Case Study on Marketing Strategy: Starbucks Entry to China

Starbucks is one of the largest coffee chains in the World. The company has a unique style and atmosphere in their coffee houses. We chose China because it is the world’s most populous country with over 1.3 billion people live there and second-largest country by land area. After 1978, the country’s economy were underwent dramatic changes which involved such relief as permission for entrepreneurs to start up their own business and opening the country for foreign investment. It is obviously that Starbucks managers decided to take advantage of such opportunity to expand their business into new region. To evaluate Chinese market the company used several steps of analyses.

Who might be interested in buying coffee in China?

To introduce the Starbucks brand the company begun to distribute coffee for free to guests in several Beijing’s hotels in 1994. This initiative indicated that there was a strong demand for their products, particularly among foreigners in China. Local people, who strived to imitate the Western lifestyle, also showed interest for coffee drinking. In addition young generation were enchantment by brands and products from the West. These factors led Starbuck’s managers to learn and understand more about business climate in that Asia country.

Next step for Starbucks was to determine financial and economic conditions of China. Company’s managers were aware that Chinese Gross Domestic Product (GDP) continuously grew approximately 9 % on an average and a GDP per capita was US$3.800. All these factors led to rising income of middle class. That was undoubted advantage for entering Chinese market for Starbucks.… Read the rest

Case Study: General Electrics “Imagination At Work” Ad Campaign

Throughout its history General Electric Co. enjoyed the benefits of a consistent marketing message. From the 1930s to the 1950s the company relied on the slogan ‘‘Live better electrically,’’ which was followed by two decades of variations on the word ‘‘progress,’’ such as ‘‘Progress is our most important product.’’ In 1979 GE unveiled ‘‘We bring good things to life,’’ a cornerstone to one of the most successful corporate branding campaigns in history, backed by about $1 billion in advertising. The company also had consistent leadership in the form of John F. ‘‘Jack’’ Welch, who became chairman and CEO in 1981. The charismatic leader sought to build up GE’s status in all of the technology, service, and manufacturing areas that the company participated in. By the time Welch announced that he would retiring in 2001, GE, fast growing and profitable, had a market capitalization of $505 billion, making it second only to Microsoft. Welch’s tenure at the top, however, ended on a sour note when GE failed in its bid to acquire a major rival, Honeywell International.

Welch was succeeded by Immelt, who set out to put his own imprint on GE by, among other things, revamping the company’s marketing. According to Diane Scarponi, writing in the Seattle Times, ‘‘Immelt said shortly after he was appointed in September 2001 that he wanted to rethink the company’s image.’’ Beth Comstock, head of communications at GE, told Scarponi, ‘‘Immelt has really been pushing a technology focus, a reinvigoration of technology at GE around the world.… Read the rest

Case Study: American Express “Do More” Advertising Campaign

American Express had built its reputation as a prestigious charge card. In 1976 the company began its famed ‘‘Do You Know Me?’’ campaign in which celebrities ranging from dancer Mikhail Baryshnikov to puppeteer Jim Henson appeared in ads that pictured them and an AmEx Green Card bearing their names. In 1987 the ‘‘Portraits’’ campaign followed a similar formula. By aligning the brand with stars, AmEx cultivated the notion that carrying one of its cards was more akin to joining an elite country club than making a financial transaction. As later ads sniffed, ‘‘membership has its privileges.’’ In the 1980s, however, AmEx’s careful positioning began to backfire. According to Brandweek, while AmEx ‘‘clung to its old, elite ways,’’ the credit card industry went through monumental changes. With so many cards vying for consumers’ attention, Visa and MasterCard (specifically, the member banks that comprised the Visa and MasterCard consortia) began to cross-market with various businesses so they could offer incentives to consumers. For instance, by teaming up with airlines, Visa and MasterCard could entice consumers to charge purchases with the promise of frequent-flier miles. Moreover, companies such as AT&T and GM allied themselves with the Visa and MasterCard brands and began to peddle cards that tied in to phone service or car purchases. But while the entire industry became hyper-segmented, AmEx continued to sell itself on its reputation alone and lost market share as a result. Also damaging was Visa’s 1987 launch of an attack campaign that stressed Visa’s global acceptance by featuring countless businesses that declined to take American Express.… Read the rest

Case Study: Social Anxiety Disorder Campaign by SmithKline Beecham

In 1987 Eli Lilly and Company won U.S. approval to sell Prozac, the first among a class of drugs called Selective Serotonin Reuptake Inhibitors (SSRIs) that treated clinical depression by elevating levels of serotonin—a chemical believed crucial to regulating mood—in the brain. Prozac’s effectiveness and lack of side effects compared to existing medications for depression revolutionized not only the way mental illness was treated by psychiatrists but also the way it was perceived by the public. By 1992, when Pfizer and SmithKline Beecham introduced their own SSRIs, Zoloft and Paxil, respectively, depression had lost much of its stigma in the United States. In the following years SSRIs became one of the best-selling prescription drug categories.

