3. STARBUCKS EVENINGS MARKETING PLAN
TASHA HUGGINS, KRISTY ALLAN, ASHLEY LEWENBERG, KATIE LEE,
BRITTANY WATSON MKTG-5007
3
EXECUTIVE SUMMARY
COMPANY SUMMARY
Starting in April 2016, Starbucks will be implementing their Starbucks
Evenings service, which will encourage customers to both start and end their day
with Starbucks. After 4:00 p.m., customers will now have the option of ordering
from a menu of local craft beers, wines and small share plates in addition to their
extensive line of premium coffees and handcrafted beverages menu that is
offered during the day.
STRATEGY OBJECTIVES
The main objectives of the launch of Starbucks Evenings include:
- Build Evenings menu and service awareness to target existing and potential Starbucks customers through push
and pull marketing strategies
- Increase visit frequency after 4:00 p.m. by 30%
- Increase food and beverage daily sales after 4:00 p.m. by 300% over the next 4 years
- Increase current and prospective customer base during slower coffee sales times
- Maintain premium status of brand by diversifying products while still maintaining Starbucks’ reputation of being
a premium coffee brand
MARKETING STRATEGY
The marketing strategies we propose for achieving the strategy objectives would be push and pull
promotions with the main target being existing and potential Starbucks customers. The push promotions that
would be implemented are new product sampling, drink and meal pairing options and an “Appy Hour”
promotion which would encourage customers to return after 4:00 p.m. to receive a discount on a share plate
item by showing a purchase receipt from earlier that day. Pull promotions would be implemented through the
use of email outreach to customers who are registered with the Star Loyalty Program, social media advertising
and out-of-home advertising. These promotions would be used in order to raise awareness of the new offering
and give customers an alternative place to relax with friends and have a drink if they do not like the typical bar
atmosphere.
ACTION PLAN
Starbucks Evenings is offered in 3 existing Starbucks locations in downtown Toronto, with the potential
for expanding to other locations in Canada if the service proves to be a success. In order to increase the
success of Starbucks Evenings, the proposed marketing strategies would be implemented to increase
customer awareness and visit frequency.
KEY FINANCIALS
Starbucks’ sales forecast predicts that with the incorporation of Starbucks Evenings, Starbucks will see
an annual sales increase of approximately 7% each year over the next 4 years with an increase of
$2,664,698.67 net sales per store by 2019. Market share projections show that Starbucks Evenings will
represent 0.32% of the restaurants and bars market by 2019.
ACTIONABLE INSIGHTS
Recommendations for Starbucks Evenings would be starting their Evenings service at 4:00 p.m., where
there is usually a slower rate of coffee sales, instead of 2:00 p.m. It is also suggested that the Evenings Menu
includes more items for customers who have dietary restrictions, in order to be more competitive with other
establishments that offer a variety of dietary alternative options.
4. STARBUCKS EVENINGS MARKETING PLAN
TASHA HUGGINS, KRISTY ALLAN, ASHLEY LEWENBERG, KATIE LEE,
BRITTANY WATSON MKTG-5007
4
COMPANY OVERVIEW
Starbucks is an American Company with over 22,519 coffeehouse chain locations in 50 countries
(Starbucks Corporation, 2016). In 1971, the company started as a single storefront in Seattle, Washington
offering specialty coffee with the aspiration of “becoming a place for conversation and a sense of community
outside of work and home” (Starbucks Corporation, 2016). Today, Starbucks is the premium roaster and
retailer of specialty coffee in the world. Starbucks offers a range of products to enjoy in the store, on the go or
at home. They offer coffee, handcrafted beverages, merchandise, fresh food and now alcohol and savory small
plates at Starbucks Evenings (Starbucks Corporation, 2016). Starbucks went public in 1992 and their common
stock is listed on NASDAQ under the trading symbol SBUX. Starbucks Brand Portfolio includes: Starbucks
Coffee, Tazo (1999), Seattle’s Best Coffee (2003), Torrefazione Italia Coffee (2003), Ethos Water (2005),
Evolution Fresh (2011), La Boulange (2012), and Teavana (2012) (Starbucks Corporation, 2016). First Canadian
Starbucks opened in Vancouver on March 1, 1987 – it was the company’s first international location. Since
then, Canadians have embraced Starbucks Experience with more than 1,070 company-operated and licensed
locations across Canada (Starbucks Corporation, 2016).
Starbucks takes pride in growth through a balance between profitability and social conscience. Social
conscience is demonstrated through Ethical sourcing, Environmental stewardship and community involvement
(Starbucks Corporation, 2016).
