Starbucksv Amsterdam

Starbucks Coffee Company:
An Integrated Marketing Communications Plan
April 2006
Prepared for:
Starbucks Coffee Company
W. H. Evans
Prepared by:
Sophie van der Vecht
Neni Pogarcic
Hidde van der Dussen
Tim Ensing
Dan Mackinnon
Lucia Suchankova
Table of Contents
Executive Summary .................................................................................................................3

Introduction ...............................................................................................................................4
Mission ......................................................................................................................................4
Product ......................................................................................................................................5
Price...........................................................................................................................................7
Place ..........................................................................................................................................7
Promotion ..................................................................................................................................9
Competitive Analysis ...............................................................................................................9
Customer Profile .................................................................................................................... 17
SWOT Analysis ..................................................................................................................... 18
Segmentation ......................................................................................................................... 22
Targeting ................................................................................................................................ 23
Positioning ............................................................................................................................. 23
Financial Analysis ................................................................................................................. 23
Advertising Plan .................................................................................................................... 26
Definition of the Problem/Challenge ............................................................................... 26
Research results ................................................................................................................. 27
Advertising Objectives .......................................................................................................... 29
Strategy: Media Plan ............................................................................................................. 30
Mix ..................................................................................................................................... 30
Frequency........................................................................................................................... 31
Cost insertion ..................................................................................................................... 32
Flighting ............................................................................................................................. 32
Strategy: Creative .................................................................................................................. 32
Creative platform............................................................................................................... 32
Big Idea .............................................................................................................................. 33
Appendix A:Price of a Starbucks tall latte........................................................................... 34
Appendix B: Map of Downtown Amsterdam...................................................................... 35
Appendix C:‘Marketing to Youth’ exerpt............................................................................ 36
Appendix D: Average Statement of Earnings ..................................................................... 37
Appendix E: Amsterdam Pro Forma Statement of Earnings .............................................. 38
Appendix F: Pro Forma Balance Sheet ................................................................................ 39
Appendix G: Amsterdam high and low forecast Statement of Earnings ........................... 40
Appendix H: Advertising Pyramid ....................................................................................... 41
Appendix I: Creative Series 1 ............................................................................................... 42
Appendix J: Creative Series 2............................................................................................... 44
Sophie van der Vecht, Neni Pogarcic, Hidde van der Dussen, April 2006
Tim Ensing, Dan Mackinnon, Lucia Suchankova
Executive Summary
We have investigated the possible launch of the Starbucks Coffee Company

in the Netherlands, where we tried to combine the Starbucks’ ‘way of doing’
with the local Dutch market. Our mission therefore is to successfully
introduce while paying attention to the Dutch needs and expectations.
The standardized Starbucks products will be used such as coffee, tea, and
merchandise, except for the pastries, where we strive to localize to better
integrate with the local market. The products will be premium priced,
according to the Starbucks strategy. As a result, Starbucks will be
established as a premium brand. The first store will be opened in Amsterdam
in a promising and popular area under the local community. After this we
want to expand in Amsterdam and other major cities in the Netherlands.
Although Starbucks will have to compete with several other coffee
companies, our research shows that Starbucks has a strong affection with
the potential customers, even though the competition scores better in some
aspects. Through our premium name, we want to secure this preferred
position.
The target market, and therefore the customers that will visit Starbucks
Amsterdam, fit the profile of traditional Starbucks customers in other cities.
The Netherlands are very diversified as are the Starbucks customers and
therefore we expect a quick acceptance in the Dutch market, even from
potential customers who still do not know Starbucks.
Starbucks should segment the market in the future through demographic and
behavioral segmentation, and apply differing strategies to appeal to each
segment.
The financial expectations are positive, Starbucks Amsterdam expects a

profit in its second year, and it should take around 4 years to pay off the
investments and losses which will be generated in the first year.
In terms of an advertising plan, the main initial goal is to gain awareness

throughout the primary and secondary target markets. This will be achieved
through a variety of mediums, including posters and billboards, newspaper
ads and the internet. The creative strategy aims to create awareness through
excitement and pride about living in Amsterdam, a ‘city on the map.’
Introduction
This marketing plan is going to investigate the possible launch of Starbucks

Coffee Company in the Netherlands. We will focus primarily on marketing and
advertising, in which we want to develop a possible plan and try to forecast
the success of this store.
We want to state clearly that this plan will be based on existing Starbucks
information, combined with our observations and knowledge of the
Netherlands. We think that the Starbucks strategy, mission and action plan
are very good. Otherwise there is no way that a coffee company would be
this well-known and this popular. That is why we will change small aspects of
the whole existing strategy and adapt this to the Dutch market. The Dutch
market has some special characteristics which will not accept the ‘American
way of Starbucks’. Although somewhat exaggerated, the following can give a
clearer understanding of the Dutch culture:
The Dutch care very much about the environment and see social
responsibility as an important factor. The Dutch do not have a
coffee-house culture, even though they like coffee a lot. This is
translated in our opening hours of bars and coffee places, that
go from late in the morning, until late in the evening. The Dutch
do not usually spend money very easily on food and beverages.
The Dutch respect good service, and they love special discounts
even if it’s just for a specific group (the students for instance),
and they do not see as a negative aspect.
Mission
Our mission is to introduce Starbucks to the Netherlands by opening a test

store in Amsterdam. We will focus on making our Amsterdam store
successful by adapting to the needs of the local customers while keeping the
core Starbucks strengths intact. This store will set a positive example of
corporate social responsibility by adhering to our high environmental
standards and create a positive experience for customers to create repeat
business.
Objectives
• To have first year revenues of €450,000

• To keep first year operating expenses below €300,000
• To earn a profit in the second operational year
• To have an average occupancy rate of 75% in the first year
• To have a first year market share of 15%
• To have first year average invoice of €5
Product
The Starbucks ‘product’ can be divided into actual tangible products (which
can be further divided into direct consumption products and merchandise
products) and an intangible service part. The products will be described first,
later on the service aspects of Starbucks will be explained.
Evidently, the main product of Starbucks is coffee. That is what the chain is
known for. All different coffee variations are part of their product portfolio.
Other drinks, like tea and soft drinks, are also direct consumption products.
When launching the Starbucks location in Amsterdam, this group of
Starbucks products should remain the same as they (especially the coffees)
carry the absolute essence of Starbucks.
Another important group of products that are directly consumed within

Starbucks are small snacks. Starbucks chains in the United States for
instance are known for the fact that they also serve donuts, muffins, cake
and other snacks that are alike. These products are quite popular and
frequently ordered by customers to go with a cup of Starbucks coffee. One of
the reasons for the success of these side snacks is the American culture of
having breakfast and lunch outdoors. Moreover, these snacks are for some
American Starbucks customers actual breakfast products. However, the
situation in Amsterdam, the Netherlands is quite different than in the United
States due to cultural and behavioural differences. For instance, Dutch
people are known to be a bit closed and breakfast and lunch moments are
seen as private moments of quality time, also for business people. When
launching Starbucks in Amsterdam, without adapting anything, the side,
snack products could become a bottleneck as sales could be disappointing. In
other words, this product category poses a challenge as the objective is to
launch Starbucks in the Netherlands and serious decreases in any of the
product categories could seriously harm this ambitious goal. Needless to say,
an adaptation within this snack product category should be made to fit Dutch
quality standards, behaviour and culture. Donuts and muffins could easily
stay in the product portfolio, but they should not be characterized as
breakfast or lunch products. They should be seen and promoted as side
snacks. Different sorts of cakes could also be added, as they are very popular
in the Netherlands to go with a cup of coffee or tea. Products that could be
served as lunch could be healthy sandwiches and salads. Sweet products
should never be promoted as lunch products as they are normally seen in the
Netherlands as snacks as opposed to lunch food. On the other hand, one
should never change a winning formula. It is wise to slightly adapt the
Starbucks formula to fit the Dutch market, but this should not be overdone,
because then Starbucks would run the risk of becoming like ‘others’. In other
words Starbucks should keep its identity and make slight adjustments to
serve the Dutch market best.
Another product category consists of the products that are not immediately
consumed at the spot. Starbucks merchandise, like coffee mugs, and coffee
in packages are important products here. A regular Starbucks customer can
purchase his or her own coffee mug or buy the real Starbucks coffee to
create the same kind of coffee at home to get a consumption experience that
matches the one at Starbucks. Fair trade products are quite popular in the
Netherlands and one of the most consumed fair trade products is coffee.
Maybe there lies an opportunity (an alliance with for instance Max Havelaar
or other well-known fair trade coffee producers) within this area for
Starbucks. Another opportunity within this product category is formed by a
link with the other, direct consumption, products. This link is given shape by
the possibility of launching a saving and bonus system. Almost every popular
Dutch chain uses a saving and bonus system. Starbucks could, for instance,
give customers that frequently order coffee at Starbucks the opportunity to
save certain saving units (for instance ‘Bucks’) in order to get free
merchandise (for instance a free coffee mug). Also, to fit the notion of
servitization: the adding of services to make a product a more complete one,
one could be given to opportunity to customize his/her own coffee mug.
Evidently, this service should be launched later on and only if the coffee
mugs prove to be a commercial success.
Another aspect of the Starbucks ‘product’ is the service part. Maybe the
biggest part of the Starbucks service is the creation of a very cosy, home-like
atmosphere that invokes social interaction (which is beautifully characterized
by the American hit television series ‘Friends’). This intangible atmosphere is
supported by certain tangibles like comfortable couches and big lounging
chairs. This creation of tangibles is very important as it makes the intangible
atmosphere ‘tangible’. This relaxed and friendly atmosphere is also enhanced
by the way customers are treated by Starbucks personnel. The ordering
system does not look extremely streamlined and therefore sends out a
comfortable and relaxed atmosphere. Ironically, all ‘customization’ of the
coffee and tea is done by the customers themselves at specially designed
corners with sugar, milk and other products. This customer ‘freedom’
contributes to the relaxed and cosy atmosphere while it also helps Starbucks
to reduce personnel tasks and handle/serve more customers than otherwise
would be possible. A possibility when launching Starbucks in Amsterdam
could be providing a free WiFi wireless internet connection. This service
would also enhance consumption at Starbucks within certain targeted
segments (mainly young to middle-aged people and business people) and it
could gently help keeping other customer groups out of the Starbucks
location (youth hanging on the streets). Therefore it could help Starbucks
create more of a sophisticated image as WiFi wireless internet connections
are not yet a common service at lunch places and chains in the Netherlands
as opposed to other countries. This possible service thus provides Starbucks
Amsterdam with a valuable opportunity. Details with regard to this service
opportunity aspects will be clarified in the SWOT analysis part.
Price
According to the Economist and CNN/Money a Tall Latte in Starbucks (one of

