence that Chinese has on Vietnamese
cuisine. Thai Nguyen, Lao Cai, and Cao Bang are famous provinces for producing high quality
teas nationally.
However, unlike China, Vietnam has excellent geographical features and weather
conditions that create a perfect environment for coffee plantation. According to Wolff (2015),
the French colonial government introduced coffee to Vietnam in 1857. During 1890s, French
built large-scale plantations in highland regions, especially Tay Nguyen region, which is the
central highland area that produces the best coffee in Vietnam. Although the production was

29. 29
disrupted by the war with the French and the Americans, Wolff (2015) believes that there is no
other country where coffee has been increasing at an explosive rate like Vietnam. In 2014,
Vietnam took over Brazil as the world’s largest coffee exporter (Wolff 2015). However, 95
percent of the production is Robusta coffee bean, which is considered as a low quality coffee in
comparison with Arabica. Robusta coffee is usually an ingredient for blends and instant coffee
(Wolff 2015).
Despite its world leading position, Summers (2014) states that the majority of
Vietnamese, who are farmers, drink tea more than coffee. However, in the two major cities of
Vietnam, which are Hanoi, the capital city, and Ho Chi Minh City (used to be called Saigon), the
economic central of South Vietnam, coffee culture becomes a sophisticated art that has its own
uniqueness and soul (Dang 2013). The first two coffeehouses, which were Lyonnais and Café de
Paris, were opened in Saigon by the French in 1864 (Nguyen 2012). At that time, drinking coffee
was considered a luxury joy by the French colonials and wealthy Vietnamese. During 1950s,
coffee finally became a daily beverage that was popular among the working class in Saigon
(Nguyen 2012). In Hanoi, from 1884 to 1885, there were many coffee shops opened to serve
mostly French (Nguyen 2012). People in Hanoi did not get used with coffee until the beginning
of the 20th
century. Coffee was served only to the rich and wealthy merchants in Hanoi. After the
Vietnam started open to the world in 1990s, it is believed that coffee gained its popularity among
Vietnamese as a major export agricultural product of the country.
Starbucks in Vietnam
Starbucks opened its first store in Ho Chi Minh City in 2013 (Starbucks 2013). Later,
Starbucks expanded slowly and steady to Hanoi (Vu 2014). Apparently, since Starbucks learned
many lessons from Chinese and Japanese market, the company applied a similar entry model in

30. 30
Vietnam. In additional to the popular the Asian beverages menu, such as Green Tea Frappuccino,
Starbucks invented new drinks that are specifically designed for Vietnamese (Thai 2015). For
instance, Starbucks added Dolce Misto, which is a mimic of Vietnamese traditional ice coffee
with condensed milk (Thai 2015). Instead of using Robusta coffee bean, Starbucks Vietnam
imported high quality Arabica coffee from its parent company in the United States (Thai 2015).
To adapt with the market demand, Ms. Patricia Marques, Starbucks Vietnam CEO, said that the
company will use French Roast, a fresh and stronger coffee, to make Dolce Misto (Anonymous
2015). This drink is quite comparable to Vietnamese dark bitter coffee. As a King of Robusta,
Vietnam only provided this type of coffee for its customers for many years (Wolff 2015). With
1.6 percent to 2.7 percent of caffeine, Robusta bean produces a bitter taste coffee in comparison
with Arabica bean (Summers 2014). It explained why many customers who are above the age of
25 in Vietnam believe that Starbucks taste is not as strong as Trung Nguyen Coffee, the famous
Vietnamese coffee brand (Anonymous 2013). The message from Dolce Misto therefore might
not be strong enough to persuade those who had a strong attraction to old and traditional
Vietnamese coffee style. Nevertheless, after conducting research for two years, Starbucks
eventually could create Dolce Misto (Thai 2015). This is the first attempt to create a relevant
message to the new market. Moreover, since Starbucks’ target market is young customers, the
innovative product conveys a message that Starbucks respects the rich coffee tradition in
Vietnam, while creating a total new combination for young generations. It is difficult to say
whether young customers will accept Dolce Misto as a substitute for the bitter Robusta coffee.
However, it appears that the market responded positively toward this product.
When Starbucks first entered Vietnam, the company attracted lines of curious customers
for the first time. It is believed that young Vietnamese customers are attracted not only because

