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Class project. Fall 2008.
Citation preview
Digging to the bottom of the cup
STARBUCKS NEW BUSINESS PITCHDECEMBER 9, 2008
TAYLOR FOLEYBRITTANY NUGENT
SHANNON REEDMARIAM SHAHABLOUISA STELLE
Table of Contents
Section Page Trove 3 The Market 9 The Competition 13 Starbucks 20 Research 23 Marketing Solutions 33 Fees 53 Presentation Endnotes 56 Business Paper 57
MISSIONCORE BELIEFS
CREATIVE PHILOSOPHYINDUSTRY EXPERIENCE
Trove3
Mission
We dig deep. We strive to find the gem in your brand.
4
Core Beliefs
We believe in:
• hunting for the uniqueness in your brand
• building brands that impact consumer lives
• creating a treasure chest for every campaign
5
Creative Philosophy
We help brands become diamonds in the faceless clutter of today’s society. Just as a diamond starts out as coal, the process of making a brand valuable is our ultimate goal.
6
Industry Experience7
The Team
Mariam ShahabArt Director Ideal Drink: Tall caramel frappuccino, no whipped cream, extra syrup
Taylor Foley Media DirectorIdeal Drink: Grande non-fat mocha with whipped cream
Shannon Reed Interactive DirectorIdeal Drink: Tall mint hot chocolatewith whipped cream and chocolate syrup
Brittany NugentAccount Manager Ideal Drink: Venti soy chai
Louisa StelleAccount PlannerIdeal Drink: Tall non-fat cappuccino
8
COFFEE INDUSTRY OVERVIEWCOFFEE HOUSES AND DONUT SHOPS
THE CONSUMERS
The Market9
Coffee Industry Overview
Which coffeehouse or donut shop do you visit most frequently?
All data collected from online surveys and in store intercepts.
43.3% 76.7%43.3%
10
Coffee Industry Overview
• Starbucks and Dunkin Donuts - leaders in the category with 90.3% of sales• Starbucks has seen sales decline and begun closing stores• Dunkin Donuts continued expanding in 2007
• Coffee houses growth from 2005-2007 - 43.7%
• Donut shops growth from 2005-2007 - 16.9%
• Independent coffeehouses have the largest following of regulars
• Starbucks and Dunkin Donuts have the most number of visits per month
• Starbucks dominates the West
• Dunkin Donuts dominates the Northeast
• Quick Service Restaurants (QSR) are faster, cheaper and are beginning to offer breakfast and coffee to budget conscious costumers
• Lack healthy options
Coffee houses and Donut shops11
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Coffee Industry Overview
• 55% of United States adults consume coffee on a daily basis• Loyal coffee culture
• Television advertising dominates for coffeehouses and donut shops • Interactive marketing and product sampling used to increase sales
• Men are more likely to use coffeehouses as a workspace
• Young customers (18-24 year olds) visit coffee houses for leisure time
• For households with children a drive through is important• Especially in suburban areas
• Most important features that attract potential costumers:• Convenience • Price
The Consumers12
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DUNKIN DONUTSTIM HORTON’SKRISPY KREME
CARIBOU COFFEEPEET’S COFFEE
MCDONALD'S MCCAFE
The Competition13
Dunkin DonutsUnique Selling Proposition: Quality coffee for Americans on the run
Number of Stores: 5,769
Gross Sales: $5.3 billion
Historical Fact: World’s largest coffee and donut shop, serving more than 3 million coffees a day.
Advertising Sample: DunkinbeatsStarbucks.com
The average Joe
Insert company logohere
1413
Tim HortonsUnique Selling Proposition: “Always fresh” coffee, baked goods and home-style breakfasts and lunches in a quick-service restaurant.
Number of Stores: 424
Revenue: $1.9 billion
Historical Fact: Started in Canada by a famous hockey player in 1964 and merged in 1995 with Wendy’s International.
Advertising Sample:
Canadian Craig
1514
Krispy KremeUnique Selling Proposition: Krispy Kreme makes all of its donuts in its store and they are served hot right off the line.
Number of Stores: 420
Revenue: $461.2 million
Historical Fact: Founded in 1937 in Winston-Salem, N.C.
