Competitive Analysis

By: Stacee Becker, Marisa Del Priore, Donavan Farrish, Kathleen

Kielpinski, Elizabeth Pawlowski, Michael Spinella

1
Executive Summary

 Starbucks Corporation has been the most successful

coffee chain in the past few decades using their
aggressive expansion strategies to push out much of its
competition.

 Starbucks has focused on creating a dense network of

stores all around America, while also opening up new
locations all around the world.

 They are currently leading the retail coffee market with

selling their coffee for a premium price to increase their
profitability.
McCafee
2
Problem

 Will the allure of gourmet Starbucks coffee be

maintained or will more appealing options threaten the
success of Starbuck’s primary product?

 Can advertising significantly help maintain Starbuck’s

image?

 A good place to start involves evaluating the current

market for coffee and do a competitive analysis to see
the market performance and to determine the extent to
which designer coffee appeals to current consumers.

McCafee
3
 Overview On Product Growth

 Starbucks surpassed Wendy’s and Burger King in becoming the number

3 restaurants chain posting $9.07 billion restaurant sales last year.

 It is expected to gain in one of the fastest-growing day parts in

restaurants for breakfast.

 It’s measured-media budget is a fraction of what come of the other top

chains spend.

 Starbucks only spent $94.4 million in media spending compared to

McDonald’s spent about $887.8 million in the United States only in 2010.

 Starbuck’s has worked with agencies such as Omnicom’s Goodby

Silverstein & Partners.

“Breakfast is the final frontier of growth in this country and coffee is

AD Age
growing as well.” David Palmer UBS restaurant and packaged food analyst. 4
Major Competitors

Dunkin' Donuts
McDonald’s
Caribou
Coffee

5
Store Locator

Starbucks Dunkin’ Donuts

 Has 12,500  Has 6,700 coffee
coffee shops in shops in the
the United States United States

McDonald’s McCafé Caribou Coffee

 Has over 31,000  Has 415 coffee

shops in 16 States
restaurants World in the United
Wide. States

6
Starbucks vs. Dunkin’ Donuts
Starbucks vs. Dunkin’ Donuts

 The taste-test advertisement directed towards Starbucks,

actually naming the brand in the commercial, surveying
coffee drinkers. More hardworking Americans preferred the
taste of Dunkin’ Donuts over Starbucks.

 Within a week of the ad’s launch about 50,000 people

visited dunkinbeatsstarbucks.com
 It is a site that communicates the hard-hitting competitive
message with clarity and humor. Entering this site you can: Learn
the Truth (presenting Dunkin’s coffee story) or Spread the Truth
(sending an e-card to your friends who drink Starbucks)

 Weekly traffic to DunkinDonuts.com jumped 61%

“Small is the New Tall.” AD AGE

8
Starbucks vs. Dunkin’ Donuts

 In March 2009, the company

unveiled an alternative slogan,
“You ‘Kin Do It!”, and launched
a $100+ million ad campaign to
promote it.

 The campaign slated to run

through 2009, includes radio,
print and outdoor advertising, in
addition to in-store point of
purchase, special events, and
sports marketing.

 Online marketing, often

leveraging the Boston Red Sox
and the other New England
icons.

Dunkin’ Donuts Press

9
Starbucks vs. McDonald’s

McDonald’s Billboard in Seattle

Starbucks vs. McDonalds
 McDonald’s has offered breakfast for years, and over the
last couple years has been heavily marketing its McCafé.

 Lines of coffee drinks all while continually rolling out new

drinks of both the coffee and non-coffee variety, such as
smoothies and frappes, McDonald’s version of the
Starbucks frappuccinos.

 Starbucks created their frappuccino for the summer

season while McDonald’s introduced their frozen
strawberry lemonade, a non-coffee beverage under
McCafé.

AD AGE
11
Starbucks vs. McDonalds

 Like Dunkin’ Donuts, McDonald’s took a stab at Starbucks

during TV ads as well. The two television ads were titled
“Intellectuals” and “Hipsters.”