5. STARBUCKS EVENINGS MARKETING PLAN
TASHA HUGGINS, KRISTY ALLAN, ASHLEY LEWENBERG, KATIE LEE,
BRITTANY WATSON MKTG-5007
5
PRODUCT/SERVICE OFFERING AND CHANNEL STRATEGY
Starbucks is offering customers a selection of premium wines, craft
beer, cider and small plates to enjoy after 4:00 p.m. in select locations in
Toronto. Starbucks Evenings was first introduced in Seattle in 2010 as a
response to customers’ demand for a familiar and casual meeting
environment in the evening hours (Starbucks Newsroom, 2015). With its
success, Starbucks Evenings has launched in more than 300 locations across
the US, with one location in the UK and Japan (Harris, 2016). Starbucks
Evenings is focused on providing an atmosphere where customers can unwind
at the end of the day with friends and family. The menu features a selection
of local wines ranging from $9.00 to $13.00 per glass (5 oz). There is also a
variety of beers (12oz) ranging from $5.00 to $6.00 (Strauss, 2016). The
beverages will be served in customized Starbucks glasses. Starbucks partnered
with various wine chefs to identify small plates that would best complement
the wine, beer and cider selections. From Goat Cheese and Artichoke
Flatbread, Truffle Mac and Cheese, to Chicken Skewers, the Starbucks
Evenings Menu offers customers many savory dishes to choose from that are
under 500 calories, ranging from $3.00 to $8.00 (Starbucks Newsroom, 2015).
The share plates are served on flatware to help create a more elegant atmosphere.
Starbucks provides customers with more than just great coffee;
Starbucks is committed to creating an experience for customers that includes a
warm, social atmosphere coupled with exceptional customer service.
Starbucks employees add additional value to their customers’ experience by
delivering the food and beverages directly to their tables. With the addition of
the Starbucks Evenings Menu, customers are given a larger variety of options
to choose from in the evening hours.
Starbucks sells its Evenings products through a direct distribution
channel in their stores. The suppliers for their craft beer are from local
breweries in Ontario, specifically Amsterdam Brewery and Muskoka Brewery.
The wine is purchased from the LCBO. The food products are supplied by
Gordon Food Services, and are delivered everyday to maintain their freshness.
From top: Chicken
Sausage and Mushroom
Flatbread, Meatballs in
Tomato Sauce, Truffle
Mac and Cheese
From left: Bacon-
wrapped Dates, Truffle
Popcorn, Goat Cheese
and Artichoke Flatbread
6. STARBUCKS EVENINGS MARKETING PLAN
TASHA HUGGINS, KRISTY ALLAN, ASHLEY LEWENBERG, KATIE LEE,
BRITTANY WATSON MKTG-5007
6
SITUATION ANALYSES
SWOT ANALYSIS
STRENGTHS
• Starbucks has a strong Area A built around
their brand experience and product
customization options
• Can leverage its reputation for product
innovation and customer loyalty to introduce
new offerings to customers with relatively
high success (Hellman, 2014)
• Can better capitalize on its experience value
by being a meeting place for customers
during times where they may want to enjoy a
glass of wine instead of a cup of coffee
(Haynes, 2015)
WEAKNESSES
• The brand itself may make customers
reluctant to see Starbucks as a credible place
to buy alcohol, since it is often associated
with premium coffee products
OPPORTUNITIES
• Further develop its current customer base to
increase return visits after 4:00 p.m.
• Can acquire new market segments
• Open additional locations that offer the
Evenings Menu, which can reach new
markets in more locations
THREATS
• Need to compete with other businesses that
sell small share plates and alcoholic
beverages
• Have to compete for the same market
segments as established restaurants and bars
• Licensing costs through Alcohol and Gaming
Commission of Ontario (AGCO)
• Limited menu items exclude anyone who
maintains a vegan diet
• Failure of Starbucks Evenings may negatively
affect the Starbucks brand as a whole
(Starbucks Corporation, 2015)
• Economic sensitivity of consumers may result
in fewer customers who have less disposable
income with less willingness to pay more for
products and services (Krikorian, 2014)
7. STARBUCKS EVENINGS MARKETING PLAN
TASHA HUGGINS, KRISTY ALLAN, ASHLEY LEWENBERG, KATIE LEE,
BRITTANY WATSON MKTG-5007
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PORTER 5 FORCES ANALYSIS
THREAT OF NEW ENTRY: MODERATE TO HIGH
The locations that have adopted the Starbucks
Evenings Menu in their stores were required to
pay for baristas’ Smart Serve certification, and
train them on how to serve drinks and food. For
smaller coffee shops that wish to enter the
evening market, this could potentially be very
costly for them to implement. For larger
competitors like Tim Hortons, Aroma, or Second
Cup, this would not be a significant barrier to
entry. Starbucks also needed to purchase and
brand the new glassware and dishes for the
small plates and alcoholic drinks. Depending on
the competitor’s approach, this may or may not
effect their ability to enter into the market.
