Do Children Want Different Products from Adults: Case of Starbucks - Research Proposal Example

Marketing Proposal Contents 1.0 Background Of The Research 3 1.1 Situation Analysis 4 1.1.1 Introduction 4 1.1.2 Starbucks Australia target market 4 1.1.3 Australian Starbucks SWOT analysis 5 1.2 Marketing strategies 7 1.2.1 Starbucks Australia pricing strategy 7 1.2.2Place or distribution strategy 7 1.2.3Promotion strategy 8 2.0 Statement of the Problem 8 2.1 Problems Associated With the Launch of Starbucks Champ 9 2.2 Research Questions 9 2.3 Research Vision, Mission and Objectives 9 2.3.1 Mission 9 2.3.2 Vision 9 2.3.3 Research Objectives 10 2.4 Problem Justification 10 3.0 Desk Research 11 3.1 Purpose 11 3.2 Procedure 11 4.0 Qualitative Research 11 4.1 Purpose 11 4.2 Population and Sampling. 12 4.3 Procedure 12 5.0 Quantitative Research 12 5.1 Purpose 12 5.2 Population and Sampling 13 5.3 Procedure 13 6.0 Timing 14 7.0 Project Budget 14 Appendix 1: Starbucks Champ Pre-Launch Questionnaire 17 1.0 Background Of The Research Starbuck Coffee Company Australia commenced in 2000 in the central business district of Sydney. Ever since, the company has spread to other parts of Australia and so far it has 22 coffee houses in places like Sydney, Sunshine coast, Melbourne, Gold Coast and Brisbane. Though Starbucks Australia is a constitute branch of Starbucks Seattle Washington (Datamonitor 2006, pp. 5). The products and the services offered by Starbucks are of world class level. For Starbucks Australia it offers more than the finest coffee collected from all over the world but mainly from Brazil. The Starbucks restaurants are designed to create relaxed atmospheres that provide people with their personal space to use as they want (Moon & John 2003, pp. 20). However, high public profile comes with high level of public responsibilities. Starbucks works with some principle which include but not limited to; providing a good working atmosphere together with treating each worker with required respect and dignity, to embrace diversity and make it an essential ingredient in running the business, to contribute positively and widely to both communities and the environment, to embrace innovative and flexible solutions in the business to bring about the much needed change, buy and sell environmentally friendly products, and encouraging all the stake holders to join hand in order to accomplish the mission of the corporation (Overholt 2004, pp. 6). The mission statement is to inspire and nurture all peoples spirits i.e. one cup, one person and one neighborhood at a time. The corporation is also geared to work, connect, laugh and uplift the lives of the customers. In the recent past, Starbucks Australia has introduced new products in their menu mainly targeting persons under the age of 18 years. Therefore, the marketing strategies and the products discussed below include the recently introduced brands to children. 1.1 Situation Analysis 1.1.1 Introduction Starbucks Australia sells fair trade coffee on its customers and any visitors who visits the restaurant. This makes it the current market leader through innovation and invention of new products. As mentioned earlier, Starbucks Australia has introduced new products called the champ line of beverage through innovations. The corporation prides itself as the world’s provider of the top most brands of beverages which is strongly supported by the mission statement (DIU 2007, pp. 9). In addition, the corporation has done the following; introduced new variety of coffee with lower concentrations of caffeine, introduced smaller and safer products mix for Starbucks champ preschool customers, recognition of younger generation by Starbucks Australia staffs as an important stakeholder of the corporation, has introduced a clarion call of satisfying every children customer who visits the stores, has created a place away from school and home where children can spend their leisure time. 1.1.2 Starbucks Australia target market Since teenagers and kids have a high sensitivity to nutritional and calorie content of any beverage that they consume, the Australian Starbucks champ brands are made with these enticing products best to sought the consumers. Again, since children under the age of 6 require low calorie and low sugar products, the corporation has made sure that this is what they offer to the little ones. Since obesity among the teens is of major concern the Australian Starbucks has introduced brands with low fat and calories in the aim of achieving their target. 1.1.3 Australian Starbucks SWOT analysis 1.1.3.1 Strength point of Starbucks Starbucks is recognized globally as the producer of world class quality products and excellent services. It therefore attracts a good number of customers and other stakeholders due to its reputation (Kotler & Armstrong 1999, pp. 56). As a matter of fact, everyone who knows of the corporation or has heard of it wants to be associated with it no matter the cost. The corporation has also demonstrated its prowess in invention and innovation of new products, which aims at satisfying the customers’ needs and taste. The relationship between the customers and the corporation operators has enabled Starbucks to attract children and have gained experience in dealing with them through loyalty of the parents. On the same point, Starbucks staffs are highly motivated to work for the corporation through teamwork and better pay. Finally, the relationship between the suppliers and workers is good, through involving other workers of the corporation in decision making, making the decisions made concrete. 