Marketing Plan: CX554101 Starbucks Bubble Tea Introduction Strategy

This report presents a comprehensive marketing plan for the introduction of a Bubble Tea product variant within the Starbucks product line in New Zealand. It begins with an executive summary and table of contents, followed by an in-depth situational analysis that assesses market size, customer needs, competitor analysis, and internal and external environmental factors using PESTEL analysis and value chain analysis. The report then outlines segmentation, targeting, and positioning strategies, along with measurable SMART marketing objectives. It delves into detailed marketing strategies, including product, pricing, distribution, and promotional decisions. The report concludes with a summary of recommendations for Starbucks, offering insights into how the company can successfully launch its Bubble Tea product variant in the New Zealand market.

Running head: MARKETING PLAN
MARKETING PLAN
Name of the Student
Name of the University
Author Note

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Executive Summary:
The purpose of the report is to construct a marketing plan for the introduction of a product
variant Bubble Tea in the Starbucks product line. The paper presented a situational analysis
for assessing the suitability of the product to be introduced in New Zealand. In this paper, the
segmentation, targeting and positioning strategies are discussed depending on the population
structure and preferability of the region. The paper constructed a SMART goal strategy for
the new product followed with the marketing strategies of the product mix of the Bubble Tea.
The paper concluded by presenting a summary of recommendation, which Starbucks can
apply for launching the product variant.

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Table of Contents
Introduction................................................................................................................................4
Discussion..................................................................................................................................4
Situational Analysis-..............................................................................................................4
Description of the market size:..........................................................................................4
Analysis of customer needs and trends:.............................................................................5
Analysis of the competitors:...............................................................................................6
Identification and analysis of internal environmental factors:...........................................8
Identification and analysis of external environmental factors:........................................11
Segmentation, Targeting and Positioning of the Product:...................................................11
Segmentation-..................................................................................................................11
Targeting-.........................................................................................................................13
Positioning of the new product-.......................................................................................13
Measurable Marketing Objectives:......................................................................................14
SMART objectives-.........................................................................................................14
Marketing Strategies:...........................................................................................................15
Product Decisions-...........................................................................................................15
Pricing Decisions-............................................................................................................15
Distribution Decisions:.....................................................................................................16
Promotional Decisions-....................................................................................................17
Integration and Link:............................................................................................................18
Coordination and Control:....................................................................................................18

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Conclusion:..............................................................................................................................19

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Introduction
The existence of marketing have transformed from the technique of word-of-mouth
marketing to the hand-written form of marketing to print media and to digital or electronic
forms (Kumar, 2015). Marketing strategies are based upon the objective of fostering
relationships with the consumers as well as marketing includes the state of being aware of
their requirements and motivation which influences the needs of the buying process (Baker,
2016). The purpose of the report is to construct a marketing plan for the introduction of a
product variant Bubble Tea in the Starbucks product line. The paper will present a situational
analysis for assessing the suitability of the product to be introduced in New Zealand. In this
paper, the segmentation, targeting and positioning strategies will be discussed depending on
the population structure and preferability of the region. The paper will construct a SMART
goal strategy for the new product followed with the marketing strategies of the product mix
of the Bubble Tea. The paper will be concluded by presenting a summary of
recommendation, which Starbucks can apply for launching the product variant.
Discussion
Situational Analysis-
Description of the market size:
The current business of Starbucks in New Zealand is profitable and has a specific
target market, specifically tourists. Starbucks is targeting the students and travellers in New
Zealand for increasing the market size of the brand. The brand has faced challenges and
losses in the future due to the existent competitors, as the coffee culture of New Zealand is
strong. Starbuck’s sale is forecasted to be around 1.3 million dollars. Starbucks is about to
have a new partnership contract in New Zealand. Tahua Capital successfully acquired license
of Starbuck’s with a price of 4.4 million New Zealand dollars (Lewis, 2017). The profit