 Along with a TV ad McDonald’s set up a website

unsnobbycoffee.com to promote its Washington States
McCafé Outlets.
 To email their friends about how they feel about high priced
coffee

 In additional to the usual media, McDonalds makes

significant use of billboards and signage, sponsors sporting
events ranging from Little League to the Olympic Games.

AD AGE
12
Starbucks vs. Caribou Coffee
Starbucks vs. Caribou Coffee

 Caribou Coffee spent $2 million on U.S. advertising in 2008,

compared to the $300,000 it spent in 2007 according to Nielsen
Monitor-Plus. (AD Week)

 Analysis of visitor demographics reveals that Caribou Coffee could

possibly have more online success if they pull-in some of the same
types of online visitors as Starbucks does.

 While Caribou Coffee attracts a respectable amount of young

adults (32% between the ages of 18 and 34), this does not compare
to the 42% that Starbucks attracts.

 Paying for advertisements on social networking sites where

educated young adults visit frequently, such as Facebook, may
likely prove to be a wise strategic move for Caribou
Coffee. Facebook refers 3.92% of Starbucks’ traffic to the Starbucks
Website, while Caribou coffee lacks in Facebook referrals.
SEO Analysis
14
Starbucks vs. Caribou Coffee

Catergories Caribou Coffee Starbucks Coffee Starbucks Coffee Shops

Coffe Brand $606,600 $12,312,300.00 $26,219,100

Magazines $417,200 $11,637,100.00 $641,900

Newspaper $189,400 $10,000 $744,600

National Newspaper $604,900 $6,948,000

Outdoor $60,400 $1,699,000

Network TV $3,152,400

Spot TV $125,400

Syndication $89,200

Cable TV $8,640,000

National Spot Radio $4,134,700

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Starbucks vs. Caribou Coffee
$30,000,000

$25,000,000

$20,000,000

$15,000,000

Caribou Coffee
$10,000,000 Starbucks Coffee
Starbucks Coffee Shops

$5,000,000

$0

16
Media Spending

 Television Campaigns

 Web Campaigns

 Tactical Campaigns (Giveaways and

Promotions)

 Regional Campaigns

17
Television Campaigns

 Dunkin’ Donuts outspent McDonald’s 60% on coffee-

specific products in paid media $27 Million to $17 million.

 Dunkin; Donuts spent 83% of its budget on TV: two-thirds

of that on spot TV and a third on cable.

 McDonald’s spent 97% of its traditional media budget on

spot TV to support its McCafé rollouts and on regional
promotions in 74 local markets.

AD AGE
18
Web Campaigns

 Dunkin’ Donuts spent 15% of

its total media budget on
paid internet. This is
considered a significant
amount compared to
competitors in this category.
 Ads were posted on a
number of sites
including: Yahoo,
AOL, CNN, CNBC,
MSNBC, Fox Sports,
MLB.com, Good
Housekeeping,
Cosmopolitan, and
Digg.
AD AGE
19
Tactical Campaigns for Dunkin’
Donuts

 In 2008, Starbucks announced it was simultaneously shutting down

all 7,100 U.S. stores for a restraining effort, Dunkin’ Donuts was quick
off the mark, offering 99-cent espressos.

 On Tax Day, Dunkin’ Donuts held a special promotion to offer a free

doughnut with the purchase of a cup of coffee.

 May 15, Dunkin’ Donuts holds its annual Free Iced Coffee Day,
giving away 4 million cups in 2008.

 In June 2008, Dunkin’ Donuts launched its “Bases Loaded”

campaign, a summer iced-beverage promotion. Iced beverages
came with peel-away sticker that revealed a one-time login code
for participation in an instant-win game in conjunction with Major
League Baseball.

AD AGE
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Tactical Campaigns for McDonald’s

 McDonald’s promoted its national coffee promotions

with special prices.

 In 2008, it showed its ice teas in combination with its

chicken sandwich and ice coffees over the summer in
the buildup to the Olympics.