For its first several years on the market, Paxil remained in third place among SSRIs, and SmithKline Beecham set its sights on new markets for the drug. In the mid-1990s Paxil won FDA approval for the treatment of anxiety-related conditions like panic disorder and obsessive-compulsive disorder. Though these markets led to substantial growth for the brand, it was the FDA’s approval of Paxil in 1999 as a treatment for a little-known condition called social anxiety disorder that gave the drug its first significant advantage over competitors. Social anxiety disorder, or debilitating shyness, was a condition that, according to SmithKline Beecham, affected as many as 10 million Americans, and Paxil was the only FDA-approved treatment. SmithKline Beecham was aided in its attempt to reach this untapped market by an easing of FDA regulations in 1997 that governed the advertising of prescription drugs.… Read the rest

Case Study: Citibank “Live Richly” Ad Campaign

Founded in 1812 as the City Bank of New York, this urban merchant’s bank continued to expand and diversify its services over the next century. The bank changed its name to Citibank, N.A. (National Association), in 1976, following its parent holding company’s change to Citicorp. In 1998 Citicorp and the Travelers Group completed a $76 billion merger to form Citigroup, Inc. Citicorp was at the time the second-largest commercial bank, and Travelers Group was a leading international insurance/investment banking firm. The Citicorp-Travelers merger thus represented a new era of horizontal expansion. Citigroup then began an acquisition spree that included acquiring in 2002 Golden State Bancorp (the parent company of First Nationwide Mortgage and California Federal Bank), a move that added 352 branches and approximately 1.5 million new customers to Citigroup. By then the company was well on its way to having 3,000 bank branches and consumer-finance offices in the United States and Canada, plus an additional 1,500 locations worldwide.

The terrorist strikes of September 11, 2001, initiated changes in American opinions regarding finances. While Americans were left reordering their priorities to allow more time at home with family, Citibank was creating a ‘‘new standard’’ in consumer retail banking. ‘‘In a down economy people want to hear that money isn’t important,’’ said Al Ries, chairman of Ries & Ries, a marketing consultancy in Atlanta, Georgia. Though the market research for the ‘‘Live Richly’’ campaign had been completed prior to 9/11, Citibank, with its simple and reassuring ads, benefited from consumers fears of corporate layoffs and the stock-market instabilities of a down economy.… Read the rest

Case Study: GoDaddy’s Super Bowl Commercials

Bob Parsons sold his first successful company, Parsons Technology, in 1994, and in 1997 he used the proceeds to start a new company, Jomax Technologies. Unsatisfied with the Jomax name, Parsons and his staff came up with the more arresting moniker Go Daddy. As Parsons told Wall Street Transcripts, the name worked ‘‘because the domain name GoDaddy.com was available, but we also noticed that when people hear that name, two things happen. First, they smile. Second, they remember it.’’ After an unsuccessful attempt to establish the company as a source for website-building software, Parsons reinvented Go Daddy as a registrar of Internet domain names, buying unused website names and then reselling them to individuals and businesses in need of an online presence. Go Daddy also offered auxiliary services and products enabling customers to launch their sites after the domain-name purchase, including (as in the company’s early days) software for building sites. Domain-name registration, however, was a burgeoning industry as America became increasingly wired and more and more businesses found it essential to establish a Web presence. By 2004 Go Daddy had sold nearly seven million domain names and was the world’s leading registrar of domain names. Up to that point the company had done little marketing, relying primarily on word-of-mouth buzz and low prices; Go Daddy offered domain names for $8.95, compared with fees of $35 at the industry’s high end.

In late 2004 Go Daddy enlisted New York agency the Ad Store for its first sustained offline advertising campaign. The company announced that the campaign would make its TV debut during the 2005 Super Bowl, a move that drew widespread criticism, partly because of the recent history of Super Bowl advertising undertaken by dot-com companies.… Read the rest