the most ordered coffees) costs in Europe around $3,72, or € 3,10 (Please
see Appendix A). Our suggestion is to use this price. We have several
reasons for this. First of all, this is a Tall latte, a coffee what is not going to
be popular in Holland because of the size. It is too big. So a smaller coffee
would be a fraction cheaper, what could result in a price round € 2,75. This is
a reasonable price for a such a location in Amsterdam. It is still premium
pricing, compared to the competition. We’ve chosen to pursue a premium
pricing strategy because that is in line with the Starbucks’ ideology.
We can illustrate this best with the next anecdote:
What's more, Starbucks already has a reputation for having the

most expensive coffee in the marketplace. When I left
Moneybox's New York headquarters to conduct research at the
closest Starbucks (a block away), I passed a half-dozen other
coffee vendors. There's the guy with the cart who sells the little
Greek diner cups for 50 cents; the deli with the scalding 75-cent
generic joe and the thin paper cup; the convenience store with
$1.00 faux gourmet stuff; and Cosi, where a latte costs $3.59.
Only after running this gantlet could I enter Starbucks, where a
java chip Frappuccino runs $4.75.
D. Gross, Oct. 5, 2004
This New-York based story is exactly what we want to achieve in Amsterdam.

Premium pricing combined with a premium name. We already mentioned a
high rate of potential customers who already know Starbucks and want a
Starbucks in the Netherlands. This rather high price will be approved by the
customers through our clear statement of corporate social responsibility.
Place
The first Starbucks in the Netherlands will be opened in Amsterdam, the

capital city. (Please see Appendix B for a city centre map.) This choice is
rather obvious for several reasons. We quote the Starbucks Marketing
policy:1 “Starbucks customers are people of diverse ethnic, income and age
groups with varying tastes and interests”.
11
http://www.starbucks.com/aboutus/marketingPolicy.asp
Amsterdam is a very diverse, dynamic and busy city. The city where history
and future meet each other, the city with approximately 60.000 students,
100 ethnicities, lots of global firms, thousands of small firms, ten million
tourists per year, and a city without Starbucks. We see Amsterdam as a
opportunity for Starbucks, because of the striking similarity between the
marketing policy of Starbucks, and the characteristics of Amsterdam.
Where as the decision of first city in the Netherlands to launch Starbucks was
not a problem, it is a lot harder to decide where in the city we can place the
first Starbucks. As you already may know, Amsterdam is a segregated city in
which different customer groups are divided throughout the city. On the last
page, you will find a map of Amsterdam so, this part of the story can me
made clearer. The large amount of the tourists can of course be found in the
center of Amsterdam. Where the two big shopping streets, Leidsestraat and
Kalverstraat, with the four big squares around, the Damsquare, the
Leidseplein, Museumplein, and Rembrandtplein….. At first sight, this looks
the best area to place the first Starbucks. It is the most popular area, with a
large amount of people, and therefore a large amount of potential customers.
But it is also an area with a lot of problems. Small (sometimes even criminal)
groups create a lot of trouble here, and this could create a negative image
for Starbucks. These groups are well-known and last thing a shop wants is
such a group inside. This is especially important for coffee places such as
Starbucks, because there is a strong chance these groups will tend to go
inside. This also explains why there are a few coffee places like Starbucks in
the center. Of course this low penetration offers a lot of possibilities and
potentials, but this will be discussed in the SWOT analysis.
The east and far west side have a rather negative image in Amsterdam. That
is why Starbucks should not open their first coffee place in this area. As in
the center, this area has a lot of potential, but for the introduction of a new
brand, we need something different. There are three potential places left.
Java island is at this moment the hippest place in Amsterdam. The place to
be, so Starbucks could have a very strong appeal if it would locate it self at
the island. The problem with this island is that it is too far from the center of
Amsterdam, and therefore it is not appealing for a great part of potential
Starbucks customers. Another possibility is the business area, like said
before, due the strong segregation there are areas with specific customers.
This is a very nice part of the town, with also a big potential customer group.
The last potential area is called ‘the nine streets’. ‘The nine streets’ are nine
small streets with cozy shops, lunch cafés, and lots of people. The public
here is very diverse, students, tourists, ethnic groups, businessmen. The last
two locations are both very good and promising. We think that ‘the nine
streets’ have the most similarities with the Starbucks marketing policy.
Therefore, our first location in Amsterdam should be in ‘the nine streets’. We
expect to have a large diverse potential customer base, and to develop a
strong customer base because of our location.
The next locations can be located throughout the Netherlands. The expansion
in Amsterdam could of course continue with some of the locations already
mentioned above such as the Business area at the Beethovenstraat and at
Java Island.
Other locations in the Netherlands would be of course in the big cities, as is
clear in the Starbucks strategy. The highly developed area in the Netherlands
is called de Randstad. De Randstad is the political, academical and
economical heart of the Netherlands. This is the area with the four biggest
cities of the Netherlands: Amsterdam, Utrecht, Rotterdam and the Hague.
These four cities should be the main focus of Starbucks in the first period.
Like Amsterdam, the other three cities are very diverse with an own local
culture. These cities possess like Amsterdam all the necessary characteristics
for a successful launch of Starbucks.
Promotion
Please see Advertising Plan.
Competitive Analysis
Big cities like Amsterdam will always be crowded with diverse people.
Students, tourists, ethnic groups and businessmen are examples of the
diversity that one can notice in the city as a whole. This diversity will always
attract a lot of businesses that will compete to serve all the different kinds of
people. Restaurants, small bars, cafés and pubs can be defined as places
where all the different kind of people will go to, so they can drink coffee, eat
snacks, have a break and sometimes have breakfast/dinner. The public
places that have been mentioned here are very abstract and include a lot of
different companies. Two companies will be describe in further detail,
because they are considered as big coffee chains that will be strong
competitors of Starbucks.
Coffee Company
The Coffee Company is a chain of 'fast-drink' coffee houses in Amsterdam,

