CX554101 Marketing Plan: Starbucks Bubble Tea in New Zealand

This report presents a comprehensive marketing plan for Starbucks' introduction of bubble tea in New Zealand. It begins with an executive summary and situational analysis, including market size, needs, trends, competitor analysis, and internal and external factors assessed through SWOT and PESTLE analyses. The report then delves into market segmentation, targeting young people, females, and Asian demographics, and positioning bubble tea as a premium product. Measurable marketing objectives are established, followed by detailed marketing strategies covering product design, pricing, place (distribution), and promotion. The report also addresses the integration, coordination, and control of the marketing plan, offering insights into Starbucks' approach to launching this new product and meeting its marketing objectives. References are provided to support the analysis and recommendations.

INTRODUCTION TO MARKETING

CONTENTS
Executive Summary...................................................................................................................1
Situational Analysis...................................................................................................................1
Market size.............................................................................................................................1
Market needs and trends.........................................................................................................2
Analysis of the competitors....................................................................................................2
Internal analysis......................................................................................................................3
External analysis.....................................................................................................................3
Market Segmentation.................................................................................................................4
Segmentation..........................................................................................................................4
Target market..........................................................................................................................5
Positioning..............................................................................................................................5
Measurable marketing objectives...............................................................................................5
Marketing Strategies..................................................................................................................6
Product decision.....................................................................................................................6
Pricing decision......................................................................................................................7
Place decision.........................................................................................................................7
Promotional decision..............................................................................................................7
Integration and links...............................................................................................................8
Coordination and Control...........................................................................................................8
Conclusion..................................................................................................................................9
References................................................................................................................................10

Executive Summary
In any business, marketing is the most vital aspect. It is, in fact, the main process of
selling, promoting and researching the products and services to the market to be targeted. For
each and every business, the bottom line is just the profit which can be attained through
successful sales. This can be made possible with effective marketing process in place that
significantly helps in informing, attracting as well as convincing people about the products
and services and their values to the potential customers (Cooper, 2010). The current research
report also aims to understand varied marketing strategies for meeting out the ultimate goals
of the products of the firm. Starbucks is being chosen as a case company for the current
study. Focusing in relation with the Starbucks, it is one of the leading retailer, marketer and
roaster of speciality coffee all throughout the globe. The firm is planning to introduce a new
product known as “Bubble Tea” in the markets of New Zealand. Bubble tea is a famous non-
alcoholic drink of Taiwan and Hong-Kong. It contains fruit flavours and chewing balls and is
being accepted by many people all across the world. As a marketing manager of Starbucks,
the main task is to create a marketing plan for the firm for this new product and analyse
present environmental factors and situations in New Zealand.
In addition to this, the report will also throw light on segmentation, targeting and
positioning strategies of the new product. Furthermore, marketing mix tools that the firm will
use to market the product will be evaluated effectively. The bubble tea will be a premium tea
in the market of New Zealand which will offer a high-quality product with extraordinary
services to their customers. Additionally, the store environment will also be outstanding,
which will help in a fascinating large number of customers. The marketing plan will also state
measurable marketing objectives and will suggest the design of the product, pricing,
promotion and distribution of Bubble Tea. The promotion will include an outdoor display,
internet advertisement, sampling, free coupons and signs. The final part of the research report
will throw light toward coordination as well as control of the marketing plan.
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Situational Analysis
Market size
Focusing in relation to the market size for the bubble tea, it is a new market in the
western nations. In New Zealand, most of the people prefer to have traditional English tea
and thus, will have a decent market base for the beverages which are based on tea. In addition
to this, the population of New Zealand is below two times of London’s population. Taking
into account the sales of Bubble tea in London, it is around £4.5 million in the year 2013
(Davids & Newcomb, 2010). Therefore, the market size of bubble tea in New Zealand will be
around $2 million every year. These figures are quite decent for Starbucks which has done a
sale of NZD26.5 million in the previous year. Considering the sales figure for the last of the
company, it can be assumed that the average spending per person will be around NZ$8. In
addition to this, the firm also accommodates more than 2 million customers in each passing
year. However, it is not obvious that all these 3 million customers will purchase this new
product, this customer base will still offer a market potential for Starbucks for promoting its
new product in the market of New Zealand (Snyder, 2016).
Market needs and trends
In recent decades, there has been a trend within the drinking industry that people in
western nations are very open in nature and started liking tea-based drinks. In most of the
supermarkets and shops in New Zealand, products such as Lipton Iced teas, ready to drink tea
products, iced tea etc. are readily available (Jain, 2013). Because of the fast development of
Lipton in the markets, bubble tea gets the advantage of unlocking the preconceived notions in
regards to the tea. People in the nation are accepting new products which are based on tea like
bubble tea. They are even aware of the benefits of drinking tea such as it helps in reducing
the chances of heart attacks and cancers. However, people in the present age are more
concerned about their health and just prefer to have healthy drinks. Starbucks has recognized
this trend and thus, decided to offer the most popular drinks of Taiwan and Hong Kong
(Kang et al, 2012).
