Post on 20-Jan-2016
Starbucks Hot Alcoholic Drinks
Kirk KaubishSuzanne SouvaChris TagliaviaLeina Rabanal
5-7-13
AgendaO ProductsO Market Needs/TrendsO Target MarketO Market Size/GrowthO PositioningO CompetitionO Marketing MixO FinancialsO Conclusion
New ProductsO The Irish CoffeeO Spiked Hot Chocolate
Market NeedsO The Starbucks “experience”O Liquor demandO Where our product is offered
Market TrendsO Market TrendsO What our product does for existing
trendsO Starbuck’s and it’s differentiation
Target Market
21-28 29-39 40-50 51-61 62+0
5
10
15
20
25
30
35
40
45
Based on Age, Would You Buy Starbucks Alcoholic Beverages?
YesNo
Age
Responses
Market GrowthO Growth within the coffee industry
and its marketplaceO Correlation between coffee and
alcoholO Evenings MenuO Continuing market growth
Marketing ObjectivesO Survey results
O Goal
Marketing MixDistribution
PricingMarketing Communication
DistributionO Starbucks builds relationships with
its distributorsO Using this strategy, Starbucks’
distribution channel is:
PricingO Spiked Hot Chocolate $6.00
O 70% profit marginO Cost $1.78 (raw materials)
O Irish Coffee $6.25O 60% profit marginO Cost $2.49 (raw materials)
Spiked Hot ChocolateRaw Material Portion Size Calculation Cost Per
Portion ($)Baileys Irish Cream 2.5 oz. 1 oz. = $0.54 $1.35
Milk 6 oz. 1 oz. = $0.03 $0.18
Fontana Bittersweet Chocolate Mocha Sauce
3 tbsp. (1.5 oz.)
1 oz. = $0.11 $0.17
Whipped Cream 2 oz. 1 oz. = $0.04 $0.08
Total: $1.78
Irish CoffeeRaw Material Portion Size Calculation Cost Per
Portion ($)Baileys Irish Cream
3.5 oz. 1 oz. = $0.54 $1.89
Coffee 6.5 oz. 1 oz. = $0.08 $0.52
Whipped Cream
2 oz. 1 oz. = $0.04 $0.08
Total: $2.49
PromotionO Starbucks does not use national
advertising campaignsO There will be one party at each
locationO Each location will create hypeO Starbucks will provide sale incentives
Product PositionO More for the sameO Competitors cannot match
Competitors
Spiked Hot ChocolatePrice Per Unit $6.00
Number of Units Sold 2850
Total Sales $17,100 100%
Less: Variable Production Costs $5,073 29.7%
Less: Variable Selling Costs $0 0%
Total Variable Costs $5,073 29.7% $1.78
Contribution Margin $12,027 70.3%
Less: Fixed Production Costs $0 0%
Less: Fixed Selling and Administration Costs
$0 0%
Total Fixed Costs $0 0% $0
Income Before Taxes $12,027 70.3% $4.22
Irish CoffeePrice Per Unit $6.25
Number of Units Sold 2850
Total Sales $17,813 100%
Less: Variable Production Costs $7,097 39.8%
Less: Variable Selling Costs $0 0%
Total Variable Costs $7,097 39.8% $2.49
Contribution Margin $10,716 60.2%
Less: Fixed Production Costs $0 0%
Less: Fixed Selling and Administration Costs
$0 0%
Total Fixed Costs $0 0% $0
Income Before Taxes 10,716 60.2% $3.76
FinanceO Goal = sell 300 hot alcoholic drinksO There are no fixed costsO Design and produce new mugsO We expect sales to grow quarterly
Sales ForecastsMeasuremen
t of Time
Beginning on: Units Sold Sales
1st Quarter June 1, 2013 10,260 62,842.5
2nd Quarter September 1, 2013 11,970 73,316.25
3rd Quarter December 1, 2013 13,680 83,790
4th Quarter March 1, 2013 15,390 94,263.75
2nd Year June 1, 2014 68,400 418,950
3rd Year June 1, 2015 68,400 418,950
Thank youAny Questions
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