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- 1. 1 10 STEP Marketing Plan for Seattle’s Best Coffee Nicole Ngui October 2010
- 2. 2 10 STEP Marketing Plan for Seattle’s Best Coffee Nicole Ngui October 2010
- 3. 5 Steps for Part 1 (PTM and Positioning) 1. SBC PTM “uncommonly smooth taste” 2. Who wants flavorful quality coffee 3. Can choose Starbucks, Figaro, other local coffee shops. 4. GAP 5. Market Size
- 4. 5 Steps for Part 1 (PTM and Positioning) Imported 1,000,980 83% Local 205,000 17% Coffee Retail Service Market in the Philippines (in thousands)1 Imported Local
- 5. 5 Steps for Part 2 (Marketing Mix & Strategy) 6. Product 7. Price 8. Promo 9. Place 10. Generic Winning Strategy of Mix
- 6. 6 Positioning to the Primary Target Market Part 1: Steps 1 to 5
- 7. 1.My primary target market (PTM) is.. Demographics 24.8 34 17.2 12.8 11.2 0 5 10 15 20 25 30 35 40 15-20 21-25 25-30 30-35 35 & up Percentage Age Group Age Group of Coffee Retail Service in the Philippines Percentage
- 8. Demographics Metro Manila 87% Outside Metro Manila 13% Demographic Concentration of Coffee shops in the Philippines Metro Manila Outside Metro Manila
- 9. 1.SBC’s primary target market (PTM) are those who go for flavorful coffee Demographics (21-25, M/F, social class AB, single) Lifestyle (urban, fast paced, and on the go lifestyles ) Behavior (drinks coffee atleast 2-4 a week)
- 10. Demographics Starbucks 723,850 60% Seattles Best Coffee 241,200 20% Figaro 180,900 15% Others 60,300 5% Leading Coffee Retail Service Brands in the Philippines (in thousands) Starbucks Seattles Best Coffee Figaro Others
- 12. 2. My PTM’s NWE Targets : 1st, 2nd and 3rd level of Needs Flavorful Coffee Imported Parking Wifi A place to Hang out Other variety of choices Comfort
- 13. 3a. Direct products that address my PTM’s NWE Starbucks 723,850 60% Seattles Best Coffee 241,200 20% Figaro 180,900 15% Others 60,300 5% Leading Coffee Retail Service Brands in the Philippines (in thousands) Starbucks Seattles Best Coffee Figaro Others
- 14. 3a. Indirect products that address my PTM’s NEW SHAKES (Big Chill) Yogurt Place (Red Mango) Bars and Resto Any place that sells drinks and food
- 15. 3a. SBC has many formidable competitors Direct: Starbucks, Figaro, Coffee Bean and Tea Leaf, Indirect: non – coffee place that serves other beverages Variables: Age, Price, Place, Preference, What mood PTM is in.
- 16. SBC’s unique positioning is shown in this competitive map Positioning vs. Brand Matrix
- 17. 4. Identify the gap between customers and competition Where is the marketing opportunity? What NWEs are not being addressed? What can be the unique selling proposition for the new product (totally new or repositioned.)
- 18. Strengths Quality Beans SBC prides itself on the quality of their beans. Based from independent testing, their beans are neither too bitter nor too bland compared to the beans of Starbucks which are bitter. But then again, it usually comes down to the taste preference of customers if they prefer bitter coffee.
- 19. Strengths Research and Development Department SBC has its own Research and Development Department that continuously improve the quality of its products.
- 20. Strengths Free to adapt products SBC international Starbucks Corporation acquired Seattle’s Coffee, the mother company of SBC. Despite that, SBC in the Philippines is not affected since it belongs to the SBC International which is given the freedom to adapt to the market they are in. And as such, SBC in the Philippines have the option to introduce products carrying SBC brand name made specifically for the Filipino market only.
- 21. Strengths Faster implementation and decision making Since SBC is smaller than Starbucks and only operates 19 branches, it has the advantage of being more flexible and implementing decisions faster. With this, they are able to introduce products and coordinate actions and activities a lot faster.
- 22. Weaknesses Lesser branches compared to Starbucks Since SBC has only 19 branches compared to Starbucks, it is not as visible as Starbucks. Due to limited outlets some of SBC customers have trouble finding them.
- 23. Weaknesses 2nd only to Starbucks Competing with the industry giant is difficult since it has more than half of whole market share. SBC doesn’t get the same recognition as Starbucks Filipino mentality of being very brand conscious also contributes to the weakness of the brand since some customers would perceive SBC only as second best.
- 24. Weaknesses Reading materials Reading materials are value added services of coffee shops. It used to be that SBC tried to increase this by subscribing to FHM and other worthwhile reading materials. However, SBC soon faced the problem of its magazines being stolen just after a day or two. This resulted to SBC not subscribing/providing their outlets with such reading materials. Although they still provide customers with a copy of leading newspapers such as Philippine Daily Inquirer, Star, and Manila Bulletin everyday.
