Caribou Coffee Marketing Plan Lynette Bordignon, Shae Kwapil, Teresa Offerman, Samantha Wehr Table of Contents: Executive Summary……………………………………………………………………………..…3 Background……………………………………………………………………………………..…
.4 Internal Environment…………………………………………………………………………....4­5 External Environment………………………………….………………………………………..…5 SWOT Analysis……………………………………………………………………………..…...5­8 Marketing Objectives……………………………………………………………………….……..8 Target Markets & Positioning Strategies…………………………………………………….….8 Product Strategies………………………………………………………………………….…...…8 Pricing Strategies……………………………………………………………………………….....8 Promotional Strategies……………………………………………………………………….…,..9 Supply Chain Strategies…………………………………………………………………….…….9 Implementation…………………………………………………………………………....……9­
10 Works Cited…………………………………………………………………………………..…..11 Executive Summary The following is a marketing plan developed for Caribou Coffee Company. It will begin by first introducing the company and detailing a brief history and background. It will analyze both the internal and external environment of the company. It will examine both the strengths and weaknesses possessed by our company, as well as the opportunities and threats to Caribou Coffee. It will identify the unique ways that set Caribou Coffee apart from the competition. Our objective discussed to promote the Waterloo location of Caribou Coffee will be to implement a Caribou Coffee Trail Pass, which would resemble a loyalty card. This card will serve as a function to increase the variety of menu items that customers purchase. This in return would allow customers to discover new menu items that they may have not previously tried. When the customers discover that they like more menu items other than a typical coffee, they will end up returning to Caribou to purchase items such as sandwiches. This plan will target, middle to upper class individuals in the Waterloo and Cedar Falls area. The card will be promoted through the Hy­Vee gas station, and weekly e­newsletters. Trail Passes will only be available and implemented at the Waterloo Caribou Coffee location. After the completion a two month trial period of Trail Passes, store owners and managers will be able to assess the success of this promotion by tracking the number of Trail Passes completed by customers. This information will then be able to be used in addition to sales data from the same time period, to evaluate whether the Trail Passes should continue or not. Finally, at the end of our marketing plan, the process of how our marketing objectives will be implemented will be discussed. Background Caribou Coffee Company is a specialty coffee and espresso retailer; the second largest in the United States. The coffee company sells coffee, tea, and baked goods in 415 company owned coffee houses spanning over 40 states, the District of Columbia, and 126 franchise locations around the world. Caribou’s headquarters and coffee roasting facility is located in the metropolitan Minneapolis area. Their slogan is, ‘Life is short, stay awake for it.” Caribou has a focus on their aspirations, experiences, and values. As stated on their website, “We are here to share and extraordinary experience, that feeds the soul.” This is applied to four core values, commitment to their guests, their community, their team members, and to deliver all of this with a unique personality. Caribou not only offers coffees, On January 27, 2005, Caribou Coffee Company announced that the company would contribute $106,000 to the Coffee Kids "Sumatra Relief Fund,” and on February 28, 2010, Caribou announced a corporate­wide re­branding strategy and began using their new "Coffee Bean Caribou" logo officially on March 1, 2010. Situation Analysis Internal Environment: Currently, Caribou has adopted a loyalty program focused on boosting their guest’s experience and encouraging loyalty with the company. “Caribou Perks Program” was started in the beginning of 2014. Caribou Coffee guests are offered a variety of rewards when stopping in at the coffee shop. For regulars, the daily cup of coffee will add up to a lot of ‘perks.’ Customers obtain a card from any Caribou Coffee location, then will need to log on to the web page for Caribou Perks and finish registering the card. After signing up, the customer will receive a voucher for a free medium drink. Each perk only lasts for 7 days from the time that the perk appears on the customer’s account. Throughout the whole perks program, each time the customer makes a transaction, the perks card needs to be swiped to track the card. After a customer reaches a certain level they will receive a random perk on their card to which they can use at their free will. These perks can vary from 50% off bakery items, free drinks, a complimentary upgrade, such as pay for a small get a medium drink, or a free add­on, espresso shot or flavor shot. Caribou recently launched a new fresh food platform in February 2014 designed to provide customers with a top quality assortment of food options with premium ingredients served fresh every day. As part of the first phase of the launch, Caribou's new bakery offers guests with fresh baked goods. Fan favorites including the Maine Blueberry Muffin and Cinnamon Coffee Cake will will remain on the menu, and 13 new items will be introduced including the Parisian Macarons, Spinach Feta Croissants, and Toffee Crunch Blondies. The new and expanded food menu will offer new and fresh food for customers; a big advantage against competitors. External Environment: Caribou Coffee's unique coffees are available within grocery stores, mass merchandisers, club stores, office coffee and foodservice providers, hotels, entertainment venues, and e­commerce channels. Caribou Coffee is a proud recipient of the Rainforest Alliance Corporate Green Globe Award and is committed to operating practices that promote sustainability and environmental protection. Caribou’s main competitor is Starbucks, which is the largest retailer of coffees. Competitors, not only Starbucks, are selling similar items. Smaller coffee shops are a definite competitor due to smaller prices. SWOT Analysis Strengths: Starbuck’s was first started in Seattle, whereas Caribou is being roasted here in the Midwest. With the coffee being produced in the Midwest it is more likely to able to cater to the Waterloo area. Starbuck’s also almost burns their beans for a bolder taste. Caribou has various flavors and roasts that even a first time coffee drinker will more likely enjoy versus Starbuck’s. Another strength would be their coffee being sold for Keurig and being a partner with Keurig. Being a partner with Keurig creates a larger array of people who might not be able to go