StarbucksStarbucks is a global coffee company that have an expanding product range. They don’t just sell coffee anymore, but also sell cold drinks, sandwiches, cakes etc. has a range of chocolate products that are in different stages in the product life cycle. Three of their products that are currently in different stages of the product life cycle are GingerbreadLatte, Caffe Mocha and Iced Caffe Mocha. The Caffe Mocha is a traditional drink sold inStarbucks, the Iced Caffe Mocha is exactly the same but served cold, this is an extensionstrategy. The Gingerbread Latte has been released for the festive period over Christmas so is new on the market. x x Iced Caffe Mocha Caffe Mocha x Gingerbread Latte
Price Gingerbread Latte – This product is only going to be on the market for a short period of time as it is as a Christmas Drink. Therefore the pricing strategy Market Skimming was used for the release of this product. This is selling the product at a high price for a limited period of time. The aim is to gain as much profit for theproduct whilst it is unique on the market. The product is brought out at Christmas each year but with new flavours, many Starbucks customers look forward to theproduct coming back. Therefore the loyal customer base are willing to pay a higher price for it due to it only being on the market for a limited time period. Caffe Mocha & Iced Caffe Mocha – The Caffe Mocha is a product that has been on the market for a long period of time, it is a drink sold at every coffee store on the market so Starbucks need to keep the price of it very similar to their competitors prices otherwise their customers will go elsewhere. The Iced Caffe Mocha is at aslightly higher price as it is a unique product to Starbucks so people will be prepared to pay a higher price if it is the only place where they can get it.
Place Starbucks has a number of stores located in different areas, from city centres tomotorway services. Even though they are a coffee shop they sell a wide variety of hot and cold drinks and foods, so they have a very wide target audience. However theremain target audience is city workers who want to grab a coffee, therefore this is where most of there stores are situated. With the Gingerbread Latte being a special edition drink for the Christmas season, there are special signs for it as soon as you walk into the shop and posters advertising it in the window.PromotionBoth below the line and above the line promotion will be used for the launch of theGingerbread Latte, however it will mostly be below the line. The Christmas lattes come outevery year, therefore people are already aware of the product so not as much promotion isneed for them.Below the line promotion will be shelf edge labelling promoting the £1 chocolate barwithin Morrisons and leaflet advertising through the local paper. Above the linepromotion would be a TV advert produced by Cadburys for the new product along withsupport from TV advertising for Morrisons products.
Cadburys Cadburys has a range of chocolate products that are in different stages in the productlife cycle. Three of their products are Dairy Milk, Dairy Milk Caramel and Dairy Milk Oreo. Cadburys first product was the Dairy Milk chocolate bar which is just a plain bar of chocolate, since then they have brought out a range of products in bags, boxes, tins and drink. They now have a lot of different takes on the original bar, for example the DairyMilk Caramel, this is an extension strategy to prolong the life of the Dairy Milk. The latest product they have released is the Dairy Milk Oreo. x x Dairy Dairy Milk Milk Caramel x Dairy Milk Oreo
Price Dairy Milk Oreo – Penetration pricing was used for the launch of this product, alarge bar was released at a price of £1. Using penetration pricing attracts consumers attention to the product and they will be encouraged to buy it, Cadburys hope that consumers will like the product and develop the habit of buying it even when the price starts to rise. Also retailers are likely to purchase the product in large quantities, therefore Cadburys gains a significant slice of the market with this product.Dairy Milk and Dairy Milk Caramel – These products have been on the market for a long time, so the price of them is very similar to all other chocolate bars on themarket from competitors. If Cadburys notice a fall in sales or if a competitor bringsout a new chocolate bar they may change the price slightly as part of a promotion campaign.
Place Cadburys sell their products in all supermarkets and corner shops. TheSupermarkets display the products within certain parts of the shop. For example in Morrisons the Dairy Milk and Dairy Milk Caramel will be in the confectionary isle. However with Cadbury Oreo being a new product on the market it will be onprominent shelf displays usually at the front of the shop, this will attract consumersattention as soon as they walk into the shop. Consumers tend to look at prominent shelf displays at the end of isles as they know this is where the offers will be displayed.PromotionBoth below the line and above the line promotion will be used for the launch of thenew Dairy Milk Oreo product. Below the line promotion will be shelf edge labellingpromoting the £1 chocolate bar within Morrisons and leaflet advertising throughthe local paper. Above the line promotion would be a TV advert produced byCadburys for the new product along with support from TV advertising forMorrisons products.