Starbucks Evenings

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STARBUCKS EVENINGS MARKETING PLAN
TASHA HUGGINS, KRISTY ALLAN, ASHLEY LEWENBERG, KATIE LEE, BRITTANY WATSON
MKTG-5007
MKTG-5007
Professor P. Gillespie
TASHA HUGGINS, KRISTY ALLAN, ASHLEY LEWENBERG, KATIE LEE,

BRITTANY WATSON MKTG-5007
TABLE OF CONTENTS
COMPANY OVERVIEW....................................................................................................................................3
SITUATION ANALYSES ....................................................................................................................................4
SWOT ANALYSIS ....................................................................................................................................................................... 4
PORTER 5 FORCES ANALYSIS ........................................................................................................................................................ 5
PEST ANALYSIS.......................................................................................................................................................................... 6
MARKET OVERVIEW, SUMMARY & TARGET MARKET DEFINITION...................................................................7
PRODUCT/SERVICE OFFERING AND CHANNEL STRATEGY................................................................................8
MARKETING OBJECTIVES AND STRATEGIES.....................................................................................................9
MISSION STATEMENT ..................................................................................................................................11
MARKETING MIX..........................................................................................................................................11
FINANCIAL ANALYSIS ...................................................................................................................................13
MARKET ANALYSIS ................................................................................................................................................................... 13
SALES FORECAST ...................................................................................................................................................................... 13
MARKET SHARE FORECAST ......................................................................................................................................................... 14
CONTINGENCY PLAN....................................................................................................................................14


COMPANY OVERVIEW

Starbucks is an American Company with over 22,519 coffeehouse chain locations in 50 countries
(Starbucks Corporation, 2016a). In 1971, the company started as a single storefront in Seattle, Washington
aspiring to offer Italian coffee bar experience and become a place for conversation and a sense of community
outside work and home (Starbucks Corporation, 2016c). Today, Starbucks is the premium roaster and retailer
of specialty coffee in the world. Starbucks offers a range of products to enjoy at home, in the store or on the
go. They offer coffee, handcrafted beverages, merchandise, fresh food and now alcohol and savory small
plates at Starbucks Evenings (Starbucks Corporation, 2016b). Starbucks went public in 1992 and their common
stock is listed on NASDAQ under the trading symbol SBUX. Starbucks Brand Portfolio includes: Starbucks
Coffee, Tazo (1999), Seattles Best Coffee (2003), Torrefazione Italia Coffee (2003), Ethos Water (2005),
Evolution Fresh (2011), La Boulange (2012), and Teavana (2012) (Starbucks Corporation, 2016d). First
Canadian Starbucks opened in Vancouver on March 1, 1987 it was the companys first international location.
Since then, Canadians have embraced Starbucks Experience with more than 1,070 company-operated and
licensed locations across Canada (Starbucks Corporation, 2016b).

Starbucks takes pride in growth through a balance between profitability and social conscience. Social
Conscience is demonstrated through Ethical sourcing, Environmental stewardship and Community
Involvement (Starbucks Corporation, 2016a).

Starbucks Evenings was first introduced in Seattle in 2010 as a response to customers demand for a
familiar and casual meeting environment in the evening hours (Starbucks Newsroom, 2015). The Evening
stores are designed to make this experience easy and comfortable, providing each customer even more value
(Talpau & Boscor, 2011). Starbucks Evenings started out in 2011, and now there is more than 76 locations in
the USA and 3 locations in Toronto (Johnson, 2015).


SITUATION ANALYSES

SWOT ANALYSIS

STRENGTHS
WEAKNESSES
1. Starbucks has a strong Area A built around
1. The brand itself may make customers
their brand experience and product
reluctant to see Starbucks are a credible
customization options
place to buy alcohol since it is often
2. Can leverage its reputation for product
associated with their premium coffee
innovation and customer loyalty to introduce
products
new offerings to customers with relatively
2. Investment costs to introduce Starbucks
high success (Hellman, 2014)
Evenings may not necessarily yield a strong
3. Can better capitalize on its experience value
return on investment
by being a meeting place for customers

during times where they may want to enjoy a
glass of wine instead of a cup of coffee
(Haynes, 2015)