this one is expanding "slowly but surely". Much like the world famous
Starbucks Family. They serve fresh coffee of all sorts, flavours and sizes all
day, accompanied by "irresistible sweet things" and rather less remarkable
sandwiches.
The Coffee Company serves every corner of town. The branch on the
Beethovenstraat is the most recent addition to the family, situated in the
lobby of Hotel Beethoven. It offers a modern concept with bright shades, a
cool décor and nice atmospheric music. ‘A strong ristretto is the best start to
a hectic day.’ The different outlets barrista’s (bar operators) have a different
way of ‘working the espresso machine’, despite the fact they’ve been trained
the same way.
Bagels & Beans
The Bagels & Beans company started in Amsterdam in 1995. Bagels & Beans
key features are a place of rest and harmony, where the customers can easy
read their newspapers. According to the Bagels & Beans website the quality
of the service is more important than the quantity. The Bagels & Beans
company is located in fifteen places in the Netherlands and in Amsterdam
there are nine locations. The quality of the coffee is very good at the Bagels
& Beans company, however they do not offer a very wide product line of
different kinds of coffee. The product line of Starbucks is much more
developed. Like Starbucks, the Bagels & Beans company do offer a wireless
internet facility. The customers are therefore able to use the internet at their
laptops, while drinking their cup of coffee in a very nice environment.
Analysis
Starbucks is a well known chain in the Netherlands although it does not exist
in the Netherlands. Studies, in the form of questionnaires, actually have
shown that possible Dutch customers have a positive stance when it comes
to the possible launch of a Starbucks establishment in the Netherlands.
Therefore, the idea of launching Starbucks in the Netherlands has potential.
The places that have been mentioned above offer the primary product of
Starbucks. That is, as we concluded in the product analysis, the coffee that
will be consumed at Starbucks. Although, those several restaurants, little
bars, cafés and pubs try to serve the same customers, there are differences
between those public places. In this paper will try to map out which
companies are the strongest competitors that has to be dealt with. That will
be done by comparing the features of the several companies. The most
important feature that has to be compared will be the product and the
service that will be offered.
The secondary product, as we defined in the product analysis, are the small
snacks that are offered at Starbucks. Those products are defined as
secondary products, because those are most of the time bought in
combination with coffee. Some providers of small snacks, like bakeries, do
not offer this combination of products. That is why they do not have to be
defined as competitors.
The last Starbucks categories of product are Starbucks merchandise, like
coffee mugs, and coffee in packages. The analysis of this product category
will make clear the reason this additional product category is offered by the
providers of the primary product. We will also consider what the combination
effect is of the primary product and this additional product.
First we will compare the quality of the product of Starbucks with the quality
of the product offered by the other public places that have been mentioned
before. At the website of Starbucks there is a lot of information available that
refers to the quality and taste of the coffees one can buy. At the website
regions and tastes are defined, so one can choose the coffee he or she likes
the most. Regions that have been defined are Latin America, Africa Arabia,
Asia Pacific, dark roast blends, multi-region blends.
In comparison with the other competitors of Starbucks, one can conclude
there is no company that describes it’s coffee as detailed. The width of the
product line points out that the quality of the product defined by Starbucks is
very important.
Starbucks purchases and roasts high-quality whole bean coffees and sells
them along with fresh, rich-brewed, Italian style espresso beverages, a
variety of pastries and confections, and coffee-related accessories and
equipment -- primarily through its company-operated retail stores.
The sentence above is a quotation that can be found at the website of

Starbucks. High-quality whole bean coffees is an other example of being a
more high quality provider than the competitors.
At Starbucks, the coffee is served is big carton cups. Although the carton
cups are rather good, it is being perceived by customers as being
qualitatively less than the ‘normal’ cups being used in restaurants and bars.
The two quality aspects of the product has been combined in the graph
below.
From this graph it can be concluded
Quality coffee
that the products of Starbucks are not

seen as a high quality product as a
whole. Most of the customers
considered Starbucks as a high quality
provider of coffee, however Coffee
Company should be considered as one
Bars/
restaurants also. At the Coffee Company it is also
possible to choose your coffee from a
width range of products, but at the
Quality cups Coffee Company the coffee is served
in cups of better quality than at
Starbucks. The coffee is served in regular mugs in stead of carton cups.
Bagels & Beans do not offer a width range of coffee products. Compared to
the Starbucks, the product line of Bagels & Beans is rather limited. However,
they do serve the coffee in cups of good quality like the Coffee Company
does.
An other aspect of the primary product is the service that is offered by

Starbucks. As already pointed out in the product and service analyses,
Starbucks customers are served in a friendly atmosphere and one can make
use of the wireless internet connection, while sitting in comfortable couches
and big lounging chairs. Although, there are relatively less comfortable
chairs, it has to be considered as a very differentiated way of serving the
customers.
Customers that are served in Starbucks will always notice the availability of
the chair, however they might not be able to use them due to the fact that
they are in use by other customers. The facilities offered by Starbucks are
qualitatively better than the facilities offered by most restaurants, little bars,
cafés and pubs. The friendly environment, wireless internet connation and
comfortable chairs are the most important aspects for this conclusion.
The staff in Starbucks is not considered as being customer centered. It is not

possible to order anything by a waiter. Customers have to order additional
cups of coffee at the pay-desk. They have to pay there and afterwards they
can get there coffee. This is not considered as a really goods service to
generate additional orders from customers. On the contrary, bars and
restaurant provide better service to do so. Most of the times people can order
extra drinks at the waiters ones can find there. The availability of waiters in
Starbucks is not considered as important by Starbucks. Customers get a
rather big cup of coffee and therefore most of the times reordering is not
necessary. Most of the customers leave after have drunk their coffee. This is
not considered as a problem, because it provides the possibility to serve new
customers that enter the Starbucks.
The Coffee Company does not see the absence of the waiter as a problem
also. This is the feature that Starbucks and the Coffee Company have in
common. Still there are some differences between the Coffee Company and
Starbucks. In Starbucks ones can use the wireless internet connection and
comfortable chairs. Those facilities are not offered at the Coffee Company
and therefore the quality of the environment of Starbucks is considered
better than of the Coffee Company.
Bagels & Beans do offer a wireless internet connection and the quality of the
environment is considered as very important to compete with competitors.
The comfortable chairs one can find in Starbucks will not be available at
Bagels & Beans, but the quality of the environment is improved by creating a
very relaxing environment as one can see at the pictures available above at
the introduction of the Bagels & Beans company. In conclusion ones can say
that the quality of the staff and of the environment are both qualified as
good.
One can define the quality of the

Quality Staff
Bars/
service by examining the quality of
restaurants the staff and the environment. The
staff includes the service they provide
and the environment is affected by
additional services or other aspects
that increase the value of the service
for the customer. The two quality
Quality environment
aspects of the service has been combined in the graph left.
The last Starbucks categories of product that we have defined are Starbucks
merchandise, like coffee mugs, and coffee in packages. The analysis of this
product category will make clear the reason this additional product category
is offered by the providers of the primary product.
Starbucks can be defined as a coffee restaurant with a high quality coffee

and a friendly atmosphere. The comfortable chairs give the customer the
feeling of being in their home environment and not being in a public place.
The mugs provide the feeling of ‘being one of them’ and therefore create
some kind of a Starbucks community. The combination effect of the primary
product and this additional product is that the coffee must be drunk in a
comfortable and homelike environment. The mugs are a useful tool for
creating this environment.
Quality coffee
Quality Staff
CC Bars/
restaurants
Bars/ CC
restaurants
Quality cups Quality environment
The two graphs that where created during the analysis are shown above
again. We can conclude that the coffee company does not provide a good
quality of cups and staff. Nonetheless, they are product leader when it comes
to the quality of coffee and the environment. This combination is the key to
success for Starbucks as a whole and should be considered a unique selling
point.
Five forces model
A very suitable model to explore the competition in a market is the five

forces model of Porter. This model is visualized in figure 1. The main essence
of the model is that competition does not only come from one side, but from
several directions. It can be separated in several kinds of threats and risks.
First of all there is a market with direct competitors that a specific player is
influenced by. Besides those direct competitors, a company should be aware
of substitutes, suppliers, buyers and potential entrants.
Coffee market competitors – Intensity of rivalry

The main competitors have been pointed out in last chapter ‘competitors’. It
has been concluded that there are two strong competitors in the market:
Bagels & Beans and Coffee Company. Both do have several stores located in
Amsterdam and already have a loyal customer group. Nonetheless, it has
also been concluded that Bagels and Beans does not offer a wide product line
of coffee and therefore in the coffee market the Coffee Company should be
considered as the main competitor. Bagels and Beans should be defined as
main substitute.
Suppliers
The suppliers of Starbucks can be found in many part of the world.
“Our connection with coffee farmers Purveying quality

coffees means much more than selecting the finest beans on the
market. Starbucks strongly believes in the importance of
building mutually-beneficial relationships with coffee farmers
and coffee communities with which we work. The success of the
farmers with whom we do business is a critical component of
our own success. We are taking an integrated approach to
building relationships with coffee communities”
The sentence above is a quotation that can be found at the website of

