Primary Researchers
Will Brown nn MauriceDu Secondary Researchers
ac Haley Woimnney Kasey K Editors
sting Rachael Fgugers Katie Ja
Table O
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Industry Analysis: Economic Issues:
I. Situation Analysis
Economic crisis in 2009: Over the past few decades the retail coffee and snacks store industry has seen an overall incline. Though in 2009, due to the economic crisis, the industry experienced a decline. During this economic crisis, consumers spent less on the luxuries of eating out and purchases lower priced items, not including the highpriced coffee of Starbucks. Expected Growth: “The industry is now forecasted to grow at an annualized rate of 3.9% over the next five years, with a potential to reach $35.1 billion revenues in the US. This growth would be mainly driven by an improving economy, increase in consumer confidence and expanding menu offerings within the industry. Starbucks dominates the industry with a market share of 36.7%, Dunkin Brands with 24.6% and other competitors like McDonalds, Costa Coffee, Tim Horton’s etc” (Geereddy). Driving Factors of the Retail Coffee and Snack Industry: “The industry’s demand for premium coffee and snack products are mainly driven by a number of factors which include disposable income, per capita coffee consumption, attitudes towards health, world pricing of coffee and demographics” (Geereddy ). New Strategic Plan Due to Industry Shift: “There is an expected shift towards healthy eating and diet among the consumers in 2014, and this could be a potential threat to the industry as they become more aware of issues related to weight and obesity. There has been a proactive shift among the industry participants to tailor their menus towards more organic and healthy products mix” (Geereddy). A new strategic plan of many retail coffee and snacks industry brands involves shifting to healthy choices, such as having Greek yogurt at Starbucks. Threat of New Entrants/Competitive Rivals: The threat of new entrants is moderate. Also, small local coffee shops offer a moderate competition. “The coffee and snack shop industry includes thousands of mom and pop shops to a small number of franchised businesses. The U.S. Census Bureau estimates that nearly half of this industry, 48.0%, of establishments are small business owners with nine or fewer employees. The top four players in the industry are Starbucks Corporation, Dunkin’ Brands Inc., Krispy Kreme Doughnut Corporation and Einstein Noah Restaurant Group, which currently dominate 64.8% of the market” (StudyMode).
Social Issues:
Starbucks Mission Statement: To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time. Social issues include keeping up to standard with this mission statement. Starbucks must keep up with the standard of creating a community driven, inviting environment. But, to take this farther, they are also responsible for constantly modernizing their appeal to a new culture of consumer. The current audience, Generation Y was raised in a time period of rapid paced change, including equal employment opportunity for women, dual-income households becoming standard, expanding definitions of “normal” family structures, the acceleration of technological advancement, and a growth of respect for cultural diversity. This creates a culture of social awareness that Starbucks plays to nicely. Generation Y requires companies to have “greater purposes,” and Starbucks fufills that in many ways. Their Youtube channel has an entire playlist called “Giving Back.” The incoming wave of Starbucks drinkers, Generation Z, is growing up in a post9/11 society of global terrorism, school violence, mortgage crisis, and the recession, but have also grown up with single moms, homosexuals, and normalized diversity. Starbucks simultaneously appeals to this generation’s so-called new conservativism with their emphasis on creating jobs in America. But they appeal to their social liberalism through issues like the acceptance of gay culture (ex: lesbian mothers referenced in their mother’s day ad) and disaster relief. This generation also had their teen years jumpstarted by a rise in exploitive “tweendom” advertising which in combination with obesity trends is predicted to continue the steady rise in health-food alternatives.
Environmental Issues: Recycling: Starbucks holds a high standard of recycling in stores, promoting using reusable cups, having green cups, and composting of coffee grounds. Energy: Starbucks had reduced use of energy by 25% by 2010. Starbucks continues to aim to yearly lower their use of energy.
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Water: Starbucks aims to reduce their use of water. They are planning on sticking to a plan that will have them reduce water consumption by 25% by 2015.
Competitor Analysis: Dunkin Donuts: In 2013 Dunkin Donuts reported their sales to $ 9.3 billion. They sell more than 1.8 billion cups of hot and iced coffee globally every year.
