Marketing Plan for Bubble Tea, Starbucks

This marketing plan provides a strategy for the introduction of Bubble Tea by Starbucks in the New Zealand market. It includes a situational analysis, analysis of customer needs and trends, analysis of competitors, SWOT analysis, Porter's Five Forces analysis, market segmentation, target market profiles, and positioning.

Running Head: Starbucks
Marketing Plan for Bubble Tea, Starbucks
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Table of Contents
Executive Summary.....................................................................................................................................1
Situational Analysis......................................................................................................................................2
Market’s Size...........................................................................................................................................3
Analysis of Customer needs and Trends..................................................................................................3
Analysis of Competitor............................................................................................................................4
Internal Environment Factor: SWOT Analysis..........................................................................................4
External Environment Factor Porter’s Five Forces Analysis.....................................................................6
Market Segmentation, Target, and Positioning...........................................................................................8
Segmentation Factors..............................................................................................................................8
Possible Target Market Profiles...............................................................................................................9
Product Positioning...............................................................................................................................10
Marketing Objectives:...............................................................................................................................12
Marketing Strategies:................................................................................................................................13
Product Decisions:.................................................................................................................................13
Pricing Decisions:...................................................................................................................................16
Distribution Decisions:...........................................................................................................................16
Promotional Decisions...........................................................................................................................17
Integration and Link:.................................................................................................................................20
Coordination and Control:.........................................................................................................................20
Conclusion.................................................................................................................................................21
References.................................................................................................................................................22

Executive Summary
Starbucks as a premium marketer of speciality coffee is operating and competing in the beverage
and snacks industry for years Their product includes roasted high-quality coffee, handcrafted
premium tea and a variety of fresh food items other beverages. Starbucks is launching an iced
drink called Bubble Tea, and this report is written for providing a marketing plan for the Bubble
Tea’s introduction in New Zealand Market.

Situational Analysis
Competitive Forces: Costa Coffee is a prominent competitor. They have a high production
capacity and good distribution channel in New Zealand. The product is custom packed under
various private label brands. This has given the beverage International recognition and
distribution across NZ (Taecharungroj, 2017).
Regulatory Forces: According to the reports over 35% of foods advertised to the children do
not meet the food regulation authority’s parameters. Therefore, jurisdiction has been passed that
after December 2015, the food and beverage products who fail to fulfil the food regulation
authority’s parameters will not be advertised to the kids below the age of 12 years
(Taecharungroj, 2017).
Economic Forces: There are over 2 lakhs of people in New Zealand who are looking forward to
working more in the country. The employment rate will also increase in the near future. The rate
of interest has been pegged at 1% for the last four years. This shows that the macroeconomic
position of the country is in a good state and the economy can further flourish which means
higher business for the entrepreneurs. The new product can expect high demands in the near
future (Dewhirst & Davis, 2015).
Socio-Cultural Forces: The concern of parents regarding children’s eating habits has been
increased a lot. This has forced them to carefully check all the parameters and read the package
labels in order to ensure that their kids are consuming healthy food. The new product will be
developed by keeping these factors in mind (Dewhirst & Davis, 2015).

Technological Forces: Over 22% of people in NZ in the age group of 18-34 years prefer to shop
online via mobile phones. Whereas, over 20% of people in the age group of 18-54 prefer online
purchase from a tablet device (Dewhirst & Davis, 2015).
Demographic Forces: A rise of 10.8 % has been recorded in the household income of residents
of NZ since 2005-2015 as compared to earlier decades. This is an important factor which shows
that parents can spend a higher amount of money to purchase quality products for their children
provided they are healthy for them (Taecharungroj, 2017).
Market’s Size
As of 2019, the current population of New Zealand is estimated at over 4.80 million. And
the total surface area within New Zealand comes in at 104, 427.89sqaure miles. The country’s
population density as on 2018 census was approximately 17.56 individuals per sq. kilometre.
Similar to its neighbouring country, Australia, NZ also had a 5.7% gain in population over the
last five years. The country continues to increase in population, though at a slower rate(Chua&
Banerjee, 2018).
Analysis of Customer needs and Trends
NZ has a dedicated coffee culture. The population of NZ is crazy over tea as they prefer
something that is usually strong and gives real kick after a sip. Also, people in metropolitan cities
prefer quality over quantity. A short quality drink is a strong drink. People of NZ truly stay true
to the British roots by dedicated time to tea and social hour. Kiwis take a break from work to
have beverages in a fine coffee house. The younger population likes ice-blended and fruit-
flavoured drink for a regular day(Di Benedetto, 2017).

