Comparing two bests Starbucks and Peets. The team conducated a market, industry and competitive analysis. In addition the project included a comprehensive focus group and online survey for both the firms. Duration of the project was 10 weeks.
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The Starbucks vs. Peets Story
1. Starbucks vs. Peets
UC, Irvine – Merage School of Business
Group Six
Brian Landau, Ethan Luu,
Lawrence Mier, Vikram Moorjani and Mirka Wlochal
MARKETING MANAGEMENT
PROFESSOR IMRAN CURRIM
21. - Average Coffee
-Specialty
- Super Specialty
Coffee Segment
Convenience
- Low
- Medium
- High
- Medium
- Low
Customer Visit
Frequency
- High
Type: Specialty
Convenience: High
Frequency: Low-Med-High
Type: Specialty to Super
Convenience: Low
Frequency: Low-Med-High
The customer….The customer….
34. Both:
• Unique Approach to advertising
• Very little traditional advertising
• Point-of-sale materials and local-store marketing
Peet’s:
• Peet’s depends on word-of-mouth advertising
How they learn about usHow they learn about us
35. Mission Message Media Money Measurement
• Call to action
• Try New
Products
• Increase
User Activity
The Whole EnchiladaThe Whole Enchilada
• Call to action
• Try New
Products
• Increase
User Activity
• We Care
• Ambiance
• Internet
• Product
Placement
• Magazines
• 129 Million in
2008
• Website
Usage
• Foot Traffic
• Product
placement
• Radio
• Word of
mouth
• Internet
• 4.5 Million in
2008
• Website
Usage
• Foot Traffic
• Quality is key
• Wide Variety
• Low Shipping
Costs
Starbucks stock price dropped $40 -> $8, Starbucks closed 600 stores this year
Peet’s stock price is solid $20-28 a share, Peet’s profits increased 25%, Peet’s opened 23 new stores
Grinders / Brewers: early grinders used stones to mash the beans. Now grinders are so sophisticated they measure everything from grind density to temperature specifications. Recently, Starbucks unveiled an $11,000 coffee maker. It
3-6 % for marketing in other industries
Post 911 – when other retailers were reeling from the recession, Starbucks was enjoying its 11th consecutive year of sales growth, making them think they were recession proof. They had few sales promotions and relied purely on customer loyalty. This is no longer the case. Starbucks has really upped the number and types of sales promotions they offer. They have coupons, both on-shelf and on-line, loyalty programs, where you can buy a starbucks card that gives you discounts the more you use it. More recently they started introducing price deals. On their ready to drink products. And finally one of the ore popular promotions was Starbucks’s “Summer Hot Relief tour” where A fleet of Starbucks Chill Patrol vehicles went to festivals, beaches and city streets offering samples refreshing blended drinks, including Frappuccinos and Tazo Ice Blended Tea.
Peet’s Coffee and Tea has a different philosophy. They too offer on shelf coupons – catering to their established clientele, and just like Starbucks, they have loyalty programs. What’s unique to Peet’s is that they do free standing inserts, which is similar to a direct mail campaign. You can see from these two companies that Peet’s is not trying to sell to the masses. Peet’s is mostly interested in keeping it’s customer, so these programs are tailored to them.