1.1.3.2 Weakness of Starbucks Starbucks have a number of competitors who serves as a potential threat to the market share of Starbucks. The competitors include corporations like McDonalds and other beverage restaurants which serve quality coffee brands to their customers. Another weakness associated with Starbucks Australia is that its prices are very high and expensive which makes the demands for the services and the products to be associated with wealthy people. This makes the corporation to limit its number of customers therefore reducing the total revenue that would have collected. 1.1.3.3 Opportunities Australian based Starbucks Corporation has well established distribution channels that enable it to be close to the customers as well as creating easy access to the premises. Through inventions and innovations the corporation can change and extend the existing range of products. For example, the new champ collections of brands targeting the children and teenagers were accomplished through invention and innovations. Furthermore, the demographic of the Starbucks Australia has changed due to the recent introduction of the new customers i.e. children and teenagers. Marketing opportunities options through new ventures and products extensions can open other opportunities for the corporations (Stanton 1997, pp. 45). Say, if they partner with Schweppes Australia which is well known for distributing bottled products, Starbucks can be certain that their products are in every channel of distribution at the right time therefore ensuring that the products are available to the customers. Through products extensions, Starbucks offers lattes, Frappuccino in eight-ounce short size but do not always list it on the menu. Again, Frappuccino is bottled by Pepsi and available in many stores. 1.1.3.4 Threats Starbucks Australia is faced by a number of potential threats that hinder in the development of the products as well as reduce market share of the corporation. They include; competitions from vendors and restaurants, weather; in the sense that people don’t find it appealing to take hot beverages during hot weather and unhealthy products such as caffeine products are associated with unhealthy living habits. The unhealthy beverages are associated with obesity and strict measures and policies are being applied to curb their excessive consumption mostly by teenagers and children. 1.2 Marketing strategies The Starbucks marketing mix strategies mainly for champ products targeting teens and children are characterized by attractive products and stringent measures in order not to rub shoulders with the laws are protects kids and teenager. Therefore, the market mix for the champ product is specifically and expertly done to increase the returns and minimize the cost (Kennedy 2009, pp.15). The products are of high quality and great taste to satisfy the devotions of the customers and make them their loyal brands. In that respect, the champ products must be appealing to the teens and children and should make them appear cool, therefore positioning the champ product mixes under the teenage segment of their marketing mix. Due to the sensitivity nature of marketing strategies for both teenagers and children, Starbucks Australia should jump onto the opportunity enabling them to brand and achieve brand recognition before other competitors joins in. The champ product mix includes but not limited to; Champ Kid Frappuccino, Champ Decaf Espresso Roast starting at 8.0unce, Mango passion fruit blend 8 Oz cool Size, Champ iced latte, Champ Vanilla Frappuccino starting at 8 Oz, Champ kid Cookie, Champ Lemon Meringuet Tart, Champ mini cupcakes, Champ mini Carrot loaf, Champ White Caramel Mocha, Champ Kid special pastry, The Starbuck Champ RTDs (Ready To Drink) 1.2.1 Starbucks Australia pricing strategy Starbucks champ brands and beverages are sold at discount prices, weekend special pricing which makes increases the market gains in promotion and sell of the same products. They have also introduced a discount card to the regular users of the products which gives a discount of AU$ 0.5 to a loyal customer every time they purchase a Starbucks champ product (Kennedy 2009, pp.7). 1.2.2Place or distribution strategy Starbucks champ ready to drink products are distributed by Pepsi are available in schools and other hanging joins for teenagers and children. Moreover, shops in which the products are sold are located in high traffics, high visibility locations in in order to popularize the Starbucks champ brands. Other Starbucks locations are situated in strategic places which are reachable either by foot or other means. 1.2.3Promotion strategy The ‘be champ’ promotion campaign has helped the corporation to market its products to young people by targeting school events and festival where they the corporation set up their tents advertising the products. They also advertise their products in school and college magazines, through internet and promotional road shows as well as tours. Starbucks Australia has also shown the advertisement on billboards through social media like television during kid programs. It has also contributed a great deal in sponsoring events like sporting activities all over Australia. Finally, ‘the Champ Soccer Festival’ takes the centre stage in advertisement and promotion activities for the champ brand campaign (Kotler 1997, pp. 34). 