Analysis of Competitor
The second largest coffeehouse in New Zealand and in the world after Starbucks is Costa
Coffee. Founded in the year 1961, Costa has over 3000 Stores across the world and multiple
stores in highly populated cities of NZ. Mid this year, Costa moved to three prime locations of
Auckland and invested over 30 million pounds to increase their roasting capacity(Geereddy,
2013).
Similar to Bubble Tea, Costa serves iced drinks. Some of the products are Strawberry
Lemonade, Strawberry cold brew Coffee, Summer berries fruit cooler, and ice cold and berry
delicious. With these products, Costa is already a step ahead of Starbucks (Armstrong, Kotler &
Gaudet, 2015).
Internal Environment Factor: SWOT Analysis
SWOT analysis is an optimum scale to analyse a company’s strength, weaknesses,
opportunities, and threats. In this case, it used to find obstacles Starbucks is likely to face and
find the areas where the company can make an improvement(Chua & Banerjee, 2018).
Strengths:
The company, in a unique way, represents an all-together different business model that is
based on the core values designed for achieving a fragile balance between social conscience and
business profitability. One of the strengths of Starbucks’s is its human resource management
capacities. It always has the human capital to strategically use HR and provide outstanding
benefits to employees. Furthermore, Starbucks follows HR philosophy where employees are a
key part of the business. To ensure a good relationship with them, Starbucks has communication
facilities like an open forum, training programs like mentoring, workshops, and health benefits

like insurance and paid leaves (Geereddy, 2013).
Besides this, Starbucks is focused on offering a high-quality product with an extensive
product mix to assure differentiation. The product line has varieties that include coffee,
Frappuccino, tea, smoothies, sandwiches, pastries, and snacks(Armstrong, Kotler & Gaudet,
2015).
Weakness:
One of the things that can be counted as weakness is the expensiveness of Starbucks
products. Since the company emphasizes on quality, their prices are so high that they repel a
large section of buyers. Even though the focus is on offering ‘exclusive Starbucks experience,’
there still are many buyers who would rather buy the same product at McCafe and Dunkin
Donuts. Another weakness is the class of coffee culture and taste. The coffee culture in New
Zealand is different from the culture in the USA. Hence, for the introduction of bubble-tea in
NZ, Starbucks would need to analyse customer taste preference(Di Benedetto, 2017).
Opportunities:
The self-cannibalization in the NZ market indicates the importance of Bubble-tea and
Starbuck’s expansion. With an aligned HR strategy, Starbucks can create a strategy to utilize the
potential for bubble-tea supply into the emerging markets of NZ. Since the company is already
operating in NZ for years and they have a loyal customer base, they can use it an opportunity to
introduce the new product. In NZ too, Starbucks can use the technological advances through a
mobile application that allows users to place an order online and deliver the product to their
doorstep through their delivery system called ‘Mobile Pour’ (Di Benedetto, 2017).

Threats:
In a world of excessive competitive rivalry and brutal competition, Starbucks faces
threats too. The biggest threat is increased competition with the expansion of companies like
Costa Cofee, McCafe, and Dunkin Donuts that offer similar products like Bubble-Tea. Another
threat is the rising price of tea leaves and coffee beans. Moreover, the customers are likely to
switch to companies offering cheaper products, and that way, Starbucks will leave a significant
number of buyers (Pearce, Robinson& Subramanian, 2017).
External Environment Factor Porter’s Five Forces Analysis
For External Analysis, Porter’s five forces were introduced by Michael Porter to examine
the forces that affect the performance of a company and expose it to potential threats (Elliot,
2017).
The threat of New Entrant: Weak force
Given Starbucks reputation and the royalty the brand carries along with its name, it’s
tough for a new competitor to beat the leading player. Moreover, there are huge economic
barriers for entering the stage where Starbucks is (Moon & Quelch, 2016)
The threat of Substitute: Moderate Force
There are many substitutes. For tea, there is Teavana and Tazo. For Coffee, there is
Costa, McCafe, and Dunkin Donuts, and home-made coffee. And for food, Starbucks has never
made an imprint in this department. But with the quality and rich experience Starbucks offers to
its coffee consumers, the threat of substitute is moderate (Daly, 2012).
The threat of Competitive Rivalry: Strong Force