AD AGE
21
Regional Campaigns

 McDonald’s drives a lot of promotion through outdoor and

print buys in a number of markets: Louisville KY, Chicago,
Detroit, Kansas City, MO, San Diego, and Seattle.

 In December 2008, a TV campaign highlighted “McCafé

Mondays,” a promotion that offered customers a free eight-
ounce coffee of their choice.

 Urban radio and TV ads in the Midwest regions feature

jingles for McCafé.

 Caribou Coffee is offering a limited edition mug that

features Chicago landmark’s such as Lakeshore Drive, Navy
Pier, and the Chicago Theatre. (Biz Journals)

AD AGE
22
Regional Campaigns

 Caribou Coffee turned a

Minneapolis bus stop into a
toasty oven complete with
a ceiling mounted heating
element.

 The objective was to

spread the world about
caribou Coffee’s new
menu items.

 This helped them

differentiate them form
competition.

Corporate Eye
23
Situation Analysis

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History of Market

 Coffee is the second most commonly traded commodity in the world.

 Unlike many commodities, shifts in coffee supply and demand are not
prone to price changes

 A coffee tree can provide enough coffee beans to fill a one-pound

ground coffee during each growing season.
 Coffee beans are the seeds of cherry-sized berried, the fruit of the coffee tree.
 It takes 3 to 5 years after planting a coffee tree before it can produce
marketable coffee beans.

 The bulk of world coffee production comes from the tropical highlands
of the Western Hemisphere and in the low, hot areas of Africa and Asia.
South and Central America produce the majority of coffee traded in
the world commerce. The world’s major coffee producers are Brazil,
Vietnam, Colombia, and Indonesia.

http://www.tradertech.com/information/coffeetrading.asp
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History of Market

 The United States is the world’s largest

importer of coffee: Kraft, Nestl, Procter &
Gamble, and Sara Lee are the major
roaster companies that account for
about 50% of all annual production of
coffee.

 Demand of coffee is price inelastic:

when coffee prices rise, people do not
reduce their coffee consumption.

 U.S. coffee consumption tends to rise in

the winter.

http://www.tradertech.com/information/coffeetrading.asp
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Market Share

27
Market Share

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Market

 Starbucks built itself on being the world’s most powerful and

recognizable brands of high quality coffee and the unique
“Starbucks Experience.”

 They were the first to revolutionize the coffeehouse industry

by marketing expensive, high-quality coffee as well as a
“third” place between work and home for customers to go
and escape the chaos of daily life.

 As of 2011, Starbucks has a 32.6% market share a good

portion of its industry.

 Starbucks currently has over 11,500 stores in the United

States alone.

http://www.wikinvest.com/stock/Starbucks_(SBUX)
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Competition

 McDonald’s introduced the McCafe to select stores, where

customers can purchase espressos and cappuccinos priced
in the $2-4 range.

 In response, Starbucks teamed up with Burger King and

began selling Starbucks’ Seattle Best Coffee in about 7,250
U.S. outlets selling for $1-$2.79 replacing Burger King’s BK Joe
Brew.

 Dunkin Donuts is another major competitor, with nearly 5,000

stores in the U,S. overlapping with Starbucks but their
customer experience is more coffee-to-go model rather
than the “third place to work and relax” model.

http://www.wikinvest.com/stock/Starbucks_(SBUX)
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Pricing

 Prices for a cup of Starbucks coffee vary from state to

state here are the prices for some of the big cities:

http://online.wsj.com/article/SB123413848760761577.htm
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 Strengths
Internal factors
 Weaknesses

