The document provides a marketing plan for Starbucks' Verismo single-cup coffee brewing machine. It includes an executive summary describing the Verismo and its target market. Financial details show Starbucks' revenue growth. The current market situation analyzes the specialty coffee brewing industry and Starbucks' competitors like Keurig and Nespresso. A SWOT analysis identifies the Verismo's strengths as the Starbucks brand but weaknesses as quality concerns. Objectives, strategies, budgets and controls are outlined to position the Verismo in the specialty brewing market.

1. 1
Michael McCulloch
Section 24
SID: 861145492
Marketing Plan:
Starbucks
Corporation

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Table of Contents
I.) Executive Summary..................................................................................................................3
II.) Financial Overview..................................................................................................................3
III.) Current Market Situation........................................................................................................4
a.) Industry ......................................................................................................................4
b.) Product Review..........................................................................................................4
c.) Competition................................................................................................................5
d.) Channels and Logistics Review .................................................................................6
IV.) SWOT Analysis .....................................................................................................................8
a.) Strength ......................................................................................................................9
b.) Weaknesses................................................................................................................10
c.) Opportunities..............................................................................................................10
d.) Threats .......................................................................................................................11
V.) Objectives and Issues ..............................................................................................................12
a.) First year objectives ...................................................................................................12
b.) Second year objectives...............................................................................................12
c.) Issues..........................................................................................................................12
VI.) Marketing Strategy.................................................................................................................13
a.) Product Strategy.........................................................................................................13
b.) Pricing Strategy..........................................................................................................13
c.) Distribution Strategy ..................................................................................................14
d.) Promotional Strategy..................................................................................................14
e.) Position.......................................................................................................................15
f.) Marketing Research....................................................................................................15
VII.) Action Programs ...................................................................................................................16
VIII.) Budgets................................................................................................................................17
IX.) Controls..................................................................................................................................17
X.) References ...............................................................................................................................18

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I.) Executive Summary:
Starbucks has expanded into people’s homes with its Verismo brewing machine. This machine brews all of the
classic Starbucks specialty drinks at the touch of a finger. (Starbucks.com) Starbucks established themselves as one
of the leaders in the single cup coffee market with its K-cups, used with Green Mountain’s Keurig brewing machine.
With the demand for the Starbucks brand and quality at home, Starbucks saw an opportunity to offer more than their
classic coffee. The Verismo is positioned among the other single cup brewers competing directly with Nestlé’s
Nesspresso, and is the exclusive brewer of Starbucks brand expresso flavors. The Verismo is used by people who
already frequent Starbucks locations that are familiar with the brand. The core demographic for Starbucks drinkers
are adults 18-45, 25% percent of people over the age of 18 claim to use a single-cup coffee brewer at home, with
another 5% who have a brewer at work. (Harris Interactive, Statista) The Verismo is an extension of the Starbucks
line into people’s homes and is attempting to be the number one single-cup specialty coffee drink maker in the
market. The Verismo is in the early stages of product development in its second year. Starbucks should continue to
innovate with the Verismo, as they have in other facets of their business, bringing the Verismo’s taste and quality of
coffee closer to the product offered in Starbucks shops.
II.) Financial Overview:
At end of Yr 2009 2010 2011 2012 2013
Stock Price $23.06 $32.13 $46.01 $53.63 $78.39
Revenue $9.78 B $10.71 B $11.7 B $13.3 B $14.9B
Profits $390.8 M $945.6 M $1.25 B $1.38 B $8.3 M
Prof Margin % 4% 8.8% 10.65% 10.4% .056%
Growth Rate -6.2% 8.7% 8.5% 12.02% 10.7%
(Yahoofinance.com)