Starbucks. One can conclude from this sentence that Starbucks put a lot of
effort in retaining a good relationship with it’s suppliers. The quality of the
coffee is very important to Starbucks and therefore the bargaining power of
good and big suppliers is rather big. However, sometimes it is rather easy to
switch between suppliers within a region, but a good quality and supply of
coffee can only be provided by a selected number of trusted suppliers.
Buyers
Customers that buy from Starbucks do have little influence on the
profitability, at least as an individual. When they group together, their
bargain power will increase. However, this is not something that will happen
very quickly. Starbucks wants to generate loyal customers by providing a lot
of advantages for the environment. As an example Starbucks has launched
the ‘Starbucks Foundation’. The sentence below is a quotation that can be
found at the website of Starbucks and will provide some insight in the
activities of the foundation:
Introducing soccer and sonnets America SCORES was

founded ten years ago by a Starbucks barista in Washington,
D.C. who loved soccer and poetry. Today, America SCORES
serves nearly 4,000 poetry-performing soccer players in 13
Starbucks cities, and growing.
What makes this nonprofit a national phenomenon is that it gets
to the heart of what motivates kids: teamwork, sportsmanship,
creativity, and performance.
America SCORES continues to provide partners with rich and
meaningful opportunities to help youth in their neighborhoods
Threat of new entrants

It is necessary to have a good network of suppliers if one wants to
participate in the coffee market. It will take special skills to build a network
of suppliers like Starbucks. All the suppliers have to be carefully selected in
all the different parts of the world. Suppliers of Starbucks come from regions
like Latin America, Africa, Arabia, Asia and the Pacific. It will take years to
build a network like this and therefore one can say that there is a big
entrance barrier. In conclusion one can say that the treat of entrance of new
competitors rather small is.
Substitutes
Although the treat of entrance of new competitors is rather small, the
number of substitutes is rather big. Bagels and Beans has already been
defined as the main substitute, but there are a lot of companies that offer
products that are a substitutes for the width coffee product line of Starbucks.
The ‘normal’ coffee that one can order in restaurants, without all the special
tastes and options are the biggest substitute for the ‘special’ coffee of
Starbucks. The availability of other drinks, like tea, chocolate milk or soft
drinks are substitutes for the coffee that Starbucks provides. Restaurants,
little bars, cafés and pubs offer these kinds of products and that is why those
organizations can be seen as the main substitute for Starbucks.
Customer Profile
Starbucks customers constitute mainly of customers that consume Starbucks

coffee and side products within the Starbucks establishment, customers that
take Starbucks coffee and other products to go and customers that come to
Starbucks for the special Starbucks merchandise. However, it is assumed
that customers in this last group are also part of one or two of the first two
groups. Various combinations are therefore also possible.
Evidently, just like every competitor, Starbucks should focus on customers

within a wide variety of segments. Every customer that drinks coffee at
Starbucks, takes coffee-to-go and spends money on Starbucks merchandise
(mugs and coffee packages) is a valuable one. It is thus important to keep
the area to focus on wide, without excluding valuable customer segments.
A statement directly copied from the Starbucks marketing policy clarifies this
notion, and can be seen in Appendix C.
Introducing a bonus saving system (allowing customers to safe for free

coffee mugs and Starbucks coffee), which is very common in Holland, is an
applicable tool when trying to fit the Starbucks concept with the Dutch
customers and habits. This will be appealing to frequent customers across all
customer groups and therefore strengthen the overall Starbucks position in
the Dutch market.
Although remaining a wide focus is crucial in order to establish share of mind

within all kinds of different customer segments, another ‘parallel’ narrowed
marketing effort to appeal to a certain particularly important group of
customers can also be useful. Although direct actions in this area are of more
importance for the marketing and advertising department, certain aspects
are closely linked to the desired target segment and therefore worth
mentioning in this customer section.
Youth (including so called ‘young urban professionals’ and ‘double income, no

kids’-households) has always been a very important customer group for
Starbucks. Having a considerable market share in youthful customer
segments holds the key to future growth and Starbucks has always been
very keen on stimulating certain activities in this particular area. This has
been done by sponsoring certain youth events worldwide, public relations
and contracting celebrities that are appealing to youthful Starbucks
customers. A Dutch Starbucks location in Amsterdam should adopt the same
strategy. Examples of tools to facilitate this tendency could be the sponsoring
of certain Dutch youth events (there are lots of them in Amsterdam), as
mentioned before offering a (free) WiFi Internet connection service to appeal
to young ‘mobile’ customers, and maybe introducing special reduced student
pricing systems that are also very common in Holland. All these tools could
be helpful when trying to gain ground in the important young customer
segments in the Dutch market rapidly.
Concluding, remaining a wide focus when it comes to customer segments is

of great importance, because Starbucks should not rule out certain customer
groups, as every customer is a valuable and potentially profitable one. But
bearing in mind that certain customer groups and segments are of extra
importance (youth) and adopting ‘parallel’ marketing strategies and
accompanying tools, fuelled by an extra marketing effort within these
customer segments, to expand market share among these customer
segments may be a wise corporate customer strategy for Starbucks. The
Dutch market is no exception here.
SWOT Analysis
This part is devoted to the analysis of the internal and external environment
of Starbucks, when launched in Amsterdam, in the form of a SWOT analysis.
Although there are some drawbacks of a simple SWOT analysis that are
generally agreed upon, for instance the lack of financial implications and
clear future scenario recommendations based on the analyzed environment,
it always is a helpful tool in making the first step to explore the environment
of an organization. Especially when trying to enter a foreign and thus new
market.
Strengths
One of the most important strengths of Starbucks, and this counts for every
Starbucks location, is its worldwide image. All across the world, people are
familiar with the American Starbucks concept. People also know that
celebrities like Britney Spears even fly back to the States to get a cup of real
Starbucks coffee during their busy schedules. The Dutch market is no
exception in that matter and people even have a positive stance with regard
to a potential launch of Starbucks in Holland. There has even been some
research with the possibilities of Starbucks survival in Holland (see
Appendix). Share of mind among potential Dutch customers is already
achieved. Share of heart is the next step.
Another strength of Starbucks is the fact that it combines certain aspects
that have not yet been combined by others. A considerable range of different
quality coffees has been a major selling point for the Coffee Company,
however they do not offer a comfortable and cosy environment like
Starbucks does. Offering a nice atmosphere to consume in has been point of
focus for many lunch areas in Amsterdam, but none of them is so specialized
and advanced when it comes to quality coffee. One might say that Starbucks
holds the key formula and owns best of both (competitive) worlds in
Amsterdam which could be considered a sizeable strength.
Yet another strength of Starbucks lies in its expanded worldwide network and
community along with close relationships with its suppliers. This generates a
certain level of know-how with regard to different markets all over the world,
consumer behaviour and quality expectations. All of the aforementioned
generates a valuable kind of database which could help ‘young’ Starbucks
locations, like the one in Amsterdam, to make a flying start, outperforming
competitors and rapidly grasping market share.
Being able to customize your own drink (and maybe one day even your own
Starbucks coffee mug) fits the recent customization trend and sends out a
certain atmosphere of freedom that blends in perfectly with the relaxed and
cosy ambience that is supported by the interior of the Starbucks chain. After
ordering a drink the customer has the possibility to customize the drink with
a whole range of essences, flavours, sugar, cream, powders and other
products. This is also an example of ‘prosuming’ (combination of production
and consuming), which is a consumer effort to engage in the production
process which in its turn generates a certain bonding with the
product/service provider (in this case a bonding between the customer and
Starbucks). However, this self service freedom could also be seen as a
weakness as it is contrasting with the high prices charged at Starbucks.
Weaknesses
Starbucks sells moderate to good quality coffee against a premium price.
Nevertheless a considerable part of the service a customer receives at
Starbucks is actually self service. This self service is not exactly in line with
the value proposition Starbucks communicates with its quality coffee and
accompanying premium price to potential customers outside and could be
seen as an odd aspect, especially in Holland where certain customers groups
are seen as cautious and quality demanding when it comes to (relatively
high) expenditures. Also, according to the Treacy & Wiersema model (De
Vries, Goud & Goud , 2004) of service value ( this combination of product
and service quality, high financial fee and self service is something strange
and could be seen as being ‘stuck in the middle’:
Service value = (Service result * Service delivery)/(Financial fee *