 Opportunities
External
 Threats factors

SWOT Analysis
Strengths
•Starbucks is seen as the biggest and best in the business-
Highly regarded coffee shop
•Starbucks has a natural edge over its lesser‐known
competitors in that people already associate it with a high
quality and popular experience
•With high amount of locations allows them to reach a larger
market. Especially when the locations are in big cities.
•Drive-Thru Stores
•Also, new products quickly across a large demographic
and ensures a large exposure of clientele to prevent new 7
entrants from gaining market share
•Its goal is to become a ‘third place’ within its consumers
lives.
- Offers free ‘wifi’ connection
- Comfortable ambiance
Source: http://www.starbucks.com/assets/company-profile-feb10.pdf
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Brand Image
 Focuses on consistency in delivering positive consumer experience stresses the
point about consumer visits to its cafes being an experience

 Four store designs—one for each of the four stages of coffee making: growing,
roasting, brewing, and aroma—each with its own color combinations, lighting
scheme, and component materials

 They create a consistent, inviting, stimulating environment that evokes the passion
for coffee

 Every barista hired for a retail job in a Starbucks store received at least 24 hours
training in the first two to four weeks. The training included classes on coffee
history, drink preparation, coffee knowledge (four hours), customer service (four
hours), and retail skills, plus a four-hour workshop called "Brewing the Perfect Cup.“

 Quality and keeping all aspects consist is of main concern

 EX: Customers who order one pound of beans must be given exactly that—not .995
pounds or 1.1 pounds; never let coffee sit in the pot more than 20 minutes; always
compensate dissatisfied customers with a Starbucks coupon that entitles them to a
free drink.

Source: http://www.mhhe.com/business/management/thompson/11e/case/starbucks-2.html
http://www.scribd.com/doc/50040066/Analysis-of-Starbucks-and-its-International-Strategy-2011

34
Unique Strategy
To capture key locations and open stores in close proximity to each
other is unique strategy for Starbucks

 ensures that franchises that don’t meet set achievements are

closed down

 Clustering its stores in one area helped Starbucks quickly achieve

market dominance. With over 20 million regular customers per
week

 Spends less than 1% of its annual revenues on advertising- Starbucks

strategy relies on word of mouth advertising.

 Engaging in smart joint ventures with the right companies:

-Pepsi-Cola Co.

- New products: Hot sandwiches, new drinks, coffee liqueurs

Source: http://www.evancarmichael.com/Other/612/Starbucks-Strategy.html
35
Weaknesses
 Questions to consider:
 Where could Starbucks improve?
 What ideas are badly ?
 What should Starbucks avoid?

 Entire business rests on the coffee industry

 whereas other competitors, such as Dunkin Donuts, have investments in a
variety of industries.

 Strong presence in the United States of America with more than three quarters of
their cafes located in the home market
 Achieve a balanced portfolio by reaching additional worldwide consumers
 Over-saturation of the market

 High price
 Competition with other low priced brands
 Still Starbucks Source: www.shahzadtc.com/pdf/SWOTTOWS.doc
36
Weaknesses
 Customer standards:
 In Israel, Starbucks has had a hard time taking off because it won’t maintain kosher
standards.
 Refuses to guarantee that milk, beverages, and baked goods sold in the company’s stores
do not contain any genetically-modified ingredients.

 Financials:
 Increased competition- General , small coffee shops and large corporations
 Customers trading down shifting to competitors with lower priced products
 Declines in general consumer demand for specialty coffee products

 Increased Costs:
 High quality milk
 Arabica coffee
 Labor costs such as increased health care costs, general market wage levels and workers’
compensation
 New Store openings- construction
37
Opportunities
 New Market Opportunities Internationally

 New Products:
 Health drinks
 Organic drinks
 Energy drinks
 Kid focused drinks

 More bottled drinks sold in stores- Expand on distribution

 Form partnerships with other coffee companies- widen market

 U.S. job creation-

 Accept donations at CreateJobsforUSA.org and Starbucks cafes in the
United States

Sources: http://www.reuters.com/article/2011/10/03/us-starbucks-idUSTRE7921M320111003
38
Threats

 The Threat of New Entry :

 McDonald's came into direct competition with Starbucks

when it upgraded its coffee in 2006
 As a result, the average number of customers visiting a
Starbucks store declined from an estimated 460 in 2005 to
just above 400 in 2007
 With the launch of McCafe in 2008, the competition
between the two chains intensified further.