OPPORTUNITIES
1. Can acquire new market segments
2. Further develop its current customer base to
increase return visits during the day
3. Open more locations that offer the evening
menu, which can reach new markets in more
locations
THREATS
1. Need to compete with other businesses that
sell small share plates and alcoholic
beverages
2. Have to compete for the same market
segments as restaurants and bars
3. Licensing costs through Alcohol and Gaming
Commission of Ontario (AGCO)
4. Limited menu items excludes any who
maintains a vegan or vegetarian diet
5. Failure of Starbucks Evenings may negatively
affect the Starbucks brand as a whole
(Starbucks Corporation, 2015)
6. Economic sensitivity of consumers may result
in fewer customers who have less disposable
income with less willingness to pay more for
products and services (Krikorian, 2014)


PORTER 5 FORCES ANALYSIS

THREAT OF NEW ENTRY: MODERATE TO HIGH

The locations that have adopted the
Starbucks Evening aspect to their stores were
required to pay for baristas Smart Serve
certification, and train them on how to serve
drinks and food. For smaller coffee shops that
wish to enter the evening market, this would
potentially be very costly for them to
implement. For larger competitors like Tim
Hortons, Aroma, or Second Cup, this would not
be a significant barrier to entry. Starbucks also
needed to purchase and brand the new
glassware and dishes for the small plates and
alcoholic drinks. Depending on the competitors
approach, this may or may not effect their
ability to enter into the market.
SUPPLIER POWER
SUPPLIER POWER: MODERATE TO HIGH

Since Starbucks owns many of their food
suppliers, supplier power in this respect is very
low. Their wine and cider supplier is LCBO, giving
it immense supplier power since it maintains
control over both distribution and pricing of all
alcoholic products. Starbucks chose Muskoka
Brewery and Amsterdam Brewery as their craft
beer suppliers (Ontario Craft Brewers, 2016), yet
LCBO still maintains control of distribution and
pricing of alcohol across Ontario.

THREAT OF NEW
ENTRY
COMPETITIVE
RIVALRY
THREAT OF
SUBSTITUTION
BUYER POWER: LOW

Buying power of Starbucks customers is
relatively low. The brand has built a very loyal
following, as demonstrated through its Star
Loyalty Program, with over 11 million members
(Choi, 2016). Customers have a variety of lower
priced and lower quality options available to
them, but the significant market share of
Starbucks is a testament to its customers
willingness to pay higher prices for the
experience and quality that Starbucks works to
provide. The only significant implication on
buyer power is the fact that only customers
that are legal drinking age can purchase
alcohol.
BUYER POWER
THREAT OF SUBSTITUTES: HIGH

The alternative plan for customers would be to
go to a bar or restaurant that serves the same
beer and wine, or to the craft breweries
themselves. The wine, beer and cider that
Starbucks Evening is selling is not exclusive,
unlike their coffee, so customers do have a
choice to go somewhere else to consume the
same product. However, the food menu is
exclusive to Starbucks specifically.

COMPETITIVE RIVALRY: MODERATE

Despite the threat of competitive rivalry, Starbucks has a strong, loyal consumer base that is likely to stick to the brand they
know and trust, as opposed to going to another caf. The majority of other options for individuals are bars, which are a very
different atmosphere where people often drink to get drunk. In the USA, 60% of Starbucks Evenings customers are female
who do not necessarily like to hang out in bars so they choose to come to Starbucks instead (Wright, 2015).

Starbucks Evenings is also striving for exceptional quality of their snacks, beer and wine to prevent ease of copying
by competitors. Starbucks tasted more than 500 wines, and chose their favorite 10 to be included on the menu (McCoy,
2015). It was very important that the right wines were chosen, because studies show that 70% of Starbucks customers
drink wine opposed to any other alcoholic beverage (Leaf, 2016). In addition, Starbucks paired with gourmet chefs to create
their small plates so that they would compliment each wine selected. Research also showed that Starbucks customers are
two times more likely to drink craft beer, opposed to craft non beer so this was taken into consideration (Leaf, 2016).


PEST ANALYSIS

POLITICAL/LEGAL
Political and legal barriers upon entry mainly deal with the licensing and legality of serving alcohol
within stores. In Ontario, the AGCO is the governing body that is responsible for the granting and distribution
of liquor licenses to establishments (Alcohol and Gaming Commission of Ontario, 2016). Companies wishing to
serve alcoholic beverages must adhere to the regulatory requirements for both its sale and service under the
Liquor License Act (LLA) (Alcohol and Gaming Commission of Ontario, 2016). Additionally, employees will need
to be certified by the province of Ontarios Smart Serve Certification in order to legally handle, sell, and
responsibly serve alcoholic beverages within Starbucks establishments (Smart Serve Ontario, n.d.). A wide
variety of new liabilities are also assumed with the addition of alcohol sales (Insurance Bureau of Canada,
n.d.). Some Starbucks locations are open 24 hours a day. This raises the concern of legal hours at which
establishments can sell or serve alcohol. Varying from province to province, Starbucks will have to ensure that
locations that are open 24 hours a day abide by these regulations (Insurance Bureau of Canada, n.d.).

Lastly, Starbucks should be cautious in abiding by governmental regulations with regards to the
handling of food products. Since employees will be responsible for administering new menu items, they must
be trained in proper food handling procedures including food-borne illnesses, contamination, and tampering,
as these could negatively impact both the business and relationships with suppliers and governments
(Starbucks Corporation, 2015).

ECONOMIC
With the Canadian economy being in a recession, many Canadians do not have as much disposable
income as they might have had in the past during less fragile economic times. As a result, many Canadians may
turn to lower priced competitors. According to Starbucks Corporations (2015) 2015 Annual Report,
approximately 69% of the companys total net revenues for 2015 were attributable to the Americas (Canada
and the US). With the economy being in an undesirable state, any potential slows or declines in the US and
Canadian markets could largely impact cash flows, which translates into decreased funding for new initiatives,
such as the Evenings Menu (Starbucks Corporation, 2015).

SOCIO-CULTURAL

Socio-cultural factors that may impact Starbucks bottom line and long-term growth opportunities
include changes in consumer values towards nutrition and aging demographics spending power. Consumers
are increasingly becoming more aware of the inherent nutritional value of products they buy. Specifically,
consumer trends are moving towards healthier options that offer whole ingredients, low fat, low sugar, and
low sodium content (Wills et al., 2009). For Starbucks, this means that consumers will likely want to see
healthy options available among, and calorie counts along with other nutritional information made readily
available to them. With many Baby Boomers approaching the age of retirement, their sources of income will
likely become more limited. The impact of potentially losing such a large group of consumers could be vast.
Starbucks will likely have to evolve its strategy to focus more on Millennials and Generation X consumers
(McKenna, 2015


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TECHNOLOGICAL
It is unlikely that Starbucks will need to bring in new ovens and equipment for its Evenings Menu, as
the menu items are all prepackaged and only require reheating. However, failure of machinery and equipment
necessary in the production and administering of Evenings Menu items could have significant negative impacts
on profitability and reputation.
MARKET OVERVIEW, SUMMARY & TARGET MARKET DEFINITION

Canada has the most number of Starbucks stores per million residents out of all OECD countries at
almost 40 stores per million people (The Huffington Post Canada, 2014). For per city store count, Toronto
ranks 6th place with 160 stores, and Calgary and Vancouver in 13th place and 15th respectively with most
locations per city (The Huffington Post Canada, 2014). The data shows large growth potential in Canada, if
some of these Starbucks Coffee stores were to convert to the
Starbucks Evenings. With the Starbucks Evenings, the company
is able to serve customer in two categories as one: coffee
shops and bars. The Evenings stores will offer beer, wine, and
tapas style snacks in addition to existing services to customers
looking for more than just coffee. It aims to further extend the
Starbucks Experience to accommodate customers with a
meeting place during the afternoon and early evening in a
quiet, relaxing setting (Starbucks Newsroom, 2015).
Research shows that 70% of existing Starbucks customers drink wine and are also twice more likely to
drink craft beer than national average (Starbucks Newsroom, 2015). Canadas wine market is valued at US$6.1
billion and is currently ranking 7th in consumption. Per capita wine consumption has risen by 0.6% since 2013
and the projected wine consumption in Canada will increase by 7.8% by 2018 (Abraham, 2015). Consumption
per adult is expected to increase by 4.1% to reach 16.4litres in 2018 (Wright, 2015) (Wright, 2015). For beer,
per capita consumption was 63.35 litres per person based on total population (Beer Canada, 2016). Craft beer
was chosen to be sold in the Evenings locations as craft beer continues to be the fastest growing segment in
the LCBO beer category, growing 20-30% per year (Mulkins, 2016). Substantial amount of $290 million total
sales in Ontario comes from smaller licensees, especially in the independent bars and pubs (Mulkins, 2016).
With the Starbucks Evenings stores, Starbucks stores can now extend their reach to target growing number
customers that want alcoholic and/or non-alcoholic beverages in a quiet, relaxed atmosphere than bars.
Starbucks Evenings primary target market will be
men and women between the ages of 19-40 years old
(Millennials and Generation X) living in affluent
neighbourhoods. These Millennials and Generation X
cohorts have higher education are already users or loyalty
members of Starbucks Coffee. They have relatively high
income depending on the life stage, and are in the
workforce. Our target market is technology savvy,
cultured, connected with society and wants to make a
positive impact on the environment. Research shows that
Canadian domestic beer consumption in 2015 shows that


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women aged between 19-50 years old were responsible for 22.2% consumption most out of all age range and
men aged 19-50 years old were responsible for 35.5% of Canadas beer consumption (Statista Inc., 2016).
Studies show that 28% of Millennials between the ages of 19-30 are regular consumers, consuming alcohol a
few times per week to daily (Nadeau & Coletto, 2013). Most Millennials consume some type of alcohol and
65% of them recommend wine or beer they like through telling it in person and 30% recommend through
social media (Nadeau & Coletto, 2013). Millennials would be a huge potential long-term target market with an
opportunity to bring in new customers through word of mouth and social media; if we can successfully turn
them into our loyal customer base. Generation X represents more than 2.8 million Canadians who generally
have more discretionary income and they are willing to pay more for better product and experience
(Marketing - 3rd Canadian Edition, 2015). Alongside Millennials, they have a huge sales potential for Starbucks
Evenings stores due to their spending power. Generation X cohort are known to be the biggest spenders when
it comes to dining and entertainment expenditures (White Hutchinson Leisure and Learning Group, 2012).
They are very interested in working outside of the office - 51% would change jobs if they are allowed to
telecommute (Fisher, 2006). To attract Generation X and ensure retention, Starbucks Evenings stores can
create a suitable atmosphere as their third place away from home and work.

Various research proves that the next step for growth would be to convert existing Starbucks Coffee
stores into Starbucks Evenings stores. Projected growth of beer and wine consumption in Canada for people
between the age of 19-40 years old means that serving beer and wine alongside their Starbucks Coffee
beverage offerings in a quiet and inviting atmosphere will allow Starbucks to better accommodate and adapt
to meet evolving customer needs.
PRODUCT/SERVICE OFFERING AND CHANNEL STRATEGY

Starbucks is offering customers a selection of premium wines, craft
beer and small plates to enjoy after 4pm in select Starbucks locations in
Toronto. Starbucks evenings was first introduced in Seattle in 2010. With its
success it has launched in more than 300 locations across the U.S, with one
location in the UK and Japan (Harris, 2016). Starbucks Evenings is focused on
providing an atmosphere for their customers to unwind at the end of the day
with friends and family. The menu will feature a selection of local wines
ranging from $9.00 to $13.00 per glass (5 oz). There will also be a variety of
beers (12oz) ranging from $5.00 to $6.00 (Strauss, 2016). The beverages will
be served in customized Starbucks glasses. Starbucks partnered with various
wine chefs to identify small plates that would best complement the wine, beer
and cider. From Artichoke and goat cheese flat bread, truffle mac and cheese,
and chicken skewers the Starbucks Evenings Menu offers customers many
savory dishes to choose from under 500 calories, ranging from $4.00 to $8.00
(Starbucks Channel, n.d.). The share plates are served on proper flatware to
help create a more elegant atmosphere.
From top: Chicken