- 25. Weaknesses Music Music forms part of the overall experience of customers in a coffee place. SBC clearly realized this and so it provided each outlet with a 6-CD Player Component with each CD having different set of songs. However, problem arises when these CD players malfunction and ends up playing a certain CD only. And when this happens, a customer who has been in the coffee shop for more than an hour would probably hear the same songs being played over and over again which would contribute to a decrease in overall experience in such coffee shop.
- 26. 5a. Based on NSO Statistics
- 27. 27 The Marketing Mix Strategy Part 2: Steps 6 to 10
- 28. 6a. Photo of product category
- 29. Leading Coffee Brands Starbucks 723,850 60% Seattles Best Coffee 241,200 20% Figaro 180,900 15% Others 60,300 5% Leading Coffee Retail Service Brands in the Philippines (in thousands) Starbucks Seattles Best Coffee Figaro Others
- 30. 7. Price
- 31. 8a. Promo
- 32. 8a. Promo
- 34. 9. Place
- 35. 10. What is the generic winning strategy? Which of the 4 strategies are being used? (bold and underline to most dominant strategy)
- 36. Competitive Strategies Putting up near a Starbucks location location, visibility, and a good concentration of A, B, and Upper C market is important. one of their strategies is to put up a SBC branch wherever there is a Starbucks located in the area. This means that there is a market for coffee drinkers in the area. In addition, SBC also hopes to get some of the customers of Starbucks who are not loyal and are just after to get their usual dose of caffeine.
- 37. Competitive Strategies Parking Related to location, is also the convenience of parking. Usually for some people, the deciding factor on where to hang out is the availability of parking space. This is what SBC banks on. For instance, in SBC Katipunan branch, there is a parking space big enough to accommodate 25-30 cars excluding double parking compared to Starbucks Katipunan that only has 7 parking slots available including double parked cars already. Moreover, there is the inconvenience of moving your car whenever you double park in Starbucks.
- 38. Competitive Strategies Wifi spots & electrical outlets Certain SBC branches have already installed routers for their area. Eventually SBC plans to Wifi all its branches. This is to accommodate students who usually do their group projects and meetings in the area and also for the working adults who regularly meet their friends or conduct casual meetings over a cup of coffee. SBC was also the first one to provide these value added services before Starbucks. In addition, SBC recognized the need for electrical outlets to be installed in their area for laptop users. Starbucks followed after.
- 39. Competitive Strategies SBC Card Unlike Starbucks whose discount is usually in the form of coupons for their newly released drinks, SBC has introduced the SBC card where cardholders enjoy 10% discount on every purchase. In addition, SBC card also accumulated points which can be used after reaching a certain amount to buy SBC products.
- 40. 40 SUMMARY Today, good coffee is fashionable everywhere, but we still believe that our customers prefer Seattle’s Best Coffee because of its Uncommonly Smooth™ taste.
Editor's Notes
- a majority of coffee shop goers are ages 21 to 25 since these are more or less the bulk of the people who are on the go and have grown along with the coffee phenomenon. This age group enjoys both hot and cold coffee drinks as well. The next age group dominating the market would be that of 15 to 20 age bracket. This can be attributed to the introduction of ice-cold drinks such as frappes which are well received by the younger generations. In addition, the high number of teenagers can also be the result of teens usually going to coffee shops for group meetings and study sessions. Tagline: Today, good coffee is fashionable everywhere, but we still believe that our customers prefer Seattle’s Best Coffee because of its Uncommonly Smooth™ taste.
- a majority of coffee shop goers are ages 21 to 25 since these are more or less the bulk of the people who are on the go and have grown along with the coffee phenomenon. This age group enjoys both hot and cold coffee drinks as well. The next age group dominating the market would be that of 15 to 20 age bracket. This can be attributed to the introduction of ice-cold drinks such as frappes which are well received by the younger generations. In addition, the high number of teenagers can also be the result of teens usually going to coffee shops for group meetings and study sessions.
- During an interview with Mr. Frederick Siy, the concentration of coffee shops is in Metro Manila with 87% of the market. The reason behind this is that coffee shops are targeted towards the urban, fast paced, and on the go lifestyles of people who are mostly found in Metro Manila. In addition, Metro Manila area has numerous night spots or gimmick places. This is why coffee shops are open until 2 AM to suit the lifestyle of many. On the other hand, only 13% comprises the coffee outlets outside Metro Manila. However, it can be seen that coffee shops outside Metro Manila are still located in modern areas outside the city such as in Subic, Tagaytay, Baguio, Cebu, and even in South Luzon Express Way. This shows us that they still mainly cater to the urbanized since these areas are popular vacation spots or out of town destinations of many.