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Starbucks is currently the largest coffee company in the world with revenues toping 14 billion dollars in 2013.
Starbucks Corporation saw steady growth in revenue the past five years, due to the combination of the expanding
number of stores both domestically and internationally, and the introduction and growth of new products such as via
instant coffee, Starbucks Refresher drinks and the Verismo brewing machine. Starbucks saw profits rise year to year
from 2009-2012, but profits fell dramatically in 2013 due to expansion and new product Research and Development.
Despite the fall in net income in 2013, Starbucks was able to maintain profitability and stock price rose in 2013 from
2012 and years prior.
III.) Current Market Situation:
Market Description
a.) Industry
Starbucks is in the restaurant industry; more specifically they are in the specialty eatery industry. The Verismo
however, extends the product line to compete in the single-cup at home brewing market, which is relatively new,
and was established with the Keurig brewer in 1998. Since then more competitors have joined Keurig in the market
place, drawing consumer away from traditional brewers. By 2013 a quarter of all coffee brewed at home was brewed
with one of these machines. Single-cup coffee brewers use pods or disks that are preloaded with coffee or espresso,
the convenience they offer has attracted enough customers to start a booming multi-billion dollar industry. Much
like the razor blade industry sells blades with a detachable handle as a vehicle for its razors, single-cup brewing
companies sell these machines as a way to sell coffee pods, and disks. The machines are distinguished by their
features and the corresponding pod or disk brands they offer, with some machines brewing strictly coffees and teas,
while others brew a variety of hot and cold beverages. Some machines offer multiple sizes allowing for the user to
adjust strength of brew. With the Verismo, Starbucks wants to establish its place as the leader of the specialty
brewing machines surpassing Nespresso. (Statista) (Business Source Complete)
b.) Product Review
The Verismo brewer is a single-cup coffee brewer with specialty packaged pods that allows you to recreate the
specialty coffee drinks you get in store from the comfort of home. The Verismo’s features include:

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 High-pressure brewing system heats up and is ready to make Starbucks-quality beverages in less than 15
seconds.
 Variable temperature system allows for optimum coffee extraction and milk steaming.
 Integrated rinse function helps keep machine clean.
 Height-adjustable drip tray accommodates different sized cups.
 Auto-off activates after 5 minutes to save energy.
 Easily removable water tank makes refilling simple.
 Built-in used pod removal automatically moves up to 10 pods to storage for easy cleanup.
(Starbucks.com)
Target Segment
Customer
Need
Corresponding Features/Benefits
Coffee
Drinker
 Quality coffee, without the
inconvenience of the trip to the
quality café
 Starbucks quality coffee pods
Espresso
Drinker
Tea
Drinker
Latte
Drinker
Mocha
Drinker
 Espresso coffee without espresso
machine
 Quality tea brewed quick and easily
 Tasty vanilla latte, without walking
out of the house
 Delicious tasting mocha, without
ever stepping foot into a coffee
shop.
 Espresso brewed easily without any know
how, or bulky equipment.
 Teavana Masala Chai Tea pods
 Café Ensemble pack Vanilla Latte, includes:
espresso roast pods, vanilla syrup, and milk
pod
 Café Ensemble pack Cafe Mocha, includes:
espresso roast, mocha flavored sauce, and
milk pod
(Starbucks.com)
c.) Competition
The Verismo competes with the other single cup brewing machines. The Keurig was the first single-cup brewer
using k-cups and leads the market. The Verismo also competes against The Tassimo which brews coffee, tea, and
expresso based drinks, as well as Nestlé’s Nespresso machine.