 Smaller privately owned coffee houses

Source: http://www.thestreet.com/story/10781552/cheap-coffee-starbucks-vs-mcdonalds.html
39
Threats

 Bargaining Power of Buyers:

 Force of the buyer’s bargaining power is proportional to the ability of
buyers to force down prices
 differentiation involved in the specialty coffee industry and the lack of
differentiation in the basic coffee industry

 Image Threat:

 Anti-Starbucks Groups:
 National Gun Victims Action Council (NGAC)

 Unions
 Petition for Good Jobs at Starbucks
 Increased pay

Source:
http://coe.brown.edu/documents/StarbucksaStrategicAnalysis_R.Larson_honors_2008.p
df
Source: http://www.starbucksunion.org/
40
Distribution Channel

Starbucks.com
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Chain of Supply

42
Chain of Supply

 Starbucks is involved in the source of bean all the way

down to the brewing of the coffee

 Planning involves everything from raw materials to

manufacturing to retail markets

 Coffee department sorts the coffee to get the best

beans available

 All products used in all processes revolve around

sustainability

Starbucks.com
43
Background Information

 Starbucks is involved in every process starting with the

growing of beans all the way down to brewing the
coffee for the consumer

 Everything they put into their work comes from their own
passions and inspirations

Starbucks.com
44
Plantation

 All coffee must meet Starbucks standards of high quality

 Starbucks’ organic coffee is grown using methods and

materials that have a lower impact on the environment.

 Starbucks bought 269 million pounds of coffee in fiscal

2010. Some 84% of that – 226 million pounds worth – from
C.A.F.E. Practices–approved suppliers.

Starbucks.com
45
Plantation to Manufacturing

 Senior supply chain planning manager Kimberly A.

production planning across five roasting plants and
multiple contract-manufacturing facilities.

 Starbucks currently gets its coffee from Mexico,

Guatemala, and Colombia.

Starbucks.com
46
Manufacturing to Store

 Starbucks makes more then 70,000 deliveries outbound a

week to retail stores

 Products being delivered include coffee, teas, ice

creams, treats and food

 Their 5 manufacturing plants then ship to over 16,000

stores world wide

 Starbucks provides 5 different forms of their coffee

(Whole bean, Ground, VIA, K-Cups, and Pre made filters)

Starbucks.com
47
Retailers to Consumers

 There are currently over 16,000 retail stores world wide

serving Starbucks coffee.

 “It happens millions of times each week – a customer

receives a drink from a Starbucks barista – but each
interaction is unique.”

 With every cup, Starbucks strives to bring both their

heritage and an exceptional experience to life.

Starbucks.com
48
 History

80’s 90’s
70’s • 1982-Howard Schultz joins • 1995- Beginning of the
Starbucks as director of Frappes- total stores
• 1971- Starbucks retail operations and 677
marketing. Starbucks
opens first store begins providing coffee • 1997- Starbucks
in Seattle’s Pike to fine restaurants and Foundation starts
espresso bars
Place Market.` • 1983-Developed
• 1998- Tazo tea
company is aquired
coffeehouse in Seattle • 1999- China, Kuwait,
based on Cafes in Italy.
Lebanon and South
• 1984- First Starbucks café
late served
Korea
• 1987- expanded to 17
stores
 2000’s
2000- Howard Schultz
transitions to chairman and
chief global strategist
2001- Introduces the
Starbucks Card, an
innovative stored‐value
card for customers to use
and reload.
2002- Starts selling Fairtrade
certified coffee in the
countries where Starbucks
does business.
2002- Establishes Starbucks
Coffee Trading Company
(SCTC)
2000’s cont.
2003- Seattle’s Best Coffee Present Day
and Torrefazione Italia 2010- Expands digital
coffee brands are aquired
offerings for customers
2004- 8,569 Stores with free unlimited Wi‐Fi,
2005- Orin Smith retires as Starbucks Digital
Starbucks president and Network in U.S. stores
chief executive officer. Jim
Donald promoted to 16,858 Stores
president and chief 2012- Becomes the
executive officer world’s largest buyer of
2008- Eliminates all artificial Fair Trade coffee
trans fat and makes 2
percent milk the new
standard for espresso
beverages in all U.S. stores
Advertising and Media Analysis

