Media Plan for Starbucks Coffee By Allison Copens Wes Young Dennis Rudasill
Media Plan‐ Starbucks Coffee Allison Copens, Wes Young and Dennis Rudasill
Table of Contents S itu atio n a l A n a ly sis Product Evaluation Target Market – Consumer Evaluation Sales History Product Distribution SWOT Competitive Analysis Advertising History
Pages 2-4 2 2 3 3 3-4 4 4
M a r ke tin g G o a ls
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M e d ia O b je c tive s Media target Geography Seasonality Reach and frequency goals Creative implications Promotional Support
5 5 5 5 5 5 5
M e d ia S tr a teg ies M ed ia Ta c tic s M ed ia S c h ed u lin g a n d C o st Pie Chart Flowchart Budget Worksheet P la n P er fo r m a n c e Peak 4-week GRPs Summary A pp en d ix Cost Calculations Formula Sheets Rates/ Research
6-7 8 9 9 10-11 12 13 13 13 14+
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Media Plan‐ Starbucks Coffee Allison Copens, Wes Young and Dennis Rudasill
Situational Analysis Product Evaluation Starbucks’s strives to buy and globally sell the finest coffees the world has to offer. The company sells more than 30 blends of coffee, in addition to handcrafted beverages, fresh food, merchandise and consumer products like Frappucino. The number of stores makes for extreme ease of access and the wide product variety allows for everyone to create his or her own favorite. The company is at the forefront of maximizing corporate responsibility, including efforts to minimize its environmental impact and maximize its compliance with Fair Trade regulations. Target Market Demographics: o Age: 25‐34 with a secondary market of 18‐24 o Sex: Male and Female o Income: Average income of $60,000 or more o Race: White and Asian o Marital Status: Married or Single o Education: Graduated College or more Psychographics: The target market is educated and affluent. Those in the market are students or professionals in urban areas with interests in culture and the arts and a disposable income. Considering their place in life, those in the market may have young children and be looking into buying their own home. Geographics: Penetrated: West Opportunities: North and East Usage Habits: The average consumption in the United States is 3.1 cups of coffee per day. Consumer Profile: Sippin’ Suzy – Suzy graduated college three years ago with an accounting degree. After graduation she moved to Chicago with her dentist fiancé at the time and they got married a year later. After she got pregnant, she and her husband decided to buy a house instead of renting. She had her baby about a year ago and now they are in the process of making their house a home.
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Media Plan‐ Starbucks Coffee Allison Copens, Wes Young and Dennis Rudasill Sales History In 2008, Starbucks had a net revenue of $10.4 billion, a 10 percent increase from 2007. However, this was also the lowest margin of growth, down from 21 percent in 2007. For the first time in its history, Starbucks had to close stores. Product Distribution Starbucks has more than 8,000 stores worldwide. Their larger stores are located in Indiana, Washington D.C., New York City, Connecticut and California. More than 1,000 of their stores are located in Supermarket locations. Starbucks and Kraft Foods, Inc. have a licensing agreement. Kraft is in charge of distributing Starbucks whole bean and ground coffees to supermarkets across the U.S. Starbucks also produces and sells bottled coffee, ice cream, and a line of premium teas to supermarkets. SWOT Strengths: o Industry market leader o Strong brand loyalty o High brand recognition o Great partners and empowered employees keep the company strong o Globalized o Stores are allowed to have individuality (ex. Chalkboards) o Help promote different authors and artists by selling CDs and offering book signings o Support social issues like the Fair Trade Organization, literacy clean water and health issues Weaknesses o Culture differences o Ex: Starbucks opens much earlier than Irish coffee houses and some feel that takes away from the Irish culture o Narrow product line for overseas clients o Over‐expansion o High priced goods
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Media Plan‐ Starbucks Coffee Allison Copens, Wes Young and Dennis Rudasill Opportunities o Starbucks could add more to its menu like sandwiches, breakfast foods and more desserts. o Starbucks could also sell more products like coffee makers, espresso makers, IPod Stands. o New distribution channels, like delivery o There is still a lot of room for expansion overseas Threats o Consumer trends away from caffeine o Increasing fast‐food restaurants are making specialty coffee o McDonalds, Dunkin Donuts, Tim Hortons and Nestle are all creating specialty coffee drinks Competitive Analysis Starbuck’s primary competition is Dunkin’ Donuts, which boasts 8,835 locations in 31 countries. In 2008, global system‐wide sales were $5.5 billion. Behind Dunkin’ Donuts is McDonalds. In 2006, McDonald`s introduced premium roast drip coffee. In 2007, they introduced iced coffees and began testing more espresso‐based specialty coffees in some U.S. markets. McDonald’s attributes a two percent sales growth to its premium coffee line. Other competitors include other quick‐service restaurants like Panera, as well as local coffee shops. Advertising History Starbucks uses the least amount of dollars for mass media advertisements when compared to other restaurant chains, in 2005. Today, Starbucks is beginning a new advertising campaign that will clearly define the Starbucks story. They want this new campaign to silence any rumors while telling the public more about Starbucks’ history. They are also working to combat McDonald’s McCafe by showing Starbucks as distinct and superior. Their tagline will be, “it’s not just coffee. It’s Starbucks.” They are currently the leader in the market. Their new campaign is working to position themselves as a class above their competitors.