2.0 Statement of the Problem Price is the not the only factor used by consumers to make the final Decision whether to buy or not to purchase a product. Starbucks Australia for a long time has not considered children to be an essential part of their consumers, mostly lumping products they sell to this age group with those of adults. Children are a sensitive group when making and marketing products targeting them. Starbucks intends to come up with new products for this age group, but the marketing of these products seem to be already problematic to the company as there is a lot of debate condemning companies for marketing to children. 2.1 Problems Associated With the Launch of Starbucks Champ 1. It is believed that marketing to individuals under the age of 18 is immoral. Thus marketing the Champ line will be a challenge for starbucks. 2. Most of Starbucks Products contain a lot of caffeine. 3. The Starbucks stores interiors are designed for mostly adult customers. 4. The Companies staffs are used to dealing with adult customers and may be unable to deal with unaccompanied children. 5. Adults want their relaxation times to be quiet especially in a restaurant thus the presence of kids might affect starbucks reputation as a peaceful store. 2.2 Research Questions Is the under-18 market viable enough for starbucks to develop the Champ line of products? Do children want different products from adults? What impact will the new strategy to target the under 18 market affect starbucks reputations 2.3 Research Vision, Mission and Objectives 2.3.1 Mission The mission of the Starbucks Champ research will be to ensure when the product line is finally rolled out every marketing aspect of the product that might affect their uptake in the market or the operation of Starbucks is well thought of and developed according to customer demands. These aspects include product calorie content, taste and packaging 2.3.2 Vision To provide Starbucks with well analyzed and interpreted market information that can enable the smooth roll out of starbucks champ line of products, ensuring that Starbucks quickly establishes dominance in the under-18 market and holds it for many years (Burns and Bush 2010). 2.3.3 Research Objectives The main objective of the study will be to provide market information that will enable the smooth roll-out of the starbucks champ line and it consequent success in the market. 2.3.4Specific objectives 1. Establish the average number of under-age customers that come into a starbucks store everyday 2. To find out the contents of a beverages parents consider appropriate for their children 3. To establish which promotional activities for beverages and other restaurant are popular among children. 4. To Find out what methods of advertising are acceptable to society when targeting kind 2.4 Problem Justification Modern product lifecycle has become too short and competitors will always respond to new product ranges with tactics of their own meant to counter the market effects of any products introduced in the market by a company like starbucks (Vickery1990, pp. 56). To ensure that starbucks champ products are accepted in the market and curve themselves a dominant market share the market information needed for the new line is very essential. Benefits of Conducting Market Research for the new product 1. Starbucks can be able to establish the what children and people who will purchase the new line really need in a product from the starbucks champ line 2. Starbucks can be able to establish the volumes of under-18 customers that come into their stores and whether the new products will increase the number of under-18 customers 3.0 Desk Research 3.1 Purpose Available sources of information on Starbucks will be examined and analyzed to refine the objectives and enables us to know the kind of information the research will be focused on getting. Desk research will enable the compilation and analysis of starbucks existing products and their competitors (Lev, Brewer and Stephenson 2004, pp 24). The aims of the Desk research will be a) Establish how many under-age customers are served on a monthly basis from starbucks records b) Establish what starbucks as an organization feels towards under-18 customers and marketing to them c) What are the prices of Starbucks existing products especially those targeted at children d) What are the current ways the company uses to market its products e) What are the sizes of these products 3.2 Procedure The research will begin with visiting a store and obtaining records from the relevant staff. Externally the research will look into previous market assessment of competitors in the food service industry (Sallant and Dillman 1994, pp 12). 4.0 Qualitative Research 4.1 Purpose In order to satisfy some of the exploratory objectives the qualitative research will be provide the company with detailed information. Focused group discussion will be used to find out and analyze attitudes towards existing products and the new line of products (Curtis 2008, pp. 45). This phase of research will seek to find out the following How do children prefer in the packaging of beverage What size of a product is a child likely to buy at starbucks What are the qualities they look for in restaurant 4.2 Population and Sampling. The population will consist of schools that will be visited during the research (Smith and Napier 2002, pp 62). The population will be divided into the following group Group 1: Children who come to starbucks store unaccompanied Group 2: Children who go into starbucks store accompanied by seniors Group 3: Children who are not customers of starbucks. 4.3 Procedure The research team will visit schools after making arrangement with the relevant authorities and select a group of students. The team will ask 4-6 questions that can elicit enough debate among the children to be able to answer the questions of this phase of research. 