51
Starbucks Advertising

 Starbucks company chooses to focus on the customers in-store

experience versus producing commercials for the masses

 Executives feel that improving the in-store experience will be

more effective than having advertisements and commercials
for Starbucks via mass media

 The company encourages the promotion of their stores as

another home to the consumer

 This is done by providing a comfortable chairs for the customers

to relax in, relaxing music, and outlets for laptops

52
Starbucks Advertising

 Starbucks depends on word-of-mouth advertising through this “third

home” which had proved greater success than actual
commercials

 Starbucks aims to cultivate brand versus traditional advertising

 As stated by executive, “Once you’ve got a brand consumers love,

they are going to increase their store patronage. Starbucks has also
done advertising more efficiently

 Starbucks has advertised more efficiently by spreading all over

social media, and mobile payments

 Starbucks advertising agencies include Omnicom’s “Goodby

Silverstein and Partners” and “BBDO Worldwide”

53
Starbucks Advertising

 The few commercials which Starbucks had created were

quite successful
 One commercial featured a character drinking a double
shot drink in the morning before going to work
 The band “Survivor” is in the background singing “Eye of
the Tiger” while character is drinking
 Another commercial has a character named “Stacey”
who takes a break at work to drink a Frappuccino
beverage

54
Starbucks Advertising
 Starbucks created a joint venture with Pepsi-Cola which had driven up company
sales

 26 percent of viewers had admitted to admire the equality of men and women
possessed in the Starbucks commercials

 Though their commercials were a success, Starbucks executives still depend on

the customers first hand experience by creating a “third home” coffee shop

 Starbucks wants to continue their marketing and advertising efforts in this unique
way

 These commercials were aired during CW’s “Gossip Girl”

 Starbucks had partnered with the CW in 2010 for an online contest. This online
contest was to show ingredients for the Frappuccino beverage, and transitions
and music into one commercial

 The winning online ad through this contest would be aired during the “Gossip Girl”
season finale

55
Starbucks Advertising

 The Starbucks company focuses on word-of-mouth

advertising not only through a “third home” experience,
but also through providing quality products and services

 Starbucks has a slogan “Uniquely Starbucks” which has

played a large part in the company’s success

 The uniqueness of customers experience at Starbucks

results in the word-of-mouth advertising with their
customers

56
Starbucks Advertising

 Their premium products with its rich taste and aroma also
results in the word-of-mouth which the company
depends on primarily

 Their “Perfect Cup of Coffee” allows Starbucks to

emphasize on product quality which allows it to advertise
differently than most businesses

 Viral marketing also plays a huge role in their advertising

campaigns and word-of-mouth advertising

57
Starbucks Social Media
 Starbucks has a social media marketing strategy, as well

 Their social media has created an online community with the

Starbucks brand

 Starbucks is part of many social media sites, such as Facebook,

Twitter

 On the company's Facebook and Twitter page, consumers are

able to express their opinions about the company through online
blogs

 The company is able to join consumers during blog conversations

 Discussions via blogs are another word for “new media”

58
Starbucks Advertisements
On May 3rd, 2009 Starbucks had launched a long term, multi
channel campaign. It’s goal was to emphasize the unique
experience, exceptional coffee, and the brand’s quality value

59
Starbucks Ad Campaign
 When Starbucks had created the new ad campaign in 2009, it had
wanted to target a whole new generation of coffee drinkers

 Starbucks had put those advertisements, on the previous page in six

major cities, New York and LA included

 Starbucks had further sought to spread this new message through

social media

 Consumers had to hunt for these posters all around the cities. Once
they had found any one of these posters, they had to post them on
Twitter

 Customers would also try to find the first photos of Starbucks

adorned for the holidays with red and green.