31. 31
of foods and beverages, but the experience and the place that Starbucks provided (Hookay 2013).
Before Starbucks officially entered Vietnam in 2013, from the internet and social media, these
customers should have ready heard about Starbucks. Furthermore, customers expected to find a
wonderful place to enjoy their cup of drink. Similar to Chinese customers, Vietnamese customers
have the habit of sitting for long hours in the coffeehouse for chatting and working (Anonymous
2015). Starbucks therefore built large coffeehouses with excellent furniture quality that offers
spacious areas. Customers will find an excellent environment for all of their interaction
activities. As mentioned above, Starbucks’ objective is to seduce people to come back regularly.
It seems that Starbucks wanted to make the objective becomes relevant and familiar to
Vietnamese customers.
Facing Trung Nguyen coffee is another challenge for Starbucks. Using the nationalism
and the love for local coffee, Mr. Dang Le Nguyen Vu, Trung Nguyen Group CEO and
Chairman, believes that Vietnamese should use the local products to maintain its traditional
values (Anonymous 2013). His branding strategy is to attract customers by conveying a message
that Trung Nguyen represents Vietnamese values, while Starbucks represents foreign values. Mr.
Dang stated that “only those who are nationalists will drink Trung Nguyen” (as stated in
Anonymous 2013). The issue with this message is that there has not been a meaningful stories
attracted to the company brand strategy. The message itself has not been changed for years.
Consequently, Trung Nguyen’s message is not as persuasive and creative as Starbucks because
of the lack of story elements. Nationalism and the love of coffee will not be a long-term branding
strategy for Trung Nguyen. If Starbucks can contribute to the greater development of Vietnamese
coffee culture, the author believes that Trung Nguyen’ message will immediately be disgraced
(Anonymous 2013). Moreover, Trung Nguyen’s CEO sent a wrong message to the public when

32. 32
openly criticized Starbucks’ coffees as “tasteless” (as cited in Anonymous 2013). This action
deteriorated the image and reputation of Trung Nguyen because it shows the weakness of the
company when dealing with a foreign competitor. In terms of branding image, Trung Nguyen
Corporation appears to lose its position, and the company needs transformation to adapt a new
business environment with fierce competition from many brands. If Trung Nguyen does nothing
to improve the situation, Starbucks will have an opportunity to occupy a substantial market share
value in Vietnam.
In terms of pricing war, Starbucks increases the price substantially higher in comparison
with local average. A cup of Starbucks coffee is range from 35,000 to 100,000 VND (around
$1.6 to $5) (Starbucks Vietnam 2015). Meanwhile, local coffee brands can offer a cup of coffee
less than $5 (Sauer 2013). There are also popular Vietnamese coffee brands, such as Highland
Coffee, that have a quite similar business model to Starbucks. Highland Coffee currently has 80
stores across Vietnam (Sauer 2013). Starbucks’s main competitor, Trung Nguyen Coffee, offers
their products at 60,000 VND (around $3) (Annonymous 2013; Trung Nguyen 2015).
Additionally, there are many small coffee stalls on the street that offers coffee that is less than $1
for the average people (Anonymous 2013). For pricing strategy, Starbucks desires to promote its
products as high-end beverages in Vietnam. As stated in China case study, holding a Starbucks’s
coffee cup can be understood as a wealthy symbol (Peterson 2014). Many young customers went
to Starbucks to demonstrate their social status.
According to Hofstede (2015), Vietnam has a high score on power distance. It reflects
that an individual in the society accept the hierarchical order and s/he has the place in the chain.
When Starbucks price up the products, the public might interpret it accordingly: Starbucks is for
people that can afford it. Those wealthy people will immediately associate Starbucks with social

