As Starbucks has entered into the market based as a specialty coffee shop, the company like many other, looks for ways to expand and create a competitive advantage over competitors. Restaurants have become increasingly interested in competing for customers in the specialty coffee market to create more drive and attraction to the fast-food industry, which in turn has created a broader and more diversified competitor group for Starbucks. To offset these new and upcoming decisions of restaurants and other coffee shops, Starbucks has ventured out to broaden their customer reach by pairing up with other brands to enter into different product markets. Starbucks is known for its co-branded products with Pepsi-Cola Company, the licensing agreement with Unilever to manufacture, produce, and market Starbucks ice cream, but the newest to come in 2014 is the co-branded yogurt product with Dannon.
The licensing agreement with Pepsi-Cola Company fits perfectly into the realm of Starbucks’ main product offerings. The co-branded products such as Frappuccino® and Starbucks DoubleShot® are marketed as a high quality convenience product that can be found at most grocery stores and gas stations. The products are coffee based for those who are on the go and cannot seek out the closest Starbucks to wait for their drink to be made, creating a new segment of loyal customers.
In March of 2008, Unilever partnered with Starbucks to create a coffee themed line of ice cream inspired by the most popular coffee beverages sold at Starbucks locations. Starbucks had already created their own ice cream in 1996 leading the coffee flavored ice cream category (Starbucks Newsroom), but with the newly announced licensing agreement, Unilever could help expand the company’s reach. This partnership benefited Starbucks by allowing a company already producing similar products to manufacture their product at a lower cost and in larger quantities to be sold in more stores across each region.
References: Baertlein, Lisa and Geller, Martinne. July 23, 2013. Starbucks and Danone team up to take on growing U.S. yogurt market. Retrieved from http://www.reuters.com/article/2013/07/23/us-starbucks-danone-yogurt-idUSBRE96M0PF20130723
Starbucks. 2014. News Room. Retrieved from http://news.starbucks.com/news/trade-release-new-super-premium-starbucks-ice-cream-line-debuts
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