 These customers would than post the photos on Flickr

60
Starbucks Ad Campaign
 These ad’s were placed in upscale magazines, such as New York, the New
Yorker, In style, and Vogue

 This was the first time which Starbucks had performed traditional advertising
and ignored their word-of-mouth advertising

 Another social media campaign included store employees submitting

headlines for future Starbucks advertisements

 Employees would also post YouTube videos talking about their experiences
working at Starbucks

 On the Saturday before the 2008 election, the company had sponsored 60
second commercials on “Saturday Night Live”

 These commercials had advertised a coffee giveaway on election day

 This video had caused Starbucks to have more followers on Twitter

61
Starbucks Competitors
 One of Starbucks major competitors in this ad
campaign was McDonald’s line of “McCafe” coffee
drinks

 McDonalds was known to spend more money on

media, such as television, radio, print, billboards, and
interactive web ads

 Starbucks had never lost coffee drinkers to

McDonald’s line of McCafe

 McDonald’s sells its own version of Frappuccino, and

competes with Starbucks with breakfast oatmeal, fruit
salads, and smoothies
62
Starbucks Advertisements

 Starbucks creates advertisements with a unique content

 The backgrounds are supposed to resemble a coffee

sack, with large and bold headlines promoting the
brands qualities

 The ad’s which Starbucks had placed in newspapers

explain how Starbucks chooses only the best 3 percent of
beans for their coffee

 The ad’s also emphasize how they roast the beans until
they pop twice to ensure quality taste

63
Starbucks Ad campaigns
 Another ad campaign for
Starbucks was for the
Frappuccino beverage.
Starbucks had launched two
campaigns at the same time in
2010

 Via Instant Coffee

 Frappuccino drinks

Frappuccino campaign

had emphasized

Customization for the drink

64
Starbucks Mobile Advertising
Campaign

 In 2011, Starbucks had run a Mobile ad

campaign to increase downloads of its
mobile applications. The ad’s were run by
Flixster Iphone Applications. When
consumers tap on the banner, “Pay Faster,
Sip Slower”, they are directed to a
optimized mobile page this mobile page
shows a picture of Starbucks applications
mobile payments Starbucks generates
mobile ad’s to maintain the mobile aspect
of their advertising strategy.

65
Starbucks Mobile Advertising
Campaign

 Starbucks had also maintained it’s mobile strategy

through a mobile campaign which allows consumers to
chose their ideal summer beverage

 Starbucks had run mobile banners ads through music site,

Pandora IPhone application

 The banner ad’s read “Handcrafted Refreshment is

Waiting”

66
 When consumers tap on the ad, they are directed to swipe this screen:
 Consumers can choose a summer drink once they swipe the icy
screen. Such drinks include iced coffee with milk or Tazo shaken
iced passion tea lemonade.
67
Starbucks Advertising
 Starbucks had also ran a rich
media ad campaign on I pad
sites on VH1 and MTV

 Campaign is designated to drive

interaction with Apple users

 This campaign is known as the

“Starbucks, VH1, and MTV Celtra
for tablet-optimized rich media”

 MTV and VH1 were the first media

brands to create touch optimized
browser experience

 Starbucks was seeking to target

the affluent, early adopter IPAD
users
68
 Starbucks Advertising
 They also seek to target the youth
audience of MTV, as well as VH1’s older
audience

 Objectives of ad campaign on MTV

and Vh1 IPAD sites was to maintain
brand awareness and seek out
purchase behavior

 Starbucks put a banner on the MTV

and VH1 sites. The banner had asked
consumers, “What is your Starbucks
signature. Tap to Find Out.” Consumers
are then led to a screen where they
can learn and chose a specific
Starbucks beverage.

