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Starbucks powerpoint
The document analyzes Starbucks' promotional strategy, specifically a 'buy 1-get 1 free' offer, by comparing sales data from two periods. The results indicate that the promotion did not increase overall profit, and it raised concerns about potential cannibalization of sales and customer loyalty. Conclusions suggest a need for a revised marketing approach to balance profitability and customer retention.
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Starbucks powerpoint
- 1. T01704225艾 可 B99701112駱柏蓁 B99701141羅文吟 B99701150李韻坊 B99701156張宇婷
- 2. Agenda • Introduction • Experiment •Sensitivity • Further discussion • International Strategy • Conclusion
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- 5. The coffee market Abusiness with a high profit margin
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- 7. Starbucks International • 17,651stores in more than 60 countries • International strategy: ‘Blanket’ an area
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- 10. Promotion Plan • Time •Usage • Precautions
- 11. Methodology • Record realsales data at Starbucks for two periods (Tuesday). 1. Offer Promotion Period:12/4 13:10~15:10 2. Normal Period: 12/11 13:10~15:10 • Information collection is focused on the drinks customers ordered and whether they used the “buy 1-get 1 for free” offer. • Analyze the data by calculating and comparing the total revenue and profit and the average price and order size.
- 12. Methodology Research Question Is thespecial offer beneficial for Starbucks?
- 13. Important Assumption The offerpromotion plan has a beneficial impact on Starbucks revenue
- 14. Assumptions • The twohours we recorded are representative. • The weather and the temperature don’t affect customers buying behavior. • We assume those who used “buy 1 get 1 for free” during the offer period all used the offer promotion plan; no other promotion plans.
- 15. Assumptions • On anormal Tuesday with no offer promotion, there is still a promotion to “buy 1 get 1 for free” by using an I-bon ticket. • According to the research on the Internet, the cost for a Starbucks coffee is 30%.
- 16. Data Analysis Offer Promotionperiod Normal Period Total Revenue Total Cost Total Profit 11,515.00$ 6,276.00$ 5,239.00$ Amount of Drinks Single Cup 17 Promotion Cup 140 Total 157 Total Revenue Total Cost Total Profit 12,385.00$ 4,818.00$ 7,567.00$ Amount of Drinks Single Cup 71 Promotion Cup 56 Total 127
- 17. Data Analysis Average Price(revenue):Total Amount of Drinks Normal Day 97.52 127 PromotionOffer Day 73.34 157 Price Elasticity ϵ = −(157/127)/127 (73.34−97.52)/97.52 = 0.95 close to 1
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- 20. Sensitivity •Compare the top-5products •Compare the average size •Compare the average price
- 21. Compare top-5 products Thepromotion day The normal day No.1 Caffè Latte (Venti: $135) No.1 Caffè Latte (Venti: $135) No.2 Toffee Nut Latte (Venti: $155) No.2 Toffee Nut Latte (Venti: $155) No.3 Green Tea Latte (Venti: $145) No.3 Java Chip (Venti: $165) & Cranberry White Chocolate Mocha (Venti: $155) No.4 Caramal Macchiato (Venti: $155) No.5 Cranberry White Chocolate Mocha (Venti: $155) No.5 Vanilla Caffè Latte (Venti: $150)
- 22. Compare the averagesize The promotion day The normal day Promotion Single Total i-bon Single Total Tall (12oz) 14(cups) 5 19 4 28 32 Grande (16oz) 82 9 91 42 42 84 Venti (20oz) 44 3 47 10 2 12 Average size 16.71(oz) 15.5(oz)
- 23. Compare the averagesize • Price Sensitivity
- 24. Compare the averagesize • Time Sensitivity
- 25. Compare the averagesize Starbucks’ Strategy
- 26. Compare the averageprice The promotion day The normal day $73.34/cup $97.52/cup
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- 28. Cannibalization Total Total RevenueTotal Total Revenue 157 $11,515 127 $12,385 Promotion Nonpromotion
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- 30. SWOT Analysis of Promotion StrengthWeakness Lower quality of service -Loss comport and good atmosphere -Long-time waiting Opportunity Threat New source of customer Loss of loyal customer (college student->loyal customer) Loss of the good brand image The lowest price compare to other high-quality coffee shop