Analysis of the competitors
The main competitors of the company's new product are the bubble tea shops in the
market of New Zealand. Most of these shops are being located in the Asian as well as
Chinese restaurants. Further, they are quite popular among the bubble tea lovers and Asians
and this is their major advantage. Moreover, the prices of these tea shops are very low and
many other Asian cuisines are also being served to the customers (Lee & 2016). The other
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competitors of Starbucks are Coca Cola and Pepsi. Talking in relation to Coke, it has around
43.7% of the total soft drinks market of New Zealand. Other than this, McDonalds and
Dunkin Doughnuts are also considered as the major competitors of Starbucks. However, all
these brands do not offer a coffee house like atmosphere to their guests and their beverages
are also priced low. This is can be an advantage for Starbucks in this economic environment
where customers are spending consciously.
Internal analysis
SWOT analysis
Strength
 Starbucks is the leading retailer in coffee
and tea
 Strong awareness of the brand in the
markets of New Zealand (Starbucks plc,
2015)
 Welcomes by young and white collar
people
 Employees of the firm are well trained
Weakness
 Some people consider Starbucks as a fast
food brand
 To introduce bubble tea in the market,
the firm will need to upgrade their
machines and will require staff training
 Most of the people link the firm with
coffee and thus, Starbuck need to covert
this idea at the time of promotion
Opportunities
 People today are more concerned
towards their health and the firm can
promote the bubble tea considering this
aspect (Singh et al, 2012)
 Increasing demand for tea and its related
products in the market of New Zealand
 There is no domain brand in the market
and this Starbucks can capture the
market
Threats
 High level of competition in the market
 Changing taste and preferences of the
customers
 The popularity of the bubble tea shops in
New Zealand (Perreault, 2010)
External analysis
PESTLE analysis
 Political – The political condition and government in New Zealand are quite stable
which substantially offers economic strength to the local businesses of the nation.
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Rules and regulations are also very strong. Further, laws related to labour laws are
strict and the workforce is quite expensive in New Zealand (Brooksbank, 2013).
 Economic – The per capita income of the nation is also very good. People are in a
position to afford anything and resource are available abundantly. Further, there is
less inflation rate and the rate of unemployment is also very in New Zealand. This
means that Starbucks can get materials for their bubble tea at low costs.
 Social – The majority of the people in New Zealand are from the Christian religion.
Generally, people of these communities do not have many restrictions in regards to
the food they consume. Further, the literacy rate of the nation is also very high i.e. 99
per cent. Further, the floating population is also high in the nation because of the
famous university. This can bring wide opportunities for the new product of Starbucks
(Ahmad et al, 2013).
 Technology – New Zealand has made vital developments in the field of technology.
They have introduced the use of the internet as well as information technology in
most of the urban as well as rural areas. To operate a new product in the market,
Starbucks will get advantage of these technologies.
 Legal – The government of the nation has curbed the problem of corruption and thus,
people are enjoying basic facilities in the nation. Though the profit margin for
international companies is low in New Zealand, there is ample of opportunities for the
new business. There is trade and business freedom in the country which will help
Starbucks to operate its business effectively and successfully (Homburg et al, 2011).
 Environmental – Further, the ecological system in New Zealand is also very unique as
it is located 900 km away from Australia. People in the nation are also well-aware
about the change in weather conditions. Thus, the company have to ensure that it
should keep the environment safe and free from dust as well as pollution.
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Market Segmentation
Segmentation
Segmentation is being referred to as the process of segregating the market of the
customers into various groups and sub-groups. Focusing on the current market of New
Zealand, it can be categorized into various segments on the basis of geographic,
psychographic, demographic and behavioural segmentation.
 Demographic segmentation – Under this, the population is being divided based on
income, age, gender and education. For the new product bubble tea, young people,
females and people with a higher level of education are more likely to have tea
(Piercy & Morgan, 2014).
 Psychographic segmentation – It divides the population based on attitude, belief, and
lifestyle. People with a healthy lifestyle will prefer bubble tea. Other than this Asian
will show more interest in this tea as they might have heard or tried bubble tea earlier.
 Behavioural segmentation – Under this, Starbucks will segregate its population based
on their loyalty status and buying patterns. There is no such difference amid the
bubble tea being offered in the shops and that offered in Starbucks. Thus, the
company should pay attention to those customers who possess strong loyalty on the
bubble teas (Wood, 2017).
