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Starbucks Frappuccino A study of Brand extension TIMSI GUPTA PGP30401 Email: [email protected] Ph:9871876704
| Date post: | 18-Aug-2015 |
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Starbucks FrappuccinoA study of Brand extension
TIMSI GUPTAPGP30401
Email: [email protected]
Ph:9871876704
Content
• About the company• Product category• Starbucks Frappuccino• Market share and growth of Starbucks• Marketing Mix• STP• Comparative frame of reference and POP-P
OD
Manufacturer: Starbucks Corporation
https://www.youtube.com/watch?v=nn0bB9A9n4c
Founded in 1971 in Seattle, WA
Largest coffeehouse company in the world
21,536 stores in 65 countries and territories, including 12,218 in the US
Ready to drink coffee US Market
2009 2010 2011 2012 2013 2014 2015 2016 20170.00
50.00
100.00
150.00
200.00
250.00
300.00
350.00
400.00
450.00
500.00
199.30 205.70238.60
286.50
350.40378.00
399.20417.80
433.60
RTD coffee market in US
Off-Trade volume in mn liters
Source: GMID
Tremendous growth and
projected to grow further in the coming years
Birth of Starbucks Frappuccino
• Starbucks was experiencing slow down in summers
• Introduced Frappuccino, a frozen drink in 1996
• Partnered with PepsiCo to make RTD bottles
• Value Proposition: Ready to drink
Product mix
“We were so confident of our product that we didn’t even test-market it,” -Schultz in his book, Pour Your Heart Into It.
Starbucks and Frappuccino market share
72%
15%
Market Share of Starbucks Corp in RTD coffee (2014)
Starbucks Corp Monster Beverage Corp
WhiteWave Foods Co
Rockstar Inc
Campbell Soup Co Illycaffè SpA
Private Label Others
Starbucks Frappuccino
49%
Starbucks23%
Monster15%
Market share of Frappuccino in RTD coffee
Starbucks Frappuccino
Starbucks
Monster International De-light
Rock Star Roasted Bolthouse FarmsIlly Private labelOthersMarket
leader in RTD coffee
Source: GMID
Starbucks and Frappuccino growth story
2009 2010 2011 2012 2013 20140.00
20.00
40.00
60.00
80.00
100.00 81.80 83.20 79.2070.60 68.70 72.30
Starbucks in RTD coffee in USA
2009 2010 2011 2012 2013 20140.00
10.00
20.00
30.00
40.00
50.00
60.00
70.0066.60 65.80
59.10
53.40
46.4049.30
Frappuccino in RTD Coffee in USA
Experienced a decline in the last
few years because of increased
competition
Source: GMID
Marketing Mix
Product Price Place Promotion
Frozen
coffee
Available in
multiple
flavors
Packed in glass
bottles
Cool drink for
summers
Available in non-coffee base too
Ready to
drink and can
be stored and
stocked
“The Frappuccino transformed it into a haven for moms and office workers,” -Taylor Clark in Starbucked.
Place
Marketing Mix
Price
$25 for
pack of 12
Premium
product
In accordance with Starbucks (parent brand) image
Priced high like other Starbucks
products
Nearest
competitor:
Monster
$34.75 for pack
of 24
Product Promotion
Marketing Mix
PromotionPlaceProduct Price
Vending machines
Supermarkets
E-retail (Amazon, Alibaba)
Grocery stores
Local Starbucks store
Marketing Mix
PromotionPlaceProduct Price TV campaign
after 2007
Social media
(Facebook etc.)
Digital ads on
sites like
meebo.com,
Yahoo!, Pandora,
Flickr
Frappuccino card, merchandise
Local advertisement (print, hoardings)
Starbucks has traditionally spent very little on advertising
STP
Segmenting• Behavior (coffee lovers and
neutral to coffee)• Behavior (Walk to coffee
shop and drink at home/workplace)
• Demographics (gender, occupation)
Targeting• Not so-much coffee lovers• Like to drink coffee at
home/workplace• Housewives who stock chilled
drinks at home
Positioning• Ready to drink Starbucks
coffee• Chilled• Convenient
Competitive frame of reference
• Convenience in storage• Refreshing drink for
summer• Variety in flavors
• Coffee• Tasty• Brand name• Premium
Points of Parity
• Cool drink• Ready to drink• Non-aerated• Available in multiple flavors• Convenient to store
Points of Differentiation