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Keurig: Created in 1998 by Green Mountain Coffee as the first singe-cup brewing system on the market, the Keurig
brewer not only created a new market for coffee brewers, but also for the disposable coffee filled cups the brewers
use. Keurig offers three different lines of brewers; the classic Keurig, which is the classic single-cup coffee brewer
with its two models priced at $99.99 and $119.99; Keurig 2.0, the updated Keurig system with digital display with
three models priced at 149.99, 169.99, and 199.99; and at Rivo, the expresso capable version priced at 199.99. The
Keurig brewer used k-cups, 24 cups are prices from $15.99-$20.99. Keurig machines also use vue-cups boxed in 16
from $12.99-$16.99. The Rivo’s cups come in a box of 18 for $14.99. The Keurig is the most widely available
single-cup brewer, it is not only available on its website and Starbucks.com , it is also available in most big box
retailers that carry coffee maker including Target, Walmart, Costco, Bed Bath & Beyond, and Macy’s. Keurig has
labels their packaging to establish brand recognition with customers, enhance shelf prominence, and establish
consistency throughout various distribution channels. (Keuriggreenmountain.com) Keurig is positioned as the leader
in both single-cup coffee brewers and single-cup coffee pods, the Keurig was the first brewer of its kind into the
market place, enabling it to establish a firm position as the go to brewer in consumer minds.
Nespresso: In 1976 an employee for Nestle, invented the Nespresso machine. The product was release in
Switzerland, and did not see any progress until 1988, when the product was handled by Jean-Paul Gaillard. The first
patent for the coffee filled espresso pods for the machine was filed in 1996. Nespresso’s original line brewed only
espresso pods; their Orginaline as they call it features seven brewers priced from $99.00 up to $599.00. Nespresso
has recently released a new line to compete with the multi-functional machines in the market; this line entitled
Vertuoline brews both 8 ounce coffee and 1.35 ounce espresso. The Vertuoline includes two brewers priced at
$299.00 and $349.00. The Nespresso machines are available online at their website, William-Sonoma, Amazon,
Crate and Barrel, and in stores featured in boutiques at Macy’s, Bloomingdales, Target, Bed Bath & Beyond, and
other retailers. The Nespresso has recently launched a campaign with ads featuring acclaimed actress Penelope Cruz,
the ads depict a sense of quality, mysteriousness, and satisfaction associated with the machines. Nespresso has tried
to position itself both with its pricing and promotion as a premium single-cup brewer, that offers a taste and quality
that is unmatched by its competitors. (Nespresso.com)
Tassimo: The Tassimo is owned by Kraft foods and manufactured by Bosch, and was first introduced in France in
2004. The Tassimo uses coffee filled pods called T-disks that use a barcode printed on the top to instruct the

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machine on how to brew that particular pod. The Tassimo brews a variety of beverages including classic coffee,
espresso, tea, and hot chocolate. The product was developed by Kraft as another vehicle to deliver its Maxwell
Coffee house brand of coffee in the form of the Tassimo’s T-disks. The Tassimo is offered in three models, the T20
priced at $99.99, T47 at $139.99, and T55 at $169.99. The Tassimo is now available in Andorra, Austria, Canada,
Czech Republic, Greece, Germany, Ireland, Norway, Spain, Sweden, Switzerland, The Netherlands, Russia, Poland,
Portugal, the United Kingdom and the United States. The Tassimo is sold online at its website and Amazon, and in
stores in big box retailers such as Bed Bath & Beyond, Walmart, and Best Buy. Kraft created webisodes in a
campaign to promote the Tassimo. The “Who hired Bob” campaign features a trouble making office worker who
gets very little work done; the Tassimo machines are incorporated into each episode. The videos were promoted in
Google’s AdSense networks and spread across 40 different video-sharing sites. The campaign was meant to spread
brand awareness and establish brand equity among new users. The Tassimo is positioned as a unique and hip choice,
attempting to establish brand equity with up and coming coffee enthusiasts. ( Tassimodirect.com)
d.) Channels and Logistics Review
Starbucks Corporation markets its brand through several avenues; their website sells everything from coffee and tea,
to at home brewing machines. Starbucks also offers several products throughout supermarkets and other retail stores.
Competitor Brand Features
Green Mountain Coffee Keurig
The Elite Brewing System brews a
perfect cup of coffee, tea, hot cocoa
or iced beverage in under one minute
at the touch of a button. With the
choice of three cup sizes, the Elite
brewer offers a removable drip tray
to accommodate travel mugs.
(Keurig.com)
Nestle Nespresso
Fast heat up 25 seconds, Coffee Size
Espresso & Lungo, Off mode after 9
min, Compact and light
(Nespresso.com)
Kraft Tassimo
The TASSIMO Single Cup Brewing
System by Bosch uses
INTELLIBREWTM to make sure
every coffee, tea, cappuccino, latte,
mocha, espresso, or hot chocolate
taste exactly the way they are
supposed to. Every single time.
(Tassimodirect.com)

