Marketing Plan for New Bubble Tea Product Line for Starbucks PDF

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Marketing Plan for New Bubble Tea Product Line for Starbucks 1

MARKETING PLAN FOR NEW BUBBLE TEA PRODUCT LINE FOR STARBUCKS

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Marketing Plan for New Bubble Tea Product Line for Starbucks 2 Executive Summary Starbucks is a global dealer in coffee business. The company has experienced continued growth over the last ten years. We are continually establishing new places and adding more products to our mix. However, we have not reached the Canberra market with our product of bubble tea. Most of the customers prefer tea which is mixed with cream, or shaken with milk, and that constituents 67% of them. It is necessary therefore to introduce this product in the Australian market in an offer to meet the varied needs of all our clientele. We trust that pursuing our high-end customers with a bubble tea product, as would be in line with the present operations; we could grab a whole fresh set of coffee users. With the implementation outlined in this paper, the growth of the company is expected to increase by 5% from this initiative, which will continually impact our capacity to give a better quality coffee customer experience for the coming operation years in the business. This paper explores the feasibility of the business idea of setting up a bubble tea shop in Canberra by the Starbucks. It examines the market analysis and the expected returns of the concept. Introduction Starbucks is a company that is always ready to make new ventures, scale new markets. Since its inception in 1971, it has a significant market share in the coffee industry. Many different products are also available in the company’s outlets. Starbuck uses appealing and contemporary promotional designs to draw the young generation to their stores. This modern view in their marketing helps even the older clients to feel younger when they take the coffee products from the company. However, the focus of the firm is the high-class customers who are willing to pay a premium price for a cup of tea. The customers must appreciate the natural

Marketing Plan for New Bubble Tea Product Line for Starbucks 3 contents that are used in making the products and are committed to corporate social responsibility. Our market segments within the bubble tea sector include the students, young adults, a well as all-age loyalists. The company targets to reach them through media such as TV adverts, print media, and social media. However, the company believes in its brand reputation. Therefore the advertisement will only be used to create awareness of the new market engagement at Canberra. Starbucks company has a targeted customer. Therefore the competitors are not in any way able to reach our combination of expensive better quality products. The closest competitors include ChaTime, EasyWay, and Gong Cha. These outlets sell their bubble tea through a medium like grocery stores and outlets. However, the bubble tea by the Starbucks will be offered to the clients through the specific stores and the target company’s shops. Company Background Starbucks was established in 1971 in Seattle, USA. Almost twenty years after its establishment, it had experienced an exponential growth of over 140 stores and an annual growth rate 40 and 60% (Clark & Vemuri, 2008, p. 50). Currently, the company celebrates over 15,000 outlets in forty-four countries around the world. Right from the beginning, the company has always seen it’s business as a service and experience business. The model was based on the European coffee culture, which was not yet in America. Therefore, its entrance into the coffee industry was received well, a factor that is attributable to its growth. Mainly, Starbucks company is a fast mover. They identify the market gaps and then proceed to find a way to meet a need identified. For instance, the move to Canberra arises from the market analysis that the outlets providing bubble tea are not providing the high-quality

Marketing Plan for New Bubble Tea Product Line for Starbucks 4 products, which is the market differentiator of Starbucks. The marketing plan is founded on concentrating on the client likely to purchase their product. Our objective to offer bubble tea that permits for the consumer to have the Starbucks touch in the comfort of their houses. However, the coffee business of Starbucks in Australia is not a one that calls for a celebration. Almost nine years ago, the company closed its 61 Australian outlets, which meant that the company remained with less than two percent of the market share of the coffee market. The company claimed that the reason for the closure of many such stores was that the customers had tightened their belts because of the global financial predicaments and uncertainties of the recession (Clark & Vemuri, 2008, p. 51). Also, the closing could be attributed to stiff competition from its rivals who understood the market structure well and thrived, like ChaTime, Gong Cha, and EasyWay stores (Clark & Vemuri, 2008, p. 50). Marketing Objectives Our marketing plan aims at making the Starbucks bubble tea available to a diversified range of clients. To achieve this, it means that it must advance for affordability and suitability in the takeaway bundle. Building to establish an active working link with the Target Shoppers, we will sell the products solely to their shoppers. The availability of the bubble tea will also be in the Starbucks outlets; the position of our product is to offer a high-quality product at a competitive price. The financial objectives include gaining the 10% of the bubble tea market portion in Canberra within the first twelve months. And to raise the company’s net income by 2.5% mainly from the introduction of bubble tea, increase the company’s revenue by $20 million. Strategic Environment