BUYER POWER: LOW
Buying power of Starbucks’ customers is
relatively low. The brand has built a very loyal
following, as demonstrated through its Star
Loyalty Program, with over 11 million members
(Choi, 2016). Customers have a variety of lower
priced and lower quality options available to
them, but the significant market share of
Starbucks is a testament to its customers’
willingness to pay higher prices for the
experience and quality that Starbucks works to
provide. The only significant implication on
buyer power is the fact that only customers
that are legal drinking age can purchase
alcohol.
THREAT OF SUBSTITUTES: HIGH
The alternative plan for customers would be to
go to a bar or restaurant that serves the same
beer and wine, or to the craft breweries
themselves. The wine, beer and cider that
Starbucks Evenings is selling is not exclusive,
unlike their coffee, so customers do have a
choice to go somewhere else to consume the
same product.
SUPPLIER POWER: MODERATE TO HIGH
Gordon Food Service supplies food products.
Since Starbucks does not manufacture their
food products, Gordon Food Service has control
over pricing. Their wine and cider supplier is
LCBO, giving it immense supplier power since it
maintains control over both distribution and
pricing of all alcoholic products. Starbucks chose
Muskoka Brewery and Amsterdam Brewery as
their craft beer suppliers (Ontario Craft Brewers,
2016), yet, LCBO still maintains control of
distribution and pricing of alcohol across
Ontario.
COMPETITIVE
RIVALRY
THREAT OF NEW
ENTRY
BUYER POWER
THREAT OF
SUBSTITUTION
SUPPLIER POWER
COMPETITIVE RIVALRY: MODERATE
Despite the threat of competitive rivalry, Starbucks has a strong, loyal customer base that is likely to stick to the
brand they know and trust, as opposed to going to another café. The majority of other options for individuals are bars,
which are a very different atmosphere where people often drink to get drunk. In the US, 60% of Starbucks Evenings’
customers are female who “do not necessarily like to hang out in bars”, so they choose to come to Starbucks instead
(Wright, 2015).
Starbucks Evenings is also striving for exceptional quality of their snacks, beer and wine to prevent ease of copying
by competitors. Starbucks tasted more than 500 wines, and chose their favorite 10 to be included on the menu (McCoy,
2015). It was very important that the right wines were chosen, because studies show that 70% of Starbucks’ customers
drink wine over any other alcoholic beverage (Leaf, 2016). In addition, Starbucks paired with gourmet chefs to create their
small plates so that they would complement each wine selected. Research also showed that Starbucks customers are two
times more likely to drink craft beer, as opposed to non-craft beer so this was also taken into consideration (Leaf, 2016).
8. STARBUCKS EVENINGS MARKETING PLAN
TASHA HUGGINS, KRISTY ALLAN, ASHLEY LEWENBERG, KATIE LEE,
BRITTANY WATSON MKTG-5007
PEST ANALYSIS
POLITICAL/LEGAL
Political and legal barriers upon entry mainly deal with the licensing and legality of serving alcohol
within stores. In Ontario, the AGCO (Alcohol and Gaming Commission of Ontario) is the governing body that is
responsible for the granting and distribution of liquor licenses to establishments (Alcohol and Gaming
Commission of Ontario, 2016). Companies wishing to serve alcoholic beverages must adhere to the regulatory
requirements for both its sale and service under the Liquor License Act (LLA) (Alcohol and Gaming Commission
of Ontario, 2016). Additionally, employees need to be certified by the province of Ontario’s Smart Serve
certification in order to legally handle, sell, and responsibly serve alcoholic beverages within Starbucks
establishments (Smart Serve Ontario, n.d.). A wide variety of new liabilities are also assumed with the addition
of alcohol sales (Insurance Bureau of Canada, n.d.). Some Starbucks locations are open 24 hours a day. This
raises the concern of legal hours at which establishments can sell or serve alcohol. Varying from province to
province, Starbucks will have to ensure that locations that are open 24 hours a day abide by these regulations
(Insurance Bureau of Canada, n.d.).
Lastly, Starbucks should be cautious towards abiding by governmental regulations with regards to the
handling of food products. Since employees will be responsible for administering new menu items, they must
be trained in proper food handling procedures including food-borne illnesses, contamination, and tampering,
as these could negatively impact both the business and relationships with suppliers and governments
(Starbucks Corporation, 2015).