I. Situation Analysis
Dunkin Donuts is distinguished for brewing a superior guest experience. For seven years, dunkin donuts has been recognized by the brand keys customer loyalty engagement index as number one in customer loyalty in the coffee category. Their coffee is freshly brewed. If not used in 18 minutes they discard the coffee. BRANDING PLAN is to continue to open more stores to become more popular. They announced plans for 46 new restaurants this year. And to open more than 100 in the next few years. They also will have new looks to enhance the current restaurant appearance, environment and layout to serve people all day long. Dunkin Donuts wants to keep their customer loyalty award as well. They are known as very customer friendly and great customer service and they want to keep that brand going.In 2013 Dunkin ran their first TV ad made entirely from a single vine video during Monday night football. Dunkin Donuts Social media platforms: Twitter, Facebook, Youtube. Dunkin Donuts uses social media in a different way. They have all the real time post about their products or services from twitter, facebook and youtube, automatically go onto their website. This way people can always monitor what is being said about them. McDonalds: McDonalds seeks to out-latte starbucks in coffee war. One of McDonalds top interest is to become more coffee driven. Originally when McCafe was released, McDonalds planned to transform their restaurants into a starbucks feel and style. With the colors and offering free wifi like starbucks.Trying to make McDonalds a starbucks style is actually hurting them because people are there for fast food and the special coffee drinks are slowing them down. McDonalds strategy is to make specialty drinks or seasonal drinks like starbucks at a cheaper price. For example McDonalds latte’s sale for $2.89 and the same drink at starbucks cost $3.65. A new advertising campaign encourages diners to “Make the most of breakfast with McCafe.” The chain recently added drawings of red coffee beans and such slogans as “Smooth” and “Good Days Start Here” to its hot-beverage cups. McDonald’s is also selling packaged ground and whole-bean coffee in grocery stores this year to spread the word that the the company is as much about java as burgers and fries. McCafe has branded itself as a “unsnobby coffee” but it will have to be more than down to earth to take on the bigger coffee brands. Perceptions of starbucks and Dunkin are more postitive than McDonalds according to survey data from researcher yougov. Bringing bags of Mccafe beans to supermarket seems unlikely to put mcdonalds on higher grounds. McDonalds Social media platforms: Facebook-post are few times a week. Twitter-daily. Youtube-few times a week. Flicker-few times a week. Linkedin-few times a week. Pintrest –few times a week Twitter is most commonly used , having real time tweets. For the first time ever, “Ronald McDonald” is taking a very active role in social media. McDonalds plans on engaging consumers by using #RonaldMcDonald hashtag. The plan is to deliver the new mission of “Fun makes great things happen”.
Yoplait: A Yogurt brand that gives 8 reasons that set it apart from all other competition. While also helping consumers’ well being, health and even their mood. Mostly advertisement are on TV. Ad’s show classy women dancing around men. These ads have slim, smiling, and enjoyed women. Their advertisements show that consumers will achieve a slim waste and smiling face if they eat Yoplait. In 2013, Yoplait made 2.9 billion in net sales. Yoplait has facebook, twitter, pintrest and youtube. They are not very active in any social media. But mostly active in facebook and twitter posting a few times a week on each.
Chobani: Chobani focuses on the “HOW”- how it is made, how it impacts others, how it will help. They have a foundation that focuses on giving back and supporting community. They have been named America’s #1 Greek Yogurt Their focus is on natural: no additives, no artificial sweeteners, etc. They have a lear, engaging website. Social media is primarly Twitter (interactive, simple, colorful, informative) and Facebook, pinterest, instagram, foursquare, google plus, youtube.
