Starbucks Bulletin

Karin Koonings, Vice President of Marketing, Starbucks Coffee International, leads the international brand marketing team and is responsible for setting the priorities and developing the plans to support company brand strategy and business objectives around the world. Starbucks Abuzz About Global Growth The focus of this Leading Global Brands Bulletin is on how the worlds most popular coffee brand stays connected to local marketing needs and leverages expertise across the globe in a way that builds local marketing capability and fuels the organizations international growth.

Starbucks Coffee Company (NASDAQ: SBUX) was founded in 1971, opening its first location in Seattles Pike Place Market. Twenty−five years later, in 1996, Starbucks opened its first overseas location in Tokyo, Japan. Today, with nearly 12,500 stores in 39 countries, Starbucks is quickly becoming one of the most recognized and respected brands in the world. Karin Koonings team of marketing and communications professionals create seasonal marketing programs and promotions, oversees communications, CSR and PR initiatives, and shares best practices from the international community for the overall benefit of the brand globally. The team acts as global stewards of the brand, working with the local teams in each of the regions to ensure that all expressions of the brand are consistent with the brand positioning and promise. Karin started her career in Canada with Starbucks in 1996 as the companys very first field marketing manager. EB: Everybody knows about Starbucks' US success, but your expansion overseas is relatively recent. How important is International to the Starbucks business? KK: International is poised to contribute significantly to Starbucks overall growth. Once a U.S. company that operated internationally, Starbucks is now a truly global company. We are a young global brand that built its success in the U.S., and the U.S. market activities, trends, and ideas still play a dominant role. Having said that, its clear that our future growth will largely be shaped by our international business. China is set to be our largest market outside the United States, we just opened Brazil and Egypt, and India and Russia are next on the horizon, so there are many reasons to be excited about Starbucks growth internationally. EB: When you started your job, how well connected was the international marketing team to the needs of the local and regional marketing teams? KK: I came to this role from a field position in North America and was used to working quite autonomously within the boundaries of strategic programs that had been defined by Seattle. The Support Center understood our markets and developed programs that we would implement with local creativity and surround with local marketing initiatives. This is why the brand is so well connected with the communities in which we operate. Our grassroots marketing has made us successful. When I joined Starbucks Coffee International, I made it a priority to build a team that would connect with and provide substantive support to our international markets, while at the same time affording them the flexibility to engage their communities in ways that were locally relevant. I think we have done a terrific job of relating to one another, sharing best practices, and getting together as often as possible for one−on−one interaction and strategic planning. We have made a lot of progress toward better understanding and delivering against our markets needs. Were taking our progress a step further by offering international rotational assignments to our partners, so a partner from Seattle may go to a regional office or market for a six−month assignment or someone from one of our international markets will come to Seattle. Its like an exchange program that provides the opportunity for the reciprocal sharing of knowledge and expertise. EB: How did you go about getting better connected with the local markets and were your initiatives successful? KK: Starbucks is in the people business serving coffee, which is why we believe in that personal human connection, not just in our stores but with one another as fellow partners (employees). When I came to the Support Center, I made it a priority to connect personally with the regional teams and learn first hand what their challenges and opportunities were. It involved a lot of travel to all corners of the world and a lot of listening, which I think our markets appreciated. Also, as I mentioned earlier, we are offering international rotational assignments for our partners in marketing and communications. We also stay in close contact with our markets − even in spite of the many time zones. We have regular calls, travel as often as is necessary, and host regular marketing and communications immersions in Seattle and elsewhere. We also rely on our Regional Support Centers to work closely with their markets. In addition, the commissioning of the EffectiveBrands Global Brand Benchmark has helped our teams become more outside−in focused. The Benchmark was aimed at almost everyone who works in marketing for Starbucks around the world. We asked our marketing representatives in each country to rate SCIs performance against key drivers of Global Brand Capability Program effectiveness. The survey results have created a completely new level of transparency and measurable accountability around the effectiveness of our international marketing support. The Benchmark findings really helped us to step back and view our work from the perspective of those on the receiving end. Although most of the findings were very encouraging, with extremely high scores for brand inspiration and growth potential, there were clearly areas where we could make changes to help accelerate our growth. The process of drafting and learning from the Benchmark brought the regional and central support teams closer. It was clear that countries saw us as one, and that we were going to divide and conquer to deliver against our overall business needs and objectives. EB: Can you explain a bit more about this "dividing and conquering to deliver?" KK: Until recently, every geographic region operated fairly autonomously. Take an area like marketing training. Sharing marketing programs and ideas happened at regional forums where marketers from the most important countries facilitated the meetings. There was little or no sharing across regions. The Benchmark helped us pinpoint the areas of marketing skills and development needed by all marketers across Starbucks Coffee International. Together with the regional marketing teams, we developed ONE international training agenda. The team in Seattle is spearheading the development of the marketing training programs and the regional teams are charged with roll−out and implementation support. This has been a tremendously efficient and effective approach that has allowed us to put in place dedicated marketing capability development resources for the first time. The new Starbucks Learning Series is being received with enthusiasm across the globe! EB: Starbucks seems to have been very successful at maintaining and globally leveraging brand consistency. At the same time you mentioned the importance of grass roots programs to build local relevancy. Arent these two contradictory goals? KK: Our brand promise of providing the highest quality coffee, exceptional customer service, and a truly uplifting Starbucks Experience is the same around the world. We continue to spend a lot of time sharing on Brand Stewardship programs that explain to our partners worldwide what the company and brand stand for and challenging them to bring that to life in their respective markets. The way our stores and our store partners (baristas) connect with their customers and the communities in which we operate is what makes Starbucks unique and locally relevant. Our marketers everywhere are always looking for ways to connect to their communities and in ways that make a difference. I dont think there is another global brand that runs the breadth and diversity of local marketing programs that we do. But all programs deliver against our core values and business principles, providing the consistency that our customers have learned to recognize and expect. EB: Many global marketers tell us that they feel somewhat isolated in their companies because they dont have many colleagues that share their challenge of correctly balancing local relevance with global leverage. Do you recognize this predicament? KK: Absolutely. I felt pretty much the same way for at least the first year of my job. I dont think there were many people in the company that fully understood the challenge. But I have to say that this feeling is far behind me now. Working more closely with colleagues responsible for global category (food, beverage, and product) management and innovation and, most importantly, my regional marketing colleagues have helped us all see and share the same goals. Together we have found that leveraging global programs is precisely what local markets want. It stops them from having to reinvent the wheel−which is costly and time consuming for them−and frees them up to focus on the things that help them create local programs that connect with their customers and communities. A balance of global leverage and local relevance has made everyones life a lot easier, more productive and, frankly, more fun! I'm proud to work at Starbucks. This is an exciting time to be here and to be in International. Looking ahead−six months, one year, 10 years down the road−there is so much to be excited about.

