Potential Market and Competition

Write an essay on Starbuck Bubble Tea Marketing Plan.

Market Size

New Zealand is home to over 4.6 million people most of which are lovers of hot and cold drinks (Zealand, 2002). Starbucks has made a name all over the world, and its presence in New Zealand has been noted by lovers of coffee and other beverages the company is best known to make. Out of these, the potential market size is 700,000 people who like sitting and having cold and hot drinks in restaurants.

Market Analysis

Coffee shops are known as places where people go to have conversations and relax. In New Zealand most people who come to these outlets are singles and couples and occasionally families, they come out to have a good time. The environment is comfortable, and the trend has been that people tend to believe that many things happen over a drink especially coffee (Squires, Juric & Bettina Cornwell, 2001). Bubble tea is unique to the market, and most people have heard its fame, but now that it is in New Zealand most people want to try it, and the coffee shops are expected to be filled. Also, people now prefer the best quality of ingredients in all the products they order; people are moving away from the traditional coffee and other hot beverages (Wong, Parnell, Black & Skidmore, 2012).

Analysis of Competitors

Most cities, malls and shopping centers are filled with coffee bars, shops, restaurants and other eating places which offer almost similar products that Starbucks is offering. Some of the rivals the company is facing in New Zealand include Dunkin Donut and other local coffee shops that are spread across significant cities (Glowik, 2017). McDonald’s used to be the most active competition until they stopped offering similar products that the company now offers. The competition was intense because of the prices, however, since the Bubble tea is new and the ingredients are not local the product is likely going to demand high price which will see the competition come back again. However, because of its uniqueness, international goodwill, and public demand, Starbucks’ Bubble tea will outwit the competition (Honack & Waikar, 2017).

Internal Environment Analysis

Resources will be among the things that might slow down the marketing of this new product (Grant, 2016). There is not enough human resource to conduct a nationwide campaign and marketing for the Bubble tea. The actual labor is fully committed, and the allocated funds cannot allow hiring enough staff to achieve the company’s goal (Fleisher & Bensoussan, 2015). Besides that, there is the company’s culture which is most employees don’t like changes, any shift from the routine could upset the whole system and slow down the process of marketing.

Market Segmentation and Target Market

External Environment Analysis

The recent tax policies that have been introduced by the government could cut into moist of the profits gained from the sale of the product. If they are implemented and made law, the company will have to part with close to 3% of its profits from the sales. Also, with the low market entry barriers, more competitors have eyed this vast market and have begun trickling in which will force the company to share its market share with the competition. Besides that, the fluctuating exchange rates will also eat into the profits, with the dollar being unstable in the recent times, the threat is real (Moutinho & Phillips, 2018).

Market Segmentation

The segmentation base applicable to the product is demographic, under this, there are three variable to consider namely, marital status, social status and income level. For the marital status, there are two sub-variables, single adults, and married couples. Also, under the social status, there are the professionals and the college students (Brian, 2015). Similarly, under the income level, there are the income earners who are employed or self-employed. Singles are many in the region because it’s a place where people from different nations come for study and work. There are a few married couples and families. Those who have high social status in the community are mostly professionals and those who have a source of income which is regular include the self-employed and those working or employed by companies.

Profile of the Target Market

The target market for the product can be divided into two distinct groups, those who are single and those who are not single. These are the individuals who are considered many in the locations where Starbucks is famous. The coffee shops are their usual place for meeting dates and new people for socializing (Atzori, Shapoval & Murphy, 2018). Singles are many, and they are self-evident because of the circumstances.  They are mostly between the age of 20 and 40, and they are considering this the appropriate time and place to find partners. Most of the singles earn an income of about $35,000 per year. The professionals who are either working or self-employed view the outlets as convenient places for conversation. They are open, and everyone minds their own business, people can talk and have their privacy even in a crowd. Those who are not dating are still in the same age bracket, and they are frequent, they come to the coffee shops most of the time because of the environment and the feeling they get from the outlets.

Objectives

The positioning of Bubble tea

Starbucks is positioned in prime locations where it’s easy for people to access them. Their site is advantageous because they are mostly at the entrances and easily noticeable by people who are coming and going out of the shopping malls and centers. The outlets will be concentrating on the new Bubble tea as the primary product and supplement it with other drinks. The competition does not have this specialization which will give Starbucks advantage over such shops (Brotspies & Weinstein, 2017). Starbucks will be distinguished from other shops because they will offer not only the best product but also the service and the environment that allows the flow of conversation. Also, it will be concentrating on the needs of its clients and not serve them alone.

Marketing Objectives

The first objective is to strengthen the consumer awareness of the product among the targeted markets. The efforts will be aimed at ensuring the shops attract the target customers. Intentional communication to the target market that the shop is mean for those who are single and those who are not and would like to enjoy the environment. Increasing the market share of the product to 30%. The efforts will be to boost promotional activities in the region and ensure that regions that are strongly dominated by the competition are shared by the company as well (Hinterhuber & Liozu, 2017). Offering consumers more than the product, offering them an environment where they can have good conversations. Providing the environment, music and the best service that will retain customers.