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Company Analysis: Starbucks
I. Situation Analysis
Starbucks Foundational values statement: A distinctive set of values has always shaped how we engage our customers, our partners, and the communities where we do business. This past year, given the tenuous economic and political environment we continued to observe in the U.S. and around the world, Starbucks was particularly cognizant of our responsibility to stay true to our guiding principles, and to lead by example. The complexity of these times requires that businesses complement their main goal of profitability with actions that can help our society move forward in ways that benefit as many people as possible. With this in mind, those of us who lead public companies, in particular, have a duty to share our organizations’ success with our people and reach out to the communities we serve, in addition to creating shareholder value. Starbucks revenues in 2013 reached a record of $14.9 billion and a 12 percent increase over last year. Global performance. In fiscal 2013, Starbucks had more than 3 billion customer visit more than 19,000 stores. America is the largest segment, produced revenue growth of 11 percent,led by the strength of the U.S., where comparable store sales have grown 7 percent or higher for 15consecutive quarters, which is particularly noteworthy given the size of the market Market segmentation: The company has stayed with the upper-scale of the coffee market, competing on comfort rather than convenience. They currently reach the young professional market. They appeal to the generation through community service and green initiatives. They are a high loyalty brand through their rewards programs and connection with regular customers. Execution: The company continues to focus on its original product bundle that includes good coffee, quality service, and a nice environment to hang around. They keep their attention on paying attention to the details of great execution and service. Social Media: Starbucks is One of the earliest adopters of the use of social media for marketing. Starbucks has taken the leader position when it comes to their creative use of social media and marketing. Their social media strategy is built around their company web site and some additional social platforms, including Twitter, Facebook, Pinterest, G+, Youtube, and My Starbucks Ideas. My Starbucks Ideas gives customers the opportunity to give starbucks their new coffee and starbucks ideas. 1-2 posts per week on Facebook; 2-3 posts per day on Twitter; Executive Bios: CEO Howard Shultz holds a BS from Northern Michigan University has a long corporate history before coming to Starbucks. In 2002, Mr. Schultz was named one of the top 25 Managers of the Year by Business Week magazine, and was named to the 2004 “Time 100”, Time magazine’s list of the most influential people of the 20th Century. Shultz is dedicated to maintaining Starbucks image as a world leader in social responsibility and as being a step ahead of the current generation’s trends and desires. COO Troy Alstead came to Starbucks with a history in Business Administration and finance. Alstead has been a Starbucks employee since 1992 and has held many titles, including Senior Vice President of Finance and Global Business Operations, Chief Operating Officer of Starbucks Greater China, and Senior Vice President of Starbucks Coffee International. He was one of the original members of the Starbucks International team, and was responsible for financial leadership as well as strategic planning and business development for the fast-growing international business.
Company Analysis: Dannon Mission: One Yogurt a day Dannon is building a solid consensus with the scientific community around the strong conviction that yogurt is essential to a balanced diet. Eating one yogurt every day is the simplest way for people to take care of their health: yogurt is natural, easy to digest, densely nutritious (rich in calcium and proteins), affordable, convenient and can be enjoyed by everyone. Keeping Fresh: The Fresh Dairy Products division produces and markets fermented fresh dairy products and other dairy specialities, drawing on Dannon’s capacity to develop its ranges and constantly innovate, whether in terms of flavour, texture, ingredients, nutritional benefits or packaging. Quality Guarantee: - Improve the quality and nutritional balance of milk - Encourage development of the dairy farms - Protect environment
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Consumer Analysis Starbucks Consumers 65% have college degree or higher 61% are women 39% are 18-34 Appealed to through consistently hip, contemporary design and decor Views products as an indulgence and symbol of prestige
I. Situation Analysis
Majority have Professional Occupations This target audience grows at a rate of 3 percent annually
Persona 1: The first persona is a well-educated, professional woman between the ages of 24 and 34. She works a corporate job, is on-the-go and doesn’t take much time for herself or to relax. She views Starbucks as an indulgence and a treat for herself. She often stops by Starbucks on her way to work or comes by during her lunch break for a quick snack. She values taste, convenience, and experience.
Yogurt Consumers 41% have college degree or higher education. 74% are women 26% are 18-34 Appealed to through active lifestyle and healthy snacking option Views product as a symbol of healthy choices Majority have Professional Occupations 87% of Starbucks customers surveyed already eat yogurt
Persona 2: The second persona is an active, health-conscious college student between the ages of 18 and 24. This person is likely female, and defines herself as busy, ambitious, and is driven by a desire to be healthy and active. She already eats greek yogurt for its health benefits and already drinks Starbucks coffee because of its environment and socially-conscious image. She values health benefits, convenience to match her fast-paced life, and the ability to define her self-identity based on her purchases.
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I. Situation Analysis
Survey Results The results we found were as follows: ·
73% Female
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67% College students. 17% post grad students. 17% Not in college
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57% buy coffee. 23% buy food. 27% buy cold drinks
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63% spend $2-$4.99. 30% spend $5-$7.99.
