Transcript STARBUCKS ICE CREAM SANDWICHES

STARBUCKS ICE CREAM
SANDWICHES
Elizabeth Phillips
Brooke Shelton
Gina Ognoskie
Ken Alexander
The Challenge
• How increase Starbucks Specialty Sales?
– Non-coffee revenues
– From Ice Cream to Starbucks branded products within
Starbucks retail stores
• Tap into growing ice cream novelty sector with our
established partnership with Dreyer’s
– 1997 began partnership—quickly became #1 Coffee Ice
Cream in United States
– Largest U.S. specialty coffee retailer
– Largest U.S. ice-cream maker
Product Line Expansion
• Current Supermarket
Offerings
• Tap into third highest
growing ice cream
sector with new
product:
– STARBUCKS ICE
CREAM
SANDWICHES
Internal Environmental Analysis
• INTERNAL
– Marketing goals and
objectives aligned with
mission statement
– Current resources
– Current Nestle-Dreyer’s
Merger
External Environmental Analysis
• Competitors
– Brand Competitors
• Blue Bell Sandwiches
• Healthy Choice
Sandwiches
• Private label Brands
– Product Competitors
• Other novelty ice cream
products
• Sherbet, fruit bars, etc.
• Ice Cream Pints
– Generic Competitors
• Other ‘comfort’ food
(cookies, chips, candy)
• Industry Environment
– Compete on Brand Image,
Quality, Flavor Selection, and
price.
– Few barriers to entry
External Environmental Analysis
Frozen Novelty Retail Dollar Share
Ice Cream bars
w/stick
17%
Other
36%
Sandwiches
14%
Frozen Ice
13%
Ice Cream
Cones
10%
Fruit/Juice
10%
www.dairyfoods.com
• Frozen Novelty Market
–
–
–
–
total of $2.1 billion retail
ice cream sandwiches accounted for $283.5 million
second largest dollar share
third fastest growth area at 19.8% vs.total novelty ice cream
market growth of 7.1 %.
External Environmental Analysis
• Regulatory Impacts
– Current DOHA rounds
• Potential problem for Dreyer’s input prices
• Must be monitored by partnership
• Ice Cream Purchasing Trends
– Growth of sandwich sector
– September 11 Effects
– Seasonal Fluctuations
Purchasing Pattern
Ice Cream Industry
Customer Environmental
Analysis
• Current Customer Profile
– Starbuck’s Coffee Drinker
• 50 K Income
• Ages 25-44
• 4 Year + College
• Primarily Caucasian
• Potential Customer Profile
– Not a regular Starbucks
drinker,but recognize brand
– Ice Cream consumer
• Purchasing Pattern
– Grocery Store
– Only branded coffee
ice cream
– Potential non users
dislike coffee
– Targeting snack user,
not dessert consumer
“Our Customers are
people we know and
those we are yet to meet.”
SWOT Analysis
STRENGTHS
WEAKNESSES
•Exclusive Marketing Rights
•High Brand Equity and
•Narrow Product line in super
recognition
•Reputation of high quality
supports high price point
•Partnership with leading ice
cream manufacturer/distributor
premium frozen dessert sector
•Coordination of quality
assurance between partners
OPPORTUNITIES
THREATS
•Internet Promotion
•High Growth Segment of
•Current Nestle Merger
•Economy decline
•Intense shelf space competition
Sandwiches in frozen novelties
•Comfort food purchasing
pattern
Marketing Goals
• To capture significant market share in the
frozen dessert novelty sector
• Increase total Starbucks ice cream sales
through product line expansion
• Further establish Starbucks reputation for
high quality products
Marketing Objectives
• Goal 1 – Market Share
– Capture 2% of the 13.5% sales share in the sandwich
sector by 2005 (Year 1)
– Capture 2.75% of the 13.5% sales share in the sandwich
sector by 2007 (Year 3)
• Goal 2 – Increase Starbucks Ice Cream sales
– Maintain minimum 10% sales growth per year of ice
cream sandwiches
• Goal 3 – High Quality Product
– Establish 35% repeat purchase pattern
Action Plan
Product Life Cycle
Product
• Product line extension
• Sold in packages of six
• Filled with our 4 top selling ice creams
– Java Chip, Low-Fat Latte, Almond Fudge, Classic
Coffee
• How will they compare to Blue Bell’s
sandwiches?