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Media Plan‐ Starbucks Coffee Allison Copens, Wes Young and Dennis Rudasill
Marketing Goals
To sustain sales from the previous year
Media Objectives
Media Budget: The budget for this campaign will be $25 million. Target Audience: Advertising should be directed toward our primary audience, which includes white and Asian males and females ages 25‐34 with an average income of $60,000 or more. Advertising should also appeal to a secondary market of young adults age 18‐24. Geographic Coverage: We are going to campaign nationally to support our stores across the United States. Pattern of Scheduling: Utilizing year round magazine and Internet advertisements will reach the majority of our target market. While television will be used in October, December, June and July to support seasonally specific drinks. Reach/frequency: We are planning on reaching 70 percent of our target audience with a frequency of 10. Starbucks is a product purchased often therefore it is important to have a higher frequency, causing lower reach. Creative Implications: Starbucks coffee has no creative implications. Promotion Support: We are going to highlight our seasonal drinks‐ iced teas, pumpkin spice latté, peppermint white chocolate mocha‐ with television ad’s and a CD give away promotion. With each purchase of a venti seasonal drink customers will receive a free seasonal soundtrack, highlighting new artists.
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Media Plan‐ Starbucks Coffee Allison Copens, Wes Young and Dennis Rudasill
Media Strategies Budget: $25 million Target Audience: Magazines like InStyle and GQ attract a majority of our young, upper‐middle class target. InStyle reaches the women of our target and GQ reaches the men. Our secondary market also reads these magazines. Top 40 and other popular and “hits” stations are best to reach our target during their commutes. Our young target continues to be attracted to the latest music. The target will see Internet ads as they surf the Web throughout their day. TV spots on cable stations like Food Network and HGTV will have the highest viewership for our target. These stations have programming that appeals to our target and daytime is the perfect time to reach our target market. Geographic Coverage: Ads in national magazines like InStyle and GQ position themselves as magazines for the young and cultured, like the men and women of our target audience. Using the InStyle‐GQ combination reaches both men and women. National spots on cable will help promote our seasonal drinks. The growing popularity of national cable TV is a good way to reach our fragmented target market. Purchasing spots through syndicated radio will ensure consistency and provide higher reach and frequency among the target. Pattern of Scheduling: Magazine ads will run monthly for the entire year of the plan to provide a higher frequency among loyal readers in the target audience. Internet search words will be purchased for the entire year. Radio will be pulsed with emphasis during the TV off‐times – January through April and August and September.
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Media Plan‐ Starbucks Coffee Allison Copens, Wes Young and Dennis Rudasill Reach/Frequency: Reach will be built through Magazine, TV and Internet because the magazines have high circulation and RPC, cable networks have quality programming and everyone uses Internet search words. Radio will achieve high frequency because every morning on the way to work our target market will be exposed to our advertisement. Creative Implications: Starbucks has no creative implications. Promotion Support: TV will be used to supplement magazine and radio ads for the seasonal drink promotions because the high reach of TV will get the word out to more of the target than radio and magazines alone. These seasonal drinks attract more customers in general.