Since the company emphasizes on quality, their prices are so high that they repel a large
section of buyers. Even though the focus is on offering ‘exclusive Starbucks experience,’ there
still are many buyers who would rather buy the same product at McCafe and Dunkin Donuts
(Pearce, Robinson & Subramanian, 2017).
Bargaining Power of Suppliers: Weak Force
The suppliers offer commodities and raw material. Since coffee is the main product,
Starbucks is somewhat dependent on the suppliers for premium quality. But given the company’s
status delivery and scale, they have a great relationship with suppliers who benefit from the
partnership. Other products suppliers like plastic, paper, dairy, equipment etc. have a diverse
population, so they don’t have much power (David, 2018).
Bargaining Power of Buyers: Moderate force
This is a moderate force because buyers can easily switch from Starbucks to other brands.
Switching cost is zero when it comes to SBUX. But since the company’s speciality is a beverage,
many customers are likely to stay because of the premium quality and exclusive experience it
offers. The company has a modicum of the pricing power. Coffee-Addictive buyers are likely to
stay (Chiu, Chen, Shyu& Tzeng, 2016).
Market Segmentation, Target, and Positioning
Segmentation Factors
Geographic: The product will be launched in most populated cities of New Zealand, starting
from Auckland to Wellington, Christchurch, Manukau City, Waitakere, North Shore, and

Hamilton. Of these Auckland has the highest population of 417, 910 people, and Wellington and
second highest at 381, 900 (Moutinho,2015).
Demographic: The Bubble-tea targets people aged between 10 to 50 years. People of both sexes,
male and female can enjoy Bubble tea given the fruit and tea-based mix. The specific target
would be the married couple with families since it’s a product that can be enjoyed by children,
youngsters, and adults too. People with home ownership, those working in the business sector,
industrial sector, and earning an average income of $700 will be targeted (Aielloand Dickinson,
2014).
Psychographic: Since Bubble Tea contains fruit flavoured and ice-blended versions of tea,
people who like to ice, cold beverages, and iced-tea should be the target. Youngsters and
children who have a liking for small chewy balls made of tapioca starch and pearl milk tea will
(Dibb& Simkin, 2017).
Behaviouristic: Consumers interested in dining out or drinking out after an exhaustive day of
work, and those who like to try a new product. Brand-conscious customers leading an upper-
middle-class lifestyle shall be the target (Aaker, 2008).
Possible Target Market Profiles
Christina is a 25-year old interior designer who works at a renowned designing company.
Her monthly income is $1000 and she likes to hang out at premium restaurants and coffee
houses. She likes sipping a cup of tea during lunch break, and she prefers to try different flavours
to change the taste, but the main base of all her beverages is tea. Recently she’s in search of a
refreshing beverage that could help her relax during lunch or tea breaks.

George has recently moved from the USA to NZ. He is now living in Auckland and
working for a multinational corporation. At the age of 30, he likes to go out with his friends,
dine out, and take his girlfriend to premium coffee shops and restaurants. He prefers ice-
blended beverages over a hot cup of coffee and has a liking for fruit-based beverages. Once a
day, he makes sure to sip over a cup of tea and is a frequent buyer of Starbuck’s products.
Bushra is a married woman, a doctor, and she’s married to a lawyer. Bushra and her
husband, Flintoff dine out every Sunday, and they are always looking for a place where they
could get along with their 12-year-old nephew, Mark. They prefer a fine dining experience. The
three of them wish to try new products and are not price-sensitive as long the product is healthy
and tasty.
Product Positioning
ELEMENT OF POSITIONING
STATEMENT
BUBBLE TEA
(1) the branded product name Costa Coffee: Summer berries fruit cooler
(2) the category in which it competes Iced Drinks
(3) one or two main reasons why the
target market buys the branded product
Tea-based mixed with fruits and milk (fruit
flavoured, milk-added, and ice-blended
versions of the tea).
(4) what sets the product apart from the
competition
The unique combination of fruit, ice, small

chewy balls made of tapioca starch
 Important product attributes on which the target market will base their purchase
decision on:
1. Taste
2. Quality
3. Healthy
4. Price
5. Appearance / Presentation
 Out of the five attributes, the important attributes for target market will become the axes
for your positioning map:
1. Quality
2. Taste
 Identify the major competitive brands to your new product in this category.
1. Costa Coffee: Iced Drinks
2. Teavana: Iced Drinks

High
Quality
NOT AS TASTY
TASTY
Low
Quality
BUBBLE
TEA:
STARBUCKS
COSTA
COFEE:
STRAWBERR
Y ICED DRINK
TEAVAN
A: ICED
DRINK
Marketing Objectives:
The IMC objectives of Bubble Tea are as follows:
 To capture 30% of New Zealand’s Iced-Drink market within one year of its
launch:

