Bubble Tea The Marketing Plan Marketing Essay

Bubble Tea is one of the most popular non-alcohol drinks in Taiwan and Hong Kong, and it is what coffee is to the western world to Taiwan and Hong Kong. There are a lot of bubble tea shops in almost every corner in Taiwan and Hong Kong. As Bubble Tea is so popular in Asia, Starbuck’s Corporation is trying to figure out a plan to broadcast Bubble Tea in New Zealand. Therefore, this marketing plan will help Starbuck’s Corporation to launch Bubble Tea in New Zealand. This marketing plan involves situational analysis in terms of strength, weaknesses, environmental analysis and social analysis etc. In addition, the four Ps are discussed in detail, and they are product strategy, pricing strategy, promotional strategy and place strategy.

2.0 Situational Analysis

2.0.1 Description of the market’s:

In this section, strengths, weaknesses, environmental trends, political trends of Starbucks will be discussed in detail, as these factors play a critical role in affecting the new marketing plan for Bubble Tea.

Starbucks, as a huge and global corporation, has quite a lot of strengths. For example, Starbucks is a very strong global brand, and it has quite innovative initiatives (Michelli, 2007). It has high quality and diversified products, and it has strong, loyal customer base, and passionate and loyal employees.

2.0.2 Trends: Through the early 1960s, soft drink is “cola” in consumer’s mind. In the 1980s and 1990s, however, other beverages enter market such as bottle of water, milk tea, become more popular. Today, the volume sale of carbonated soft drink has declined because most of consumers to choice healthier alternatives in functional market such as energy drinks, milk juice drinks, sports drinks. The company has been actively committed to new product development as a response to the growing concern about the negative health effects of high fructose drinks, but also increases the needs of the market, to provide products to mature quickly. In the functional market customer’s choice shift to trendier, healthier and more sophisticated product in the future.

2.0.3 competitors:Starbucks offers the value proposition that its major competitors, such as Coke and Pepsi, coca-colas top competitors for the soft drinks industries. Coca-cola is leading with 43.7% of the total soft drinks market. Starbucks competitors, mainly McDonald’s and Dunkin’ Doughnuts, although provide the same basic product do have an advantage over Starbucks since they do not provide the same coffee house atmosphere they price their coffee beverages significantly lower. This is important in this economic environment where consumers are more consciously spending. Competitors have been able to create value to the consumer by basing their prices with quality of their product. With Bubble Tea, which is totally different from drinks like coffee, Starbucks will overperforme its major competitors a lot.

2.0.4 Impact on the company’s marketing objectives:

In terms of environmental trends for Starbucks, the demand for coffee or caffeine is considered to be inelastic by the industry. Meaning that even with a rise in prices or decrease in income, coffee consumers are hesitant to replace it with another product. Therefore, Bubble Tea could only be a substitude for coffee. It is the perfect drink for young children, and people who do not want to drink alcohol at a certain time.

Political and regulatory environment is also very important for Starbuck’s performance. After the terrorist attacks on September 11, 2001, the Bioterrorism Act was passed by congress and enforced by the FDA. The new law requires “all domestic and foreign facilities that manufacture, process, pack, or hold food for human or animal consumption in the United States must register with the FDA”. This act will help the FDA immediately react to a threat or attack on the U.S. food supply. Also, in the case of an outbreak, the FDA will have information to find the source and cause and contact the affected facilities.

On the other hand, the social environment affect Starbucks as well. Coffee is a culture or the art of enjoying coffee in a relaxing atmosphere. Coffee culture and coffeehouses have been around since the 16th century, all over Europe, originally as a place for social gatherings and the arts. The U.S. is conforming to this Europe tradition of slowing down and socializing over coffee at a local coffee shop. Not only is coffee a social drink but for some it is a way of life. Therefore, Bubble Tea could be a perfect substitute for drinks like coffee, because it is suitable for all the people at all ages.

In addition, technological trends will be discussed as well. Although the way coffee is produced has not changed much through the years, technology in preparing coffee for the customer has made it easier to provide the best cup every time. New brewing systems and espresso machines like the new revolutionary in-store Clover brewing system that delivers the best cup of coffee available anywhere. It is good news that making Bubble Tea is much easier than making coffee. All the ingredients are quite normal and simple, and it does not require a lot of techonology for making Bubble Tea.

3.0 Market Segmentation, Targeting and Positioning

In market segmentation section, two aspects will be discussed, namely, target market and positioning, respectively. First of all, the target market will be all the people in New Zealand, young and old, rich and poor. Therefore, Starbucks should use a great variety of targeted promotional tools. For example, the media selection could include television, radio, magazines, internet, outdoors, personal selling, public relations, and publicity. Television is the most expensive media for advertisement for Bubble Tea, however, it can reach over 90% of the homes in New Zealand. As a huge corporation, Starbucks has enough budgets to cover such high costs. In addition, as students are a heavy radio listener team in New Zealand, Starbucks should make full use of this, and advertise much more through radio, so that more and more people will know about Bubble Tea and try to develop the taste for it. In terms of magazines, as each magazine’s readers often represent a unique profile and group, Starbucks should advertise in magazines more regularly, because its marketing objective is to target all the people in New Zealand, young and old, rich and poor. Everyone should enjoy a cup of Bubble Tea occasionally when friends and families getting together at any time of the day. In terms of the positioning strategy, Starbucks should package Bubble Tea with eye-catching cup, colorful straws, and a variety of flavors.