Target market
It is being defined as a technique of dividing a large market segment into different
groups of customers who have the same need, features and behaviour. On the basis of the
above explanation, it is vital for Starbucks to have a well-defined target market. Considering
all the factors, the main target market for the company will be:
 Young people – These are the people with a higher level of education, who want
Asian food and healthy food (Boone & Kurtz, 2013).
 Female – Females are generally more concerned about their looks and always have
specified choices about the drinks they intake. They also want a healthier lifestyle.
 Asian people – Asian people who have a high level of loyalty towards their food.
Positioning
Positioning is being referred to as a strategy that which the firm selects so as to pay
attention as well as excel in those areas. While deciding this strategy, it is vital for Starbucks
to take into account the strength and weakness of the firm, needs and demands of the
customers and finally, position of the competitors in the markets of New Zealand.
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Considering all the aspects being elaborated in the above discussion, Starbucks will position
its new product i.e. “bubble tea” as a premium tea which will accomplish the needs of young
people, females and Asian people who like something sweet, healthy and authenticity to
drink (Berman, 2014). The prices of the bubble tea will be higher in comparison with the
other competitors in the market of New Zealand such as Bubble tea shops, McDonald,
Dunkin Doughnuts, Coke and Pepsi. It will offer tea with high-quality services and great in-
store environment.
Measurable marketing objectives
Marketing objectives are the goals which the firm establishes for promoting their
products and services to their target market. Further, these marketing objectives should be
achieved within a stipulated period of time. Since Starbucks is planning to introduce a new
product known as bubble tea in the markets of New Zealand, it will be branded as
“Bubblecino". Moreover, the product will be introduced to the public through major 35 stores
of Starbucks throughout the nation (Hassan & Craft, 2012). The measurable marketing
objectives for the new product of the company for one year are as follows:
 Increasing brand awareness of the bubble tea in the public by illustrating the health
benefits of drinks which are tea based
 Adding and introducing new flavours every month for accumulating response about
the products from the customers (Christopher, 2010)
 Attaining NZ$1 million sales of the new product next year
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Marketing Strategies
Product decision
The new product of Starbucks "The bubble tea" will make in-store like other
beverages. It will be branded as “Bubblecino” and will be served to the public in the half-
round top with a clear plastic cup. These cups are also being used by the store for serving
Frappuccino, and Tazo Chia. The main motive behind making use of these plastic cups is that
people can look at the colourful beverage depending upon the flavours they choose and the
chewing pearls which are at the bottom of the cup (Gordon, 2011). In addition to this,
Starbucks will make use of half round top because if the customers want to add cream on the
top then they can easily add to their bubble tea. Other than this, the straw will also be slightly
different from that being used in Frappuccino. It will be in a bigger size so that chewing
pearls can be sucked out without any difficulty. Thus, the package will support in
differentiating the bubble tea from other tea in the market and people will be aware that this
cup is of Bubblecino from Starbucks (Moore & Farris, 2010).
As a marketing manager of Starbucks, it is vital to take many decisions. First of all, it
is vital to make sure that the waiting time for bubble tea should be similar with the waiting
time for other tea and coffee based products which is generally not more than one minute
unless the store is very busy. Secondly, it is also crucial that different flavours should be
available so that customers can choose their most liked flavours from the list. Considering
this, bubble tea will introduce new flavour every month so as to accumulate better response
from the people in regards to their taste as well as preferences (Luther, 2011). If such flavours
are welcomed by the customers, Starbucks will keep that flavour on the menu. Regarding
this, there is a need of conducting marketing research during the early stage of marketing for
the purpose of determining the type of mixtures, flavours and formulas are most appropriate
and recognized by the people of New Zealand. Further, the cups will be available in three
sizes i.e. small, medium and large. Finally, customers will also get an option of adding cream
on the top of their tea, double the chewing balls and coconut gel.
Pricing decision
At the time of deciding the pricing of the products, both internal, as well as external
factors, need to be considered. The very first is the cost of goods sold which will include raw-
materials like fruits flavours, milk, tea, cream and packages. The appropriate cost of all these
materials is NZD $3.00. Further, the cost of packages is NZ$ 0.10, labour costs are NZ$
15.00 per hour so for making a cup of Bubblecino it will be around NZ$0.50. Moreover, the
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cost of overhead about NZ$3.60 (Ashford, 2010). Thus, this cost will offer enough margin to
set the prices to Starbucks. In addition to this, external factors encompass prices being offered
by the rivalries and expectation of the customers. Starbucks sells their other beverages at
around NZ$7 per cup. So, it is reasonable to set the rate of bubble tea at NZ$7. Furthermore,
if the customer desires to add more cream or chewing balls than they have to pay an extra
cent for the same.