This is the prime objective of the marketing plan. Since the product falls into the
iced-drink industry, the objective is to capture 30% this market. To achieve the
objective a robust marketing plan with a focus on product, pricing, promotion,
and positioning will be created (Beard&Easingwood, 2016).
 To accelerate the sales by 20% within six months from its launch:
This will be done by implementing a sales strategy successfully and creating a
sales forecast.
 To capture 30% of market share within one year
The Bubble tea also comes under the non-alcoholic beverage industry of New
Zealand, and hence, the third objective of this marketing plan is to capture the
25% of the Non-Alcoholic Beverage Industry market share within one year
Marketing Strategies:
Product Decisions:
FEATURES RATIONALE
Appearance: The bubble tea will be bottle
green in appearance, with a dash
of tea residual colour, but the
bottom part of the drink will be
colourful with the small chewy
balls.
The greenish colour will give
away the presence of tea-base and
the bottom colour will give away
the mixed fruits and milk base.
Both the combination gives an
appealing appearance to attract

both youngsters and adults.
Ingredients: The main ingredients will be
mixed fruits, like strawberry,
blueberry, orange, melon, and
guava. Apart from this mixed
fruit base, there will be the
premium tea leaves, ice, chewy
balls made from the tapioca
starch.
The rare combination of health
and taste sets it apart from other
iced drinks. Where ice-blended
tea will appeal to the taste buds of
the consumer, the fruit will enrich
them with nutritional benefits, and
the chewy balls will further
enhance the taste
(Thompson&Arsel, 2014)
Packaging
(functional):
The cups will have eco-friendly
packaging with colourful ribbons
on it. The main colour on the
packaged cup will be green and
white. Contents will be clearly
mentioned on the label along
with the food authority’s
sanction
The parents can read the added
ingredients and get assured that
the product and its ingredients are
safe for consumption by both
adults and children.
Differentiation: The pearl tea milk which
contains small sized chewy balls
made from the tapioca starch.
Tapioca starch is the purest starch
which contains the minimum
amount of fat and it can help the
consumer meet the recommended
allowance of important nutrients.

Brand Personality:
 Rebel
 Young
 Mass
 Innovative
Brand Elements:
DESCRIPTION RATIONALE
Brand
images/designs
The cup will have images of tea
leaves, ice, and fruit pulp. The
product logo will be composed
of tea leaves scattered around
fruit pulp and garnished with
chewy balls.
The appearance of all these
ingredients on the brand image
will appeal the consumers and
attract the attention of young
buyers.
Brand colours Green colour leaves, multi-
coloured fruit images with white
background
The vibrant combination of brand
colours will definitely attract
people towards it
Font styles The font style shall be Algerian,
Font size 17
Beautiful font design will attract
the consumers

Packaging
design
Eco-friendly packing, with
colourful ribbons tied to the
packet.
The more the colour contrast, the
more consumers will be attracted
Pricing Decisions:
1) General Pricing Approaches: In the initial stages of Bubble Iced selling, it’s best to use
penetration pricing. By using this strategy, the product will able to enter the market and start
capturing it within the stipulated time. Once the product has made its position in the market,
the bundle pricing strategy will be applied (Smith, 2016).
2) Pricing Objectives: The main objective of Bubble Ice’s pricing strategy is to increase the
profits of the Starbucks in the prime locations of NZ by 20%. It shall also recognize and fulfil
its social responsibilities (Schultz, 2017).
3) Pricing Constraints: The demand of the product is expected to increase once the product
gets thoroughly promoted in the major cities and areas of New Zealand and once it is capable
of earning a good reputation in the market. The marketing and advertising costs will be
determined in advance before the determination of prices (Onkvisit&Shaw, 2008)
Distribution Decisions:
1. Retailers: The bottled iced drink will be sold out through corporate chains and contractual
systems. A number of retail outlets, departmental stores and grocery stores like Real
American Superstore, Wisconsin retailers, etc. will be approached. Retailers will be
approached by Starbucks’s own sales force and through online invitations (Michelli, 2016).

2. Wholesalers & Agents: Wholesalers and Distributors will not be appointed to distribute the
products. These agents and wholesalers will be approached by Starbuck’s own sales force
and through online invitations(Michelli, 2016).
3. Alternate forms of retailing: Online retailing through building up social media following and
sending out free samples, buy-one-get-one-free, and referral discount systems
(Gallaugher&Ransbotham, 2018).
4. In-store strategy: The product will be placed in a separate rack where salespersons will also
be appointed to explain the benefits of the products to the customers.
Promotional Decisions
a. Advertising
i. Internet: Since the Internet has become one of the largest platforms for promotion
and product advertisement, Bubble Tea will be promoted through internet
marketing. To fully exploit this mode of promotion, Bubble Tea will be advertised
through the following: Social Media (Facebook, Twitter, Facetime), Personal
Emailing Campaign, Online Ads and Videos
ii. Traditional media: Traditional media still has an immense scope of catching the
attention of buyers and the target market. Using the banners and flyers in the
optimum location, the target market can be informed of the latest introduction in
Starbuck’s menu. Outdoor Banners and Posters will be placed around metro cities
and then the smaller towns. Pamphlets distribution shall also be undertaken
(Gallaugher&Ransbotham, 2018).
b. Public Relations
i. PR Tools: Since Starbucks is one of the leading sellers and manufactures in the
non-alcoholic beverage industry, the company has immense potential to reach the