- Starbucks dominates the coffee retail service industry. Following Starbucks would be SBC with 20% and Figaro with 15%, while the remaining 5% is distributed among the local and foreign coffee brands. This can be mainly attributed to the fact that at present, Starbucks has 72 outlets scattered all over the country. This means that they are able to reach a wider range of customers compared to SBC which only has 19 branches. Although Figaro has quite a number of branches (43), it still has a smaller market share compared to its competitors since it only focuses on a specific market segment serving only local coffee. Starbucks dominates the industry since it captures all ages. In fact, we can even see children as young as twelve years old drinking Frappuccinos already.
- This is very common to developing markets such as the Philippines. However, unlike developed markets such as Japan, SBC and Starbucks received the same recognition and status mainly due to the fact that they are not as brand conscious and are more willing to try other brands.
- Price in 2005
- Competitive Strategies Putting up near a Starbucks location location, visibility, and a good concentration of A, B, and Upper C market is important. one of their strategies is to put up a SBC branch wherever there is a Starbucks located in the area. This means that there is a market for coffee drinkers in the area. In addition, SBC also hopes to get some of the customers of Starbucks who are not loyal and are just after to get their usual dose of caffeine. Parking Related to location, is also the convenience of parking. Usually for some people, the deciding factor on where to hang out is the availability of parking space. This is what SBC banks on. For instance, in SBC Katipunan branch, there is a parking space big enough to accommodate 25-30 cars excluding double parking compared to Starbucks Katipunan that only has 7 parking slots available including double parked cars already. Moreover, there is the inconvenience of moving your car whenever you double park in Starbucks. Wifi spots & electrical outlets Certain SBC branches have already installed routers for their area. Eventually SBC plans to Wifi all its branches. This is to accommodate students who usually do their group projects and meetings in the area and also for the working adults who regularly meet their friends or conduct casual meetings over a cup of coffee. SBC was also the first one to provide these value added services before Starbucks. In addition, SBC recognized the need for electrical outlets to be installed in their area for laptop users. Starbucks followed after. SBC Card Unlike Starbucks whose discount is usually in the form of coupons for their newly released drinks, SBC has introduced the SBC card where cardholders enjoy 10% discount on every purchase. In addition, SBC card also accumulated points which can be used after reaching a certain amount to buy SBC products. Slide 9 Strengths Quality Beans SBC prides itself on the quality of their beans. Based from independent testing, their beans are neither too bitter nor too bland compared to the beans of Starbucks which are bitter. But then again, it usually comes down to the taste preference of customers if they prefer bitter coffee. Research and Development Department SBC has its own Research and Development Department that continuously improve the quality of its products. Free to adapt products SBC international Recently Starbucks Corporation acquired Seattle’s Coffee, the mother company of SBC. Despite that, SBC in the Philippines is not affected since it belongs to the SBC International which is given the freedom to adapt to the market they are in. And as such, SBC in the Philippines have the option to introduce products carrying SBC brand name made specifically for the Filipino market only. Faster implementation and decision making Since SBC is smaller than Starbucks and only operates 19 branches, it has the advantage of being more flexible and implementing decisions faster. With this, they are able to introduce products and coordinate actions and activities a lot faster. Slide 10 Weaknesses Lesser branches compared to Starbucks Since SBC has only 19 branches compared to Starbucks, it is not as visible as Starbucks. Due to limited outlets some of SBC customers have trouble finding them. 2nd only to Starbucks Competing with the industry giant is difficult since it has more than half of whole market share. In addition, SBC doesn’t get the same recognition as Starbucks and to most people, SBC is only second to Starbucks. Moreover, Filipino mentality of being very brand conscious also contributes to the weakness of the brand since some customers would perceive SBC only as second best. This is very common to developing markets such as the Philippines. However, unlike developed markets such as Japan, SBC and Starbucks received the same recognition and status mainly due to the fact that they are not as brand conscious and are more willing to try other brands. Reading materials Reading materials are value added services of coffee shops. It used to be that SBC tried to increase this by subscribing to FHM and other worthwhile reading materials. However, SBC soon faced the problem of its magazines being stolen just after a day or two. This resulted to SBC not subscribing/providing their outlets with such reading materials. Although they still provide customers with a copy of leading newspapers such as Philippine Daily Inquirer, Star, and Manila Bulletin everyday. Music Music forms part of the overall experience of customers in a coffee place. SBC clearly realized this and so it provided each outlet with a 6-CD Player Component with each CD having different set of songs. However, problem arises when these CD players malfunction and ends up playing a certain CD only. And when this happens, a customer who has been in the coffee shop for more than an hour would probably hear the same songs being played over and over again which would contribute to a decrease in overall experience in such coffee shop.
- SBC penetrated the market in 2000 with its first branch in E. Rodriguez Avenue, Quezon City. The mission of SBC is to make the client’s café experience a satisfying one while its vision or objective to be a strong number 2 or the 2nd best coffee shop next to Starbucks. Based from the interview with Mr. Siy if it’s the quality of coffee you are after then you are most like to choose SBC over other coffee establishments. The difference between Starbucks and SBC is that: the latter has a larger percentage of hot coffee drinkers than the former whose popularity is based on its popular drink Frappuccinos which are enjoyed by both young and old alike.