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40% never buy starbucks products in grocery stores. 30% buy once a month. 13% buy twice a month. 7% buy once a week.
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83% did not know that starbucks was going to be selling greek yogurt soon.
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60% said they would buy greek yogurt from starbucks
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70% find themselves snacking at different times during the day
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93% know greek yogurt is a healthy snack alternative
· 53% said their life was active and healthy. 50% said time consuming and busy. 43% said overwhelming. 33% said planned. 10% said lazy and 9-5. 7% said sluggish and weekends free. Only one person said relaxed. · 87% already eat greek yogurt. Of that 87%, 46% eat Chobani. 35% eat Yoplait. 27%eat Dannon. 19% eat Oikos. 3% eat Greek Gods. 12% eat Fage ·
60% of all people surveyed have planned daily exercise routines.
Survey Analysis: From the surveys, we learned that a high percentage of Starbucks customers already eat greek yogurt, which means the market is available but simply needs to be tapped into. Additionally, we learned that our ideal buyer is active, healthy, and defines themselves a busy and onthe-go. This reaffirmed our personas and aligned well with our consumer analysis.
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Brand Audit Starbucks has been around since 1971 when it was established in Seattle. The brand has always been driven by the desire to sell high-quality coffee as the addiction of choice for high-performance professionals. Starbucks has continuously evolved to meet the demand for a welcoming, modern environment that meets the caffeine cravings of professional twenty-somethings. Starbucks has continually readjusted to a new generation of young professionals.
I. Situation Analysis
In recent years, this has meant becoming more green, economically friendly and globally conscience, creating customer loyalty programs and reducing their logo to a simplified icon and taking all typography out of their logo to reflect their recognizable status.
As they continue to adapt to modern trends in their industry, Starbucks will start moving into convenience foods and healthier options. By creating new brand extensions that allow people to buy more Starbucks products at a variety of locations they already visit and enabling their customers to treat themselves without guilt, Starbucks will meet the needs and desires of future generations. Generation Z is more health conscious and concerned about the connection between brands and personal identity. As the younger generation seeks to define themselves, Starbucks will benefit from an expanded definition of what it means to be a part of their brand identity. The more you can convey about yourself through your brand loyalty, the more value that brand will have.
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S.W.O.T: II. Strengths / Weaknesses / Opportunities / Threats
Strengths: Strong brand recognition and high sales Inviting, community atmosphere and aesthetic Strong customer loyalty High quality products
Weaknesses: High cost Negative corporate image Viewed as an indulgence, not many healthy options
Opportunities: Appeal to new audiences with healthy options Expand to new audience: Generation Z
Threats: Increased competition with coffee and yogurt companies Potential consumer disinterest in product
The Problem: 1. Starbucks is known as an indulgence to many, as a satisfying of a sweet tooth craving with the risk of a guilty waistline and wallet. 2. Starbucks must continually adjust to new trends in order to stay current with its evolving generations of consumers.
III. The Challenge
The Solution: 1. To change this image, yogurt will be offered as a healthy alternative to cake pops, brownies, and other baked goods. This campaign seeks to redefine indulgence, encouraging a healthier lifestyle without giving up taste or prestige. 2. Appeal to the incoming generation by expanding the brand tribe of Starbucks to include health alternatives. This generation’s need for instant gratification is all filled through the drive-through convenience of getting products they already buy in places they already go.
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Objective 1:
IV. Branding Strategies
III. The Challenge
1. To position Starbucks Evolution Greek Yogurt as a healthy, convenient indulgence
Positioning Statement: Starbucks Evolution Greek Yogurt is a healthy, convenient indulgence.
Connect Starbucks Evolution Greek Yogurt to healthy and active lifestyle choices through image, language and social engagement. Use customer engagement to harness the power of person-to-person promotion simultaneously further increasing brand loyalty. Portray Starbucks Evolution Greek Yogurt as a convenient, easy-access health option because it can be purchased at a Starbucks that the customer already frequents.
Objective 2: 2. To make healthy lifestyle choices desirable
Creative Execution: The next evolution of indulgence is here. Convenient, healthy and delicious can coexist. Appeal to desire for self-improvement through healthy images in advertisements. Overcome stereotypes of healthy foods as inconvenient and difficult. Appeal to generation’s desire to participate in online social conversation about relevant social issues. Appeal to desire for convenience by product placement in stores that customers already frequent.