target market by exploiting the PR tools. A media release will help the launch of the
product and its expansion in NZ. Media release and press release will be considered
here. Online updating shall also be done at the same time. Through PR tools, press
release, the product will gain a lot of publicity in the very initial stage, and brand
awareness will be established (Gallaugher&Ransbotham, 2018).
c. Consumer Sales Promotions
i. Online Promotions
Since online selling is on the gain, Starbucks can use this area strategically to meet the
target buyers. For promotions on the online channels, Bubble tea can be advertised through face-
book advertisement and Instagram videos ads. Online blogs and articles will be published with
product details and benefits. Photoshoot pictures shall also be shared online. Social media
followers building, sponsoring events, and exhibiting at trade shows which will be attended by
retailers.
ii. Traditional Promotions
For this form of consumer sales promotion, bubble tea will be promoted through
complimentary gifts to the buyers, discounts on the first few purchases, referral prizes, and
family offers. Contest and Coupon distribution shall be undertaken with complementary gifts and
prizes (Talpau&Boscor, 2011).
d. Direct Response
i. Offline approaches
Since customer loyalty programs are deemed to be one of the effecting ways of
gaining a direct response from the consumers, a loyalty program will be employed for

the promotional purpose. Loyalty programs will be undertaken for the new product
with prize distribution at the end(Gallaugher&Ransbotham, 2018).
ii. Online approaches
For the online approach email campaigns will be used as a medium to gain a direct
response from the buyers. Apart from that online display ads, pay-per-click ads, and
bulk email will be sent to potential customers (Gallaugher&Ransbotham, 2018).
e. Event Marketing and Sponsorship
This can be one of the fruitful and effective modes of promotion. Since Starbucks can
afford large scale event marketing and sponsorship, this area should definitely be
exploited during the NZ launch. Starbucks can sponsor the events and games occurring
in the prime and populated location of Auckland and other major cities of New Zealand.
During sponsorship at these events, large banners, advertisements, free-product for trial,
and referral benefits should be used for marketing purposes.
Integration and Link:
All the above four elements of marketing can be integrated through the 4Ps approach. The
best way to integrate and link the product, place, price, and promotion would be to ask the
following questions:
 What do the buyers want from the product?
 How will the customer use the product?
 How will the product look like?
 Where can the buyers look for the product?

 What should be the value of the product?
 Is the buyer’s price sensitive?
 How do the competitors promote their product?
 What special can Starbucks do for product promotion?
Coordination and Control:
For proper coordination and control, the following strategies can be employed at
Starbucks:
1. Financial Audits: The financial audits should be regularly conducted at Starbucks
operational units and departments to make sure that all FM practices are in accordance
with the accepted procedure, laws, policies, and the guidelines. This can be done by
frequently measuring the liquidity ratios, profitability ratios, activity ratios, and debt ratios.
2. Budget Controls: Budget depicts how an organization can spend and earn over a period of
time. For proper coordination, Starbucks should frequently employ strategies to employ
budget control techniques. This can be done by preparing a budget in advance and sending
it over to the subordinates. Another technique can be zero-based budgeting, bottom-up
budgeting, and flexible budgeting.
3. Marketing Controls:
This helps the company to Monitor the company’s progress toward the goals. For
coordination and control, Starbucks should regularly conduct market research for
identifying customer needs and changing preferences. Marketing test should be testing the
general requirements. It can be done through customer surveys and focus groups.
Marketing statistics will further help the company to measure performance by analyzing
data and compiling the information received.

Conclusion
Starbucks, in a unique way, represents an all-together different business model that is based on
the core values designed for achieving a fragile balance between social conscience and business
profitability. Their product includes roasted high-quality coffee, handcrafted premium tea and a
variety of fresh food items other beverages. Starbucks is launching an iced drink called Bubble
Tea, and this report is written for providing a marketing plan for the Bubble Tea’s introduction in
New Zealand Market.

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