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Starbucks primary business is still serving customers in its 18,000 coffee shops throughout the world. The coffee
shops reach across 60 countries and continue to grow both domestically and internationally. Starbucks coffee shops
can be reached by foot from almost any metropolitan area throughout the United States, not only with solo locations,
but also located inside many Targets, Vons, and other larger retail and supermarket chains. Starbucks is truly trying
to accomplish the goal of being wherever you need them to be. Extending on the convenience of location Starbucks
Verismo allows people to brew their favorite in store Starbucks drinks from the comfort of home which was
“impossible until now” (Starbucks) . The Verismo is distributed to customers in several ways:
 In Starbucks stores: There is a Verismo display located near the front counter of every store in North
America, allowing customers to see the Verismo in person.
 Online: The Verismo can be found on the Starbucks home websites, as well as major retail websites
including Amazon, Walmart, Target, and Bed Bath & Beyond.
 Retail Stores: The Verismo is on the shelves of all the big box retails alongside its competitors, giving the
Starbucks brand yet another location in stores to spread brand awareness.
Because of Starbucks brand equity there were no obstacles to prevent the Verismo from entering all major big
box locations. The Starbucks brand brings followers from in store to at home with the Verismo. Having the
Verismo in Starbucks stores allows the Verismo to have its own display space without competitor products to
compete with. The mastery of logistics allowed Starbucks to quickly and easily spread the availability of its
products in many locations.
IV.) SWOT Analysis
The Verismo has many strengths, its biggest being the equity that the Starbucks brand holds. However powerful the
Starbucks brand may be the Verismo is still very vulnerable amongst its competitors. Starbucks must do its best to
eliminate the Verismo’s weaknesses, fend off threats, and take full advantage of the opportunities that are available.

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Strengths
 Starbucks Brand
 Expertise in coffee marketing
 Distribution channels
 Expansive Budget
Weaknesses
 Quality of espresso taste
 Machine malfunctions
 Lack of store ambiance
Opportunities
 Growing market
 Product expansion
 Brand expansion
 Global opportunities
Threats
 Fierce competition
 Oversaturation of market
 Product differentiation
 Pressure from Green Mountain
Strengths
The Verismo can rely on the following important strengths:
1. Starbucks Brand: The Verismo is the official single-cup coffee brewer for Starbucks, because Starbucks
already has such a large customer base, Verismo is likely to attract some of those customers who love the
Starbucks brand, and need a home brewer.
2. Expertise in coffee marketing: Starbucks is the leading coffee store in the world, and it isn’t just because
they brew great coffee, they are excellent marketers. This ability to market their products well in Starbucks
stores, online thru social media, and in television and print will transfer over to the Verismo.
3. Distribution: Starbucks is excellent at establishing and maintaining relationships with distributors. The
Verismo can be offered almost anywhere that coffee makers are sold, and Starbucks will have negotiating
leverage because the strength of their brand.

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4. Expansive Budget: Starbucks brings in revenues exceeding 14 billion dollars annually, with profit set to
be near 2 billion dollars in 2014. This heavy cash flow allows Starbucks to invest in the Verismo in ways
its competitors might not be able to. (Hoovers)
Weaknessess
1. Quality of espresso taste: Although the Verismo provides a similar product to the one you might get at a
Starbucks location, it is not as good. Because the quality of the in store espresso is relatively high,
customers are expecting the same from the Verismo, and it has yet to match the level of quality that is
offered in Starbucks stores.
2. Machine Malfunctions: When Starbucks first released the Verismo there were several issues with the
machine, so much so that Starbucks offered trouble shooting guides next to the Verismos that were
displayed in stores. The Starbucks brand represents prestige, so the machines must be as flawless as the
stores are, in order to captivate the same user experience.
3. Lack of Store ambience: Part of Starbucks’ success is their ability to create an experience that
accompanies their product. When people think of Starbucks they think about the warm and hip vibe the
stores offer, and a machine like the Verismo cannot offer the same experience. Because the machine has the
Starbucks name it will be difficult to separate it from the store.
Opportunities
1. Growing Market: The Single-cup coffee market has grown year over year for the last decade. In 2005 less
than 3% of people in the United States owned a single-cup coffee maker, today that number is nearly 20%.
Most people who purchase a new coffee maker will now buy one of these machines, which is also good
news for the sales of the pods that the brewers use. (Statista)

