The success of Starbucks in Hong Kong

This research proposal aims to investigate the reasons of the success of Starbucks in Hong Kong, with a mainly focus on the shop environment and atmosphere of Starbucks. The range will cover from 2000 to now. Since Starbucks first appeared in Hong Kong in2000 with a shop at Central’s Exchange Square. The research proposal will mention the possible factors and threats which can affect the success of Starbucks in Hong Kong. Background Starbucks Coffee Company was established in 1971.

Starbucks Coffee Company is the global leading retailer and global coffee brand which has more than 12,000 retail locations all over the world, such as North America, Europe, and the Middle East. At 1999, Starbucks entered China market, and entered Hong Kong market at 2000. (Nation’s Restaurant News, 2000, MarketWatch 2005) Now there are now more than 100 stores in Hong Kong across commercial, shopping & entertainment and residential areas. (Starbucks Corporation, 2000. )

The price of Starbucks coffee (count as US Dollar) can be afford by the common consumer in the foreign country(Compared with foreign GDP data). However, when the price of US Dollar exchange to HK Dollar, the Starbucks coffee becomes to high level consumers. In Hong Kong, the price of one Starbucks coffee equals to one lunch set. It seems that the “third place “model be the main factor which make Starbucks success in Hong Kong although coffee is not the necessaries in Hong Kong.

The “third place” model is the concept that social surroundings separate from the two usual social environments of home and the workplace. The first place is the home and those that one lives with. The “second place “is the workplace where people always spend most of their time. The “third place” is anchors of community life and foster, more creative interaction. It is important for civil society, democracy, civic engagement and establishing feelings of a sense of place (Ray, O. 1989, 1991)

Starbucks adopt the “third place” model in its marketing; it aims to be the “extra place that people frequent after home and work. The concept came by Starbucks CEO Howard Schultz. Starbucks want to become a “third place” that link between people’s home and work where they can read the book, download music, or prepare the work. (Joseph A,M 2007, Thompson, and Strickland 2002) In order to make Starbucks a “home away from home”, every store is often outfitted with comfortable, hard-backed chairs.

Free electricity outlets are provided for patrons. Moreover, some stores have wireless internet access. Starbucks becomes to room for a “third place “in consumer lives. (Glenn, R. 2007 Oldenburg, R2000) Simple speaking, the” third place” model is bringing consumer the feeling of relaxation and the home feeling. Consumer can enjoy the acme Starbucks experience, simple speaking, and consumer want a comfortable environment, enjoy the personal service, and make a meaningful communication.

The atmosphere is the key point of the “third place “model to make Starbucks success in Hong Kong. It pays attention to the atmosphere of the shop: the pleasant background music, the comfortable furniture and the soft lamplight. Consumer especially likes the relaxed atmosphere of Starbucks. If you want to date your friends or lover, of shake off the working pressure,(William L,2006) In the research,it will have six hypotheses about the consumer characteristics of Hong Kong consumer that could be applied to the “third place” model of Starbucks Coffee Hong Kong.