Chih-jen Shiau Jeroen Verleum Robert Jan van Leijden Pei-chia Hsu Seon Hoo Kim Young Eun Kang

1. STARBUCKS Natural Tea Blend Frappuccino Chih-jen Shiau Jeroen Verleum Robert Jan van Leijden Pei-chia Hsu Seon Hoo Kim Young Eun Kang

2. Strategy Action Plan Situation Objectives Table of Contents SITUATIONAL ANALYSIS MARKETING OBJECTIVES MARKETING STRATEGY MONITORING AND CONTROL CONTINGENCY PLAN

3. INTRODUCTION & SITUATION ANALYSIS

4. Strategy Action Plan Situation Objectives Introduction to STARBUCKS • World’s leading retailer for purchasing, roasting and selling whole bean coffees and specialty coffee. • Starbucks Coffee Company was founded in 1971. It opened its first store in Seattle’s Pike Place Market • 8500 retail locations across 32 countries worldwide. (statistics as of May 2005) • The company is headquartered in Seattle, Washington and employs about 74,000 people. • The company recorded revenues of $5294.2 million during the fiscal year ended

5. Strategy Action Plan Situation Objectives CEO Howard Schultz The man who made Starbucks the number one specialty coffee brand.

6. Intro C. Identity1 C. Identity2 Culture Starbucks Mission Statement Provide a great work environment and treat each other with respect and dignity.Embrace diversity as an essential component in the way we do business.Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee.Develop enthusiastically satisfied customers all of the time.Contribute positively to our communities and our environment.Recognize that profitability is essential to our future success.

7. Strategy Action Plan Situation Objectives Customers • A Starbucks Coffee house has approximately 33 million customers each week • They see Starbucks as a second home • They enjoy the “Starbucks Experience” • Age of 15 - 45 Product and Company • offering the finest coffee worldwide and maintaining their principles while they grow. They see Starbucks as a second home • Mainly sell specialty coffee (Arabica coffee)

8. Intro C. Identity Culture Future STARBUCKS’ Products

9. Intro C. Identity1 C. Identity2 Culture STARBUCKS’ Products

10. Intro C. Identity1 C. Identity2 Culture STARBUCKS’ Products Frappuccino Non fat milk, soy based products, Confectionary, ice cream 1984 Italian Style Espresso Caffè Latte Cappuccino Barista Drop coffee

11. Intro C. Identity1 C. Identity2 Culture Powerful Symbol for Positive Planetary Change Color of STARBUCKS

12. Strategy Action Plan Situation Objectives Competitors The Coffee Bean, Krispy Kreme + Dunkin’ Donuts. Small local coffeehouses, supermarkets, Jamba Juice, Orange Julius Fast food chains such as McDonald’s and Burger King Channel Starbucks Coffee stores – retail Supermarkets – for canned products

13. Intro C. Identity1 C. Identity2 Culture MARKETING OBJECTIVES

14. Intro C. Identity1 C. Identity2 Culture Sales, revenue and profit goals: Sales goal: 256.76 million units total Revenue goal: 950 million dollars Profit goal: 149.1 million dollars Increase share of Frappuccino in total Starbucks sales and revenues Driven by opening more stores in US, marketing and adding a new customer group Larger profits due to increased sales

15. Intro C. Identity1 C. Identity2 Culture Customer goals: “Develop enthusiastically satisfied customers all of the time.” Expand the market to tea consumers Give tea the image that it is healthy Increase the consumer acceptance of tea products at Starbucks

16. Intro C. Identity1 C. Identity2 Culture MARKETING STRATEGY

17. Intro C. Identity1 C. Identity2 Culture Overall Strategy: • Two additional beverages on the Natural Tea Blend • Synergy effect from the star product: Green Tea Frappuccino • For non coffee drinkers • Seeking more healthy alternatives to coffee 6 months, 5 million dollars

18. Intro C. Identity1 C. Identity2 Culture STP Psychographic: lifestyle: health conscious people who seek non-coffee beverages Target Prestige, high quality “Starbucks experience” (surroundings) Location convenience Positioning Health appeal but at the same time delicious With highest quality possible. Premium specialty tea

19. Intro C. Identity1 C. Identity2 Culture Product Natural tea blend green tea, chamomile tea, jasmine tea “Starbucks experience” Product Tall: $3.20 grande: $3.70 venti: $4.20 At the average of $3.70

20. Intro C. Identity1 C. Identity2 Culture Place You can always find a Starbucks on the corner: numerous retail stores provides convenience Promotion main advertisement: websites (ex. yahoo and google) in store sample testing. others: magazines

22. Intro C. Identity1 C. Identity2 Culture On websites:

23. Intro C. Identity1 C. Identity2 Culture Promotion : Advertisement Jasmine Chamomile Health Starbucks Frappuccino Tea Blend

24. Intro C. Identity1 C. Identity2 Culture EXECUTING & MONITORING

25. Intro C. Identity1 C. Identity2 Culture Allocation of marketing investment • We allocate the marketing investment budget, which is 5 million dollar, as follows: • Advertising costs are 3.5 million: • Website: 1.75 million (50%) • Testing: 1.05 million (30%) • Magazine: 0.7 million (20%) • R&D costs are 0.5 million. • Marketing research costs are 1 million.

26. Intro C. Identity1 C. Identity2 Culture Marketing Budget Break even point (BEP) for the Frappuccino line Sales: 191.74 million units. Revenue: 709.43 million dollars Return on marketing investment (ROMI) ROMI = 2.594 times (259.4%)

27. Intro C. Identity1 C. Identity2 Culture Methods of monitoring Sales check (by monthly) Customer Survey (post-purchase)

29. THANK YOU