33. 33
status, and only wealthy and powerful people will go for this brand (Peterson 2014). Starbucks’
cup with the logo is therefore a symbol of financial power and social status. In the short term,
this pricing strategy can cause financial issues because there are a small number of people in
Vietnam currently can afford to drink Starbucks on a regular basis. As the minimum wage of
Vietnam was $145 a month, it is a long way until average Vietnamese have enough financial
capacity to consume Starbucks coffee as a daily beverage like Americans (Tomiyama 2014).
It is quite early to say whether Starbucks will be successful in Vietnam. While changing
its branding to be more localize and maintain its unique values, Starbucks also clashes with new
competitors that are famous for coffee production. Moreover, the company is challenging the
entire coffee culture of Vietnam. Dang (2013) acknowledges that there are many coffee styles in
Vietnam, including café salt, coffee egg, and many others. In the long-term, the story will decide
who win this market, especially between Starbucks and Trung Nguyen. If Starbucks can
persuade young customers that the brand is part of Vietnamese coffee culture and the beverage
tastes are accepted by these new generations, Starbucks will win.
SUGGESTIONS FOR STARBUCKS VIETNAM
In Starbucks’ case, it is required to have a long-term commitment with the Vietnamese
market. Unlike China, where Starbucks can quickly establish a new type of coffee culture, it will
take years to conquer and change the perception about coffee in Vietnam. For Vietnamese coffee
drinkers who are above the age of 25, Starbucks has only a small chance of winning this segment
because they are attracted to the traditional coffee and coffeehouses (Anonymous 2013). The
company should solely focus on the younger generation. Since many of these customers have
never drank coffee, if Starbucks can turn their first cup of coffee into a whole unique and
interesting experience, they will be loyal to the brand. However, new model of Starbucks is also

34. 34
mimicked around the city of Hanoi and Saigon (Dang 2013). At local level, there are brands that
are established based on the business model of Starbucks with uniformity and standardization.
The author did go to these places and feel that they provide the same type of environment as
Starbucks does: a spacious and open area for social interactions. Furthermore, Starbucks will
have a pricing war with these smaller brands because they are significantly cheaper. In the
future, it is believed that Vietnamese minimal wage will increase, which means people will have
more money to spend for luxury items, including Starbucks coffee. Nevertheless, it will be long
until Vietnamese can consider a cup of Starbucks as a daily beverage as it will have to surpass
many challenges from local customers and competitors.
CONCLUSION
Western countries had brought their influences around the world and left many imprints
in their colonies. East Asia region, however, is rising again and demands a new business model,
which will not be similar to American-style. China and Vietnam are vivid examples of Third
World countries that are globalizing to adapt new ideas and technologies. Nevertheless, these
countries strictly believe in their traditional cultural values. Therefore, they are new challenges
for American companies oversea.
Starbucks cross-cultural branding practices had been greatly successful in China. The
company has the ability to persuade Chinese that it is part of Chinese, and the value of a third
place is for everyone in China. Chinese market might one day exceed the profitability level in
comparison to the United States market. With young and dynamic population, China promises
new opportunities for Starbucks.
On the other hand, Vietnamese market is entirely different with a strong coffee culture.
Vietnamese is famous not only in their country, but also globally about their way of making

35. 35
coffee. Ice dark coffee, ice milk coffee, and egg coffee are the few names of Vietnamese coffee
art. Therefore, many customers in Vietnam are loyal to their local brands. Moreover, many
brands, such as Trung Nguyen, will be a huge giant that Starbucks has to face in Vietnam.
However, young customers, who have never tasted dark coffee, will be a promising segment for
Starbucks. Starbucks will have to develop a long-term branding strategy in order to persuade
young customers to become loyal fan of the company. Until this strategy is successful,
Vietnamese market demands Starbucks to commit time and efforts to adapt their style.
An old quote said: “When in Rome, do as the Romans do.” With globalization, Starbucks
values and culture are knowable for many international customers through communication
channels. Nevertheless, to achieve better success, making the brand relevant to local customers is
a primary objective. If the multinational corporation cannot develop a suitable cross-culture
branding strategy, the brand will definitely fail.

36. 36
APPENDIX
Starbucks’ logo innovation (Starbucks 2015)
Trung Nguyen Coffee Store: Vietnamese coffee group (Trung Nguyen 2015)
The Coffee Inn: Hanoi Coffee house that mimicked Starbucks model

37. 37
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