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achievement of Starbucks has been difficult in the past because of the competition from the
local coffee shops. In New Zealand, there are small coffee shops, which are selling drip
coffee and espresso as well as the national coffee chains like Fuel Coffee and Mojo Coffee
are expanding the business globally. The new acquisition of Starbucks by Tahua Capita is
expected for securing the leases for around 22 stores of Starbucks and the Tahua Capital will
also employee 300 existing Starbuck’s employee (Ansoff et al., 2019).
Analysis of customer needs and trends:
The country New Zealand depicts continuous changes in regards with the market
trends for products and services and regarding the changing customer needs. Constructing an
understanding of the demographic changes is very crucial for the brand and media owners.
The brands of New Zealand requires the knowledge about the past trends, present preferences
and future trends for ensuring better offerings of the products and services (Gupta, Nagpal &
Malik, 2018).
The multi-cultural transformation of New Zealand is portraying a major impact on the
cultural perspectives of New Zealand buyers. The importance of authenticity is increasing is
in the customers as around 1.4 million potential customers are visiting food and beverage
websites every month and to meet the changing preferences, the market is also offering
2,00,000 plus gourmet food recipes and ingredients for delivering into the doorsteps (Nair &
Weber, 2017). The importance of convenience is increasing in the population of New
Zealand. The country has experienced major changes in the snaking business. Big fast food
brands and cafes have introduced the facility of takeaway. The leisure preferences is
changing in the New Zealanders, they are becoming more focused about their personal
fitness. Even the media preferences and attention span of the New Zealanders are changing as
the young New Zealand population is estimated to be watching an average of 12 hours of
digital/video content every week. The demography is also changing in New Zealand as the

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average age is forecasted to alter with the presence of more 55 year olds in the population, a
growth to 30 percent from 27 percent by the year 2028 (Huang et al., 2017). The most
focussed segment of the consumer market in New Zealand is non-alcoholic beverages. The
Asian population, which is around 540,000 in New Zealand have consumed wide ranges of
beverages in the year 2018, such as smoothies, soft drinks and iced drinks whereas the people
with European origins do not prefer smoothies and iced drinks (Zhang, Kim & Goodsir,
2019).
The changing demographics, psychographic and behavioural changes of the
customers, needs to be taken into account while constructing any product development and
promotion strategies in Starbucks. The country has experienced a growth in colloquial mixes
in coffee blends, specifically in the latte-variant as the consumers in New Zealand prefers
coffee with the addition of milk.
Analysis of the competitors:
The country has experienced a growth in the segment of pod coffee machines, which
offers fresh-grounded coffee for the consumer market. One of the major competitors in the
coffee business/beverage segment is BrewGroup, which was acquired in the year 2016 by
Jacob Douwe Egberts, as it became second largest coffee player after Nestlé (Parsons &
Wilkinson, 2015). Even though the brand focussed on foodservice medium in the country at
the initial phase but it started gaining a significant base in retail channel by adding retail
brands like, Hummingbrid, Gravity and Jed’s Coffee Co. in the portfolio (Nair & Weber,
2017). The country New Zealand also experienced a rise in the private label coffee chain
brands. The segment also experienced a growth in the consciousness of health and wellness
which marked the growth of fresh coffee business as well as the rise of the decaffeinated
version of beverages (Chai, 2016). This market/consumer trend contributed towards the
growth of organic players.

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The indirect competitors of Starbucks can be the local coffee boutiques and café,
which sells freshly, ground coffee. The consumer coffee pod machine businesses can also be
considered as the indirect competitors of Starbucks. The direct competition can be the retail
chains of coffee selling brands like BrewGroup, The Coffee Club and Robert Harris (Sakal,
2018). The potential competitors can be the growing demand for organic brand of coffee or
the brands/shops selling beverage with health and wellness benefits.
INDIRECT COMPETITORS DIRECT COMPETITORS
POTENTIAL COMPETITORS
MARKET COMMONALITY
RESOURCE SIMILARITY