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V. Communications Framework
Creative Brief Overall our goal is twofold: To convey the positioning statement that Starbucks Evolution Greek Yogurt is a healthy, convenient indulgence, and to make healthy lifestyle choices desirable. Starbucks has already begun working on the insight that we are moving into a more health-conscious, active generation. As a result the single-minded proposition is that convenient, healthy and delicious can coexist in the form of the Starbucks Evolution Greek Yogurt. The reason to believe this is that Starbucks has a long-term reputation for social consciousness and cause-driven initiatives. Additionally, they have recently begun a campaign that visually supports active lifestyles in its video advertising. For both of these reasons, there is strong support for a transition to greek yogurt as a healthier menu option. This campaign targets the current generation of coffee and yogurt consumers and sets the stage for the next generation by appealing to someone with an active, busy lifestyle and simultaneously appealing to a desire for self-improvement, in this case through healthy lifestyle choices. Social and owned media will primarily be used for messaging strategies with the intent of connecting with a modern, digitally-savvy consumer. In order to position Starbucks Evolution Greek Yogurt as a healthy, convenient option, social platforms will be a key media. Through research, we observed that food-related posts are connected to indulgence. Encouraging Instagram and Twitter posts related to Evolution Greek Yogurt positions the product as simultaneously indulgent and prestigious while the implicit healthiness of the product serves to merge the two perceptions. Our chosen hashtag is #StarbucksGoesGreek. In order to make healthy lifestyle choices desirable, both social and owned media platforms will be used. Pinterest will be a place to engage a community of healthy, busy women to connect their current lifestyle ideals with the new Starbucks brand. Additionally, a continuation of the say yes to what’s next campaign will feature a YouTube campaign that asks people to share videos of themselves on-the-go with their Evolution Greek Yogurt to reflect healthy, active, busy lifestyles that resonates with our target audience. Videos will be combined as one overall YouTube ad to encourage participation through an appeal to a desire to participate in a socially-conscious community. In this way we will have gradually transitioned to the new Starbucks identity.
Timeline Phase I: YouTube Owned Media An extension of the current “Say Yes to What’s Next” campaign will feature the new yogurt product. Phase II: YouTube Social Media We will start encouraging submissions to our contest and enaging Starbuck’s YouTube community. Phase III: Remaining Social Media: Pinterest, Twitter, Instagram The final phase involves full on social media promotion, encouraging posts about the new product,
Measurability 1. To position Starbucks Evolution Greek Yogurt as a healthy, convenient indulgence Through promotion in email newsletters and in-store advertisements, we will have tangible numbers of product awareness To recommend the product to their friends in order to spread the shifting brand identity and also convince others that Starbucks offers products that are both healthy and indulgent. This can be measured through social media listening.
VI. Implementation
2. To make healthy lifestyle choices desirable The success of this perceptional shift will be reflected in the sales of the product itself or the increase in sales of other low-calorie/healthy options compared to less health-conscious products.
Costs: Predicted costs for a 7-minute video: $2,500 Social Media Ad Promotion Budget: $1,000 costs will cover paying for social media promotion on Twitter and YouTube primarily Human Resources: $38,400 based on a staff of four (one staff member for each social media platform, note: video creation is separate) making $10 an hour working 20 hours a week for twelve months
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Total Predicted Costs: $41,900
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Where to Start:
The launch of Starbucks Evolution Greek Yogurt has the potential to be a powerful step towards expanding their brand. With a large proportion of Starbucks users already eating greek yogurt, Starbucks can easily encourage customers that buying greek yogurt at their stores is a more convenient option, and guaranteed to have the Starbucks label of quality and prestige. The key objectives for this launch to be successful are to position Starbucks Evolution Greek Yogurt as a healthy, convenient indulgence, and to make healthy lifestyle choices desirable. The first step would be to design and launch this campaign through owned media, sharing the new, healthy and convenient option of greek yogurt through a YouTube ad campaign. Following the reaction to this launch and allowing time for consumer feedback, Starbucks should launch their following three social media phases, as outlined in the timeline.
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