ECONOMIC
With the Canadian economy flirting with a recession, many Canadians do not have as much disposable
income as they might have had in the past during less fragile economic times. As a result, many Canadians may
turn to lower priced competitors. According to Starbucks Corporation’s (2015) 2015 Annual Report,
approximately 69% of the company’s total net revenues for 2015 were attributable to the Americas (Canada
and the US). With the economy being in an undesirable state, any potential slows or declines in the US and
Canadian markets could largely impact cash flows, which translates into decreased funding for new initiatives,
such as the Starbucks Evenings Menu (Starbucks Corporation, 2015).
SOCIO-CULTURAL
Socio-cultural factors that may impact Starbucks’ bottom line and long-term growth opportunities
include changes in consumer values towards nutrition and aging demographics’ spending power. Consumers
are increasingly becoming more aware of the inherent nutritional value of products they buy. Specifically,
consumer trends are moving towards healthier options that offer whole ingredients, low fat, low sugar, and
low sodium content (Wills et al., 2009). For Starbucks, this means that consumers will likely want to see
healthy options, and calorie counts along with other nutritional information made readily available to them.
With many Baby Boomers approaching the age of retirement, their sources of income will likely become more
limited. The impact of potentially losing such a large group of consumers could be vast. Starbucks will likely
have to evolve its strategy to focus more on Millennials and Generation X consumers (McKenna, 2015).
9. STARBUCKS EVENINGS MARKETING PLAN
TASHA HUGGINS, KRISTY ALLAN, ASHLEY LEWENBERG, KATIE LEE,
BRITTANY WATSON MKTG-5007
TECHNOLOGICAL
It is unlikely that Starbucks will need to bring in new ovens and equipment for its Evenings Menu, as
the menu items are all prepackaged and only require reheating. However, failure of machinery and equipment
necessary in the production and administering of Evenings Menu items could have significant negative impacts
on profitability and reputation.
MARKET OVERVIEW, SUMMARY & TARGET MARKET DEFINITION
Canada has the highest number of Starbucks stores per million residents out of all OECD countries at
almost 40 stores per million people (The Huffington Post Canada, 2014). For per city store count, Toronto
ranks 6th
place with 160 stores, and Calgary and Vancouver in 13th
place and 15th
respectively, with most
locations per city (The Huffington Post Canada, 2014). The data shows large growth potential in Canada, if
some of these Starbucks Coffee stores were to add the Starbucks Evenings Menu. With Starbucks Evenings,
the company is able to serve customers in two categories as one: coffee shops and bars. The Starbucks
locations that have the Evenings Menu will offer beer, wine,
cider and tapas style snacks in addition to existing services to
customers looking for more than just coffee. It aims to further
extend the “Starbucks Experience” to accommodate customers
with a meeting place during the afternoon and early evening in
a quiet, relaxing setting (Starbucks Newsroom, 2015).
Research shows that 70% of existing Starbucks
customers drink wine and are also twice more likely to drink
craft beer than the national average (Starbucks Newsroom,
2015). Canada’s wine market is valued at US$6.1 billion and currently ranks 7th
in consumption. Per capita
wine consumption has risen by 0.6% since 2013 and the projected wine consumption in Canada will increase
by 7.8% by 2018 (Abraham, 2015). Consumption per adult is expected to increase by 4.1% to reach 16.4 litres
in 2018 (Wright, 2015). For beer, per capita consumption was 63.35 litres per person based on total
population (Beer Canada, 2016). Craft beer was chosen to be sold in the Evenings locations as craft beer
continues to be the fastest growing segment in the LCBO beer category, growing 20-30% per year (Mulkins,
2016). A substantial amount of $290 million total sales in Ontario comes from smaller licensees, especially in
the independent bars and pubs (Mulkins, 2016). With the
Starbucks Evenings, Starbucks stores can now extend their
reach to target growing number customers that want
alcoholic and/or non-alcoholic beverages in a quiet, relaxed
atmosphere than bars.
Starbucks Evenings’ primary target market will be
men and women between the ages of 23-40 years old
(Millennials and Generation X) living in affluent
neighbourhoods. These Millennials and Generation X cohorts have higher education and are already users or
loyalty members of Starbucks. They have relatively high incomes depending on their life stage, and are in the
workforce. The target market is technology savvy, cultured, connected with society and wants to make a
positive impact on the environment. Research shows that Canadian domestic beer consumption in 2015 by
10. STARBUCKS EVENINGS MARKETING PLAN
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BRITTANY WATSON MKTG-5007
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women aged 19-50 years old were responsible for 22.2% of consumption, the most out of all female age
ranges, while men aged 19-50 years old were responsible for 35.5% of Canada’s beer consumption (Statista
Inc., 2016). Studies show that 28% of Millennials between the ages of 19-30 are regular consumers, consuming
alcohol a few times a week (Nadeau & Coletto, 2013). Studies show that most Millennials consume some type
of alcohol; 65% of them recommend wine or beer through word-of-mouth, and 30% recommend through
social media (Nadeau & Coletto, 2013). Millennials represent a huge potential long-term target market with an
opportunity to bring in new customers through word-of-mouth and social media if Starbucks can successfully
turn them into a loyal customer base. Generation X represents more than 2.8 million Canadians who generally
have more disposable income and they are willing to pay more for better products and experiences (Grewal,
2015). In addition to Millennials, the Generation X cohort represents huge sales potential for Starbucks
Evenings stores due to their spending power. The Generation X cohort are known to be the biggest spenders
when it comes to dining and entertainment expenditures (White Hutchinson Leisure and Learning Group,
2012). To attract Generation X and ensure retention, Starbucks Evenings stores can create a suitable
atmosphere as their “third” place away from home and work.
Various research proves that the next step for growth would be to convert existing Starbucks Coffee
stores into Starbucks Evenings stores. Projected growth of beer and wine consumption in Canada for people
between the ages of 19-40 years old means that serving beer, wine and cider alongside coffee beverage
offerings in a quiet and inviting atmosphere will allow Starbucks to better accommodate and adapt to meet
evolving customer needs.
MARKETING OBJECTIVES AND STRATEGIES
OBJECTIVES
Starbucks has always been considered a
premium provider of coffee, refreshments, and
bakery products. Due to a wide variety of
competitors that offer virtually identical Area A’s,
in order to stay competitive, Starbucks must win
customers with the addition of new product and
service offerings. With its entry into the market of
serving the “evening” crowd, Starbucks’ internal
positioning goal should align with its current
positioning strategy of being a premium provider
of coffee and bakery items. The positioning goals
of the Starbucks Evenings program include being
a premium location for casual gatherings, where
customers can enjoy a variety of craft beer, wine,
ciders, and savoury share plates in a relaxed and
comfortable atmosphere.
Figure 1: Percentage of Sales (Strauss, 2016)
Breakfast/
Brunch,
28%
AM Snack,
23%
Lunch,
12%
Afternoon
Snack,
29%
Dinner, 2%
Evening Snack,
6%
Percentage of Daily Sales
11. STARBUCKS EVENINGS MARKETING PLAN
TASHA HUGGINS, KRISTY ALLAN, ASHLEY LEWENBERG, KATIE LEE,
BRITTANY WATSON MKTG-5007
Specific marketing objectives include:
• Building new service awareness of Starbucks
Evenings Menu and offerings through
enhanced push and pull strategies directed
towards existing and prospective customers to
increase visit frequency after 4:00 p.m. by 30%.
• Increasing both food and beverage daily sales
after 4:00 p.m. (Dinner and Evening Snack
purchases) by 300%, incrementally over the
next 4 years.
• Launching the new Starbucks Evenings Menu
with the intent of growing current and
prospective customer base during traditionally
slower times for coffee sales.
• Maintaining premium status of brand with
product diversification while also avoiding
dilution of Starbucks’ traditional premium coffee brand (Strauss, 2016).
STRATEGY
When purchasing only coffee and/or baked goods, the average value of customers’ purchases at
Starbucks typically ranges from $4.50-$5.00 (Strauss, 2016). However, at establishments that sell wine and
beer, the average purchase is $23.07 (Strauss, 2016). Currently, dinner and evening snack purchases account
for only 8% of Starbucks’ daily customer traffic and sales (Strauss, 2016). Compared to morning purchases,
which account for 51% of customer spending, these numbers have great potential for growth (Strauss, 2016).
When discussing future growth initiatives, calculations were based off of the assumption that the
average number of daily customers per location is 500, with each location being able to accommodate 30
customers at a time. It is assumed that there will be an average of 5 table turnovers from 4:00 p.m. until close.
Therefore, to arrive at the value of a 30% increase in visit frequency, it is assumed that:
5 turnovers x 30 customers = 150 additional customers after 4:00 p.m.
500 daily customers/150 additional customers = 30% increase.
Push strategies directed towards existing customers will be adapted and enhanced to increase their
visit frequency after 4:00 p.m., which is the slowest time for current product sales (Strauss, 2016). Specifically,
three push promotions that will be used in-store include:
• “Appy Hour”
• Pairing
• Sampling
Three additional pull strategies that will be employed are:
• Email outreach via loyalty program
• Social media advertising (Instagram, Facebook, Radio)
• Out-of-home promotion
Breakfast/
Brunch,
28%
AM
Snack,
23%
Lunch,
12%
Afternoon
Snack, 29%
Dinner, 2%
Evening
Snack, 6%
Percentage of Daily Customer
Traffic
Figure 2: Percentage of Daily Customer Traffic (Strauss, 2016)
12. STARBUCKS EVENINGS MARKETING PLAN
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Pull strategies will also be employed to entice prospective customers to come and purchase items from
the new Starbucks Evenings Menu. Currently, Starbucks has a Star Loyalty Program that offers customers
perks, such as, Stars that they can accumulate and use to purchase food and beverage items (Choi, 2016).
Starbucks should continue with this approach and include Starbucks Evenings Menu food items in this
offering. Alcohol cannot be included in the loyalty program due to legal issues surrounding the promotion of
alcohol consumption through loyalty programs.
Starbucks has always used a strategic marketing mix, including premium locations in busy high-density
areas; customized products that are costly for competitors to imitate; customer service excellence; and
premium pricing to maintain its competitive advantage within the café market. To maintain the brand’s image
while continuing to grow, it is paramount to position Starbucks Evenings as a premium offering of alcoholic
beverages, savory share plates, and a relaxed atmosphere for customers who do not want the typical bar
experience; rather, a more intimate, gathering spot for their end-of-day get-togethers with friends.
MISSION STATEMENT
With the introduction of Starbucks Evenings, Starbucks will not only bring people joy in the morning,
but now also in the evenings. With customers beginning their day with Starbucks, it is our goal for them to end
their day with us as well.
MISSION STATEMENT
“To inspire the human spirit – one person, one coffee, one drink and one neighbourhood at a
time.”
MARKETING MIX
PRODUCT
Starbucks Evenings will feature alcoholic beverages
and a menu that includes new savoury share plate options.
Evenings are when Starbucks experiences the lowest volume
of customers, and Starbucks Evenings is targeted to change
this.
Now customers can come in the morning as well as
the night sit down and unwind with their friends. Additionally,
the beverages and plates will be served to tables by the
baristas. Launching the new products reinvents Starbucks
from a coffee house, to an all day and night café with multiple
product offerings.
PRICE
Starbucks’ target market is aimed towards the middle/upper class, so prices are expected to be a bit
higher than a simple pub or coffee shop (Rafii, 2013). Starbucks needs to be careful when determining the
price, because if priced too high it has the possibility of deterring customers away. It is recommended that all
the small plates are priced between $5.00-$8.00 (Strauss, 2016). Beer and cider should be priced between
13. STARBUCKS EVENINGS MARKETING PLAN
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$5.00-$6.00, and wine should be between $9.00-$13.00 (Strauss, 2016). The wine compared to all the other
new products is higher priced, but still competitively priced. (Nguyen, 2016).
PLACE
No new Starbucks are being opened specifically for Starbucks Evenings, but three locations, which have
been newly renovated and are in busy neighborhoods have adopted the new program. These locations are
3079 Bloor Street West, 446 Spadina Road and 1740 Avenue Road. These three locations are the Canadian
pilot locations, and if they are successful, then there is a
potential to convert more stores to offer the Starbucks
Evenings Menu. Even though there are over 1,000 stores in
Canada, not all stores could accommodate this expansion. For
instance, there are many express Starbucks that have little to
no seats.
Starbucks Evening ensures that each item is in stock
everyday by receiving new shipments of wine and beer nightly
in order to have shelves stocked for the next day. The beer
comes directly from the Amsterdam and Muskoka Breweries
and the wine and cider is sold by the LCBO. Once it is in the
store, it is served directly to the customers.
PROMOTION
Starbucks has never relied heavily on advertising, but often does release radio advertisements or small
sidewalk signs outside their doors when launching a new product. Starbucks also has a strong social media
presence on Twitter, Instagram, and Facebook. In keeping with their current social media marketing strategy,
Starbucks Evenings should be marketed primarily through social media, which will promote word-of-mouth
promotion of the new Evenings Menu.
Starbucks Evenings is mainly targeting existing customers but also attempting to attract new customers
into the stores. Push and pull strategies will be implemented when promoting the new Evenings Menu. One
promotion that can be used is similar to the existing “Frappy Hour” promotion. Frappy Hour allows customers
to return in the afternoon with their morning receipt to receive a Frappuccino at a 50% discount (Lam, 2015).