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Identification and analysis of internal environmental factors:
The internal environmental factors, which may reflect impact on Starbuck’s marketing
objectives, are as follows:
 Value Chain Analysis-
Inbound logistics: The brand selects business-appointed coffee buyers who selects fines the
premium quality of coffee beans, the green beans of coffee are sourced directly from farms
for the buyers of Starbucks. The distribution centres, where the beans are transported after the
process of roasting, the company owns few. The procurement of the business is not
outsourced by the company, which ensures the premiumness in the quality standards of the
beverage offerings (Rueda, Garrett & Lambin, 2017).
Operations: The brand is known for operating around 75+ markets, from direct stores or from
facilitating licensing. In the annual report, the total net revenue in the year 2017 was from
own stores was 79 percent and licensed store was 10.5 percent (Milani, 2019).
Outbound Logistics: The Company does not involve intermediaries in their business
processes, as licensed and own stores own the major areas of product selling.
Marketing and Sales: The Company’s focus is largely focused on investing in high quality
consumer service and premium quality products than in the medium of aggressive marketing.
But the company involves in communication and marketing activities for facilitating a
product launch.
Service: The customer service at the Starbucks stores majorly determines the customer
loyalty for the brand.
 Human Resource Management- One of the key success factors of Starbucks is the
commitment of the human workforce. The staffs at Starbucks is motivated by
experiencing the incentives and benefits. The human resource management in

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Starbucks in known for focussing its efforts towards employee satisfaction and
training programs, which contributes towards efficient work culture (Milani, 2019).
 Technology Development- The Company have the capability of incorporating
technological resources in the operational processes, which can be observed in most
of the branches of Starbucks across the world. The coffee brand uses technology for
ensuring a consistency in the quality and taste (Lemus et al., 2015). It also uses
technological resources for connecting with the consumers like it encourages an
effective environment by enabling Wi-Fi services in the cafes and the brand
incorporated the iBeacon system of Apple, which will allow the customers for
ordering a beverage option by the use of a phone app and also check the readiness
(Muzellec & O'Raghallaigh, 2018).
 Organizational Structure- The form of organizational structure reflects the
significance of influence over business processes.

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Organizational Structure of Starbucks
(Source: Nan & Li, 2017)
 Organizational culture- The organizational culture of Starbucks is considered to be one of
the crucial factors of business success or failure. The organizational culture of Starbucks
ensures the quality of customer experience, which is most crucial for the company. The
corporate culture is comprised of diversity and inclusion (Botha, 2019). The main
characteristics of corporate culture of Starbuck’s include Servant leadership techniques
(which keeps the employee satisfaction first), effective communication and collaboration,
relationship-driven approach, diversity and inclusion and openness (Rashid & Ghose,
2015).

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Identification and analysis of external environmental factors:
The identification and analysis of external environmental factors will be analysed through
PESTEL analysis:
 Political factors- The country has a stable government and reflects strong norms and
regulations like labour laws. The country offers trade and business freedom. It will be
positive for Starbucks for the implementation of business strategies in New Zealand.
 Economic factors- The per capita income of the country is high which indicates the
high level of purchasing power among the consumer group. The GDP per capita of
New Zealand reached 42,207.609 US dollars in the year 2018 in comparison with the
GDP per capita of 2017, 40,530.716 US dollars. It will be positive for Starbucks, as it
will help in targeting customer based on the income factor.
 Socio-cultural factors- The country possesses a multi-cultural society where
immigration is encouraged from all around the world. The diverse cultural will allow
the company to successfully communicated about the new product launch Bubble tea.
 Technological Factors- The technology sector in New Zealand is growing at a faster
rate. The expansion of the sector can be depicted from the arte of employment, which
constituted around six percent of the total workforce. The company will be able to use
the technological advancements in constructing the premium customer experience.
Segmentation, Targeting and Positioning of the Product:
Segmentation-
The process of dividing the market in homogenous groups of potential consumers on the
basis of requirements, behaviour or characteristics is known as market segmentation.
Starbucks current segmentation bases are as follows: