Starbucks Introduction of Kind Bars

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Periodical Exercise
1.) Problem/Decision Statement
According to an article in the New York Times in 2009, titled, “A Small Player Breaks Into Starbucks,” Starbucks has recently started a campaign to provide more healthy products to its consumers. This is considered quite the change since coffee, Starbucks primary product, is not necessarily thought of as healthy.To help start of this campaign it has agreed to start selling KIND bars, which are “combinations of dried fruits and nuts bound together by honey (NY Times).” KIND bars seem to fit in great with the direction Starbucks is going, but they did not always. It took Daniel Lubetzky, owner of KIND, over five years of promoting his product to Starbucks to even get his foot in the door. 2.) SWOT Analysis-Starbucks

Strengths
* Coffee industry market leader
* Customer satisfaction and strong brand loyalty
* Free Wi-Fi available for customers
* Innovative operations and a strong financial position
* Strong product diversification
Weaknesses
* Although a diversified company, still strong reliance on coffee products for profit * High operating costs
* Downsizing
* High prices on products
* Competition is rising in their growing market
Opportunities
* Coffee Beans to be sold in stores
* Brand Extension
* Expansion to South Asian Markets
* Provide more cost-and health-conscious products
Threats
* Competition
* Rising number of health-conscious customers
* Corporate giant image
* Resistance in foreign countries due to political and cultural issues * Variation in coffee price in developing countries

3.) Identification, Evaluation and Analysis of Alternatives
KIND bars are not the only thing Starbucks is going to be offering in its new campaign. They plan to revamp the menu, introducing a variety of lighter and healthier foods such as salads, smoothies and fruit muffins. So why did Starbucks choose to introduce the KIND bar when it could of chosen Clif bars or SOYJOY bars, both more established than KIND. Clif is currently the market leader in nutrition bars and SOYJOY is widely international with distribution from Singapore to Belgium. It could be due to Mr. Lubetzky’s determination, or maybe because of KIND’s marketing mix. 4. )Recommendations and Conclusions

KIND would be very appealing to Starbucks consumers for numerous reasons and this makes it obvious to Starbucks that it will be a good investment. KIND donates five percent of its profit to the PeaceWorks Foundation, “which strives to bring peace to Middle Eastern countries by building commercial food ventures (NY Times).” This makes the consumer feel good about their purchase because they feel as if they are contributing to a good cause. Also, Yale did a pilot study indicating that two KIND bars a day can help consumers lose weight. This is attractive to buyers due to the fact that around two-thirds of Americans are overweight or obese. KIND also promotes there products to be, “a brand of delicious, natural, healthful foods made from wholesome ingredients you can see & pronounce®(KINDsnacks).” In a world where it seems that everything you consume has preservatives and who knows what else in them, KIND stands out in the crowd. Finally, with the price of $1.95 at Starbucks, the deal cannot be beat, especially compared to relative prices of coffee at Starbucks. With all these advantages there is no question that Starbucks made the right decision in choosing KIND. This collaboration with to help offset Starbucks threats such as the rising number of health-conscious consumers, which is the basis of its campaign. An additional threat that may be counterbalanced is its image as a corporate giant because of their acceptance of a small business.

Source Links:
http://www.nytimes.com/2009/07/01/business/smallbusiness/01snackbar.html?ref=marketing http://www.kindsnacks.com/kind-store/buy-kind-bars

Periodical Exercise
1.)...
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