Consuming effort)
Self service fits in with an operational excellence strategy accompanied by a
low financial fee. However, the high price as charged for Starbucks coffee,
goes together with a product leader value position. Starbucks has a rare mix
of those two and this could be seen as a weakness since Dutch customers
known to be quite critical when it comes to expenses and accompanying
service expectations.
An additional weakness could be found in the way Starbucks coffee is served:

paper cups. Once again, there is a contradiction within the Starbucks modus
operandi here, since a high price and premium product do not go together
with paper cups (in Holland). Paper cups for coffee-to-go is acceptable, but
for consumers who decide to stay and consume their product within the
Starbucks location this could prove to become a problem. Paper cups are
very common in chains in America and do not have a direct link with inferior
quality contents. In Holland however, this link does exist. The Coffee
Company, one of the key competitors of Starbucks, has found its way around
this problem and serves its drinks in a type of glass cups that is very
common in Holland. Starbucks should think about this problem and maybe
even choose to serve its drinks in mugs instead of paper cups. Of course
then there is the problem of extra tasks like collecting the mugs and cleaning
them. Bycoming problem could be the possibility of people stealing original
Starbucks coffee mugs, but this problem could be tackled by introducing
something very common in Holland: a bonus system, which allows the
customer to collect bonus units in order to safe for free gifts. So in a way the
possible countermove to bypass a Starbucks weakness holds the key to an
actual opportunity.
Opportunities
The first opportunity comes forth out of the previously described weakness.
Serving Starbucks drinks in original Starbucks mugs could be a way to tackle
the ‘paper cup-inferior quality problem’ and communicate a more luxurious
feeling together with creating more logo and brand awareness with the
eventual goal of creating customers’ share of heart instead of a mere share
of mind and establishing customer bonding. Together with this way of serving
Starbucks drinks goes the notion of a bonus system which allows frequent
customers to save for free gifts: for instance the original Starbucks coffee
mug or Starbucks coffee. This allows the customer to also experience the
Starbucks coffee at home and once again creates customer bonding and
brand loyalty.
When visiting locations like Starbucks in countries like the United States and
France (business) customers surfing the Internet while drinking a cup of
coffee is a common sight. In Holland however, this WiFi connection
possibilities are virtually nonexistent, even in Amsterdam. Here lies a
substantial opportunity for Starbucks, Amsterdam. Providing customers with
a (free) WiFi Internet connection service. Aside from the fact that active
Internet usage within Starbucks has a lot of commercially interesting
business possibilities (through ‘cookies’ and other commercial digital devices,
which in its turn fuels business alliance possibilities), it also targets a
segment that has not yet been targeted before and it makes Starbucks
particularly interesting for all kinds of business people, providing Starbucks
with a more mature and contemporary image than a lot of other competitors.
Needless to say, this Internet connection possibility is also appealing to other
customer segments, especially younger people. Once again, this could have a
positive influence on the image of Starbucks. Therefore this WiFi Internet
service opportunity is closely interwoven with the desired target customer
segments as it ‘lures’ certain groups into Starbucks and discourages others.
Those discouraged groups would mainly be the elderly and groups of
youngsters hanging around on the street (a problem in Amsterdam). This
opportunity thus serves two closely related purposes.
An interesting fact is that ever since 2002 Starbucks’ head office in Europe is
situated in Amsterdam. Business lobbying and politics should therefore be
considerably easier when focusing on the aforementioned fact. One could say
that the link between Starbucks and Amsterdam already exists and that the
Americans had a reason for choosing this head office location in Europe. The
launching of a Starbucks location in Amsterdam is therefore a logical next
step.
Nike, another American company that is at least just as well-known in

Holland as the Starbucks chain, also has its head office of Europe situated in
Amsterdam. This summer (June 2006) a coffee corner in this Nike building
becomes available. One of the candidates is Starbucks (according to website
www.kookjij.nl). Once again proof that the international Starbucks
community is finally working its way into Amsterdam and has faith in the
possibilities of survival there.
Threats
Ethnic minority groups of youngsters hanging around in Amsterdam have
been a problem for a few years now. Having these groups in your store, shop
or Starbucks location could seriously harm the experience of other customers
and eventually your image. Entrepreneurs in the major streets in Amsterdam
(the Kalverstraat the Leidsestraat) have already encountered these
problems. Luckily the Starbucks location thought of lies in another area of
Amsterdam which is relatively free from this problem. The area can be
characterised by a high density of young urban professionals, upper class
residents and sophisticated tourists. Customers within these segments will
only improve the contemporary image of Starbucks and thereby increase the
entry barrier for these so-called ethnic problem groups. Nevertheless,
Starbucks should keep track of developments in this area and realize that a
possible threat could occur.
Competitors copying the Starbucks concept is another possible threat.
Copying behaviour and stealing winning formulas has always been a problem
for entrepreneurs. It may be sometimes difficult to endure and differentiate
the initial product unless the product has such a big widespread name that it
can survive these imitators. Luckily, Starbucks has that kind of name and
image and should be able to withstand imitating behaviour by (upcoming)
competition. A way to do this is by making a pre-emptive strike and
launching Starbucks in such a clear and differentiated way (focusing on the
originality of the Starbucks brand and image) that it is hardly possible for
others to compete with or copy this whole Starbucks notion. Offence is the
best defence here and Starbucks should enter the Dutch market making a lot
of ‘noise’. Evidently, a substantial task lies here for the promotion,
advertising and branding department.
Segmentation
The segmentation part will be similar to the standard Starbuck segmentation.

We will use demographic, psychographic and behavioral segments. First of
all, the demographic segmentation will focus on age, income and occupation.
We see the 15-40 group as our main customer. This correlates with our own
observations in French and Swiss Starbucks’. This group can be divided in
two other groups. The group 15-25, and the group 25-40. The first group will
have a lower income, and probably be students. This is the youngest
generation, and for this segment Starbucks has to be hip and modern. The
other group is probably working and has a higher income. The difference
between the groups is also that the first group will probably use the sitting
space whereas the second will most likely be customers who make purchases
and consume them outside of the store.
In the psychographic segment we have focused primarily on lifestyles

segmentation. This is very similar to the demographic segment above. The
students will have another lifestyle than the working group. Another lifestyle
segment will be the people who drink coffee, and those who do not drink
coffee. This is a crucial segment, because Starbucks has to have an image
that you don’t have to be a coffee drinker to enjoy Starbucks.
The behavioral segment is the most interesting one, and also the segment
that can be the most influenced. It is strong because we can create new
segments. First of all, we will segment customers with respect to benefit and
usage. Benefit segmentation is for the customers who go to Starbucks
because of the Starbucks products or Starbucks service. So the segmentation
here will be (again similar to the demographic and psychographic) the people
who prefer to sit down and enjoy their product and the buy & go customers.
The usage can be divided into light, medium and heavy users. We
recommend focusing primarily on the high usage segment. The advantage of
this type of segmentation, mentioned before, is that Starbucks can create a
new behavioral segment group and through this, new customers. This can
be achieved through segmenting customers based on their desired benefits.
A very recent example of this, introduced in several Starbucks’ through the
world is wireless internet. This is an extra incentive to go to Starbucks,
because of the creation of benefits driven segments, in this example,
customers who use wireless internet.
It should be clear though that on international basis, the Netherlands are a

specific segment, in another bigger segment, Europe.
Targeting
The main targeting activity will be undifferentiated marketing. This is rather

logical because, the products are not being differentiated for specific
customer groups. This type of marketing will be beneficial to us in that it is
less expensive than attempting to market each product to each product
segment. We will instead take our market as a whole and market our
primary product, coffee, to them. Of course, the non coffee drinker will have
a possibility to choose from several non coffee products, and is there also
non caffeine products for the youngest customers, but there is not a clear
targeting in this because Starbucks is not going to change its product mix
specifically for these segments.
Positioning
When we begin our marketing campaign we will focus primarily on building

the Starbucks brand and therefore we will position Starbucks quite generally
with respect to our market. The main goal will be to create a generate
awareness of the brand so we can attract our customers. As Starbucks
becomes more established, however, we will focus more on positioning the
products to our different segments. This will focus on two main segments;
the young, hip, and trendy segment and also the business segment.
Financial Analysis
Through the use of several analyses we have made an estimate of the

possible revenues and expenses we will incur in the first three years of
operation, as well as what a possible balance sheet may look like for
Starbucks Amsterdam. These projections have been derived from several
different methods to arrive at the final projection. We have analyzed
Starbucks most recent financial statements for the company as a whole and
divided these results by the amount of stores worldwide to get a sense of
average store performance.
Please refer to Statement of Earnings in Appendix D.
This is the data for an average Starbucks. We used this data to predict
average sales and costs by exchanging the prices to the Euro. So, if the
Amsterdam Starbucks would perform at an average level, this would be the
result. Of course this is not realistic because there are many unpredictable
factors that will arise. We are opening our store, so, we cannot expect to
perform as well as the average store that has been open for several years
because revenues are likely to be lower and we will occur several one time
costs associated with opening a new store.
Another method we have used to calculate expected revenue was by

calculating the size of the coffee market in Amsterdam and multiplying by
Starbucks expected market share, average sale and average customer
frequency in a year.
Everyday there are around 800.000 persons in Amsterdam. Of course it is

