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Information about Blue

Published on November 16, 2007

Author: Nastasia


Starbucks Product Proposal:  Starbucks Product Proposal By Todd Bowman Prathyusha Gandra Stacey Hoferka Product Idea:  Product Idea Selling Gourmet Pet Treats Treats for Dogs Small and Medium Sized Flavors of Coffee, Peanut Butter, and Chocolate Decision Tree for Product:  Decision Tree for Product Starbucks Mission Statement:  Starbucks Mission Statement Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow. Principles of Starbucks Provide a great work environment and treat each other with respect and dignity. Embrace diversity as an essential component in the way we do business. Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee. Develop enthusiastically satisfied customers all of the time. Legal Issues with Product:  Legal Issues with Product Legal Issues with how pets, humans, and restaurants can interact. Legal Issues that deal with the ingredients and making of the treats SHOULD STARBUCKS DEVELOP THE PRODUCT?:  SHOULD STARBUCKS DEVELOP THE PRODUCT? Perform viability testing Analyze outcome of product If the product is not viable, do not pursue the product. Who uses the product and for what:  Who uses the product and for what Purchasers will be primarily in the 18-50 age groups. Sales will occur within higher and lower age groups, because a 13 year old can buy a dog biscuit if they have the money. Both genders, all ethnicities are dog owners. We will market to middle class and upper income groups Product Description:  Product Description Our dog treats will be high quality, organic, and preservative-free treats. They will be made with the highest quality ingredients. Our initial flavors will be coffee, peanut butter, and chocolate. The chocolate treats will contain chocolate flavoring, since chocolate is toxic to canines. Product Viable?:  Product Viable? Current statistics (NPD Group, Inc.) 39% of US households have dogs. 62% of pet owners bought presents for their pets in 1998, compared to 45% in 1996. In 2004 (Pet Industry Market Update) there were 377.8 million pets in the US—and 290 million people. Statistics depict 34.5 billion was spent in 2003 feeding and pampering their pets. More US households have pets than children (63% vs 31%). More households own dogs than cats (44m vs 38 m). According to the American Pet Products Manufacturers Association, Americans will spend 15.2 billion dollars for pet food in 2006. Product Viable?:  Product Viable? The APPMA also states: 27 percent of dog owners and 13 percent of cat owners buy their pets birthday presents, and 55 percent of dog owners and 37 percent of cat owners buy their pet holiday presents. Why do people pamper their pets to the tune of billions of dollars a year? It is because they have a special bond with their pets and consider them a best friend, a companion or like a child or member of their family. Competition:  Competition Some of the current products for pet: Pedigree Dentabone,Greenies,Iams Pet Biscuits Purchasers select their product based on the health of their dog (the treat’s impact on their dog’s health), the perception that the treat is good for their dog, and the value of the treat. Most treats are very inexpensive per unit Choice for users:  Choice for users We intend to market our product to the most discriminating dog owner, who is able to provide the best treat possible, solely for their pet’s enjoyment and pleasure Purchasers will prefer the product because: They trust the Starbucks name to represent the very best in coffee, food and ice cream They will feel good about providing a gourmet treat The treat will be marketed solely as a pleasurable treat for dogs The treat will be organic and taste good Distribution Potential:  Distribution Potential We will begin marketing in the US markets. Starbucks are located in 35 other countries around the world. After achieving success in the US markets, we can begin marketing around the world. The dynamics of different nations and cultures will be taken into account in the marketing process Marketing Introduction:  Marketing Introduction In 2002, there were 110,757 establishments in the pets, pet foods and pet supplies retail trade. Sales of 1.8 billion US dollars. In 2004 there were 8569 Starbucks world wide, with 5028 in the United States. As the most frequented retailer in the world, there is an opportunity at the intersection of these markets of the pet owners who patronize Starbucks. Demographic and Sales Statistics:  Demographic and Sales Statistics In 2004, Americans spent 34.5 billion on pet care, grooming and other luxuries. Designer trends for pets are strong and growing. The average customer visits Starbucks 6 times a month. Among the heaviest 20%, they visit on average 16 times per month. Venn Diagram:  Venn Diagram Coffee Drinkers Pet Owners US Population 25-50 year olds Market and Product Outline:  Market and Product Outline Target Categories:  Target Categories A. (EPEM) Core business remains unchanged where Starbuck’s currently holds 7% of the coffee market. B. (EPNM) Expand core coffee sales to