My Starbucks $2 Grande Latte Experience

rahul and ed starbucks (2)I stepped off the airplane from my short flight from Hyderabad to Mumbai, gathered my luggage and walked out into the warm-N-humid day to wait for my friend Rahul who was about 15 minutes away to pick me up. I looked around to see where I could take refuge from the sultry air and the green lady beckoned me.Starbucks! I had lived in India from 2005 to end of 2009, and had been returning many times since doing coaching and leadership consulting. All this time, no Starbucks.

Stepping into the familiar scene, expecting to pay the familiar price for my Grande soy Latte….oh wait, a coffee cup with “India” on it, I spotted out the corner of my eye. Priscilla has a collection of coffee mugs from Starbucks all over the world…China, Thailand, Germany, Ukraine, Hawaii, Alaska, Belize and now India…what a find…a new one to add to her collection. I grabbed the cup and walked to the counter.

“Welcome to Starbucks, may I take your order.” Everywhere in the world, Starbucks people are trained to give great customer service and are always customer centric.

“Yes, I would like a Grande, soy latte please.”

The price…RS 120 Rupees which is Two Dollars. I was stunned.

How could they sell the same experience in the Mumbai airport as the rest of the world for only two dollars?

Starbucks had only been in India since October 2012. When they first opened, everyone questioned whether they would make it in this primarily chai (tea) drinking country. I had attended a conference back in 2007 where the speaker polled the audience only to discover that instant coffee was the favorite coffee of India. There were many articles about Starbucks’ challenges including Can Starbucks make it in India?

I looked around and saw most of the filled seats with locals. “I guess they made it.” I thought to myself. And why?

  1. They adapted to the culture. They knew that people in India would not pay $5 for a latte. Even $2 is expensive for a latte in India. However at Starbucks you are not just buying a latte, you are buying an experience…and FREE WiFi!
  2. They have Chai on the menu. Tea drinkers can still enjoy the Starbucks experience without having to buy a cup of coffee.
  3. They partnered locally to be able to meet the price point of the local market. Starbucks and Tata are partnering in India. Tata is the largest in many markets: consulting, cars, and, yes you guessed it, coffee beans.
  4. No matter where you go in the world, people appreciate excellent service.

There are several leadership lessons we can glean:

  1. Embrace the culture to be accepted by the culture.
  2. Adapt to be the leader.
  3. Partnering helps a leader to understand the local culture.
  4. Some things are the same no matter where you go (i.e. how people want to be treated).

Sipping my hot Grande soy latte, in the nice cool Starbucks store at the Mumbai airport was a great experience. Later that evening sharing that experience with my friend Rahul in one of Mumbai’s malls in another Starbucks an even better experience.