1. STARBUCKS ICE CREAM SANDWICHES
Elizabeth Phillips
Brooke Shelton
Gina Ognoskie
Ken Alexander

2. The Challenge How increase Starbucks Specialty Sales?
Non-coffee revenues
From Ice Cream to Starbucks branded products within Starbucks retail stores
Tap into growing ice cream novelty sector with our established partnership with Dreyer’s
1997 began partnership—quickly became #1 Coffee Ice Cream in United States
Largest U.S. specialty coffee retailer
Largest U.S. ice-cream maker

3. Product Line Expansion
Current Supermarket Offerings
Tap into third highest growing ice cream sector with new product:
STARBUCKS ICE CREAM SANDWICHES

4. Internal Environmental Analysis
Marketing goals and objectives aligned with mission statement
Current resources
Current Nestle-Dreyer’s Merger

5. External Environmental Analysis
Competitors
Brand Competitors
Blue Bell Sandwiches
Healthy Choice Sandwiches
Private label Brands
Product Competitors
Other novelty ice cream products
Sherbet, fruit bars, etc.
Ice Cream Pints
Generic Competitors
Other ‘comfort’ food (cookies, chips, candy)
Industry Environment
Compete on Brand Image, Quality, Flavor Selection, and price.
Few barriers to entry

6. External Environmental Analysis
Frozen Novelty Market
total of $2.1 billion retail
ice cream sandwiches accounted for $283.5 million
second largest dollar share
third fastest growth area at 19.8% vs.total novelty ice cream market growth of 7.1 %.

7. External Environmental Analysis
Regulatory Impacts
Current DOHA rounds
Potential problem for Dreyer’s input prices
Must be monitored by partnership
Ice Cream Purchasing Trends
Growth of sandwich sector
September 11 Effects
Seasonal Fluctuations

8. Purchasing Pattern Ice Cream Industry

9. Customer Environmental Analysis
Current Customer Profile
Starbuck’s Coffee Drinker
50 K Income
Ages 25-44
4 Year + College
Primarily Caucasian
Potential Customer Profile
Not a regular Starbucks drinker,but recognize brand
Ice Cream consumer
Purchasing Pattern
Grocery Store
Only branded coffee ice cream
Potential non users dislike coffee
Targeting snack user, not dessert consumer
“Our Customers are
people we know and
those we are yet to meet.”

10. SWOT Analysis STRENGTHS WEAKNESSES OPPORTUNITIES THREATS
Exclusive Marketing Rights
High Brand Equity and recognition
Reputation of high quality supports high price point
Partnership with leading ice cream manufacturer/distributor
WEAKNESSES
Narrow Product line in super premium frozen dessert sector
Coordination of quality assurance between partners
OPPORTUNITIES
Internet Promotion
High Growth Segment of Sandwiches in frozen novelties
Comfort food purchasing pattern
THREATS
Current Nestle Merger
Economy decline
Intense shelf space competition

11. Marketing Goals
To capture significant market share in the frozen dessert novelty sector
Increase total Starbucks ice cream sales through product line expansion
Further establish Starbucks reputation for high quality products

12. Marketing Objectives Goal 1 – Market Share
Capture 2% of the 13.5% sales share in the sandwich sector by 2005 (Year 1)
Capture 2.75% of the 13.5% sales share in the sandwich sector by 2007 (Year 3)
Goal 2 – Increase Starbucks Ice Cream sales
Maintain minimum 10% sales growth per year of ice cream sandwiches
Goal 3 – High Quality Product
Establish 35% repeat purchase pattern

13. Action Plan

14. Product Life Cycle

15. Product Product line extension Sold in packages of six
Filled with our 4 top selling ice creams
Java Chip, Low-Fat Latte, Almond Fudge, Classic Coffee
How will they compare to Blue Bell’s sandwiches?
Size
Premium ice cream

16. Price Prestige Pricing $1.79- $4.25 per box in supermarkets
Blue Bell, Skinny Cow and Hill Country Fair
How about Us?
$4.99!! Wow, what a deal for a slice of heaven in the form of a sandwich!!!

17. Promotion Magazine Advertising
Promotional calendar
Pull
Packaging print ads
Starbucks Retail Store Advertising
Print Advertisements
FSI
Magazine Advertisement
Push
Cooperative advertising
Magazine Advertising
Better Homes & Gardens
Real Simple
Bon Appetit
Three ½ page B/W/1 color advertisements in national magazines

19. Our Message Indulgence Extension of current Starbucks Coffee Campaign
Sit down, relax in indulgent, rich flavors
Snack
Highest Quality Product & Ingredients
Creamy and Dreamy

20. Year 1 Promotional Calendar
Promotional Calendar
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
Packaging Print Ads
SB retail Store Adv.
Print Advertisements

21. Distribution Joint venture with Dreyer’s
Located in Dreyer’s current distribution outlets in major metropolitan areas nationwide
10,000 outlets

22. Dreyer’s Distribution

23. Financial Analysis Joint Venture with Dreyer’s
Sandwich sales projection
10,000 outlets
8.4 boxes/week/store (440 boxes/year/store)
Total Sandwich Sales Year 1 = 4.4 Million Boxes
Based on 2002 Dreyer’s Bar Sales

24. Financial Analysis – Year 1
Dreyer’s Gross Revenues
$4.99 x 4.4 million boxes/year = $21,956,000
Starbucks Licensing Fee (Revenue)
.3 x $21,956,000 = $6,586,800
Marketing Objective Year 1 Met?
Yes! Year 1 sales are 2.3% of sandwich market share

25. Financial Analysis – Year 1
Revenue 6,586,800
Marketing Expenses:
Print Advertising ,152
Retail Store Advertising ,538
Packaging Modification ,614
Cooperative Advertising 1,152,690
Control Measures 1,613,766
Total Marketing Expenses 4,610,760
Net Income $ 1,976,040

26. Financial Analysis – Years 2&3
Projected 10% growth in sales per year
Decrease Print Advertisements 35% and Retail store advertisements 80% after year one.
Net Income Year 2 = $3,141,904
Net Income Year 3 = $3,866,452

27. Monitor and Control Monitor and Control Measures
Quantitative objective achievement
Nichols, Penson & Parks
Customer feedback
Information Resources L.L.C.
Advertising campaign effectiveness measures
Pretests & Posttests

28. Contingency Plan Post-Year 1
Possess 1-2% of market share
Possess less than 1% of market share
Possess 2-3% of market share
Divest Extension
Conduct Focus Group Market Research
Continue with 3 year promotional plan with yearly monitor & contingency plans
Tweak 4 P’s

29. Conclusion
High Growth Sector + Established Success + Proven Partnership = SUCCESS!!!
Contributes high profit margin to Starbucks bottom line due to minimal costs

30. Discussion