Sausage and Mushroom
Flatbread, Meatballs in
Tomato Sauce, Truffle
Mac & Cheese
Starbucks provides their customers

with more than just a cup of coffee; Starbucks is committed to creating an
experience for their customers that includes a warm, social atmosphere,
exceptional customer service and high quality. Starbucks employees add
additional value to their customers experience by delivering the food and
beverages directly to their tables. With the addition of Starbucks Evenings,

customers are given a larger variety of options to choose from in the evening hours.
Starbucks Evenings sells its products through a direct distribution channel in company-owned stores.
The suppliers for their craft beer are from local breweries in Ontario, such as Amsterdam Brewery and
Muskoka Brewery. The wine is purchased from the LCBO. The food products are purchased from national,
regional and local sources, and are delivered everyday to maintain their
freshness.
From left: Bacon-
wrapped Dates, Truffle

Popcorn, Goats Cheese
and Artichoke Flatbread
MARKETING OBJECTIVES AND STRATEGIES

OBJECTIVES
Starbucks has always been considered a premium provider of coffee, refreshments, and bakery
products. Due to a wide variety of competitors that offer virtually identical Area As, in order to stay
competitive, Starbucks must win customers with the addition of new product and service offerings. With its
entry into the market of serving the evening crowd, Starbucks internal positioning goal should align with its
current positioning strategy of being a premium provider of coffee and bakery items. The positioning goals of
the Evenings program include being a premium location for casual gatherings, where customers can enjoy a
variety of craft beer, wine, ciders, and savoury share plates in a relaxed and comfortable atmosphere.

Percentage
of Daily Sales
Aoerno

Dinner; Evening
on

2%
Snack;
Snack;

6%
29%

Lunch;

Breakfa
12%
st/

AM

Brunch;
Snack;
28%

23%
Specific marketing objectives
Percentage of Daily
Figure 1: Percentage of Sales (Strauss, 2016)
include:
Aoerno
Customer
Trac
Dinner;
Evening

on
2%
Snack;
Build new service awareness of Evenings
Snack;
6%
Menu and offerings through increased push
29%
and pull strategies directed towards existing
Lunch;
Breakfa
and prospective customers to increase visit
12%
st/
frequency after 4 pm by 30%.
Brunch;
Increase both food and beverage daily sales
AM
28%
after 4pm (Dinner and Evening Snack
Snack;
purchases) by 10%, from 8% to 18%
23%

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incrementally over the next 5 years.

Launch new Evening's Menu with the intent of growing current and prospective customer base
during traditionally slower time for coffee sales.
Maintaining premium status of brand
Figure 2: Percentage of Daily Customer Traffic (Strauss, 2016)
with product diversification while also
avoiding dilution of Starbucks traditional premium coffee brand (Strauss, 2016).

STRATEGY

When purchasing only coffee and/or baked goods, the average value of customers purchases at
Starbucks typically ranges from $4.50-$5.00 (Strauss, 2016). However, at establishments that sell wine and
beer, the average purchase is $23.07 (Strauss, 2016). Currently, Dinner and Evening Snack purchases account
for only 8% of Starbucks daily percentages of customer traffic and sales (Strauss, 2016). Compared to morning
purchases, which account for 51% of customer spending, these numbers have great potential for future
growth (Strauss, 2016).

When discussing future growth initiatives, calculations were based off of the assumption that the
average number of daily customers per location is 500, with each location being able to accommodate 30
customers at a time. It is assumed that there will be an average of 5 table turnovers from 4pm until close.
Therefore, to arrive at the value of a 30% increase in visit frequency, it is assumed that:

5 turnovers x 30 customers = 150 additional customers after 4pm
500 daily customers/150 additional customers = 30% increase.

Push strategies directed towards existing customers will be used to increase their visit frequency after
4pm, which is the slowest time for current product sales (Strauss, 2016). Specifically, three push promotions
that will be used in-store include:
Appy Hour
Pairing
Sampling

Pull strategies will also be employed to entice prospective customers to come and purchase items from
the new Evenings Menu. Currently, Starbucks offers a loyalty program that offers customers perks, such as,
stars that they can accumulate and use to purchase food and beverage items (Choi, 2016). Starbucks should
continue with this approach and include Evenings Menu food items in this offering. Alcohol cannot be included
in the loyalty program due to legal issues surrounding the promotion of alcohol consumption through loyalty
programs. Three additional push strategies that will be employed are:
Email outreach via loyalty program.
Social media advertising (Instagram, Facebook, Radio).
Out-of-home promotion