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- 32. International Strategy • Pricingstrategy • Localization
- 33. Price Comparison • Taiwanv.s. US Taiwan Tall Grande Venti CaramalMacchiato 125.00$ 140.00$ 155.00$ Cappuccino 105.00$ 120.00$ 135.00$ Caffè Latte 105.00$ 120.00$ 135.00$ VanillaCaffè Latte 120.00$ 135.00$ 150.00$ Caffè Mocha 120.00$ 135.00$ 150.00$ Caffè Americano 85.00$ 100.00$ 115.00$ US Tall Grande Venti CaramalMacchiato 137.70$ 155.70$ 161.70$ Cappuccino 104.70$ 119.70$ 131.70$ Caffè Latte 104.70$ 119.70$ 131.70$ VanillaCaffè Latte 113.70$ 134.70$ 146.70$ Caffè Mocha 113.70$ 134.70$ 146.70$ Caffè Americano 83.70$ 89.70$ 98.70$ Difference Tall Grande Venti Average CaramalMacchiato 12.70$ 15.70$ 6.70$ 11.70$ Cappuccino -0.30$ -0.30$ -3.30$ -1.30$ CaffèLatte -0.30$ -0.30$ -3.30$ -1.30$ VanillaCaffèLatte -6.30$ -0.30$ -3.30$ -3.30$ CaffèMocha -6.30$ -0.30$ -3.30$ -3.30$ CaffèAmericano -1.30$ -10.30$ -16.30$ -9.30$
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- 35. Price Comparison • Pricestill depends on: - Customer preference - Input cost, ex: rental - Other considerations
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- 38. Conclusion • Promotional offerdidn’t increase profit • Marketing purpose • Building loyal customer base Future: • From 2013/01/01, second cup half price • Attempt to increase profit?
Editor's Notes
- #2 Promotion offer of starbucks... Impacts on revenue?
- #17 Maybe two slides??
- #20 The Starbucks from which we collected data is at the back door of NTU, which is a special place, where both office workers and students can easily go to. From the experiment, we found out that the revenue on the promotion day is actually lower than the normal one.
- #21 Therefore, we want to see if there is a huge difference between the promotion day and the normal one among these customers by the three ways followed, ‘compare the top-5 products’, ‘compare the average size’ and ‘compare the average price.’
- #22 From the table above, we can see that the top five favorites look like similar not only the product types but their prices. It shows that people may not change their habits easily due to the promotion.
- #23 Furthermore, compared to the normal day the average size is larger and people buy much more venti cups on the promotion day. Hence, we conclude three reasons for the results.
- #24 For the larger size, we think that’s because students have higher price sensitivity. They will be more willing to buy a larger cup of coffee to feel like they earn more. Therefore, the venti cups are much more compared to the normal day.
- #25 However, on the promotion day, there are too many people to attract the office workers. Because they have lower price sensitivity but higher time sensitivity, the crowd will keep them away from buying coffee. On the normal day, there are fewer people in the store, in front of the counter, so they will be more willing to buy a coffee. What’s more, their purpose of buying one is different from students’. They want to get away from work and take a rest, after buying one they still need to go back to work, so they will buy a smaller one than students do.
- #26 When you go to Starbucks to buy a smaller cup of coffee such as the ‘tall’ one, the clerk may point at the cup size to make sure if you want to order it or have a bigger size of it. In other words, they want to make you feel that buying a larger size is a smarter action and they can make more money as well.
- #27 As for the average price, it's obvious the promotion day’s is lower than the former one because there's a promotion; however, the price on the normal day is still below $100 is because there's another price down method – the i-bon ticket.
- #31 店員人數一樣 Can’t enjoy a good afternoon the KSF of Starbucks is its great brand image
- #37 Tata® Tazo® Iced Shaken Hibiscus Tea, Indian Tea.. Cooperation with Tata Green Tea Latte First introduced in Taiwan, now in more Asian countries