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2. Product Expansion: As people begin brewing their coffee at home exclusively on the single-cup brewing
machines, abandoning their conventional brewers, there will be room for larger capacity brewers and
accessories that will provide additional revenues streams created.
3. Brand Expansion: As Starbucks continues to expand to everything coffee, every new product they expand
with creates a new flow of customers and strengthens the Starbucks brand and the recognition of Starbucks
as a lifestyle brand, rather than just a coffee shop.
4. Global opportunities: It is much easier to get a product like the Verismo into the homes rather than
building Starbucks buildings. In areas around the globe where it isn’t beneficial to expand the franchise
store, the Verismo can act a brand ambassador for the Starbucks brand.
Threats
Fierce Competition: The Keurig was the first single-cup brewer on the market and they saw a steady revenue
growth, their success has drawn in many competing companies who desire to distribute their coffee in single-serve
form. The more competitors that enter the growing market the smaller share will be held for those who are trying to
be category leaders.
Over Saturation of Market: With added competitors and increased competition, comes competitive pricing. As
companies like Kraft and Nestle continue to pour into the single-cup coffee market, competing to earn customer, the
more difficult it will become to maintain positive income.
Product differentiation: As the market becomes full of copy-cat and second rate single-cup brewers, it will become
more difficult to differentiate Verismo from the other brewers in the market. This makes communication of value to
customers to become increasingly more difficult.
Pressure from Green Mountain: Starbucks is one of the leading sellers of K-cups which are used in the Keurig
brewers. Keurig just released an expresso brewer that will compete directly with the Verismo. The competition
between the brewers may create tension between the companies who have partnered together. With increased sales
of the Verismo and its pods, Starbucks may be putting its K-cup revenue stream at risk, as the relationship with
Green Mountain may sour.

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V.) Objectives and Issues
a.) First year objectives
During the next year Starbucks is looking to increase sales of its single cup coffee by 10% from $330 million to
$363 million. Giving Starbucks a strong hold of the 3rd
position and gaining way against number two J M Smucker
Company who has positioned themselves in the number two slot by producing k-cups for Keurig. The increased
revenues would give Starbucks approximately a 15% share of the single cup coffee market. (Statista)
b.) Second year objectives
During the second year Starbucks will look to capture the number two position in the single cup coffee market from
J M Smucker company. This will require sales of $420 million, increasing sales from the projected first year by
15%. With the number two position Starbucks will own approximately 17% of the single cup coffee market.
Starbucks will do so by releasing Verismo 2 at $179.99 and lowering the cost of the original Verismo to just $99.99
without diminishing the brand. The Verismo 2 brews coffee more quickly than any other brewer, holds more water
in its reservoir, and allows for must customization offering a variety of brew sizes and drinks than any other brewer
on the market. (Statista)
c.) Issues
People who do not frequent Starbucks may not be aware of the Verismo, or what differentiates it from its
competitors, therefore slowing down the rate of adoption of the Verismo machine. Starbucks will sell the Verismo in
quality retailers such as Whole Foods and Costco, giving out samples with a worker who is operating the Verismo,
and is there to demonstrate it, and educate consumers about the differences and quality that the Verismo offers.
Starbucks can also start an ad campaign that paints a picture of the at home Verismo experience.