impossible and also not realistic to account all those people as potential
customers. The Dutch population has a normal onion-population distribution,
the tourists that populate Amsterdam will change this population, however,
we do not expect significant changes. We can argue that the highest and
lowest parts (very old, or very young) in the population distribution fall out of
the Starbucks’ client market. This results in a drop of around 20% in the total
population of Amsterdam. Also because of our location and the mentioned
segmentation in Amsterdam, 1/3 of the population will not be on a regular
basis in the part where our store is located and therefore cannot be
accounted as potential customers. This leaves us with approximately 425.000
persons. This population base can be divided in two equal groups in the
population distribution. We are dividing our target market into two parts for
different reasons. First of all, the younger part will consist of students and
other young adults. The other segment will consist mostly of the working
population. This has two results. Firstly, students have more free time, and
will therefore be able to visit Starbucks more frequently. This also has to do
with the fact that Dutch people will tend not to go to a place like Starbucks
early in the morning as we have already explained in our customers
paragraph. Secondly, Starbucks had a more positive image in the young
group then in the older group. This we conclude after a (not representative)
research on the biggest internet forum in the Netherlands. Around 40% of
the young people say they would like a Starbucks, (just 15% is against),
where this percentage is twice as low with the older generations. So if we
know that 40% would like a Starbucks, we can expect that around a quarter
of these people for certain will use the Starbucks. If we combine this with a
part of the 45% of the young people who didn’t know Starbucks, or didn’t
have either a positive or negative feeling with Starbucks, we expect to have
a realistic expectation if we say that around 20% of the young people will use
Starbucks and 5% of the older group. As said, the two groups are almost
equal, so this results in 25% of 425.000 persons. 106.000 Persons can be
accounted as not only potential customers, but as very likely customers. If
this group would spend around 4 euro (a achievable expectation), this would
generate a yearly revenue of 425.000 euro.
Our team also spent considerable time observing customer behavior within
several Starbucks in Paris to get a sense of average length of stay, average
sale and occupancy rates. This resulted in the next:
On the average, in a Parisian Starbucks, there is an occupancy rate about
80%. Due to the several factors (not known, different culture) we cannot
expect this rate in Amsterdam. At least not in the first year. Because of our
location, we are not able to have more than 25 places to sit. So a
combination of a lower rate and a low number of seats will result in an
expected occupancy rate about 75%. In the mornings the Starbucks will be
rather empty, and in the afternoon and evening it will be full. So, we expect
on a daily basis to occupy around 75% of the seats. The average stay in a
Parisian Starbucks was around 45-50 minutes. We expect this to be more in
Amsterdam because of the Dutch culture. A Dutchmen has to ‘earn’ his
money back through using the facility, and therefore we can expect an
average stay of one hour. We propose opening hours similar to the French,
except that we would open it later in the morning and keep it longer open in
the evening. So we can better take advantage of the evening rush of
customers. This data would result in 187,5 sitting customers everyday. We
also observed that the sitting customers spend more than customers who
take away their purchases. As said earlier, the price will be lower than in
Paris or other European city, but still on a premium level. That is why we
expect the sitting customers to spend around 5 euro. For a Starbucks which
will be open for 350 days, this has a revenue of almost 330.000 euro. We
expect around 15 buy & go customers every hour (again, low number in the
morning, high in afternoon) who will spend around 3 euro. This will add
another 157.500 euro to the revenue. The total revenue will be around
487.500 euro.
Our final projections factored these different methods and reduced expected
sales to correspond with the opening of a new store.
The results can be found in the Statement of Earnings in Appendix E.
We are projecting first year sales revenues of €450,000, however as this only
an estimate and there are many uncontrollable factors at play that may
affect the actual sales revenue we are also providing a high and low estimate
for the sake of analysis. Our best case analysis predicts €600,000 and our
worst case analysis predicts €300,000. As the company becomes better
known in Amsterdam and we develop a positive reputation, sales will rise,
this is reflected in the increasing expected sales revenues for the second and
third year of operation. We are predicting second year revenues of €550,000
and third year revenues of €650,000.
During the first year of operations we will have several one time costs
associated with opening the store. This explains the higher than average
expected store operating costs of €300,000. In the next two years theses
store operating costs will drop down closer to average levels. Our cost of
sales are in line with the average Starbucks store as are depreciation
expenses.
With all considered we are forecasting a first year net loss of approximately €
70,000. We expect to make a profit in the second year of just under € 6,000
and just over € 35,000 in the third. Our worst case scenario predicts a net
loss of approximately € 360,000 in the first year and a best case scenario of
about a € 30,000 net profit.
Advertising Plan
Definition of the Problem/Challenge

There are a few challenges in introducing and implementing Starbucks in
Amsterdam, the Netherlands. For starters, there are already a few coffee
places in Amsterdam like Bagels & Beans and Coffee Company, These coffee
places are going to create a competitive atmosphere. People already
experienced the services and products of these coffee places, they are
familiar with them and they know where to find them. However, we believe a
city like Amsterdam, with its diverse crowd of people (tourists, students,
visitors, and business people) will like the idea of something new. As a
population, they are open to trying new things.
Another challenge of implementing Starbucks in Amsterdam is the prices of

the coffees of Starbucks; they are not going to be cheaper than the rest of
the coffee places around. That is why the focus of Starbucks should be on the
good, quality, tailor-made service and the whole Starbucks experience.
Starbucks will have the widest selection of coffees around, so the advantage
will also be in the fact that customers can customize their drinks to taste.
Another possible problem is that some coffee places offer a savings card and
when it’s full, you can get a free coffee / discount on your next coffee or buy.
This is a great way to built up relationships with your customers and to make
them want to come back – in essence, a loyalty program. Starbucks does not
offer this sort of service so they really have to make an effort in maintaining
their customers and making it attractive for them to keep coming back; for
example by offering special coffees everyday, by creating a good
atmosphere, friendly personnel etc.
We believe Starbucks should provide all the things a student (our primary
target group) needs. The first thing that needs to be done is to make sure
the services and products of Starbucks appeal to them. They should offer
different things than other coffee places, like different tastes or different
sizes. The whole experience of getting coffee at Starbucks should be different
from the possibilities you have at the other coffee stores. It is foreign, but it
can also fit into Dutch culture.
We also want to provide them with comfortable chairs, the possibility to use
the internet to work on school, adequate light, good music, etc. In this way,
we believe Starbucks will be more easily adopted by the target group.
Research results
We have done some research to find out how people in Amsterdam would
think about a Starbucks opening in their city. We focused on students, them
being our primary target group, and interviewed a total of 100 people
between the ages of 15 and 30 to be able to generalize the results.
As it turns out, the 85% of students are really enthusiastic that a Starbucks
will be introduced in Amsterdam. Why? That will be the first Starbucks in the
Netherlands and they are proud that it is going to be in their city.
When we asked them about their current experiences with the coffee places,
there were a lot of different answers. Some really liked the coffee places
Amsterdam offered now, but still, they were curious about Starbucks and
said they would definitely go there to try it out. Others were really happy
with Starbucks because they already knew all the places in Amsterdam and
would like to try something new.
We also researched their opinion on the prices of Starbucks, which are a little
bit higher than other coffee places. Most students were ok with this, because
it was new, and foreign. Therefore, the general assumption was that the
costs were higher. In the long term of course, they wanted to see something
extra in Starbucks; a reason why it is more expensive than other places, in
other words, value for their money. However, some of the respondents, who
already knew Starbucks from other cities in other countries, mentioned that
Starbucks does have a lot of variety in its products and it offers extra things
like ceramic mugs, the iced and blended coffees and the coffee beans.
To get a more general idea of when students planned to visit Starbucks, we

asked about habits. 40% of students say they like to drink coffee most while
studying, 27% while relaxing and 33% as a reason to get together with
friends. This indicates that drinking coffee is a part of the Amsterdam
students’ lifestyle. It also gives insight to how to reach each segment of the
target specifically.
Targets
The first target group and they will be our main focus, is students.
Amsterdam is a real student’s city. A lot of different sorts of education is
offered there, ranging from different schools, to different educational levels
(university, practical school, high school) and different directions. Next to
this, there are also a lot of student societies based in Amsterdam, so many
students are in the city during the day or they travel through the city to go to
the station to go somewhere else.
We believe this target group should be the main focus. They are social people
and like to hang out, chat and have a drink somewhere outside of their
primary residence because many of them live in small, cramped apartments,
often with roommates and sometimes still with parents. They might need to
talk about a presentation for class or they might have a meeting for their
student’s society, which is usually done somewhere in the city. Starbucks
would be the perfect place!
This target group will use the take-out service from Starbucks right before or
after school or on their way somewhere, but most commonly, they will sit
down and talk while consuming the coffee and / or snacks. Amsterdam is a
social city; people don’t live a very fast paced life, and value spending time
with other people.
The secondary target group is business people. This group will probably
really appreciate the take-out service of Starbucks. They can get a quick
coffee before they go to work or after their work, before they get into the
train and go back home, in addition to lunch breaks. Numerous big
companies are established in Amsterdam, so there is a lot of traffic from
business people coming into the city everyday.
The success of Starbucks with the secondary target group is based on time
poverty – business people are generally doing what they can to optimize
every minute. Therefore, the quick turnaround time at Starbucks fits the
lifestyle. Whether for breakfast, a lunch break or after work, business people
will appreciate the value of the product in that it saves time without
compromising quality. The central location can also be of benefit to this
market for business meetings, as it is a neutral place with a wide variety of
product offerings.
Advertising Objectives
We have one main advertising objective and that is to create awareness.

