What is Starbucks Doing in the Middle East?

By: Said Baaghil

Starbucks is mainly the go-to place for coffee in the Middle East but only by the niche and upper middle class.  With the new logo change, it has thrown the consumers into confusion leaving the perception that Starbucks will mean something other than just coffee.  The brand is facing less popularity from the days it first launched in the region, and it will continue down that slippery slope, because it has added more to the confusion that: it’s just coffee.

Starbucks immense growth in the past 12 years showed great brand recognition in the region especially in the GCC (Gulf Cooperation Council) but not when recently introduced in North African places like Egypt.  In Egypt, local brands and a UK based brand has caught much of the market.  But with the recent health trend that is spreading throughout the world, coffee seems to be less favored, especially because their retail brand says: Starbucks holds the leading category. For many years tea has been part of the culture and still is at large, during breakfast and after lunch, with the mass audience of the region, keeping in mind that the niche and upper middle class is coffee driven.

Starbucks as a brand seems to be struggling with just focusing on coffee.  Corporate management has decided to diversify its product and remove the thought that coffee is the primary product and bring in tea and other beverages. This in the eyes of the management, in Seattle is a valid reason for Starbucks, as a global brand to depend on its brand equity and do as it pleases. The new logo is just lots of green with a sea mermaid.  Once the name is removed, it’s deep-rooted connection to the coffee culture and world coffee goes with it.  As globally as Starbucks corporate management thinks, not every brand simply makes it in the Middle East.  The change is very risky, especially in a region where people don’t take change very lightly.  Since the inception of Starbucks forty years ago the audience in the Middle East, has also changed and experienced more brand and culture.  Yet such a simple move regarding the logo of Starbucks has shown that many are rejecting the move.

Starbucks is making moves to enter the global market and that’s why they are diversifying in areas such as the Middle East and the Far East.  Starbucks is making all these moves because they are focusing much more on the global presence by trying to enter areas where coffee is less favored e.g. Morocco Algeria, Tunisia but also don’t be surprised if you see it in Somalia offering cheeseburgers!  These two markets are the most lucrative markets and by far the two most tea rooted cultures for centuries.  Which poses the question: are they planning to make everyone drink coffee within the next seventy years?  People don’t change easily.  In the Middle East, they are protected by traditions and culture, where they want tea and not coffee.

Starbucks will face hardships to make tea the primary product in countries where tea is just as good as water.  Starbucks needs to be a reliable brand Toyota and keep their brand just as it is and focused.

For an in depth analysis on Starbucks’ new logo change by Said Baaghil, click here.



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