President Starbucks Coffee Corp (統一星巴克) has outperformed its US parent Starbucks Coffee International with marketing strategies to boost trend-bucking sales in Taiwan, helping it weather the economic downturn.
President Starbucks in Taiwan has shared resources with President Chain Store Corporation (統一超商) to stabilize its clientele and has used activities across the retail group’s different brands to bring in new customer groups while Starbucks Coffee International is cutting the number of its stores in the US to keep costs down in the face of the global financial crisis.
For example, bonus points gathered by shopping at President Chain Store outlets can be used in a buy-one, get-one-free program doubling the number of customers at President Starbucks nationwide.
This strategy has given outstanding results by fully utilizing the marketing prowess of its local partner.
As raw material prices have incresed since 2007, President Starbucks lost NT$3 million (US$91,000) each month for about a year until prices were raised in October 2007.
Luckily for the company, customers remained loyal.
John Hsu (徐光宇), president of President Starbucks, said recently that the turnover of the nearly 200 stores at the time did not drop but continued to grow.
Annual turnover at the 212 stores in Taiwan, 12 of which were opened in 2007, grew by 10 percent that year, he said, adding that President Chains Store brands are following the Japanese approach of increasing investments.
Hsu said that in addition to providing further in-house training to employees and developing new brewing standards, the company is also offering coupons to customers so they can bring friends for a free cup of coffee on weekends or holidays.
The promotional activities are bringing in 30 percent to 40 percent more customers, he said.
President Starbucks sometimes also offers buy-one-get-one-free activities and because the company deliberately is pursuing a high-price strategy, such activities are attractive and bring long lines of new customers.
Statistics show that turnover doubles on the days of such activities, Hsu said.
To celebrate its first Shanghai store, the 4,800 President Chain Stores outlets in Taiwan recently introduced a bonus point program where one point was awarded for every NT$40 spent.
Twenty bonus points could then be exchanged in buy-one, get-one free activities at Starbucks, Mister Donut, Cosmed, Cold Stone Ice Cream, Dream Mall, Century 21, Unimall, and Semeur de pain.
The group-wide activity continued for 33 days until the middle of this month, and on the last day of the activity, Starbucks shops and President Chain Store outlets in office districts faced long lines of customers wanting to exchange their accumulated bonus points.
President Starbucks statistics show that turnover during the 33-day activity increased by more than 10 percent.
A representative of President Chain Stores said this type of group-wide activity had been held half a dozen times and that the main gain of such activities was to create more business opportunities by letting the group’s different brands come in contact with customers from the other brands. One of the results has been that turnover for high-priced Cold Stone ice cream products improved, the executive said.
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