2. Starbucks
Starbucks is a global coffee company that have an expanding product range. They don’t
just sell coffee anymore, but also sell cold drinks, sandwiches, cakes etc. has a range of
chocolate products that are in different stages in the product life cycle. Three of their
products that are currently in different stages of the product life cycle are Gingerbread
Latte, Caffe Mocha and Iced Caffe Mocha. The Caffe Mocha is a traditional drink sold in
Starbucks, the Iced Caffe Mocha is exactly the same but served cold, this is an extension
strategy. The Gingerbread Latte has been released for the festive period over Christmas
so is new on the market.
x x
Iced Caffe Mocha
Caffe
Mocha
x
Gingerbread Latte
3. Price
Gingerbread Latte – This product is only going to be on the market for a short
period of time as it is as a Christmas Drink. Therefore the pricing strategy Market
Skimming was used for the release of this product. This is selling the product at a
high price for a limited period of time. The aim is to gain as much profit for the
product whilst it is unique on the market. The product is brought out at Christmas
each year but with new flavours, many Starbucks customers look forward to the
product coming back. Therefore the loyal customer base are willing to pay a higher
price for it due to it only being on the market for a limited time period.
Caffe Mocha & Iced Caffe Mocha – The Caffe Mocha is a product that has been on
the market for a long period of time, it is a drink sold at every coffee store on the
market so Starbucks need to keep the price of it very similar to their competitors
prices otherwise their customers will go elsewhere. The Iced Caffe Mocha is at a
slightly higher price as it is a unique product to Starbucks so people will be prepared
to pay a higher price if it is the only place where they can get it.
4. Place
Starbucks has a number of stores located in different areas, from city centres to
motorway services. Even though they are a coffee shop they sell a wide variety of hot
and cold drinks and foods, so they have a very wide target audience. However there
main target audience is city workers who want to grab a coffee, therefore this is where
most of there stores are situated.
With the Gingerbread Latte being a special edition drink for the Christmas
season, there are special signs for it as soon as you walk into the shop and posters
advertising it in the window.
Promotion
Both below the line and above the line promotion will be used for the launch of the
Gingerbread Latte, however it will mostly be below the line. The Christmas lattes come out
every year, therefore people are already aware of the product so not as much promotion is
need for them.
Below the line promotion will be shelf edge labelling promoting the £1 chocolate bar
within Morrison's and leaflet advertising through the local paper. Above the line
promotion would be a TV advert produced by Cadburys for the new product along with
support from TV advertising for Morrison's products.
5. Cadburys
Cadburys has a range of chocolate products that are in different stages in the product
life cycle. Three of their products are Dairy Milk, Dairy Milk Caramel and Dairy Milk Oreo.
Cadburys first product was the Dairy Milk chocolate bar which is just a plain bar of
chocolate, since then they have brought out a range of products in bags, boxes, tins and
drink. They now have a lot of different takes on the original bar, for example the Dairy
Milk Caramel, this is an extension strategy to prolong the life of the Dairy Milk. The latest
product they have released is the Dairy Milk Oreo.
x x
Dairy Dairy Milk
Milk Caramel
x Dairy Milk Oreo
6. Price
Dairy Milk Oreo – Penetration pricing was used for the launch of this product, a
large bar was released at a price of £1. Using penetration pricing attracts consumers
attention to the product and they will be encouraged to buy it, Cadburys hope that
consumers will like the product and develop the habit of buying it even when the
price starts to rise. Also retailers are likely to purchase the product in large
quantities, therefore Cadburys gains a significant slice of the market with this
product.
Dairy Milk and Dairy Milk Caramel – These products have been on the market for a
long time, so the price of them is very similar to all other chocolate bars on the
market from competitors. If Cadburys notice a fall in sales or if a competitor brings
out a new chocolate bar they may change the price slightly as part of a promotion
campaign.
7. Place
Cadburys sell their products in all supermarkets and corner shops. The
Supermarkets display the products within certain parts of the shop. For example in
Morrison's the Dairy Milk and Dairy Milk Caramel will be in the confectionary isle.
However with Cadbury Oreo being a new product on the market it will be on
prominent shelf displays usually at the front of the shop, this will attract consumers
attention as soon as they walk into the shop. Consumers tend to look at prominent
shelf displays at the end of isles as they know this is where the offers will be
displayed.
Promotion
Both below the line and above the line promotion will be used for the launch of the
new Dairy Milk Oreo product. Below the line promotion will be shelf edge labelling
promoting the £1 chocolate bar within Morrison's and leaflet advertising through
the local paper. Above the line promotion would be a TV advert produced by
Cadburys for the new product along with support from TV advertising for
Morrison's products.