4.0 Measurable Marketing Objectives

The objectives of promotion strategy for Bubble Tea are discussed as follows. Firstly, the objective would be initiating strong awareness about Bubble Tea throughout younger generations’ consumers as well as their parents, hopefully. Secondly, winning market shares over other top functional drinks competitor, such as soda like Coke and Pepsi, would be another major objective for Starbucks. As Bubble Tea is a whole new product for Starbucks, it should advertise and explain more to the customers, and give them time to develop a taste for it. Bubble Tea is the perfect drink for people to drink when friends and families getting together, having a good time or before bed, because it will not affect sleep at all.

5.0 Marketing Strategies

As Bubble Tea is a whole new product for Starbucks, therefore, it is of vital importance to launch a successful marketing campaign for Bubble Tea. This section will talk about the marketing strategies about Bubble Tea in terms of product decisions, pricing decisions, place decisions, and promotional decisions. In additions, these four aspects are usually known as 4 ps.

5.1 Product Decisions

When making product decisions in product mix, two aspects are quite important and need to be taken into account, namely, brand personality, product modification, respectively. Brand personality is the characteristics of the brand, for example, energy, funky, cool, functional, original, funny, healthy, etc would be the personality. For Bubble Tea, the proper brand personality would be cool and tasty. In terms of product modification, as Bubble Tea is a whole new product to the market, it should be packaged more interesting and attractive.

5.2 Pricing Decisions

Pricing is a very important strategic issue, as it is directly related to product positioning. Impacted by the recent financial crisis started in late 2007, Starbucks has suffered a loss of customer traffic to its stores all over the world. Therefore, Starbucks has decided to lower its prices on some popular products, such as brewed coffees and lattes. At this stage, to launch a marketing plan to sell Bubble Tea, Starbucks needs to price it very carefully.

Price strategy should consider the following three aspects, consumer demand, the product life-cycle, and potential substitutes, respectively. Consumer demand is driven by the tastes and disposable income of the consumers, the availability of others similar products. Generally, the underlying philosophy is that the higher the price, the higher the value of the product. In addition, the product life-cycle is another major determinant of the price. Basically, the newer the product, the higher the price, and the higher the profit margin. Moreover, potential substitutes of the product play a critical role in setting the price. When competitors are attracted by the high profit margin of the product, they will find a way to enter the market.

For Starbucks to start selling Bubble Tea in New Zealand, it is important to analyze each price determinant very carefully. First of all, consumer demand in New Zealand for Bubble Tea is very strong. There are around 20 Bubble Tea shops in Auckland alone, and they are quite popular over the past few years. In the beginning, most customers are from Asia. However, these shops have attracted numerous local New Zealanders now. Bubble Tea is a perfect choice for friends gathering. In addition, as Bubble Tea is quite a new product in the life-cycle for Starbucks, it can price it relatively higher than other Bubble Tea places theoretically. However, this will not work, because most of the customers would be more willing to go to Bubble Tea shops for it particularly, instead of choosing Starbucks for Bubble Tea. Thirdly, as Bubble Tea shops are relatively cheap to set up, there might be more and more competitors if there is a high profit margin involved. Therefore, the price of the Bubble Tea should not be set too high.

In summary, as the average price of a cup of regular Bubble Tea is approximately $6.00, Starbucks should price it at $5.80 in order to compete with other Bubble Tea shops.

5.3 Place (Distribution) Decisions:

Briefly speaking, Bubble Tea, as a whole new product of Starbucks, can be distributed all over New Zealand through its shops. Starbucks has a lot of shops across New Zealand; it is very easy to reach out to all the people in this country.

5.4 Promotional Decisions

The objectives of promotion strategy for Bubble Tea are discussed as follows. Firstly, the objective would be initiating strong awareness about Bubble Tea throughout younger generations’ consumers as well as their parents, hopefully. Secondly, winning market shares over other top functional drinks competitor, such as soda like Coke and Pepsi, would be another major objective for Starbucks. As Bubble Tea is a whole new product for Starbucks, it should advertise and explain more to the customers, and give them time to develop a taste for it. Bubble Tea is the perfect drink for people to drink when friends and families getting together, having a good time or before bed, because it will not affect sleep at all.

6.0 Coordination and Control

The coordination and control is relatively simple enough, as Starbucks is just trying to launch a whole new product. The marketing process can be easily coordinated and controlled by Starbucks, because the management team is all familiar with launching new products, just like what they did with it when they were launching strawberry smoothie.