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Starbucks Tows

"We aren't in the coffee business, serving people.
We are in the people business, serving coffee"

Howard Schultz, Starbucks Chairman and Chief Global Strategist
Fortune Magazine, Vol. 149 No. 2

Title: Starbucks: "The Non-Coffee Treat"
Submit To: P.V. Sundar Balakrishnan
Completed By:


Matthew CarmeanPartner Julie AnstettPartner Julia ToochettePartner

Joel EnnisPartner Joey EatonPartner Trang P. HuynhPartner

Table of Contents

TABLE OF CONTENTS 2
EXECUTIVE SUMMARY 3
MANAGERIAL PROBLEM 4
SITUATION ANALYSIS 4
Company 4
Customer 4
Competitor 5
Complementors 5
STRATEGY (STP) 5
Segmentation 5
Target 5
PRODUCT LIFE CYCLE 6
Introductory Stage 6
Growth Stage 6
Maturity Stage 7
Decline Stage 7
IMPLEMENTATION PLAN AND RECOMMENDATION 7
Product 7
Price 7
Place (Distribution) 8
Promotion 8
APPENDIX 9

Executive Summary

Starbucks is the leading retailer and roaster for brand specialty coffee in the world. It has over 7,500 stores located worldwide. As Starbucks continues to expand, it will encounter all sorts of new product markets, with new and demanding customers for unique and appealing products. Starbucks has begun by introducing an extension of the Frappuccino line targeted to the non-coffee drinker. Entering this new market, Starbucks faces many challenges from having to compete to retain brand recognition of its primary products, yet increase awareness of its new product line. Our analysis and research of the market have resulted in keys findings as follows:

· The new Frappuccino blended beverages, also known as the Summer Drink flavors will help Starbucks reposition itself in the developing non-coffee iced-beverage market; Starbucks will also need to enhance the product perception to maintain the perceived high quality. Customers of this segment are sensitive to taste and quality of food product and nutritional data.

· With this new line extension, Starbucks will be facing many new competitors...