Starbucks has always used a strategic marketing mix, including premium locations in busy high-density
areas; customized products that are costly for competitors to imitate; customer service excellence; and
premium pricing to maintain its competitive advantage within the caf market. To maintain the brands image
while continuing to grow, it is paramount to position Starbucks Evenings as a premium provider of alcoholic


beverages, savory share plates, and a relaxed atmosphere for customers who do not want the typical bar
experience; rather, a more intimate, gathering spot for their end-of-day get-togethers with friends.
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MISSION STATEMENT

With the introduction of Starbucks Evenings, Starbucks will not only bring people joy in the morning,
but now also in the evenings. With the addition of the Starbucks Evening Menu, Starbucks will be offering a
variety of wines, beers and small shared plates, creating the perfect place to relax after a busy day. With
customers beginning their day with Starbucks, it is our goal for them to end their day with us as well.

MISSION STATEMENT
To inspire the human spirit one person, one coffee, one drink and one neighbourhood at a
time.
MARKETING MIX

PRODUCT
Starbucks Evening will feature alcoholic beverages and a menu that includes new savoury shared plate
options. Evenings are when Starbucks experiences the lowest volume of customers, and Starbucks Evenings
was launched to change this and have their customers coming in the morning as well as at night. Launching
these new products revamps Starbucks ideas as a coffee house, to an all day and night caf with multiple
product offerings.

Starbucks Evening ensures that they will have each item
on stock everyday. They receive new shipments of wine, beer
and food every night so their shelves are stocked for the next
day. The food comes directly from their supplier (the evening
supplier has yet to be released), the beer comes from
Amsterdam Brewery and Muskoka Brewery and the wine and
cider comes from the LCBO. Once it is in the store, it is than
served directly to the customers.

PRICE
Starbucks target market is aimed towards the middle/upper class, so prices are expected to be a bit
higher than a simple pub or coffee shop. Starbucks needs to be careful when determining the price, because if
it is too high it has the possibility of deterring customers away. Even though customers are paying for the
Starbucks brand, which includes the exclusive vibe and comfortable social atmosphere, prices could reach a
point where customers become too price sensitive and turn to competitors. It is recommended that all the
small plates are priced between $5-$7, excluding the popcorn which should be $3 (Strauss, 2016). Beer and
cider should be priced between $5-$6, and wine should be between $9-$13 (Strauss, 2016). The wine
compared to all the other new products is higher priced, but still competitively priced. The Starbucks Evenings
locations will be based in affluent, busy locations and their pricing is competitive (Nguyen, 2016).


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PLACE
No new Starbucks are being opened specifically for
Starbucks Evenings, but three locations have adopted the
new program. These locations are 3079 Bloor Street West,
446 Spadina Road and 1740 Avenue Road. These three
locations are the experimental locations, and if they are
successful, then there is a potential to convert more stores
to offer the Starbucks Evenings Menu. Even though there
are over 1,000 stores in Canada, not all stores could
accommodate this expansion. For instance, there are many
express Starbucks that have little to no seats.

PROMOTION
Starbucks has never been one to heavily advertise, but they often do release radio commercials or
small poster signs outside their doors when they have a new product. Starbucks also has a strong social media
presence on Twitter, Instagram, and Facebook. In keeping with their current social media marketing strategy,
Starbucks Evenings should be marketed primarily through social media, which will promote word-of-mouth
promotion of their new Evenings Menu.

Starbucks Evenings should work to target existing clients, so many push marketing strategies should be
implanted. For instance, Starbucks should implement a promotion similar to their Frappy Hour, where
customers can purchase a product in the morning and come back between 2-4 pm with your morning receipt
to receive a Frappuccino at 50% off. Similar to this approach, Starbucks should implement Appy Hour, where
customers can come in in the morning and purchase any regular priced food or beverage item and receive an
Evenings Menu share plate for half price. This promotion is intended to build product and brand awareness
and raise evening revenues, while simultaneously building brand loyalty through strategic price offerings. In
the past, Frappy Hour was advertised on the radio and this should be continued for the Appy Hour promotion.
Starbucks target audience is an older age bracket, who can be reached not only by social media, but in the car
while they are driving home from work.