“Appy Hour” would allow customers to receive a shared plate at 50% off with their morning receipt. This
promotion is intended to build product and brand awareness and raise evening revenues and traffic, while
simultaneously building brand loyalty through strategic price offerings. In the past, Frappy Hour was
advertised on the radio and this should be continued for the Appy Hour promotion. Starbucks’ target audience
is an older age bracket, who can be reached not only by social media, but also while they are driving home
from work.
Currently Starbucks offers breakfast pairings, where customers can have a coffee and a snack for just
$3.75 (Levine, 2009). A similar promotion should be added to Starbucks Evenings, which would allow
customers to purchase a drink and a share plate for a bundled discounted price. This would be promoted
primarily in stores, or on a small board outside the store. In-store sampling should also be used as a push
strategy offered to generate new product and service awareness among customers. Sampling will give
customers the chance to try new products and encourage word-of-mouth promotion.
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Another important aspect is to maintain their Star Loyalty Program. With over 11 million Star Loyalty
users by the end of 2014, the program’s member count more than doubled its initial number from the end of
2011 and is extremely valuable to Starbucks’ bottom line and long-term revenue growth (Choi, 2016; Jones,
2014). According to Starbucks, on average, active loyalty members spend three times more than non-
members (Jones, 2014). Even though it is illegal to give rewards for purchasing alcohol, new menu items
should receive the same amount of Stars. In addition to Stars, Starbucks should continue to send out discounts
for meals, and especially implement coupons for the shared plates. Currently, Starbucks frequently sends
breakfast and lunch coupons to Star Loyalty members. The Star Loyalty Program targets members primarily
through direct email marketing, and should remain this way for Starbucks Evenings coupons. Additionally,
email outreach will help to generate new product and service awareness.
FINANCIAL ANALYSIS
MARKET ANALYSIS
Market trends have shown that outlet numbers for Cafés/Bars have increased in volume since 2014 to
a total of 8,768 across Canada (Euromonitor, 2015). Additionally, the number of transactions has also
increased by 2% due to more varieties of new menu options (Euromonitor, 2015). Consumers are also showing
preferences for modern, sleek environments that are trendy and located in urban centres (Euromonitor,
2015). Starbucks has the potential for significant growth with the addition of its Evenings Menu since
Bars/Pubs, as a category, continues to be the leader in value share, occupying 43% of the overall Cafés/Bars
category (Euromonitor, 2015).
Since there is considerable room for growth within this market, Second Cup is becoming a leading
competitor of Starbucks with its three-year plan to transform its brand and product/service offering to a new,
sleek design. Specifically, Second Cup poses a competitive threat because of its increased food and beverage
offerings, and its shifted target toward younger customer segments that will have significant spending power
in coming years (Euromonitor, 2015).
Currently, Starbucks is the leading player in the Cafés/Bars category, with an 18% value share and 50%
share in the category of Chained Cafés in 2014 (Euromonitor, 2015). Future market prospects include the
development and growth of the Cafés/Bars category by promoting a current consumer lifestyle trend toward
the preference of relaxation (Euromonitor, 2015). Additionally, Starbucks is headed in the right direction with
improving and widening its product and service selection through the implementation of specialty Evenings
Menu offerings.
The target markets for Starbucks Evenings are Generation X and Millennials, whose behavior and
lifestyle choices have impacted and driven a significant growth in the savoury snack category (Euromonitor,
2015a). Starbucks Evenings’ target markets have also shown preferences toward whole, simple, and clean
ingredients that have more natural flavours (Euromonitor, 2015). In order to maintain a competitive
advantage, Starbucks must acknowledge these trends and adapt product and service offerings accordingly.
15. STARBUCKS EVENINGS MARKETING PLAN
TASHA HUGGINS, KRISTY ALLAN, ASHLEY LEWENBERG, KATIE LEE,
BRITTANY WATSON MKTG-5007
15
SALES FORECAST
Assumptions
# of stores worldwide 12,235
% Sales Daytime Hours 92%
% Sales Evening Hours 8%
Year 1 Evening Sales Increase 300%
Year 2 Evening Sales Increase 15%
Year 3 Evening Sales Increase 15%
Year 4 Evening Sales Increase 15%
Yearly Store Sales Increase 7%
MARKET SHARE FORECAST
The market share forecast is based
on the assumption that the Evenings
program will be successful in its first year
and will follow similar patterns as
Starbucks Evenings locations in the US.
Since the first introduction of Starbucks
Evenings, Starbucks planned to increase
the number of Evenings Menu offerings to
16% of their existing locations (Smith,
2015). If Starbucks Evenings follows a
similar trend in Toronto, we expect that in
4 years there will be 26 Starbucks locations
with Evenings Menus out of the existing
160 locations (Starbucks Corporation,
2016), which would represent 0.32% of
the market share of the restaurants and
bars industry.
