Your Federal Quarterly Tax Payments are due April 15th Get Help Now >>

STARBUCKS ICE CREAM SANDWICHES by nikeborome

VIEWS: 83 PAGES: 30

									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                        • Industry Environment
   – Brand Competitors                  – Compete on Brand Image,
      • Blue Bell Sandwiches              Quality, Flavor Selection, and
      • Healthy Choice                    price.
         Sandwiches                     – Few barriers to entry
       • 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)
External Environmental Analysis
              Frozen Novelty Retail Dollar Share

                                           Sandwiches
                  Ice Cream bars              14%
                      w/stick
                       17%                Frozen Ice
                                              13%
                                               Ice Cream
                                                 Cones
                                                  10%
                         Other          Fruit/Juice
                         36%               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         • Purchasing Pattern
   – Starbuck’s Coffee Drinker        – Grocery Store
      • 50 K Income
      • Ages 25-44                    – Only branded coffee
      • 4 Year + College                ice cream
      • Primarily Caucasian           – Potential non users
• Potential Customer Profile            dislike coffee
   – Not a regular Starbucks          – Targeting snack user,
     drinker,but recognize brand        not dessert consumer
   – Ice Cream consumer
                                       “Our Customers are
                                       people we know and
                                    those we are yet to meet.”
              SWOT Analysis
STRENGTHS                        WEAKNESSES
•Exclusive Marketing Rights      •Narrow Product line in super
•High Brand Equity and           premium frozen dessert sector
recognition                      •Coordination of quality
•Reputation of high quality      assurance between partners
supports high price point
•Partnership with leading ice
cream manufacturer/distributor
OPPORTUNITIES                    THREATS
•Internet Promotion              •Current Nestle Merger
•High Growth Segment of          •Economy decline
Sandwiches in frozen novelties   •Intense shelf space competition
•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                        • Magazine Advertising
            – Packaging print ads        – Better Homes &
            – Starbucks Retail Store       Gardens
              Advertising
                                         – Real Simple
            – Print Advertisements
                                         – Bon Appetit
               • FSI
               • Magazine              • Three ½ page B/W/1
                 Advertisement           color advertisements
         • Push                          in national magazines
            – Cooperative
              advertising
      Marketing Expenses Breakdown

                            Print Advertising

                            Retail Store
                 20%
                            Advertising
35%
                       5%   Packaging
                            Advertising
                   15%
         25%                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

                                                MAY               AUG         OCT         DEC
                        JAN   FEB   MAR   APR         JUN   JUL         SEP         NOV


      Packaging Print
           Ads

      SB retail Store
          Adv.

          Print
      Advertisements
                  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                          6,586,800
Marketing Expenses:
      Print Advertising           922,152
      Retail Store Advertising    230,538
      Packaging Modification      691,614
      Cooperative Advertising    1,152,690
      Control Measures           1,613,766
Total Marketing Expenses         4,610,760

Net Income                       $ 1,976,040
 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       Possess 1-2% of     Possess less than
 market share          market share        1% of market
                                               share




Continue with                 Conduct
    3 year                  Focus Group
                              Market      Divest Extension
 promotional
  plan with                  Research
yearly monitor
& contingency
     plans




                             Tweak 4
                               P’s
               Conclusion
• High Growth Sector + Established Success
  + Proven Partnership = SUCCESS!!!
• Contributes high profit margin to Starbucks
  bottom line due to minimal costs
Discussion

								
To top