This document provides an analysis comparing Di Bella Coffee and Starbucks. It includes sections on consumer behavior, market segmentation, positioning, and recommendations. Di Bella focuses on specialty coffee and the customer experience while Starbucks has expanded globally but diluted their brand. The document recommends Di Bella expand domestically and internationally to establish market leadership while continuing to innovate and build their brand.
3. Introduction
Company Backgrounds
Starbucks
• Established in 2002 by Phillip Di
Bella.
• Own 4 Roasting warehouses, 26
featured cafes
• Supplies 1200 Cafes, 2,2 million
cups per day
• Expanded into China 2010 and
India 2011
• Crop to Cup launched in 2010
Source: (Companies Websites 2013)
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Worlds largest coffee chain
Established 1971
20,000 stores worldwide
379 mill in revenue (2012)
Entered Australia in 2000
with 81 stores
• Only 22 shops continue
trading
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4. Market Segmentation
Quality coffee, unparalleled service, competitive
prices to create the ultimate coffee experience for
all our customers.
Vision Statement - Di Bella Coffee
Source: (Di Bella Website 2013)
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5. Introduction
Industry at a glance
$339.8m
$1.3 bn
$5.3 bn
Annual Growth
Rate 09-14
Annual Growth
Rate 14-19
3.1%
3.5%
Businesses
REVENUE
(Source: IBIS World 2013)
WAGES
PROFIT
6,613
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6. Introduction
Industry at a glance
Industry Structure
Revenue by State
Lifecycle State
Regulation level
Growth
Medium
Barriers to entry
Low
Competition level
High
(Source: IBIS World 2013)
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7. Introduction
Industry at a glance
NO
MAJOR
PLAYERS
Hudsons Coffee(1%)
Starbucks (1%)
Gloria Jean's Coffees (4 %)
Michel's Patisserie (3.5%)
The Coffee Club (3%)
Local coffee houses (87.5%)
(Source: IBIS World 2013)
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8. Introduction
Quick survey
54%
64%
People over 18
that drink coffee
Total consumption
during breakfast
hrs
Source: Fave coffee, coffee stats, viewed 20 December 2013,
http://www.favecoffee.com.au/coffee-stats/
60%
Total percent of
Australians that
need coffee to
start the day
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9. Analysis
Consumer behavior
Need
Recognition
Info
Search
Emotional,
energy, status,
social, lifestyle
Low degree of risk
involved in purchase.
Low cost item, easily
changed if not
satisfied
Word of mouth,
internet, foot traffic
Evaluation
Generic options:
instant, plunger,
home machines
(nespresso)
Competing coffee
houses: Starbucks
Other drink options:
tea or soft drink,
water
Source: In store experience, Di Bella Coffee website and Starbucks website –
Details in reference listing
Purchase
Decision
Availability of local Di
Bella coffee house
compared to
competitors,
Atmosphere,
Choice, People
Post
Purchase
Eval
Ranges from Delight
to Cognitive
Dissonance
Di Bellas goal will be
to have delighted
customers who are
more incline to make
it a regular stop.
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10. Analysis
4 Ps
Price
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Promotion
Coffee - $3.5 Cup and
$4.0 Mug
Whole Beans – Greater
then $10.5 (250g)
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Café owner operators –
city CBD, wholesale –
WA, VIC, NSW & QLD
High control over
consumer experience
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Place
(distribution)
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Word of mouth from trusted
advisors (Café Goers), Social
Media (FB 23.8K likes)
News letter, blogs and Events
Earns marketing voice
Crop to Cup – Does the right
thing
Espresso coffee,
whole beans, coffee
education
Wine like status –
Reserve ranges
Product
Source: In store experience, Di Bella Coffee website and Starbucks website –
Details in reference listing
Price
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Promotion
Coffee - $3.8 Cup and
$4.2 Mug
Whole Beans – Greater
then $12 (250g)
High foot traffic
locations, majority
city CBD
Previously high
saturation of stores
Place
(distribution)
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Buys advertising, strong
loyalty card including
mobile App
Strong social media (FB
61K likes)
Many coffee drink
variations, light food,
coffee drinking apparatus
Low control consumer
experience – United
Airlines (no SB experience)
Product
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11. Analysis
Market Segmentation
Di Bella
Quality, recognition and status
Behavior
Age +25, coffee connoisseurs,
white collar workers
Starbucks
Value a familiar and comfortable
experience, regular
Age 16 – 34, white collar and
students
Demographics
Psychographic
Geographic
Higher income, something better
attitude
High density or destination urban
food locations
Source: The Hudson Chronicle website, Di Bella Coffee
website and Starbucks website – Details in reference listing
Mid to higher income, young
optimism mindset
High density and or high foot
traffic locations
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12. Analysis
Target Market
• Primary – Café-goers,
conscious coffee drinker, that
appreciates quality
• Secondary – Instant coffee
drinkers, 70% of coffee
consumed in Australia TORQ
a ‘natural coffee concentrate’
• Primary 49% – Men and
Women between 25-40.
Attracted by the hip,
contemporary store design.
• Secondary 40% – Young adults
between 18-24. Positioned as
a place to hang out, study or
write papers
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13. Analysis
Positioning Strategy
Positioning map
• DiBella was very clear about where
they wanted to position them self in
the market.
• DiBella wanted to be Australias #1
specialty coffee distributor ->
'brand identity' focus on the top end
(specialty) coffee drinkers.
• Includes the whole value chain (crop
to cup). Everything is in-house.
• This target market is a conscious
coffee drinker, well educated (taste,
flavor, bitterness) who knows quality.
• Marketing vs advertising = educating
consumer rather than selling to
consumer.