69
Starbucks Logo Timeline
 Throughout the years, Starbucks had improved and
updated its brand logo

70
Starbucks Billboards
 In 2008, Starbucks had put up a number of billboards in
Seattle

71
Target Audience Analysis

72
 Seattle

Boston
Minneapolis Cleveland

Detroit New York

Philladelphia
Chicago
Washington D.C.
Sacramento

Denver
San Francisco

Los Angelese
Atlanta

Phoenix Dallas
Orlando

Houston Tampa

Miami

DMA Allocation 73
Media Plan

74
Media Objectives

 Reinforce brand image in consumer’s mind by

placing advertisements in television shows,
magazines, and top internet sites

 Develop a media strategy that involves advertising

Starbucks specialty coffees in both traditional and
non-traditional media outlets

 Increase Starbucks’ Profitability

75
Magazine Tactics

76
Newspaper Tactics

77
Television Tactics

78
Out of Home Tactics

79
Internet Tactics

80
Promotional Tactics

 On college campus’ have a free

specialty coffee day 8am-Noon in
the top 20 DMAs.
 This will draw college students into
Starbuck’s for their free drink in return
drawing them to make more
purchases in store.

 Sponsoring one concert featuring

the stars of the television show The
Voice held in Los Angeles.
 Starbucks will hand out free drinks
during the concert.

81
Media Strategies
 To build the brand in mediums which will involve
consumers more actively in the process of marketing
Starbucks
 To extend amount of mediums to portray brand
quality
 To gain maximum exposure to result in gain in
revenue
 To build brand awareness to guarantee subsequent
purchase of product
 The media plan will generate interest by connecting
to the public
Budget Allocation

83
Flow Chart

84
Reach and Frequency

85
Recommended Media Selection
and Rationale

86
Magazines

87
Newspapers

88
Television

89
Out of Home

90
Internet

91
Promotions

92
Other Tactics Considered But Not
Recommended

 Internet: use of more social media outlets such as

YouTube, Twitter, Four Square.

93
Alternative Plans with Fluctuation in
Budget

94
Decision Dates

95
Client Questions Responses

96
Competitive Analysis Works Cited
AD Age: http://adage.com/article/mediaworks/comparing-coffee-media-
strategies-dunkin-mcdonald-s/134095/

AD Week: http://www.adweek.com/news/advertising-branding/caribou-
coffee-names-cm-new-ad-agency-105166

Corporate Eye: http://www.corporate-eye.com/blog/2011/01/caribou-coffee-

offers-something-extra-in-ambient-advertising/

Dunkin’ Donuts Press: http://news.dunkindonuts.com/press_kits.cfm?presskit_id=2

McCafee: http://www.mcafee.cc/Classes/BEM106/Papers/2008/Starbucks.pdf

SEO Analysis: http://sites.google.com/site/seoanalysisnow/case-study-caribou-

coffee-vs-starbucks
97
Advertising and Media Analysis
Work Cited
Evan Carmichael.
http://www.evancarmichael.com/Other/612/Starbucks-
Commercials.html

Digital Commons.
http://digitalcommons.liberty.edu/cgi/viewcontent.cgi?article=1005&c
ontext=busi_fac_pubs

Sose Marketing.
http://www.sosemarketing.com/2011/03/29/starbuck%E2%80%99s-
success-is-its-word-of-mouthsocial-mediaviral-marketing-strategy/

Starbucks News.
http://news.starbucks.com/news/coffee+value+values+campaign.htm

New York Times.

http://www.nytimes.com/2009/05/19/business/media/19starbux.html 98
Advertising and Media Analysis
Work Cited
PopSop. http://popsop.com/34575

Mobile Marketer.
http://www.mobilemarketer.com/cms/news/advertising/11299.ht
ml

New York Times.

http://www.nytimes.com/2009/05/19/business/media/19starbux.ht
ml?_r=1&partner=rss&emc=rss

AD Week. http://www.adweek.com/adfreak/starbucks-logo-
timeline-future-redesigns-11746

Ad Age. http://adage.com/article/news/sales-starbucks-rolls-ad- 99