Product Decisions

First, the production process should maintain importing the raw materials that are used for making bubble tea from Thailand and not elsewhere regardless of the cost. Bringing the product from Thailand assures the company that the product will be genuine and not an imitation. Secondly, the physical product should include the ingredients that have been used in making the product which are visible to the customers. Customers should be aware of the contents of the drink to allow them to feel the originality and be assured that the quality is good. Thirdly, the product should be made into two sizes, one medium and the other larger. When it’s in two sizes, it can serve those who want to have it small or large. Finally, the product should be assigned a characteristic which related to Starbucks brand personality. When the customers see the product being advertised, they should connect it to the slung titles like “cool.” (Dorn, Messner & Wänke, 2016)

Product Differentiation

Pricing Decisions

The pricing that will be used should be penetration pricing which will allow the product to enter into new markets (Hinterhuber & Liozu, 2017). The move will enable the company to penetrate places where people have been used to coffee and other beverages. Secondly, there should be bundle pricing on days like weekends and special occasions. Bundle pricing will enable people who have less income to benefit from a wide range of products at a reasonable rate, and it will serve their needs and retain them. Also, after the product has been on the market and gained a substantial following, it should be charged on cost plus price. The starting price should create room for the product in the market after which it should return to the acceptable market price to enable the company to make profits. Finally, different locations should have different rates. The move will allow people of different places earning different salaries and income to enjoy the product and remain loyal to the brand.

Place (Distribution) Decisions

The product should not be sold through vendors and third parties. The reason is that the success of the product will boost the Starbucks’ brand and make it more famous allowing it ease of entry and access to new markets.  Secondly, shops which have been entrusted to sell the product should never run out of the product at any given time; therefore, the supply should be consistent. The reason is that people who are used to getting the product in those shops when they miss it once they may start looking for substitutes. Thirdly, shops should be set up in most cities and at the entry points of shopping malls. The move will allow the product to sell faster and its fame spread more quickly because of many customers in such places. Finally, crowded places should have a Starbucks shop or outlets (Steenkamp, 2017). The reason being, people in crowds, like to isolate themselves when they have something to do or talk about. The presence of a shop selling Bubble tea would be a good distraction for such people.

Promotional Decisions

The company should strengthen its presence in the media and make the product their priority on the social media (Wrenn & Mansfield, 2014). The reason is that the social media is where people meet and start talking and creating events where people on sites like Facebook can follow can bring sales. Secondly, the product should be promoted through the existing and loyal Starbucks’ customers. It is because marketing a product using someone who already likes the product is easier and it’s cheaper. Thirdly, winning over customers from its competition like Coca Cola, Pepsi, and the likes should be the objective of the company. Because the product is not hot and there are many cold drinks out there which want attention. Finally, the sales promotion and marketing tools used should be cheap. The cheap promotion will be necessary because the product will be selling itself because if its demand and publicity.

Pricing Strategy

Integration and Link

The product and the price can be brought together to take care of the needs of the customer. The customers should get a product that suits their needs while also in the price range that does not hurt their pockets. The price and product have a link when the customer sees the price he/she can tell the quality of the product. Normally cheap items are connected to lower quality.

Methods of controlling include, traditional methods like personal observations, reading the reports and looking at the break-even point. Also, there are cross impacts among the four Ps where its impact on the other examines each marketing mix element. Setting up the controlling methods mentioned helps in the creating and production of products which meet the standards set by the consumer (Babin & Zikmund, 2015). Also, they help to grow and develop the reputation and the image that the customers have about the company after interacting with the product. The controls help channel all units of the company in the same direction, and it ensures that no one goes astray from the plan. Setting up performance measures for each store and unit ensures that the public gets satisfied with the quality of service being offered them at all shops. Finally, these methods ensure that each party meets all the requirements and the desired outcome is achieved. They ensure that there is uniformity of action in all branches and shops across the country.

References

Atzori, R., Shapoval, V., & Murphy, K. S. (2018). Measuring Generation Y consumers’ perceptions of green practices at Starbucks: An IPA analysis. Journal of Foodservice Business Research, 21(1), 1-21. 

Babin, B. J., & Zikmund, W. G. (2015). Exploring marketing research. Cengage Learning.

Brian, J. (2015). Segmentation Marketing: A Case Study on Performance Solutions Group, LLC. 

Brotspies, H., & Weinstein, A. (2017). Rethinking business segmentation: a conceptual model and strategic insights. Journal of Strategic Marketing, 1-13. 

Dorn, M., Messner, C., & Wänke, M. (2016). Partitioning the choice task makes Starbucks coffee taste better. Journal of Marketing Behavior, 1(3-4), 363-384. 

Fleisher, C. S., & Bensoussan, B. E. (2015). Business and competitive analysis: effective application of new and classic methods. FT Press. 

Glowik, M. (2017). 4.7 Case study: Starbucks. Global Strategy in the Service Industries: Dynamics, Analysis, Growth, 156. 

Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley & Sons. 

Hinterhuber, A., & Liozu, S. M. (2017). Is innovation in pricing your next source of competitive advantage? 1. In Innovation in Pricing (pp. 11-27). Routledge. 

Honack, R., & Waikar, S. (2017). Growing Big While Staying Small: Starbucks Harvests International Growth. Kellogg School of Management Cases, 1-22. 

Moutinho, L., & Phillips, P. (2018). Strategic analysis. In Contemporary Issues in Strategic Management (pp. 46-79). Routledge. 

Squires, L., Juric, B., & Bettina Cornwell, T. (2001). Level of market development and intensity of organic food consumption: cross-cultural study of Danish and New Zealand consumers. Journal of Consumer Marketing, 18(5), 392-409. 

Steenkamp, J. B. (2017). Global Marketing Mix Decisions: Global Integration, Not Standardization. In Global Brand Strategy (pp. 75-109). Palgrave Macmillan, London. 

Wong, J. E., Parnell, W. R., Black, K. E., & Skidmore, P. M. (2012). Reliability and relative validity of a food frequency questionnaire to assess food group intakes in New Zealand adolescents. Nutrition journal, 11(1), 65. 

Wrenn, B., & Mansfield, P. M. (2014). Marketing planning guide. Routledge. 

Zealand, S. N. (2002). New Zealand census of population and dwellings 2001.