Marketing Plan for New Bubble Tea Product Line for Starbucks 5 The company has chosen to the situation the product in the best locations that attach value to the quality of Starbucks brand. The current marketing strategy involves giving products at Starbucks outlets as well as Target Shops. The needs of the customers who value high-quality products regardless of the price. By positioning the bubble tea product in these choice locations, clients will have access to the quality they are seeking while maintaining a competitive cost. PESTLE Analysis PESTEL is a critical component of our bubble tea product in Canberra. The factors to consider are political, economic, social, technological, legal, and environmental. We believe that the plan will be effective since: first, it gives the consumers an opportunity to have Starbuck experiences in the comfort of their homes; the market is mature, and therefore the economic condition in the market allows the company to make more sales. Again, the company is already engaged in corporate social responsibility, and there is concerned with the environment and social aspects of the market. In the technological dimension, the store can tap into the ability of mobile technology to allow the customers to place their orders. The company is also aware of the employment and other laws in the Canberra market. Therefore we believe that our bubble tea product will succeed. SWOT Analysis Starbucks is on the edge of a significant opportunity. The primary strength that company has is the established brand name and loyal customers, as well as an opportunity to venture into a market that is experiencing an annual growth. Table 1: SWOT Analysis Strengths

Weaknesses

Marketing Plan for New Bubble Tea Product Line for Starbucks 6 



The company enjoys an established

The Starbucks products are relatively

brand name and loyal customers.

expensive which may shy away some

Bubble tea is a product that is in high

consumers

demand and experiencing growth in







The Starbucks bubble tea will only be

the coffee sector.

available for focused and company’s

The natural contents are familiar with

clients.

many sections of the clients.



The bubble tea line will have a small quantity of flavors.

Threats

Opportunities 

The capacity to make it to the new



existing bubble tea sellers.

market section, for instance, the consumers who have seasonal





The high price would imply missing

preference of flavors

out a group of the customers that can’t

The ability to attract consumers with

pay for it.

the bubble tea product. 

Stiff competition from the already



Constant awareness of the Starbucks

Established loyalty to other bubble tea brands

brand 

Attract the customer with the convenience of enjoying the Starbucks experience while at home.

Competitor’s Analysis With this new product, the potential competitors include ChaTime, EasyWay, and Gong Cha. They have significant shares in the bubble tea market in the city. In general, nevertheless,

Marketing Plan for New Bubble Tea Product Line for Starbucks 7 the company’s competition is not focused on the same segments. Instead, the focus is on the brand loyalists. Target Market The target market is an individual who desires to have the Starbuck’s bubble tea product. The company believes that these segments would include the brand loyalists, students, and target shoppers. All of these target customers have embraced the superiority and prestige of the Starbucks products and the ability to buy the item at a higher cost than some competitor products.

Figure 1: Target Market The IBISWorld posits that 73% of coffee lovers make coffee in their houses. Starbucks has a market share of 15% in this sector. Of this percentage, the 67% are likely to add cream to their coffee. Therefore, targeting this segment alone would mean that the company has dominated the 7.3% of the coffee sector. The adults make 42% of coffee takers, and most of them take it daily. Their demand for bubble tea is backed by their purchasing power of a high priced

Marketing Plan for New Bubble Tea Product Line for Starbucks 8 product. A young population and especially students make 40% of coffee drinkers, but there is no brand loyalty, but are most likely to prefer coffee with cream. The Target Corporations are the customers who are willing to pay more money for a high-quality product, and there is an opportunity for Starbucks to attract these customers with their high-quality product. Budget and Break-Even Analysis The break-even analysis of our product is based on the overall price of units and returns required to break-even. All the summations will be founded on the sale of a 16oz bottle. Determining the production cost in the coffee industry is difficult, and therefore we have estimated that the fixed costs will be $500,000; which would include $50,000 to be used in advertising and marketing issues. We also suppose that production cost per bottle will be around $2, and by selling $3.49 per piece, the profit would be $1.49. According to our estimations, there is a need to sell around 335,750 bottles per month to reach the break-even point. The main ingredient to be added in our bubble tea will be cream, and therefore the pricing break-down will be: Table 2: Approved Bubble Tea Ingredients Budget Contents Approximately 2% milk Heavy Cream Flavoring Contents Preparation and Packing Total Cost

Estimated Cost .15 .35 .50 1.00 $2.00

Marketing Plan for New Bubble Tea Product Line for Starbucks 9

Figure 2: BEP; Where Line intersect with 0 (335,570 units) Table 3: Break-Even Point Analysis Monthly Units to break even Monthly income to break even Average revenue per piece Variable cost per bottle Estimated fixed costs per month

335,570 Approx. $1,171,130 $3.49 $2.00 $500,000

References Clark, E. & Vemuri, R., 2008. Conducting business in Australia: Prospects and strategies for international managers. Global Business and Organizational Excellence, 27(5), pp. 49-64. Couch, C., 2017. Office makeover : workspace renovation projects can deliver big benefits if teams focus on strategic needs--not passing fads. PM network, 31(2), p. 1.

Marketing Plan for New Bubble Tea Product Line for Starbucks 10 EHR, 2017. Review of periodical literature published in 2015. The Economic History Review, 70(1), pp. 275-322. Ferris, S. P., Thompson, G. R. & Valsan, C., 2008. Foreign Direct Investment in an Emerging Market Economy. Eastern European Economics, 32(4), pp. 1-95. Strategic Analysis Of Starbucks Corporation (2014) Nithin Geereddy....