– Size
– Premium ice cream
Price
• Prestige Pricing
– $1.79- $4.25 per box in
supermarkets
– Blue Bell, Skinny Cow
and Hill Country Fair
– How about Us?
• $4.99!! Wow, what a
deal for a slice of
heaven in the form of a
sandwich!!!
Promotional calendar
Promotion
• Pull
– Packaging print ads
– Starbucks Retail Store
Advertising
– Print Advertisements
• FSI
• Magazine
Advertisement
• Push
– Cooperative
advertising
• Magazine Advertising
– Better Homes &
Gardens
– Real Simple
– Bon Appetit
• Three ½ page B/W/1
color advertisements
in national magazines
Marketing Expenses Breakdown
Print Advertising
Retail Store
Advertising
20%
35%
5%
15%
25%
Packaging
Advertising
Cooperative
Advertising
Control Measures
Our Message
• Indulgence
• Extension of current Starbucks Coffee
Campaign
– Sit down, relax in indulgent, rich flavors
• Snack
• Highest Quality Product & Ingredients
• Creamy and Dreamy
Year 1 Promotional Calendar
Promotional calendar
Promotional Calendar
JAN
Packaging Print
Ads
SB retail Store
Adv.
Print
Advertisements
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
Distribution
• Joint venture with
Dreyer’s
• Located in Dreyer’s
current distribution
outlets in major
metropolitan areas
nationwide
– 10,000 outlets
Dreyer’s Distribution
Financial Analysis
• Joint Venture with Dreyer’s
• Sandwich sales projection
– 10,000 outlets
– 8.4 boxes/week/store (440 boxes/year/store)
– Total Sandwich Sales Year 1 = 4.4 Million
Boxes
Based on 2002 Dreyer’s Bar Sales
Financial Analysis – Year 1
• Dreyer’s Gross Revenues
– $4.99 x 4.4 million boxes/year = $21,956,000
• Starbucks Licensing Fee (Revenue)
– .3 x $21,956,000 = $6,586,800
• Marketing Objective Year 1 Met?
– Yes! Year 1 sales are 2.3% of sandwich market
share
Financial Analysis – Year 1
Revenue
Marketing Expenses:
Print Advertising
Retail Store Advertising
Packaging Modification
Cooperative Advertising
Control Measures
Total Marketing Expenses
6,586,800
Net Income
$ 1,976,040
922,152
230,538
691,614
1,152,690
1,613,766
4,610,760
Financial Analysis – Years 2&3
• Projected 10% growth in sales per year
• Decrease Print Advertisements 35% and
Retail store advertisements 80% after year
one.
• Net Income Year 2 = $3,141,904
• Net Income Year 3 = $3,866,452
Monitor and Control
• Monitor and Control Measures
– Quantitative objective achievement
• Nichols, Penson & Parks
– Customer feedback
• Information Resources L.L.C.
– Advertising campaign effectiveness
measures
• Pretests & Posttests
Contingency Plan
Post-Year 1
Possess 2-3% of
market share
Continue with
3 year
promotional
plan with
yearly monitor
& contingency
plans
Possess 1-2% of
market share
Conduct
Focus Group
Market
Research
Tweak 4
P’s
Possess less than
1% of market
share
Divest Extension
Conclusion
• High Growth Sector + Established Success
+ Proven Partnership = SUCCESS!!!
• Contributes high profit margin to Starbucks
bottom line due to minimal costs
Discussion