appeal to new customers. This included dog owners that don’t frequent Starbucks and those who might now visit more frequently, i.e. evening customers. C. (NPEM) Sell dog treats to current customers. D. (NPNM) Expand product sells to grocery and pet store, kennels and grooming venues. Marketing Themes:  Marketing Themes Selling a lifestyle: There self-proclaimed industry is the people business. Ann Saunders, svp of marketing states” we’re not in the coffee business, serving people, we’re in the people business serving coffee. Creating customer loyalty with intimate, emotional connection, while not diluting brand or corrupting the experience. Personalization Marketing strategies include grass-roots, in-store promotion, dependent on word-of-month as opposed to commercial or cell phone mass media marketing. Also referred to as the ”softly-softly approach” Corporate Social Responsibility. Involvement in community and charitable events plays a role in the Starbucks interaction with the customer bases in their community. Comprehensive Information Systems:  Comprehensive Information Systems -Accounting Information System: The company is currently implementing alternative ways to pay such as the Starbucks card. If not paying with cash is supportive of additional sales for the pet products, then further promotion of the cards would have multiple benefits. Information System Analysis:  Information System Analysis Sales tracking: Will provide market basket information to indicate when and where and with what other products the pet treats are tied to. Data Mining: as a means to incorporate information about customers buying habits and community information Information System Analysis:  Information System Analysis Location Analysis Tools and GIS Current site selection technology employed to determine new store locations, 3 of which open every day. Current use of this technology would be to identify the best current store locations to introduce the product. Relevant information would include: Urban locations near parks, Outdoor bars in our California stores, walk-time from areas with high-pet concentration and High flow customer areas. Additional System Support:  Additional System Support Wireless in store usage that references pet sites could be monitored to determine product placement. The intended purpose of the technologies would be to use spatial models to predict sales forecasts. Further use could include determining the location of future stores based on pet friendly areas. SWOT:  SWOT Strengths Major strength is the name brand. Starbucks is known for its quality. A dog biscuit with the Starbucks name will be thought of by consumers as a superior product. Additional strengths are the size of the market, locations of the stores, and the higher income customers. Weaknesses The weakness is the novelty of entering the pet products market, which has never been done by Starbucks. Starbucks personnel would have to be trained to handle this new product Starbucks would have to have an novel advertising campaign to promote this product. SWOT (con’t.):  SWOT (con’t.) Opportunities The opportunity to develop a line of Starbucks goods catering to pampered pets. Starbucks name branding can insure initial sales. Once the treat sales are established then can expand sales to grocery stores and pet stores. Threats There are no observable threats from the current dog biscuit market. If Starbucks succeeds in entering the pet market, other upscale coffee and/or food name brands may follow. Product Marketing:  Product Marketing In keeping with the personalized approach to customers, different treats can be marketed for different dog types. Gift Baskets can also be purchased within stores. Product Price:  Product Price Starbuck’s premier brand products tend to command a higher price. The base price per treats will be $ 1 with a range up to $2.50. This is comparable to the price of Starbucks’ coffee and treats. The cost to produce the treats will be approximately 0.14 cents per biscuit (less with volume discount purchases), thus ensuring a significant profit margin. Promotion:  Promotion Many ideas to promote the product by using in store and out of store advertisements. Contact with Paris Hilton to do a promotion of her and her dog visiting Starbucks to get a treat for herself and her dog. In store posters to remind customers no to forget about their pets when getting treats for themselves. Promotional Photo:  Promotional Photo Sales Strategies:  Sales Strategies Promotional opportunities can be developed that appeal to pet owners. Pet photo contests that incorporate the Starbuck’s connection. Community support plays a large role in Starbucks success, so there are opportunities to sponsor shelter events, such as PAWS adopt-a-pet days in the Chicago community. Corporate structure to support Product success:  Corporate structure to support Product success Strategic Partnership: Gourmet Dog Biscuits LLC out of California for a wholesale price Market Penetration: over 5,000 US store Delivery Strategies Management and Staff Minimal Competition

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