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Media Plan‐ Starbucks Coffee Allison Copens, Wes Young and Dennis Rudasill
Media Tactics Magazine InStyle o Full‐page, four‐color ad o Run of print GQ o Full‐page, four‐color ad o Run of print Television Cable o 30‐second spot o Food Network, HGTV daytime o Suggested programming: Paula’s Home Cooking, Color Splash Radio National o 30‐second spot o Morning Drive Time Internet Search Words o Coffee, espresso, latte, cappuccino, frappuccino, iced, bean, beanery, creamer, steamed, milk, soy, chai, roasted, hot, cinnamon, nutmeg, classic syrup, flavorings, Starbucks, SBUX
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Media Plan‐ Starbucks Coffee Allison Copens, Wes Young and Dennis Rudasill
Media Scheduling and Cost Media Spending
Internet 8%
Magazines 15%
Radio 30%
TV 47%
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Media Plan‐ Starbucks Coffee Allison Copens, Wes Young and Dennis Rudasill
Flowchart Quarter 1 MEDIA NATIONAL Magazine InStyle GQ Radio Network Radio Morning Drive Time Radio TOTAL TV Cable TV Daytime TV TOTAL Internet Search Words Internet TOTAL
1
8
January 15
22
29
X X
5
February 13 19
26
X X
100 100
100 100
100 100
100 100
100 100
100 100
100 100
100 100
100 100
5
March 12 19
X X
100 100
100 100
100 100
100 100
100 100
100 100
100 100
TOTAL
100 100
1760
Quarter 2 1MEDIA 2 NATIONAL Magazine InStyle GQ Radio Network Radio Morning Drive Time Radio TOTAL TV Cable TV Daytime TV TOTAL Internet Search Words Internet TOTAL
26
April 9 16
23
X X
50 50
100 100
30
7
May 14
21
28
X X
50 50
100 100
50 50
100 100
4
June 11 18
25
X X
50 50
100 100
100 100
100 100
100 100
100 100
100 100
100 100
100 100
100 100
100 100
100 100
100 100
100 100
100 100
TOTAL
1960 daytime cable GRP radio
400 200
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Media Plan‐ Starbucks Coffee Allison Copens, Wes Young and Dennis Rudasill Quarter 3 MEDIA NATIONAL Magazine InStyle GQ Radio Network Radio Morning Drive Time Radio TOTAL TV Cable TV Daytime TV TOTAL Internet Search Words Internet TOTAL
2
9
July 16
23
30
X X
6
August 13 20
27
X X
100 100
100 100
100 100
100 100
100 100
100 100
100 100
100 100
100 100
3
September 10 17
X X
100 100
50 50
50 50
50 50
50 50
100 100
100 100
100 100
100 100
100 100
100 100
TOTAL
TOTAL
100 100
1960
Quarter 4 1MEDIA 1 NATIONAL Magazine InStyle GQ Radio Network Radio Morning Drive Time Radio TOTAL TV Cable TV Daytime TV TOTAL Internet Search Words Internet TOTAL
24
8
October 15
22
29
X X
5
November 12 19
26
X X
100 100
100 100
100 100
100 100
100 100
100 100
100 100
100 100
100 100
100 100
4
December 11 18
25
X X
100 100
100 100
100 100
100 100
100 100
100 100
100 100
100 100
100 100
100 100
100 100
2160
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Media Plan‐ Starbucks Coffee Allison Copens, Wes Young and Dennis Rudasill
Budget Worksheet First Qtr Magazine:
Third Qtr
Fourth Qtr
TOTAL
45
45
45
45
180
6
3
3
3
15
Rate
$121,968
$121,968
$121,968
$121,968
$487,872
Cost
$731,808
$365,904
$365,904
$365,904
$1,829,520
GRP
15
15
15
15
60
6
3
3
3
15
Rate
$121,284
$121,284
$121,284
$121,284
$485,136
Cost
$727,704
$363,852
$363,852
$363,852
$1,819,260
Radio:
GRP
400
200
200
200
1000
Morning Drive Time
CPP
$7,500
$7,500
$7,500
$7,500
$7,500
Cost
$3,000,000
$1,500,000
$1,500,000
$1,500,000
$7,500,000
TV:
GRP
0
400
400
800
1600
Cable TV
CPP
$7,337
$7,337
$7,337
$7,337
$7,337
Daytime
Cost
$0
$2,934,800
$2,934,800
$5,869,600
$11,739,200
Internet:
GRP
1,300
1,300
1,300
1,300
5,200
105,430
105,430
105,430
105,430
421,720
CPM
$5
$5
$5
$5
$5
Cost
$527,150
$527,150
$527,150
$527,150
$2,108,600
GRP
1760
1960
1960
2360
8040
18170
10073
10073
10073
5208
$4,986,662
$5,691,706
$5,691,706
$8,626,506
$24,996,580
InStyle
Magazine: GQ
Search Words
TOTAL
GRP
Second Qtr
Frequency
Frequency
Impressions (000)
Average CPP
Cost
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Media Plan‐ Starbucks Coffee Allison Copens, Wes Young and Dennis Rudasill
Plan Performance Peak 4‐Week: The weeks from June 4 to July1, July 2 to July 29, Oct. 1 to Oct. 28 and Dec. 4 to Dec. 31 are all 4‐week periods with the same peak GRPs, Reach and Frequency. They have a 95% combined reach, a combined frequency of 12.8 and a 4‐week GRP of 1,220. Summary: Our plan reaches more than 90% of our audience every quarter, using a variety of media and delivering an average quarterly frequency of 20.3. Our GRPs for the year are 8040. Using magazines we built our reach, and with radio and Internet we built frequency. Highlighting Starbucks’ seasonal drinks with TV improved both our reach and frequency. We did all of this for $24,996,580, more than $3,000 under budget.
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Media Plan‐ Starbucks Coffee Allison Copens, Wes Young and Dennis Rudasill
Appendix
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