5.0 Quantitative Research 5.1 Purpose This phase of research will use questionnaires which will be administered to parents of under-18 children who are customers of starbucks stores. The questionnaires will be administered in conjunction with starbucks where a respondent will pick the questionnaires at the counter of a starbucks store (Ries and Trout 2000, pp 29). This part seeks to come up with the number of customers who have children that are potential customers to starbucks new line of product. The research decided not to administer questionnaires to children as their responses are not reliable and thus cannot be relied upon as a credible source of data for this research. 5.2 Population and Sampling The research decided to administer 200 questionnaires to female and male adults of various ages who visit starbucks store ( Kotler and Armstrong 1999,pp. 16). However the administering of questionnaires however will be biased with only a sample of the population of adult starbucks customers who have children interviewed. 5.3 Procedure The research team will prepare the questions to be used in the questionnaires with emphasis on what the Quantitative research is supposed to achieve. The questionnaires will seek to find out the following What a parent expects his child’s drink or meal at starbucks contain What is the most important feature in a starbucks product does the individual’s children consider when buying a beverage or any other offering at starbucks. Whether the customer would change his attitude to starbucks if they started marketing to children These among other factors are what they are among the Quantitative statistics the questionnaire in Appendix 1 will seek to provide. The questionnaire will comprise of mostly closed ended questions but a few questions will be open ended (Kennedy 2009,pp 6) The data will be analyzed through computer by use of frequency distributions including mean, median and quartiles (Whitehall Associates 2004, pp 13). Later the Data will be referenced to the whole Australian population by weighing it against the last census. 6.0 Timing The research is going to take an estimated 18 weeks. Every week on Monday the research team will meet to evaluate the progress of the research and put together any additional plans to be integrated into the research during the week. Week Activity 1-3 Desk research 3-5 Qualitative fieldwork 6 Desk/qualitative report ready 7 Questionnaire Development 8 Pilot( n=15) 9 Quantitative stage(n=400) 10-11 Data recording (coding) 11- 13 Analysis 15 Presentation 18 Proposal report ready 7.0 Project Budget Research Part Description Fees Desk Research 12 hours for research executives 24 hours for research assistants $1,000 to buy access for documents $3,500 Qualitative Research Three focus groups $6,000 Quantitative Research 400 questionnaires administered $ 8,000 Total budget $17,500 References Moon, Y. & John, Q 2003 .Starbucks: Delivering Customer Service. Harvard College. Boston: Harvard business School Overholt, A 2004 .Thinking outside the cup” Fast Company [online] at: http://www.fastcompany.com retrieved on 8th April 2012. Kennedy, D. S. 2009.The Ultimate Marketing Plan: Find Your Hook. Communicate Your Message. Make Your Mark. Ohio: Adams Media. Kotler, P & Armstrong, G 1999 .Principles of marketing. New Jersey: Prentice Hall. Kotler, P 1997 Marketing Management. New Jersey: Prentice Hall. Stanton, W 1997.Fundamentals of Marketing. New York: McGraw Hill. Datamonitor 2006 .Starbucks Corporation Company Profile [online] at: http://www.starbucks.com/about-us/company-information Retrieved on 8th April 2012. Drinks: Industry Update (2007). Market Watch: Global Round-up, vol. 6, p.21-22 [online] at: http://www.stefan-gassner.de/dokumente/starbucks.pdf Retrieved on 10th April 2012 Lev,L., Brewer, L. and Stephenson,G. 2004, Tools for rapid Market assessments, Chicago: Oregon State University. Sallant,P. and Dillman, D. A. 1994, How to conduct your own survey, New York: John Wiley and Sons. Curtis, K. R. 2008, Conducting Market Research Using Primary Data, Reno: University of Nevada. Burns, A. C. and Bush, R, F. 2010, Marketing Research, Global edition, Upper Saddle River: Pearson Education. Ries, A & Trout, J 2000, Positioning the battle of the mind, New York: McGraw-Hill Smith, P. and Napier, K. 2002, ‘Food processing: innovation in the industry’, Australian FoodStatistics, Canberra, pp. 10–19. Vickery, J.1990, Food Science and Technology in Australia. USA: Intl Specialized Book Service Inc. Whitehall Associates 2004, Price Determination in the Australian Food Industry: A Report, Report prepared for the Department of Agriculture,Fisheries and Forestry, Canberra. Appendix 1: Starbucks Champ Pre-Launch Questionnaire How many times in a month do you visit starbucks accompanied by your children What is the most important aspect when purchasing a Starbucks Product for your children? Please tick one. a) Taste b) Nutrient Content c) Size of Packaging d) What other children are drinking What would be your reaction to a starbucks campaign to sell their product to under-10 a) I would Never come into a starbucks store again b) I would consume a starbucks product, but marketing to children is wrong c) I would Continue consuming starbucks products as usual because it is okay to market to children Would you allow you children to go into a starbucks store unaccompanied? a) Yes b) No Do you think Starbucks staff treats children well? a) Yes b) No Would you purchase a starbucks product designed for children? Read More