Advertising Sample:
Insert company logohere
Joe the Plumber
1615
Caribou CoffeeUnique Selling Proposition: Caribou Coffee uses the highest quality coffee beans no matter what they cost.
Number of Stores: 464
Gross Sales: $256.8 million
Historical Fact: In 1990 the founders journeyed to the top of Sable Mountain. The breathtaking views became the entrepreneurial vision for Caribou Coffee.
Advertising Sample:
The Adventure Seeker
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Peet’s CoffeeUnique Selling Proposition: A coffee style emphasizing superior quality beans and a darker roasting style that produces coffee with richness and complexity.
Number of Stores: 165
Gross Sales: $184 Million
Historical Fact: Founded in 1966 in Berkley, CA
Advertising Sample:
Peetniks
1819
McCafé Unique Selling Proposition: All of the taste and quality of a coffeehouse with the convenience and price of McDonald’s.
Number of Stores: 3,800
Gross Sales: TBA
Historical Fact: Launched in 2008, their espresso beans come from the same place as Starbucks.
Advertising Sample: “Unsnobby coffee” microsite and television campaign
The Java Junky
1920
CURRENT SITUATION:WHO YOU ARE
MARKETING OBJECTIVES:WHERE YOU WANT TO BE
Starbucks20
Who You Are
S.W.O.T AnalysisStrengths
• Universally recognized • Customizable drinks• Partnerships with known brands• Ambiance – comfortable stores • Store placement • Introduction of drive-thrus• Community Involvement • Environmental reputation
Weaknesses• Prestigious reputation perceived as snobby• Inconsistency with store experience• Higher prices than main competitors • Do not brew organic coffee in stores• Confusing terminology in ordering
Opportunities• Product placement • Advertising to the digital consumer• Expand on fair trade • Strengthen awareness of partnerships and sponsorship• Sell more ground coffee• Easily accessible nutritional information
Threats • Economy• Trend of coffee drinking may end• Rise in cost of coffee and dairy products• Copy cat brands • Health conscious trend• Cannibalization of products
21
Where You Want To Be
• Bring back the magic of the “Starbucks experience”
• Reconnect with consumers• strengthen the brand – consumer relationship
• Increase sales of drinks
• Create a “community” feeling in Starbucks• bring back the idea of a local coffeehouse
Marketing Objectives:
22
METHODOLOGYCONSUMER INSIGHT
BRAND ESSENCE
Research23
Methodology
Field Research • 12 Store intercept interviews • 2 Barista intercept interviews
Online Survey • 60 respondents to multiple choice, fill in the blank survey • created using Survey Monkey
Email Survey • 30 respondents to in-depth multiple choice, fill in the blank survey
Primary research conducted:
24
Consumer Insight
Global
Reliable
Chain company
Corporation
Expensive
Key Insight: Currently, when a consumer thinks about Starbucks they only think about coffee and not the experience.
All data collected from online surveys and in store intercepts.
What comes to mind when we say “Starbucks?”
My paycheck
Dark
Rich
Coffee
Morning routine
Bad service
Caffeine
Money
Yuppie
Comfy sofas
High price
Caffeine rush
Nice atmosphere Not healthy
Addiction
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Consumer Insight
Describe a typical Starbucks customer“ A female Starbucks customer wears a beret, scarf, Ugg boots, skinny jeans, and has an expensive pocketbook. A male Starbucks customer wears loafers, tight sweater to show he works out, a fancy watch, and uses a debit card because he never carries cash.”
“I think there are three main types. There is the person who works really hard all the time andneeds a caffeine boost, you know the one who takes their coffee back when its not hot enough. Then there's the student who drinks one coffee and stays to study for hours and the indie moody person who likes poetry and the smell of coffee.”
“A young, urban, wannabe writer, who gets a large coffee and has time to sit in the big comfy chairs at Starbucks and write on his Mac laptop.”
“A professional in his mid 20’s on the way to work in the morning.”
All data collected from online surveys and in store intercepts.
Key Insight: There is a wide variety of types of people who visit Starbucks with varying reasons for visiting.
26
Consumer Insight
Why do you drink coffee or coffee-related drinks?“I drink coffee sometimes to socialize with my friends or husband or just to treat myself and relax after a long day. ”
“As a nice little pick me up.”