CONTINGENCY PLAN
Starbucks is a successful corporation both in North America and worldwide. Even though it has
established itself as a premium specialty coffee shop, there are some potential threats to the business as it
launches Starbucks Evenings in Canada. The potential threats we see to the business include competition,
dilution of brand identity, and the incremental costs it may incur as a result.
0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
0.30%
0.35%
2016 2017 2018 2019
Market Share (%)
Year
Market Share Forecast in Toronto
2015 2016 2017 2018 2019
Revenue Worldwide 19,162,700,000.00$ 20,504,089,000.00$ 21,939,375,230.00$ 23,475,131,496.10$ 25,118,390,700.83$
Daytime Sales 1,440,922.27$ 1,541,786.83$ 1,649,711.91$ 1,765,191.74$ 1,888,755.17$
Evening Sales 125,297.59$ 134,068.42$ 143,453.21$ 153,494.93$ 164,239.58$
New Evening Initiative Sales Increase -$ 402,205.26$ 462,536.05$ 531,916.46$ 611,703.93$
Net Sales Per Store 1,566,219.86$ 2,078,060.51$ 2,255,701.17$ 2,450,603.13$ 2,664,698.67$
Sales Forecast
16. STARBUCKS EVENINGS MARKETING PLAN
TASHA HUGGINS, KRISTY ALLAN, ASHLEY LEWENBERG, KATIE LEE,
BRITTANY WATSON MKTG-5007
COMPETITION
Starbucks has distinguished itself in the market as having higher prices, but with the promise of better
quality products and a positive experience to go with it. The risk associated with Starbucks Evenings is that its
mission statement follows too closely with that of other restaurants or pubs that offer small plates and
alcoholic beverages in a sit-down environment. In addition to competing with other restaurants, Starbucks
Evenings does not offer any vegan options in their share plates, meaning that customers who keep a vegan
diet may choose to go elsewhere. Since Starbucks will now have to compete with other licensed
establishments that offer share plates and alcoholic beverages in addition to coffee shops, it is important to
establish the promised value for the price that customers pay since value is something that is commonly
offered among restaurants and bars. In order for Starbucks Evenings to maintain the strong customer base
that Starbucks has already established, the current Star Loyalty Program should be adopted for share plates.
This will ensure that customers who are already loyal to Starbucks and are familiar with the promotional
discounts that it offers will be willing to extend their loyalty to Starbucks Evenings options.
BRAND IDENTITY
A potential issue with Starbucks adding small plate meals and alcohol to its menu is brand dilution.
Although Starbucks has built its success on being one of the top coffee shop companies, Starbucks Evenings
could alter that if it becomes more successful. Starbucks Evenings has the potential to attract new customers
during hours after 4:00 p.m., however, people may think that the Starbucks experience has more to offer
them during Starbucks Evenings’ hours as opposed to during the day and lose some of their customer base to
coffee shops that offer the same product but at a lower price.
Although there isn’t much that can be changed about Starbucks’ current marketing strategy that could
reinforce its brand identity with the addition of Starbucks Evenings services, Starbucks will still offer the warm,
friendly experience at all hours and use push marketing strategies to promote all aspects of its offerings.
COST
The final potential threat to Starbucks with the
implementation of Starbucks Evenings is the costs that it will
incur to bring in new menu items, liquor licenses, and Smart Serve
employee training. In addition, people are looking for less
expensive alternatives to products and services due to economic
strains. Since Starbucks’ products are priced higher with the
contingency that they provide more quality to both their products
and customer service, previous Starbucks customers may begin to
look elsewhere to buy coffee and food items if they are willing to
sacrifice a certain degree of quality and customer service.
In order to ensure a profitable return on investment Starbucks Evenings must deliver the same
exceptional customer service and quality products that it has before. If it is able to maintain its loyal customer
base as well as bring in new customers, then it should be able to make up for incurred expenses needed to
launch Starbucks Evenings.
17. STARBUCKS EVENINGS MARKETING PLAN
TASHA HUGGINS, KRISTY ALLAN, ASHLEY LEWENBERG, KATIE LEE,
BRITTANY WATSON MKTG-5007
17
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TASHA HUGGINS, KRISTY ALLAN, ASHLEY LEWENBERG, KATIE LEE,
BRITTANY WATSON MKTG-5007
18
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TASHA HUGGINS, KRISTY ALLAN, ASHLEY LEWENBERG, KATIE LEE,
BRITTANY WATSON MKTG-5007
19
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