Currently, Starbucks offers breakfast pairings, where customers can have a coffee and a snack for just
$3.75. Starbucks should implement a similar offer for Evenings Menu pairings, where customers can purchase
a drink and a share plate for $14.75. This would be promoted primarily in stores, or on a small sidewalk board
outside the store. In-store sampling should also be used as a push strategy offered to generate new product
and service awareness among customers. Sampling will give customers the chance to try new products and
encourage word-of-mouth promotion.

Another important aspect would be to maintain their Star Loyalty Program. With over 11 million Star
Loyalty Program users by the end of 2014s fiscal year, the programs member count more than doubled its
initial number at the end of 2011s fiscal year and is therefore extremely valuable to Starbucks bottom line
and long-term revenue growth (Choi, 2016; Jones, 2014). According to Starbucks, on average, active loyalty
members spend three times more than non-members (Jones, 2014). Even though it is illegal to give rewards in
regards to purchasing alcohol, the food should receive the same amount of Stars. In addition to Stars,
Starbucks should continue to send out discounts for meals, but especially implement coupons for the shared


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plates. Currently, Starbucks frequently sends breakfast and lunch coupons to Star Loyalty members. The Star
Loyalty Program currently targets members primarily through direct email marketing, and should remain this
way for Evenings coupons. Additionally, email outreach will help to generate new product and service
awareness.
FINANCIAL ANALYSIS
MARKET ANALYSIS

Market trends have shown that outlet numbers for cafs/bars have increased in volute since 2014 to
reach a total of 8,768 across Canada (Euromonitor, 2015b). Additionally, the number of transactions has also
increased by 2% due to increasing varieties of new menu options (Euromonitor, 2015b). Consumers are also
showing preferences for modern, sleek environments that are trendy and in urban centres (Euromonitor,
2015b). Starbucks has the potential for significant growth with the addition of its Evenings Menu because
bars/pubs, as a category, continues to be the leader in value share, occupying 43% of the overall cafs/bars
category (Euromonitor, 2015b).

Since there is considerable room for growth within this market, Second Cup is becoming a leading
competitor of Starbucks with its three-year plan to transform its brand and product/service offering to a new,
sleek design. Specifically, Second Cup poses a competitive threat because of its increases in food and beverage
offerings, and its shifted target toward younger customer segments that will have significant spending power
in the coming years (Euromonitor, 2015b).

Currently, Starbucks is the leading player in the cafs/bars category, with an 18% value share and 50%
share in the category of chained cafs in 2014 (Euromonitor, 2015b). Future market prospects include the
development and growth of the cafs/bars category by promoting a current consumer lifestyle trend toward
the preference of relaxation (Euromonitor, 2015b). Additionally, Starbucks is headed in the right direction with
improving and widening its product/service selection through the implementation of specialty Evenings Menu
offerings.

The target markets of Starbucks Evenings are Generation Xers and Millennials, whose behavior and
lifestyle choices have impacted and driven a significant growth in the savoury snack category (Euromonitor,
2015a). Starbucks Evenings target markets have also shown preferences toward whole, simple, and clean
ingredient lists that have more natural flavours (Euromonitor, 2015a). In order to maintain a competitive
advantage, Starbucks should acknowledge these trends and adapt product/service offerings accordingly.
SALES FORECAST
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MARKET SHARE FORECAST
Market Share Forecast in Toronto

Market Share (%)
0.35%
0.30%
0.25%
0.20%
0.15%
0.10%
0.05%
0.00%
2016
2017
2018
Year
2019
2020
The market share forecast is based

under the assumption that the Evenings
program will be successful in its first year
and will follow similar patterns as Starbucks
Evenings locations in the USA. Since the first
introduction of Starbucks Evenings,
Starbucks planned to increase the number of
Evenings Menu offerings to 16% of their
existing locations (Smith, 2015). If Starbucks
Evenings follows a similar trend in Toronto,
we expect that in 4 years there will be 26
Starbucks locations with Evenings offerings
out of the existing 160 locations (Starbucks
Corporation, 2016), which would represent
0.32% of the market share of the restaurants
and bars industry.
CONTINGENCY PLAN

Starbucks is a successful corporation both in North America and worldwide. Even though it has
established itself as one of the giants in the specialty coffee shop industry, there are some potential threats to
the business as it goes forth with its Starbucks Evenings opening in Canada. The potential threats we see to
the business include competition, dilution of brand identity and the costs it may incur as a result.

