Starbuck’s Bubble Tea in New Zealand

Starbuck’s Bubble Tea in New Zealand

Contents
1.0 Executive Summary..................................................................................................... 2
2.0 Situational Analysis..................................................................................................... 3
3.0 Market Segmentation, Target Markets’ Profile and Positioning of the Product.............................9
4.0 Measurable Marketing Objectives.................................................................................. 13
5.0 Marketing Strategies.................................................................................................. 14
6.0 Coordination and Control............................................................................................ 17
References................................................................................................................... 19

1.0 Executive Summary
Bubble Tea is a quite popular non-alcoholic drink of Taiwan and Hong Kong. One can find a
number of Bubble Tea shops at every corner of Asian countries. The increasing popularity of this
product in Asian markets has encouraged Starbucks to introduce this product under its brand
name for the people of New Zealand. Starbucks has been in New Zealand since 1998 and at
present there are around 22 stores across the country. The following report is a market analysis
of the New Zealand markets as the new product is being introduced. Various portions of the
report will discuss about the market size, current and future needs of the customers and the
Internal and External factors affecting the decision making process of the Starbucks. There will
also be a discussion about the segmentation factors in the market, the prime target markets and
the position of the product with respect to the other strong competitors. The measurable
marketing objectives of the company will also be discussed along with the marketing strategies.
The last segment of the report will talk about the coordination and control strategies that will be
required by the firm while launching this new product.

2.0 Situational Analysis
Market Size
Bubble Tea has been received so well in the New Zealand Markets and is even growing around
20% per year. This tea market is likely to have a competitive edge in future growth momentum
and the sales volume will also increase through 2019 and beyond. However, NZ is ranked the 13
largest consumer of coffee across the globe, but the men and women equally loves tea also. As
this concept is new and Starbucks already has a brand name, hence it will be able to attract a
good customer base (ITA, 2019).
Kaikoura is a coastal town on the South Island of New Zealand and tourists visit this place
throughout the year for amazing wildlife experiences. This place is situated in a 3 hours drive
North from Christchurch. A number of Asians visit here for relaxing and hence could serve as a
great target market for Bubble Tea.
Customer Needs and Changes in Market
There is no doubt that New Zealanders are some of the biggest coffee drinkers, yet coffee hasn’t
always been the most preferred drink of all the inhabitants. Till 1960s, the traditional (black) tea
was popular among the tea drinkers and an average tea drinker consumed more than 3 kg per
year and then came the tradition of drinking tea with the tea bags. The café culture in the 1990s
changed the behavior of the customers towards tea and even their drinking habits. There was a
jump of 316% in the price of the tea and this jump was considered as the highest as compared to
any other non-alcoholic beverage in the New Zealand.

The market is also responding positively and there are a number of competitors against Starbucks
in today’s era. All the companies have been welcomed by the customers and the tea drinkers are
responding positively towards any new experiments with their regular tea. Bubble tea has been
accepted by a number of customers in the Asian Countries and hence the tea lovers in the New
Zealand will also accept this new product and contribute readily towards its sales (Dobush,
2018).
Competitors’ Analysis
Bubble Tea is entirely a new concept and with this unique product idea Starbucks can easily
outperform the other competitors in the markets. However, there are a number of competitors for
different products from Starbucks. For instance, in the case of soft drinks, Coca Cola and Pepsi
are the leading competitors. McDonald’s and Dunkin’ Doughnuts offer fast food along with
coffee, but they are not able to provide the ambience like Starbucks and hence their coffees are
low priced. The competitors in the markets are inventing ways which are quite innovative and
are even more important in this economic environment where people are concerned about
spending in a more conscious manner (MADS Team , 2019).
Bubble Tea is not so common in Kaikoura Town, hence Starbucks can easily open a new outlet
in this area to target the tourists and other loyal customers of Starbucks who would love to try
this new experiment with their regular tea. Here the competition is quite less, so there are sure
chances that the product will gain easy popularity.

Internal Environmental Factors
To evaluate the internal factors, SWOT Analysis will be conducted for Starbucks:
SWOT Analysis
Strengths
 The company has an extremely
diversified business model.
 The staff members and the leaders can
easily adapt to the unique coffee and tea
drinking sensibilities of people across
the world.
 The stylish image of the brand has
already made it extremely popular
among young generation.
 Loyalty scheme of the firm has given a
number of advantages to the company
as the customers are not frequently
purchasing beverages through the use of
their loyalty cards.
 Starbucks is a socially responsible and a
sustainable brand, hence customers are
Weaknesses
 The financial difficulties are proving as
a hindrance in the development of new
products.
 The poor performance has declined the
stock value and hence the investors are
feeling reluctant to invest in the brand.
 The company has the “youth market”
as the prime target market and hence if
there is a drastic change in their
behavior then the profit rates will
automatically decline.
 The ambience of the Starbucks’ outlets
has a risk of getting copied quite easily
(Lombardo, 2019).