There is a new store opening in Amsterdam and we want everybody to know
that!
To accomplish this, we first have to educate our target group about

Starbucks. We have to let them now what Starbucks stands for and what
they can offer the clients. We want to communicate to the target group
where we will be located and what they can expect from the Starbucks
concern. We want to do this with an advertising campaign. (See Strategies)
In doing so, we have to take into account the consumer perception process,
which consists of five steps:
1. Physical date
2. Physiological screens (sensory)
3. Physiological screens (emotional)
4. Cognition
5. Perception files
We believe, Starbucks should focus on the last three, because they are the
most important in Starbucks objective to be noticed and to be appreciated by
the target group.
We want to make Starbucks a place where people feel good, where they are
treated with respect by friendly personnel and where they can enjoy and
relax. We want to make consumers feel good being in Starbucks and
experiencing their services and products. Because Starbucks has the
advantage of being able to offer a lot of different products, there is
something for everyone; tailor-made service / product. (Physiological
screens, emotional)
To create awareness, we first want to make the people curious of what is

going to happen. We will not right away reveal that there is a Starbucks
coming in Amsterdam. We want to make the people anxious, curious and
interested so that they will follow the whole process of the introduction and
implementation of the new store, which will make them more willing to go
there when it is actually established there. (Cognition)
Last but not least, as said before, Starbucks is entering a highly competitive
market in Amsterdam. There are many substitutes available there. That is
why Starbucks should not be perceived as ‘just another coffee place’ but as
something more than that. It should raise everybody’s expectations and it
should clearly state that they can offer everything to everybody. Starbucks
puts people first and adjusts the products they offer to them. (Perception
files)
We can also look at the advertising pyramid (please see appendix H)
First, we want to make people aware of the new Starbucks store, which is
basically the main activity. All the focus should be on that. We want to make
‘awareness process’ so strong, that the consumers are almost willing to go
on to action right away and skip the other three steps in the pyramid.
Strategy: Media Plan
Mix
In accomplishing the advertising objectives stated above, we want to use
different sorts of advertising. We will not use the tv ads as a medium.
Starbucks has never done this because it is not effective in reaching the
market at the right time and place, so we won’t use it here either.
First, we want to use posters. We will focus on the public transportation

system as the vast majority of students has to use this in going to school.
We will place big posters in the train stations in Amsterdam (Amsterdam
Amstel, Amsterdam Bijlmer, Amsterdam Centraal, Amsterdam Lelylaan,
Amsterdam Muiderpoort, Amsterdam Sloterdijk and Schiphol Airport). These
stations are used for people coming in to Amsterdam. We will also put
posters in the metro stations and at the stops of the trams.
Next to this, we will make use of the possibility to hang up posters in the
metro and in the trams. Although these posters are smaller, their position
right next to direction signs ensures that they will be seen by everybody.
We also want to make use of the internet. We want to approach the

companies with internet sites which are popular and frequently used among
students. We are thinking about the following opportunities:
- Radio 538, which is the most and best, listened to radio station in the
Netherlands by students.
- Hyves, which is a site to find old friends and to keep in touch with
them. It is mostly used by students and research shows that more that
75% of the students use this site.
- Hotmail.nl
- University websites
Last but not least, we want to place advertisements in school papers or in
magazines distributed to schools or students. Every university or school in
Amsterdam has its own newspaper where we can place ads in. Next to this,
we want to approach the biggest students’ societies (the societies with the
biggest and largest reach of students in Amsterdam) and place ads in their
magazines.
To reach the secondary market, the billboards along the side of the main
roadways and highways will be utilized also. The campaigns will be unified
throughout Amsterdam to send a stronger message, and to increase
retention among the primary and secondary target markets.
Frequency
Posters
We want to start the advertising campaign 4 to 6 weeks before the Starbucks
store actually opens. The first 2 weeks, we want to make the target groups
curious. We want to draw their attention and we want to make them wonder
and think about what is going to happen. We want to involve them in the
whole implementing process. This will be internally referred to as Phase 1.
The next 2 to 4 weeks, or Phase 2, the ads will be altered slightly to include
more information, such as the date of the grand opening and perhaps a
general location. In Phase 3, which will take place 2 weeks before the grand
opening, we will reveal the opening of the new Starbucks store. We will
announce the exact location. We want to make this opening really important
so we want to build up curiousity throughout the first part of the campaign,
and once they are interested, give away the rest.
Internet
The internet is a good medium to use because the primary target market has
proven to be almost completely computer literate. Hotmail is a popular
service with the age group and allows segmentation in terms of marketing.
When users sign up, they enter their full address. Therefore, it is possible
only to place banners on Amsterdam students sites. This lowers the CPM
(cost per thousand), and effectively targets the primary target market.
The banner ads used online will follow the same timeline and look as
billboards, only in a different format. This ensures the strength of one single
message, rather than confusing consumers with varying messages, which
individually would be more difficult to remember.
Ads
Advertisements placed in school newspapers and other student publications
will also be synchronized with the other mediums. The goal is to place an ad
in the same part (ideally, the samepage) of the paper, changing the insertion
based on the phase of the campaign.
Cost insertion
The advertising portion of the marketing plan has a budget of $40,000, or
about 9% of the total budget. This is to be distributed among the three
media that have been selected. Billboards will receive the highest portion of
the budget as a result of its wide reach, approximately $25,000. The internet
ads will have a budget of $5,000, and the remaining $10,000 will go towards
print ads. These two allocations are based on cost of insertion (internet is
much cheaper than print ads),but also based on reach. Print ads will be
reaching a much more specific, targeted audience.
Flighting
For all three mediums, posters, internet, and print ads, the flighting will be
the same. Due to the nature of the campaigns, whereas they are three
phases of the same ads, it is necessary to maintain even flighting throughout
the campaign. During the third phase, an additional advertisement will be
used with only the relevant information: a logo, address, and an
announcement about the grand opening party. These will be placed in the
same types of locations as the other ads, but refocuses the audience on the
important ‘when and where’ information.
Strategy: Creative
The creative is split up into two series within the same campaign. To see the
ads, please see Appendix I for Series 1 and Appendix J for Series 2. Phase 1
ads focus on posing a question in the consumer’s minds, and to get them
thinking. The mystery of seeing an ad and not knowing what it is for is what
will make it easier to remember. By the time Phase 2 comes around, the
consumer will realize it is a series, and continue to look back throughout the
second phase to see what the completion of the ad will look like. Phase 3 is
meant to create excitement and pride – excitement that a well known,
successful company is about to open in Amsterdam, and pride because
Amsterdam now joins hundreds of other cities around the world in the
‘Starbucks family.’
Creative platform
The artwork selected for the background of the ads was purposely chosen not
to focus on a specific continent. The view of the world is unusual, with the
cities floating above and around the globe. It is a contemporary look at the
world, as cities come closer with globalization, and geography becomes less
important in the world of business. The campaign puts Starbucks Amsterdam
in the centre of the map, among the world’s greatest cities. This evokes the
feeling of pride that is part of the creative strategy. The mysterious structure
of the campaign, with its triphasal approach, is what creates the excitement.
The strategy has been proven in other campaigns to get people talking and
eventually produce word of mouth, which can be the strongest way to
advertise, without costing a penny. The copy works well with the visual to
create that mystery, while incorporating Starbucks colours and in Phase 3,
important information about the grand opening. Overall, the composition is
well harmonized, and reaches the advertising objectives that were defined.
Big Idea
Starbucks is a cool place to study, meet new friends or talk to old ones, or
just run in and out for coffee the way you like it, with the familiarity of a
friendly atmosphere that students and business people are enjoying around
the world – a world that Amsterdam is now joining.
Appendix A:Price of a Starbucks tall latte
Appendix B: Map of Downtown Amsterdam
Appendix C: ‘Marketing to Youth’ exerpt
Marketing to Youth Starbucks customers are people of diverse ethnic,

income and age groups with varying tastes and interests. We embrace their
diversity and strive to provide excellent customer service to those we serve
by offering products that are relevant to our customer base and their varying
interests and tastes, including some products which may appeal to young
people.
While the Company’s overall marketing, advertising and event sponsorship

