Study of Brand extension of Starbucks Frappuccino

1. Starbucks Frappuccino

2. Content
• About the company
• Product category
• Starbucks Frappuccino
• Market share and growth of Starbucks
• Marketing Mix
• STP
• Comparative frame of reference and POP-POD

3. Manufacturer: Starbucks Corporation
https://www.youtube.com/watch?v=nn0bB9A9n4c
Founded in 1971
in Seattle, WA
Largest coffeehouse
company in the world
21,536 stores in 65
countries and
territories, including
12,218 in the US

4. Ready to drink coffee US Market
199.30 205.70
238.60
286.50
350.40
378.00
399.20
417.80
433.60
0.00
50.00
100.00
150.00
200.00
250.00
300.00
350.00
400.00
450.00
500.00
2009 2010 2011 2012 2013 2014 2015 2016 2017
RTD coffee market in US
Off-Trade volume in mn liters
Source: GMID
Tremendous growth
and projected to
grow further in the
coming years

5. Birth of Starbucks Frappuccino
• Starbucks was experiencing slow down in summers
• Introduced Frappuccino, a frozen drink in 1996
• Partnered with PepsiCo to make RTD bottles
• Value Proposition: Ready to drink
Product mix

6. “We were so
confident of
our product
that we didn’t
even test-
market it,” -
Schultz in his
book, Pour
Your Heart
Into It.

7. Starbucks and Frappuccino market share
72%
15%
Market Share of Starbucks Corp in
RTD coffee (2014)
Starbucks Corp
Monster Beverage
Corp
WhiteWave Foods Co
Rockstar Inc
Campbell Soup Co
Starbucks
Frappuccino
49%
Starbucks
23%
Monster
15%
Market share of Frappuccino in RTD
coffee
Starbucks
Frappuccino
Starbucks
Monster
International Delight
Rock Star Roasted
Market
leader in
RTD
coffee
Source: GMID

8. Starbucks and Frappuccino growth story
0.00
20.00
40.00
60.00
80.00
100.00
2009 2010 2011 2012 2013 2014
81.80 83.20 79.20
70.60 68.70 72.30
Starbucks in RTD coffee in USA
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
2009 2010 2011 2012 2013 2014
66.60 65.80
59.10
53.40
46.40
49.30
Frappuccino in RTD Coffee in USA
Experienced a
decline in the last
few years because
of increased
competition
Source: GMID

9. Marketing Mix
Product Price Place Promotion

10. Marketing Mix
P
r
o
d
u
c
t
Price Place Promotion
“The Frappuccino transformed it into a haven for moms and office workers,” -Taylor Clark in Starbucked.

11. Place
Marketing Mix
P
r
i
c
e
Product Promotion

12. Marketing Mix
Promotion
P
l
a
c
e
Product Price
E-retail
(Amazon,
Alibaba)
Grocery stores
Local Starbucks
store

13. Marketing Mix
P
r
o
m
o
t
i
o
n
PlaceProduct Price
Local
advertisement
(print, hoardings)
Starbucks has
traditionally spent very
little on advertising

14. STP
Segmenting
• Behavior (coffee lovers and
neutral to coffee)
• Behavior (Walk to coffee shop
and drink at home/workplace)
• Demographics (gender,
occupation)
Targeting
• Not so-much coffee lovers
• Like to drink coffee at
home/workplace
• Housewives who stock chilled
drinks at home
Positioning
• Ready to drink Starbucks
coffee
• Chilled
• Convenient

15. Competitive frame
of reference
• Convenience in
storage
• Refreshing drink for
summer
• Variety in flavors
• Coffee
• Tasty
• Brand name
• Premium
Points of Parity
• Cool drink
• Ready to drink
• Non-aerated
• Available in multiple
flavors
• Convenient to store
Points of
Differentiation