“ Its a necessity on a work morning.”
“To escape from my hectic life and socialize in a relaxing environment.”
“To keep warm.”
“One to get through the morning and one to get through the night!”
“Because I'm addicted to caffeine!”
Key Insight: Coffee is a vital part to a person’s routine.
All data collected from online surveys and in store intercepts.
27
Consumer Insight
How was your last Starbucks experience?
“Starbucks is always extremely crowded. I went there because a friend suggested we meet there. I went to Dunkin Donuts afterwards and got my coffee!”
“It was good but there were too many people around for me to relax. But still, somehow the atmosphere felt intellectual.”
“It’s my third home! I love the coziness.”
“Nice and quite.”
All data collected from online surveys and in store intercepts.
Key Insight: Every Starbucks store and experience is not the same.
28
Consumer Insight
What do you consider coffee to be?
All data collected from online surveys and in store intercepts.
33.3%
38.3%36.7%
41.7%
6.7%10%
Key Insight: Respondents do not consider coffee to be a healthy option.
29
Consumer Insight
Key Insight: People enjoy the experience of drinking coffee in a coffee shop.
Where do you consume Coffee and Coffee-Related drinks?
All data collected from online surveys and in store intercepts.
65.0%
31.7%
15%58.3%
36.7%
38.3%
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Consumer Insight
Key Insight: Starbucks offers a lot of individualization whichhelps people create drinks to suit all taste palates.
What is most important to you when visiting a coffeehouse or donut shop?
All data collected from online surveys and in store intercepts.
26.7%
40%
16.7%10%
73.3%
35%8.3%
31
Brand Essence
Rational Emotional
• Diverse, quality selection of specialty coffee• Clean store environment• Eco-conscious• Urban and suburban convenience • Consistent taste • Customizable drinks
• Charitable• Active member in the community• Personable baristas• Comfortable atmosphere• Global brand awareness• Consumer intimacy• Cultural experience
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TARGET AUDIENCEPOSITIONING STATEMENT
CREATIVE STRATEGYMARKETING CONCEPTS
INTEGRATED MARKETING CAMPAIGNMEDIA PLAN
MARKETING CALENDAR
Marketing Solutions33
The Target
• Men and women ages 16 to 27•Educated and cultured•Urban and suburban• Middle to upper class• Balance social life with responsibilities
Cultured Millennials34
Positioning Statement
To cultured millennials, Starbucks is a premium coffee house that adds an intimate and valuable experience to a consumer’s lifestyle by integrating caffeine with a comfortable environment.
35
Creative Strategy36
Key insight: Cultured millennials actually value the coffee shop experience as much as they value the quality of coffee.
What the consumer thinks now: I go to Starbucks and pay four dollars for my coffee, but sometimes I feel guilty about spending so much money on a cold corporation. I always feel comfortable at the coffee counter, but I wish Starbucks paid more attention to my needs as a caffeine lover.
What we want the consumer to think: Starbucks is worth every penny because it offers the perfect coffee shop experience. Every time I buy a coffee, I feel like an important individual whom Starbucks cares about.
The single most important thing we want to say to them: Starbucks offers more than just a cup of coffee.
Tone: Friendly, warm, inviting, conversational, informal
Mood Board37
Marketing Concepts
Free Wi-fi in store
• When a user opens an internet browser, the landing page will be a microsite which will include:
• the music currently playing in the store and an option to purchase the songs through iTunes.• information about the local community
• charity the store supports • local happenings
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Marketing Concepts
Going Green
• Place recycling bins in stores.
• Have baristas ask “for here or to go?”• If customer is staying in store, they will have drink served in real ceramic mug.
• To encourage reusing plastic gift cards, customers will receive a free tall “drink of the month” when they reload.