Global Marketing Capability Program Over the last 5 years, EffectiveBrands has developed the Global Marketing Capability Program. In this discussion, as head of the Starbucks Coffee International Marketing team, Karins experiences and work emphasizes the importance of some of these phases: Connect - creating interdependency Karin worked hard to understand what the markets wanted and needed, doing "a lot of listening" when she first assumed the role. Her first challenge was to ensure that the international and regional marketing teams shared common goals and were committed to sharing responsibility to drive the same objectives. Today they have clear alignment on roles and responsibilities in order to achieve these objectives. The markets expect the International team to deliver high quality global programs which are continuously and consistently leveraged. In exchange, local markets are better positioned to focus on initiatives that connect Starbucks to their immediate communities with locally relevant programs and promotions that have been a key success factor for Starbucks from the start. Inspire - harnessing brand passion Since its inception, the Starbucks brand has communicated the passion for coffee and community held by everyone in the organization. From Howard Schultz to the barista in a coastal Maine town who breaks out into song when calling out ready orders for customers, Starbucks harnesses its brand passion through stories that illustrate the unwavering personality and values of the brand. Ultimately, brand passion translates into winning market programs that drive loyalty and growth for the company as a whole. Build - harvesting and leveraging capabilities and best practices The results of the Global Brand Benchmark reinforced a strong desire for learning and leveraging across regions, especially from markets that were at similar stages of development. Building on regional forums already in place to share best practices within regions, Starbucks began thinking more globally about how to build its marketing capability and create consistency and excellence around the world. The Global Brand Benchmark also revealed that marketing skills development was a focus area requested by marketers from all regions, and provided the impetus and vital input into the creation of a new Starbucks marketing university called the Starbucks Learning Series. Finally, the global team is leading another initiative to offer international rotations assignments in order to enable markets to share learning and expertise around the world. EffectiveBrands is the only global marketing consultancy that focuses specifically on the opportunities and challenges of global brand marketers. EffectiveBrands helps marketing leaders build global marketing capability and accelerate growth by driving both global leverage and local relevance. Our expertise is based on our practical work experience with many of the world's leading global brands as well as our proprietary Leading Global Brands project. http://www.effectivebrands.com