COMPETITION
Starbucks has distinguished itself in the market as having higher costs, but with the promise of better
quality products and a positive experience to go with it. The risk associated with Starbucks Evenings is that its
mission statement follows closely with that of other restaurants or pubs that offer small plates and alcoholic
beverages in a sit-down environment. In addition to competing with other restaurants, current Starbucks
Evenings doesnt offer any vegetarian options for their small plate meals, meaning that customers who keep a
vegetarian diet may choose to go elsewhere for a meal. Since Starbucks will now have to also compete with
other licensed establishments that offer share plates and alcoholic beverages as well as other coffee shops, it
is important to establish the promised value for the price that customers pay since value is something that is
commonly offered among restaurants and bars. In order for Starbucks Evenings to maintain the strong


15

customer base that Starbucks has already established, we propose to keep our current Starbucks star loyalty
program and apply it to small plate menu items. This will ensure that customers who are already loyal to
Starbucks and are familiar with the promotional discounts that it offers will be willing to extend their loyalty to
Starbucks Evenings options.

BRAND IDENTITY
A potential issue we see with Starbucks adding small plate meals and alcohol to its menu is brand
dilution. Although Starbucks has built its success on being one of the top coffee shop companies, Starbucks
Evenings could alter that if it becomes more successful. Starbucks Evenings has the potential to attract new
customers during hours after 4pm, however people may think that the Starbucks experience has more to offer
them during Evenings hours as opposed to during the day and lose some of their customer base to coffee
shops that offer the same product but at a lower price.
Although there isnt much that can be changed about Starbucks current marketing strategy that could
reinforce its brand identity with the addition of Starbucks Evenings services, Starbucks will still offer the warm,
friendly experience at all hours and use push marketing strategies to promote all aspects of its offerings.

COST
The final potential threat to Starbucks with the
implementation of Starbucks Evenings is the costs that it will
incur in order to bring in new menu items and liquor licenses,
along with the costs to train employees with Smart Serve. In
addition, people are looking for cheaper alternatives to products
and services due to economic strains. Since Starbucks products
are priced higher with the contingency that they provide more
quality to both their products and customer service, previous
Starbucks customers may begin to look elsewhere to buy coffee
and other coffee shop snacks if they are willing to sacrifice a
certain degree of quality and customer service.

In order to ensure a profitable return on investment Starbucks
Evenings would have to deliver the same exceptional customer service and quality products that it has before.
If it is able to maintain its loyal customer base as well as bring in new customers, then it should be able to
make up for incurred expenses needed to launch Starbucks Evenings, and it should reduce any customer loss
that it may experience during periods of economic stress.

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STARBUCKS EVENINGS MARKETING PLAN

TASHA HUGGINS, KRISTY ALLAN, ASHLEY LEWENBERG, KATIE LEE,

STARBUCKS EVENINGS MARKETING PLAN

STARBUCKS EVENINGS MARKETING PLAN

THREAT OF NEW ENTRY: MODERATE TO HIGH

SUPPLIER POWER: MODERATE TO HIGH

BUYER POWER: LOW

THREAT OF SUBSTITUTES: HIGH

COMPETITIVE RIVALRY: MODERATE

STARBUCKS EVENINGS MARKETING PLAN

MARKET OVERVIEW, SUMMARY & TARGET MARKET DEFINITION

TASHA HUGGINS, KRISTY ALLAN, ASHLEY LEWENBERG, KATIE LEE,

PRODUCT/SERVICE OFFERING AND CHANNEL STRATEGY

From top: Chicken

Starbucks provides their customers

wrapped Dates, Truffle

MARKETING OBJECTIVES AND STRATEGIES

incrementally over the next 5 years.

STARBUCKS EVENINGS MARKETING PLAN

MARKET SHARE FORECAST

Market Share Forecast in Toronto

The market share forecast is based

STARBUCKS EVENINGS MARKETING PLAN

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