Source: Direct observation and industry knowledge
High perceived
quality and
status
Extensive
Personalized
Service
Limited Service
Less Personal
Low perceived
quality and
status
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15. Conclusion
Conclusion
DiBella found an opening in the coffee specialty end,
focusing on the experience of great coffee.
Starbucks in a state where they are diluting, which
confuses the customer.
DiBella sticks to their vision and brand identity, (brand,
marketing vs. ads, and the earning the voice).
Starbucks chasing product optimization, and brute force in
order to position themselves.
Starbucks and DiBella have similar market segmentation
but different approach (corporate cookie-cutting vs.
building relations with owner operators via customer
ambassadors)
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16. Recommendatio
n
Recommendations
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Domestic: expand current coffee houses e.g.
Adelaide, Northern Territory (Darwin), potential
for franchises.
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Continue to build brand awareness through
broad customer base.
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Continue to innovate through product
diversification (pods).
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International: establish strong hold in Asia, look
for opportunities into Europe and the US.
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18. References
References
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Athena Marketing International, What Starbucks Taught Us About Branding, viewed 14
January 2013, http://www.athenaintl.com/news/articles/what-starbucks-taught-us-aboutbranding/
Di Bella Coffee, Company overview Di Bella Coffee, viewed 6 January 2013,
http://dibellacoffee.com.au/about/company-overview/#sthash.TsO6tQCp.dpbs
Ferrell, OC & Hartline, MD 2011, Marketing strategy, 5th edn, South Western, USA
Starbucks Australia, About us Starbucks Australia, viewed 6 January 2013,
http://www.starbucks.com.au/About-Us.php
The Hudson Chronicle, Who is Starbucks Target Audience, viewed 7 January 2013,
http://smallbusiness.chron.com/starbucks-target-audience-10553.html
What Starbucks Taught Us About Branding, viewed 20 January 2014,
http://www.athenaintl.com/news/articles/what-starbucks-taught-us-about-branding/
IBISWorld Industry Report H4511b - Cafes and Coffee Shops in Australia, viewed 7
January 2013,
http://clients1.ibisworld.com.au.ezproxy.usc.edu.au:2048/reports/au/industry/default.aspx?e
ntid=2015
Interviews with DiBella CEO, Phillip DiBella on Youtube, viewed 7 January 2013,
http://www.youtube.com/user/dibellaonline?feature=watch
Starbuck Company Website,
http://www.starbucks.com
DiBella Website,
http://www.dibellacoffee.com.au
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Hinweis der Redaktion
This Agenda directly reflects the assignment, see first slide.
Crop to cup initiative:Di Bella believe it is their responsibility to support the communities2. The program builds skills, job security and growth opportunities3. Di Bella green bean specialist visits coffee growing regions to educate/assist local farmers highest quality beans4. Di Bella rewards farmers with prices that reflect the quality of the beans.I THINK WHY STARBUCKSSTUMBLED IN AUSTRALIA SHOULD BE REVEALED HERE ALREADY!. In 2002, Phillip Di Bella’s passion for coffee and entrepreneurial spirit led to the establishment of a small coffee-roasting operation in the suburbs of Brisbane.Phillips enthusiasm for both his product and customer service, resulted in Di Bella Coffee becoming a key player in the local coffee scene.
Hands up, How many people drink coffee? Keep your hand up if you drink coffee at breakfast timeOf you holding your hand up, how many believe you cant start your day without coffee. Do you think this is accurate ?
1. Need recognition Di Bella is about status while Starbucks is about the social element in store.2. Info search is a low risk for both Di Bella and Starbucks given a low-cost item.Evaluation Di Bella now looking to compete against instant coffee with its new pork product while Starbucks is often confusing in-store with so many coffee options as well as many Tea and soft drink options.Purchase decision for Di Bella this is about availability which comes down to location and people (business owners caring about the customers)while for Starbucks it seems to relate to atmosphere Post purchase evaluation Di Bella consistently looks to delight customers thus the operator market being 90% of their business this assists in spreading word-of-mouth to help grow the business.
Other high-level Starbucks is corporate and clean in contrast to the warm and friendly store environment. Di Bella coffee is more grass roots from the ground up and and its stripes rather than paying for. Surprise here was Di Bella coffee being cheaper than Starbucks. Philip is very much the figurehead of Di Bella Coffee and its use personality, enthusiasm and clever ideas that drive the business. In recent years Starbucks has lost its way losing control over the Starbucks experience an example of which was united airlines using Starbucks branded instant coffee another is the move for in-store no longer freshly grinding beans thus the stores losing the Coffee smell.
Market segmentation is performed to divide large heterogeneous markets into smaller pieces that companies can reach with greater efficiency and more effectively
Just as a sum up of the video: In 2002, Phillip Di Bella’s passion for coffee and entrepreneurial spirit led to the establishment of a small coffee-roasting operation in the suburbs of Brisbane.Phillips enthusiasm for both his product and customer service, resulted in Di Bella Coffee becoming a key player in the local coffee scene.
In-house: legal, marketing, manufacturing, distribution. Target market: the wine drinker of coffee. Diluting their bramd
How you’ve been to a DiaBella? What was your experience?First of all, one of the busiest coffee houses I visited in Freemantle. But holidays and newly opened. 15 minute wait for a seat. Personal experience – staff friendly, educating customer, targeting both consumers. Staff friendly: DiBella reckons the people are like the bait in fishing, the better the bait, the better the fish. Spends 2 miillion extra on staff. Educating the customer: There were bins of coffee, that you could try of different sorts. The staff actively ask me questions about my coffee habits, and told me about their products. There were different machines that you could try out and buy. Targeting both segements, B2B and B2C.
Positioning, Segmentation,Consumer behaviour.
Repeat the difference between DiBella and Starbucks and how their strategies have been different as outlined in the presentation. Based on this analysis our recommendations are….Building more awareness among consumers.