[MUSIC] Hi, welcome to marketing. Welcome to understanding customers, the third course in the foundation for management and specialization. My name is Mario Capizzani and I'm a professor of marketing at IESE Business School here in Barcelona. Welcome. [MUSIC] When Starbucks first opened its doors 14 years ago in Spain, the people must have been wondering, how can a company from Seattle bring its coffee to a culture and a country so steeped in good coffee, accustomed to solos, cortados, a cafe con leche? Will the people from Spain accept the Seattle company over here in Spain? Bringing upscale coffee to Europe must have seemed, for some, like bringing cold to Newcastle. Are they bringing something different? What is it so differentiating about their coffee to get Spaniards to be willing to pay two to three times as much from what they're used to paying for coffee in order to be able to have in a Starbucks? Is it the product or is it the experience? Well, perhaps it's not about the coffee. So what is it about then? Is it the ambience, the music, the comfortable chairs? Or is it perhaps about the frappuccinos, that certainly have nothing to do with cortados and solos? What is it about Starbucks that people will get to pay so much for this experience in comparison to what they're used to? This is what we're concerned in marketing with, how to understand customers, how to understand their true needs, how to communicate a distinct value proposition, and when done and executed properly, to actually even be able to make a profit. But as far as Starbucks is concerned, they're getting bolder and bolder by the day. Now they're thinking of entering Italy. What do you think about that? Wired magazine has described the experience as almost an apocalypse for the Italian market. What are your thoughts? Will they make it? But somehow their marketeers must know what they're getting themselves into. They're entering the land of some of the most discerning coffee consumers in the world. What is it, what is going to be their value proposition in order to succeed in countries like Spain and Italy? These are some of the kinds of the dilemmas that we're going to discuss in this course. By the time it's over, you will have a solid grasp for some of the fundamental principles of pricing, product design, value proposition, communicating value, and capturing some of that value by setting the right price. Welcome. [MUSIC]