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Marketing Concepts
Community Atmosphere • Require baristas to wear name tags
• Have baristas write names on cups
• Create plastic loyalty card• After 15 visits, consumer will get one free tall “drink of the month”
• Create “drink of the month”• offer sample sizes
• Put bigger tables and more electronic outlets in store
• Create a separate line for drip coffee
• Insert bookshelf with reading material and games
40
Marketing Concepts
Health Consciousness
• Serve organic coffee in store
• Implement the Swiss water process
• Create more low fat drinks• More sugar free syrups
• Have healthy food choices
41
New Tagline
“A bean is just the beginning”
42
Online• Microsite for landing page when connected to Wi-Fi in store
• Feed off of iTunes relationship
Integrated Marketing Campaign
43
Newspaper
• inserts or advertisements about new plastic loyalty card program in relation with “drink of the month” promotion
• Regional and national newspapers• New York Times•Chicago Tribune •LA Times •USA Today •Wall Street Journal
• Large college campus newspapers
Integrated Marketing Campaign
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In store displays
• Register sign “For here or to go?”
• Free Wi-Fi sign on tables
Integrated Marketing Campaign
45
In store displays• Barista name tags
• Fast line for drip coffee
• Nutritional information brochures
• Tea choices on a ring at the register
Integrated Marketing Campaign
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In store displays• Individual store charity poster
• Monitor featuring music playing in store and visuals of “drink of the month”
Integrated Marketing Campaign
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Outdoor• Non-traditional
• coffee beans leading to store
Integrated Marketing Campaign
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Outdoor• Billboards
• nearest drive-thru location
• Subway and bus shelters• loyalty card information
Integrated Marketing Campaign
49
Television
• Spotlight the charities Starbucks supports and has partnerships with• Get in touch with viewers emotions
Integrated Marketing Campaign
50
Media Plan
• Online
• Outdoor
• Television
• Newspaper
• In store
How to reach our target audience:
51
Marketing Calendar
JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER
Wi-Fi Site
Newspaper Advertisements
Name Tags
Nutritional Brochure
Menu Extension
Tea Rings
Free Wi-Fi Sign
Music Monitor
Drip Coffee Sign
Mug Sign
Charity Poster
Billboard
Bus Stop/Subway Advertisements
Trail of Beans Outdoor Advertisement
Television Spots
Key
Online
Newspaper
In Store
Outdoor
52
BUDGET OUR PROPOSED FEE
Fees53
Budget
• Starbucks 2007 ad spending: $60 million
• Proposed 2009 ad spending: $55 million• Allocated on media planning and buying
54
Proposed Fee
• Trove agency fee: 25% of budget• Includes entire process from consumer research to executing creative work
55
Endnotes56
1 “Executive Summary.” Coffehouses and Donut shops-US-July(2008).Mintel. Boston University Libraries, Boston, MA. 1 December, 2008.<http://academic.mintel.com.ezproxy.bu.edu/>2 “Executive Summary.” Mintel.3 “Executive Summary.” Mintel.4 “Coffeehouse and Donut Shop Usage.” Mintel.5 “Coffeehouse and Donut Shop Usage.” Mintel.6 “Competitive Context.” Mintel.7 “Competitive Context.” Mintel. 8 “Advertising and Promotion.” Mintel. 9 “How coffeehouses and donut shops are used.” Mintel. 10 “How coffeehouses and donut shops are used.” Mintel.11 “How coffeehouses and donut shops are used.” Mintel.12 “How coffeehouses and donut shops are used.” Mintel.13 “About Us” Dunkin Donuts 2007 <https://www.dunkindonuts.com/aboutus/company/> Viewed December 9, 2008.14Investor Relations Tim Hortons Inc. December 30, 2007. <http://www.cariboucoffee.com/page/1/company-info.jsp> Viewed December 2, 2008.15“Coffeehouse and Donut Shop Usage.” Mintel.16 “Our Company” Caribou Coffee, 2008, 6 Dec. 2008 <http://www.cariboucoffee.com/page/1/our-company.jsp>. 17 “Hoover’s Profile: Caribou Coffee Company, Inc.” Caribou Coffee, 2008, 6 Dec. 2008 < http://www.answers.com/topic/caribou-coffee-company-inc>. 18 “Company Information” Caribou Coffee, 2008, 6 Dec. 2008 <http://www.cariboucoffee.com/page/1/company-info.jsp>19 “ Peet’s Coffee and Tea, Inc” Hoovers 6 Decemeber. 2008 <http://www.hoovers.com/peet%27s/--ID__53648--/freeuk-co-factsheet.xhtml> 20 “Introducing McCafe Coffees” McCafe 2008 <http://www.mymccafe.com/> Viewed December 9, 2008