efforts are not directed at children or youth, Starbucks has a long history of
supporting community activities and events important to our customers,
including young people.
To help ensure all of our marketing efforts remain consistent with these
principles, we have formalized our long-standing practices by implementing
new review policies for all our marketing and communications activities.
Review and Enforcement Appropriate measures and best efforts are taken
so that Starbucks advertising and marketing is not specifically aimed at
reaching young consumers.
Communication of the policy: Starbucks policy on marketing to youth is

shared with all staff within the marketing function.
Campaign and Sensitivity Review: Starbucks marketing materials and

promotional campaigns undergo a formal “sensitivity review” process prior
to their approval and distribution. This process, led by Marketing, involves a
panel of Starbucks employees from key parts of the organization -- such as
Customer Relations, Public Affairs, Corporate Social Responsibility,
Diversity, Internal Communications, and Legal -- who review marketing
elements and provide input verbally and in writing. The purpose of the panel
is to identify in advance and avoid distributing marketing materials that
could be inadvertently appealing to youth, racially offensive, widely
contentious or culturally insensitive. If consistent feedback is provided from
members of the panel about a potential issue, the Marketing team adjusts
the materials or campaigns to alleviate the issue.
Media Buying: When planning and executing marketing campaigns in

which paid advertising media is used, Starbucks has instructed its
advertising agency to select media vehicles whose audience composition is
closely aligned with Starbucks adult customer base.
Appendix D: Average Statement of Earnings
Average Starbucks Average Starbucks in €

STATEMENTS OF EARNINGS
DATA
Total revenues $ 640.000,00 € 533.333,33

Cost of sales including occupancy costs $ 262.400,00 € 218.666,67
Store operating expenses $ 240.000,00 € 200.000,00
€ -
Depreciation and amortization expenses $ 38.400,00 € 32.000,00
€ -
General and administrative expenses $ 38.400,00 € 32.000,00
Subtotal operating expenses $ 579.200,00 € 482.666,67
€ -
Operating income $ 60.800,00 € 50.666,67
Interest and other income $ 1.500,00 € 1.250,00
net EBIT $ 62.300,00 € 51.916,67
Income taxes $ 23.362,50 € 19.468,75
Net earnings $ 38.937,50 € 32.447,92
Appendix E: Amsterdam Pro Forma Statement of Earnings
Average Starbucks Amsterdam Expectation

STATEMENTS OF EARNINGS year 1
DATA
Total revenues $ 640.000,00 € 450.000,00
Cost of sales including occupancy costs $ 262.400,00 € 200.000,00
Store operating expenses $ 240.000,00 € 300.000,00
Depreciation and amortization expenses $ 38.400,00 € 32.000,00
General and administrative expenses $ 38.400,00 € 32.000,00

Subtotal operating expenses $ 579.200,00 € 564.000,00
Operating income $ 60.800,00 € 114.000,00-

Interest and other income $ 1.500,00 € 1.250,00
net EBIT $ 62.300,00 € 112.750,00-
Income taxes $ 23.362,50 € 42.281,25-
Net earnings $ 38.937,50 € `155.131,75-
Appendix F: Pro Forma Balance Sheet
ASSETS
Current assets:
Cash and cash equivalents € 9.167,00
Accounts receivable, net of allowances € 7.348,00
Inventories € 53.474,00
Total current assets € 69.989,00
Long-term investments € -
Equity and other investments € 10.432,00
Property, plant and equipment € 59.564,00
Other assets € 6.767,00
Other intangible assets € 5.667,00
TOTAL ASSETS € 152.419,00
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable € 15.241,90
Short-term borrowings € 18.243,00
Total current liabilities € 33.484,90
Long-term debt € 73.004,20
Other long-term liabilities
Shareholders' equity: € 9.213,00
Retained earnings € -
Other additional paid-in-capital € 3.232,00
Total shareholders' equity € -
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY € 152.419,00
Appendix G: Amsterdam high and low forecast Statement of Earnings
high
Amsterdam Amsterdam forecast low forecast
Expectation yrExpectation yr
STATEMENTS OF EARNINGS 2 3 year 1 year 1
DATA
€ € € €
Total net revenues 550.000,00 650.000,00 600.000,00 300.000,00
Cost of sales & occupancy € € € €
costs 225.500,00 266.500,00 190.000,00 250.000,00
€ € € €
Store operating expenses 250.000,00 250.000,00 300.000,00 350.000,00
Depreciation and € € € €
amortization 33.000,00 39.000,00 32.000,00 32.000,00
expenses
General and administrat. € € € €
expenses 33.000,00 39.000,00 32.000,00 32.000,00
€ € € €
Subtotal operating expenses 541.500,00 594.500,00 554.000,00 664.000,00
€
€ € € 364.000,00
Operating income 8.500,00 55.500,00 46.000,00 -
€ € € €
Interest and other income 1.041,67 868,06 723,38 602,82
€
€ € € 363.397,18
net EBIT 9.541,67 56.368,06 46.723,38 -
€
€ € € 136.273,94
Income taxes 3.578,13 21.138,02 17.521,27 -
€
€ € € 227.123,24
Net earnings 5.963,54 35.230,03 29.202,11 -
Appendix H: Advertising Pyramid
Appendix I: Creative Series 1
Phase 1
Phase 2
Phase 3
Appendix J: Creative Series 2
Phase 1
Phase 2
Phase 3

Starbucksv Amsterdam

Enviado por

Dados do documento

Título original

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

Starbucksv Amsterdam

Enviado por

Direitos autorais:

Formatos disponíveis

Starbucks Coffee Company:

An Integrated Marketing Communications Plan

Executive Summary .................................................................................................................3

We have investigated the possible launch of the Starbucks Coffee Company

The financial expectations are positive, Starbucks Amsterdam expects a

In terms of an advertising plan, the main initial goal is to gain awareness

This marketing plan is going to investigate the possible launch of Starbucks

Our mission is to introduce Starbucks to the Netherlands by opening a test

• To have first year revenues of €450,000

Another important group of products that are directly consumed within

According to the Economist and CNN/Money a Tall Latte in Starbucks (one of

What's more, Starbucks already has a reputation for having the

This New-York based story is exactly what we want to achieve in Amsterdam.

The first Starbucks in the Netherlands will be opened in Amsterdam, the

Please see Advertising Plan.

The Coffee Company is a chain of 'fast-drink' coffee houses in Amsterdam,

Bagels & Beans

The sentence above is a quotation that can be found at the website of

that the products of Starbucks are not

An other aspect of the primary product is the service that is offered by

The staff in Starbucks is not considered as being customer centered. It is not

One can define the quality of the

Starbucks can be defined as a coffee restaurant with a high quality coffee

Quality cups Quality environment

A very suitable model to explore the competition in a market is the five

Coffee market competitors – Intensity of rivalry

“Our connection with coffee farmers Purveying quality

The sentence above is a quotation that can be found at the website of

Introducing soccer and sonnets America SCORES was

Threat of new entrants

Starbucks customers constitute mainly of customers that consume Starbucks

Evidently, just like every competitor, Starbucks should focus on customers

Introducing a bonus saving system (allowing customers to safe for free

Although remaining a wide focus is crucial in order to establish share of mind

Youth (including so called ‘young urban professionals’ and ‘double income, no

Concluding, remaining a wide focus when it comes to customer segments is

Service value = (Service result * Service delivery)/(Financial fee *

An additional weakness could be found in the way Starbucks coffee is served:

Nike, another American company that is at least just as well-known in

The segmentation part will be similar to the standard Starbuck segmentation.

In the psychographic segment we have focused primarily on lifestyles

It should be clear though that on international basis, the Netherlands are a

The main targeting activity will be undifferentiated marketing. This is rather

When we begin our marketing campaign we will focus primarily on building

Through the use of several analyses we have made an estimate of the

Please refer to Statement of Earnings in Appendix D.

Another method we have used to calculate expected revenue was by

Everyday there are around 800.000 persons in Amsterdam. Of course it is

The results can be found in the Statement of Earnings in Appendix E.

Definition of the Problem/Challenge

Another challenge of implementing Starbucks in Amsterdam is the prices of

To get a more general idea of when students planned to visit Starbucks, we

We have one main advertising objective and that is to create awareness.

To accomplish this, we first have to educate our target group about

To create awareness, we first want to make the people curious of what is

We can also look at the advertising pyramid (please see appendix H)

Strategy: Media Plan

First, we want to use posters. We will focus on the public transportation

We also want to make use of the internet. We want to approach the

Marketing to Youth Starbucks customers are people of diverse ethnic,

While the Company’s overall marketing, advertising and event sponsorship

Communication of the policy: Starbucks policy on marketing to youth is

Campaign and Sensitivity Review: Starbucks marketing materials and