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VI.) Marketing Strategy
a.) Product Strategy
Starbucks will work to make the Verismo the number one single-cup coffee brewer by improving the quality of the
brew, expanding the line of coffee pods, and launching a series of how to videos featuring Starbucks baristas. Green
Mountain launched the Keurig 2 improving on the already revolutionary Keurig machine, in the same way Starbucks
can release a new version of the Verismo that allows current users of the Verismo to upgrade and later adopters a
chance to get an improved machine at the price of the current model. Expanding the line of coffee pods to holiday
and seasonal brews, and new featured flavors that are not offered anywhere else but in the pod form will create
excitement and exclusivity of owning the Verismo. Launching a series of YouTube videos that are available online,
and show in both Starbucks and other retailers will show the easy use and practicality of the Verismo to consumers,
and the viral effect will relate the Verismo to younger generations.
b.) Pricing Strategy
The heavy competition makes it difficult to properly price the Verismo, because Starbucks’ brand promise is that of
prestige and quality they must be aware of their image whenever pricing products. Starbucks prices their K-cups
slightly higher than the rest of the brands, so those who pay for Starbucks as a single cup already expect the pricing
to be slightly higher, as they see Starbucks giving added value in terms of quality. Starbucks should use value-based
pricing but also use competition-based pricing as a measuring stick to of the amount of value the brand adds. Most
single-cup coffee brewers start their base model around $100 and their premium models from $150-$200. Starbucks
should sell their current Verismo for $99.99 and create the Verismo 2 priced at $179.99. Since the Verismo is a
vehicle to the single-cup pods pricing competitively with the machines is key, so that Starbucks can charge more for
their pods. (Starbucks)

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c.) Distribution Strategy
Starbucks has always used their stores to introduce new products before bringing them into retail stores. The
Starbucks store allows people who already have an emotional connection with the brand to adopt the product. This
was key when Starbucks launched its Via instant coffee brand, it was exclusively in Starbucks’ stores for 6 months
before it brought it to retailers, who were excited to get the already established product. In the same way it is
important for all innovations with the Verismo to be first displayed in Starbucks location, and then expand out to
retailers. The success of the Starbucks brand products in grocery chains like Safeway, Kroger, and Super Walmart
has given retailers faith that the Starbucks brand can perform outside of the Starbucks locations. Starbucks will use a
multichannel distribution system in order to reach as many people as possible, but limit the retailers that will sell the
Verismo as to maintain a sense of exclusivity and prevent over saturation of the brand. Starbucks will continue to
offer the Verismo in stores as they will be the launching point for all new products. The Verismo will also be offered
online at the Starbucks website, Amazon, and the affiliate websites of the retail stores. The Verismo will be offered
in department stores such as Macy’s and Sears, Discount stores such as Walmart, and Target. The Verismo 2 will be
sold exclusively as Starbucks and Starbucks.com for the 6 months that follow its release in order to control price and
to establish a loyal customer base with the new model.
d.) Promotional Strategy
Starbucks new campaign with the Verismo will be slightly different than previous campaigns have been, since the
machine is a larger investment than a cup of coffee and it is a piece of hardware. These differences should be noted
and seen as an opportunity for Starbucks to expand their advertising means, reaching customer that may not have
been sought through previous campaigns. Starbucks will engage the consumer base in three different areas:
 Online and mobile marketing: Starbucks has always been a leader in its ability to reach its customer base
through social media and mobile devices. Starbucks can notify people for free via their Starbucks mobile
rewards app when the Verismo 2 is launched. Starbucks can also use its presence on Twitter, Facebook,
and Instagram to reach customers. Starbucks will also launch a series of YouTube videos that will feature
the Verismo 2; they will show its easy use and speak to the features of the new machine.

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 In Stores: Starbucks will continue to have a display for the Verismo and Verismo 2 in stores, continuing to
engage loyal customers with products that represent the brand. The Verismo will also be shown in Costco’s
and other retailers, in order to demonstrate ease of use and sampling of product.
 Television: Starbucks will feature the Verismo in a series of television ads that feature a millennial soccer
mom, the ads will show her inability to get to Starbucks due to time constraints, the ad will then cut to her
getting a Verismo from her husband for Christmas. She will then be seen driving to soccer practice driving
by a Starbucks with a smile because she has a cup of freshly brewed Verismo latte in her cup.
e.) Position
The Verismo itself will be offered as a more for same price, as the machine not only offers Starbucks brand promise
it also offers innovations and quality unmatched by the machines that are similarly prices.
For Starbucks loyal customer and coffee drinkers alike the Verismo is a single-cup coffee machine that allows the
quality and satisfaction of Starbucks beverages from the comfort of home. The Verismo provides access to all of the
Starbucks beverages offered in store, in an affordable and easy fashion.
f.) Marketing Research
Starbucks ability to draw engagement of brand via social media will allow them to follow their customer
conversations via social media on details of Verismo. Starbucks can also use the mobile rewards app to issue
surveys about the Verismo, offering a rewards star for those who participate in order to incentivize customers.
Starbucks will also have baristas in stores ask customer whether or not they have tried the Verismo and if they know
of anyone who owns one, in order to gather information of its core customers. Starbucks can also coordinate focus
groups and personal interviews with those who have generated the most rewards, because they customers are
extremely loyal to the brand they may offer insights that will greatly benefit the research and development of the
Verismo 2.