Place decision
Bubble tea will be distributed through direct retail channels i.e. 35 stores of Starbucks
all throughout New Zealand. Furthermore, all these stores are located in big shopping malls
and CBDs. Since, the target market of the bubble tea is young people, white collars and
females, these stores will be a great distribution channel (Boyer, 2013). Moreover, a large
number of people can be reached by distributing bubble tea through its stores.
Promotional decision
It will include decisions related to an advertisement by using the internet, signs on
buses and outdoor displays. Internet advertising will include the promotion of new bubble tea
on frequently used websites in New Zealand. Other than this, social media such as Facebook
and Instagram will also be used. All these advertisement mixes are not so expensive and can
spread awareness about the new product of Starbucks to a large number of people (Gmelin &
Seuring, 2014). Additionally, it is also recommended to the store to make use of sales
promotion like free coupons and sampling taste for promoting their new products. Talking in
relation to sampling, it is will work better if the coupons are also being utilized at the time of
promotion of the Bubble tea. It is important for the manager of Starbucks to provide coupons
like two cups at a price of one on group purchase websites like TreatMe. Though this, the
firm will be in a position to generate an efficient amount of sales for the new products and
will also help in building a base of customer. Other than this, these promotional methods will
definitely support in attracting the customers
Integration and links
Speaking in relation to the marketing mix, it is being referred to as a specified
combination of the product, its price, making it available in the market as well as way of
promoting the same. As per the comprehension and needs of the customers, the company
creates a marketing mix of price, promotion, product and place. All these are considered as
the major components of the marketing mix and are intricately inter-linked with each other.
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The marketing mix can be good or bad and sensitively impacts the sales of the product in the
market. in the current case, Starbucks is planning to introduce a new product i.e. bubble tea in
the market of New Zealand and thus, it is important for the firm to reinforce all the elements
of marketing mix with each other for the purpose of enhancing their customer’s experience
(Simkin, 2015). If the firm is required to make changes in any one element of the marketing
mix, it is necessary to check whether the change fits as well as reinforced with the other
component of the marketing mix or not.
Furthermore, if the changes contradict with each other than the marketing mix of
Starbucks for its new product will be less effective in serving its target market. Thus, it is
vital for the marketing manager to manage the price, product, place and promotion in such a
manner that the level of customer satisfaction is always higher in comparison with its
competitors. Moreover, the decision in relation to the marketing mix forms the key facet of
the execution of the marketing concept. For illustration, Starbucks has decided to promote its
new product by using social media. This element should be inconsistent with the other
elements such as it should target those people who make use of such media, accessibility of
product and the price should be according to the target market. Each and every strategy being
chosen by the manner can influence the overall functioning of the product (Ghoshal &
Westney, 2015).
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Coordination and Control
The main success of the marketing plan is identified through its control as well as
coordination. Further, coordination can be ensured through the effective flow of feedbacks as
well as information between varied departments within Starbucks. It is vital that all data
related to sales and the response of the customers should be communicated to the marketing
department so as to support them in making suitable marketing decisions. Even the marketing
department also need to pass on information related to any special coupons they will
advertise in order to make the store prepare about the possible increase in demand and sales.
In addition to this, activities can also be coordinated and controlled through the effective
review (Ashford, 2010). With the change in time and conditions, it is necessary for the
manager to review their plan as per the external as well as an external environment like
market share alternation, competitors etc. All these methods will help the firm to improve its
services and quality and will help them to perform better in comparison with its competitors.
Other than this, there are two crucial methods that can also be used by Starbucks for
controlling and coordinating the marketing activities and these are as follows:
 Annual plan control – It is defined as the method wherein annual plans are prepared
for different activities. Each and every plan has its own objectives, resources, time
limit, rules and procedures. It is generally related to the sales wherein actual outcomes
is compared with the pre-determined Starbucks for evaluating whether the plans were
attained successfully or not. This method encompasses five majors such as analysis of
sales and market share, the market expense to sales, financial and stakeholder attitude
(Chung, 2014).
 Customer opinion and feedbacks – It is a process of gaining insight into the existing
products and services from the customers and marketing methods being employed by
the firm. It can be carried out through surveys, suggestion box, phone and feedback
forms.
Conclusion
Thus, to conclude it can be said that a marketing plan is a strategic document of the
business corporation which helps them to emphasize on the key resources as well as they can
plan their business growth accordingly. It was also originated from the study that with an
effective marketing plan in place, companies like Starbucks can comprehend the factors that
might affect the success as well as the progress of their business. Consequently, it can be
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