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VII.) Action Programs
The Verismo 2 will be released in July of 2016. The following summaries are the actions that will be taken in order
to establish a place in the market for the Verismo 2 and to Segway the original Verismo into a more affordable
version of the second. The timeline is broken down semi-annually for the next three years.
January 2015: Starbucks will begin market research in order to gain insight into improvements it will
incorporate into the new Verismo machine. The research will be conducted in stores, focus groups,
personal interviews, and on the mobile rewards app. Starbucks will also have Costco, Wholefoods, and
other retailers set up Verismo demonstrations in stores, offering coupons to those who customers who
volunteer a survey on their Verismo experience.
July 2015: Using the data that was gathered by the marketing research Starbucks will begin the design and
manufacturing process of the Verismo 2. Starbucks will announce that the Verismo 2 is under development
but will not indicate the release date.
January 2016: Starbucks will air the television ad campaign featuring the Verismo. The ad will run during
the Super Bowl, and other popular events. The idea behind the campaigns will be customer engagement
and excitement towards the release of the new Verismo.
July 2016: The Verismo 2 will be released in Starbucks stores, with the grand unveiling featuring CEO
Howard Shultz in the original Starbucks location in Seattle Washington. Starbucks stores around the
country will have a dedicated “Verismo Specialist” who demos and answers questions about the Verismo
on the weekends.
January 2017: The Verismo 2 will be offered in all the retailers that currently offer the original Verismo.
Starbucks will launch an ad campaign starting in early October featuring the Verismo 2 as a great holiday
gift. In Costco stores Starbucks will have special Verismo 2 Starter kits of the holidays that include the
Verismo 2, coffee and espresso pods, milk pods, chocolate sauces, and a Starbucks Barista apron.

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VIII.) Budgets
During the first year of the release of the Verismo 2 Starbucks expects sales of $100 million. The Keurig sold 11
million units in 2013. Starbucks must sell more than 550,000 units at $179.99 in order to generate $100 million in
revenues with the Verismo 2. Starbucks plans to break-even during the 4th
quarter of the first year of the release of
the Verismo 2. During the first 6 months the Verismo will be sold exclusively by Starbucks, and in big box retailers
following with wholesale revenue of $100 per unit, and variable cost of $25 per unit, and estimated first-year costs
of $50 million. (Statista) Based on this assumption, the break-even calculation is:
$50,000,000/(139.95-25)= 434,783 units
IX.) Controls
Starbucks plans to closely control the product quality, brand image, and customer satisfaction. This will allow the
Verismo to be positioned in the single-cup coffee market in the same way that the Starbucks stores are positioned in
the coffee shop industry. Starbucks will control the product quality by taking careful care during the research and
development process, by ensuring that their manufacturing process is sound, and by creating an infrastructure that
ensures the quality of each machine. Starbucks will maintain the brand image by ensuring that the Verismo is held to
the same standards as the coffee chain is, that the quality of product is higher than its competitors and that the
customer service that is involved with returns and warranty is at the same level of excellence as it is in store. Finally
Starbucks will meet customer satisfaction by first making sure that both product quality and brand image are
maintained with the Verismo 2, then Starbucks will live up to the promise of quality, ease of use, and premium taste
that is promised in the promotional campaigns. Starbucks will do everything it can in order to ensure the best post-
purchase experience it can, training its employees to provide the best customer service possible to those who have
purchased the Verismo when they have issues that need to be addressed.

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"Cyber Monday Means Sitewide Savings." Keurig. N.p., n.d. Web. 30 Nov. 2014.
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