in and buy the coffee from the shop, but instead, making it at their house. Another strength for Caribou at the Waterloo location is that the area has a lot more seating than the Cedar Falls Starbucks location. There are larger tables, that are more spread out, offering a lot more room for people to work as both groups and individuals. With the area being more catered to this work environment, there are a lot more outlets for charging computers, tablets, and phones while working in comparison to Starbucks. The Waterloo Starbucks is also attached to a Hy­Vee gas station. This give the opportunity to attract commuters, and people who are stopping for gas to also pick up a coffee. Being located on University Ave, the majority of people using the road are commuting between Cedar Falls and Waterloo and this is a very easy point to stop and get gas. Caribou also has more options to create your own drinks. Any drink that is made using chocolate, the customer has the option of white chocolate, dark chocolate, and milk chocolate. By allowing customers to have these options within a smaller drink menu, there is still a large variety of options and the opportunity to find new drinks within personal favorites. Caribou is aware that customers not only come to their locations for the coffee, but also the atmosphere, socializing, and studying. Caribou is also known for their great customer experience. Weaknesses: There are many identifiable weaknesses in terms of the Waterloo Caribou Coffee. The first of these being the various other options available to residents of the area. In the surrounding area there are three locally owned coffee shops ­ Cup of Joe, Side Car Coffee, and Lamp Post Cafe. These are all located in Cedar Falls and close to the UNI Campus, and Main Street. Beyond these, the Starbucks is located on the same street, but closer to the UNI Campus. With the population of Cedar Falls being 39,998 during the last census, and the Fall 2013 enrollment of UNI being 12,159 this is the furthest option for most of these people. Another weakness of Caribou Coffee is that their prices are generally more expensive than Starbucks, it's most similar competitor. With a large drink running on average between $4.00 and $4.49 at Caribou, a large at Starbucks costs on average between $3.50 and $3.99. Starbucks also offers a mobile app where customers can track their favorite drink orders, as well as earn points for drink purchases. With this app, users become eligible for free drinks on one's birthday, free refills and special notifications of buy one get one free offers. During the last census, the average household income of Waterloo Iowa was $36,127 placing them well below middle class. With Caribou being located in Waterloo, many of the people that live there do not have the surplus income to purchase coffee from coffee shop. In contrast, the average household income of Cedar Falls was $45,682, placing them in the middle class having a larger surplus of income to spend on things like coffee. While Caribou is not located in Cedar Falls, it does not bring the convenience factor the target market. Opportunities: Caribou just introduced a new food menu in February, this brings more options to the menu besides breakfast items. By introducing these 13 menu items to the Waterloo store, lunch can become a more prevalent source of revenue for the organization. Many customers are not aware of simple offerings on the menu. Such as; the ability to have a choice of dark chocolate, milk chocolate, or white chocolate with any drink containing chocolate. Advertising this offering is a simple step that could create revenue. Customer loyalty increases when customers are aware of the product offerings. Threats: Starbucks has introduced a new line that they are planning to introduce to their stores in the next two years. This line will include appetizers, wine, and craft beers that will be available after 4 p.m. This will offer a more variety to the Starbucks offerings, and will compete with the food offerings of Caribou. The coffeehouse industry is characterized by intense competition not only from the industry leader, but also from the threat of new entrants and substitutes attracted by such huge growth. Caribou Coffee’s position is threatened by new and existing competitors that may provide coffee in a more differentiated manner. Marketing Objectives Objectives: To create a “Caribou Trail Pass” that has four menu items on it (cold beverage, hot beverage, a bakery item, and a sandwich) to promote more traffic flow through the Waterloo Caribou Coffee. The customer has two weeks to purchase an item from each category on the Trail Pass, and then the customer will receive a free beverage of choice after completing the purchase of all four category items within two weeks. Marketing Strategies: Target Markets and Positioning: middle to upper class individuals Product Strategies: Continue highlighting the natural, environmentally friendly, healthy products of the franchise by getting individuals to try more products Pricing Strategies: Prices remain the same, but once the “Caribou Trail Pass” is all filled out then a free large beverage will be awarded. Promotional Strategies: Because of it’s location in a gas station, have signs on each pump explaining the “Caribou Trail Pass”; have an advertisement in Hyvee’s weekly E­newsletter. Supply Chain Strategies: Promotion only available at the Waterloo location. Implementation and Control Action Plans: Advertising for the Trail Pass by placing signs on the gas pumps, as well as placing information regarding it in the Hy­Vee e­newsletter. We suggest starting with 500 cards, each being the size of an average business card. These could be printed at Waterloo Staples location. The use of a Caribou Logo stamp for the marking of each step on the trail pass can be used during the implementation of the Trail Pass. This can be also be produced at Staples in Waterloo. The Trail Pass will be evaluated after a two month trial period, to determine its strengths and weaknesses. This can be looked at in comparison to regular sales records. Responsibility: The store owner is responsible for the ordering and and design of the Trail Pass and stamp. The managers are in charge of ensuring that all employees are trained on the basic knowledge of the Trail Pass and that every customer is to receive one. Each employee is then responsible for asking each customer if they already have a Trail Pass, and providing and explaining them to each customer who does not. After a Trail Pass is full, it is the responsibility of the employees to collect the full Trail Passes, and store them in the cash drawer. It is then the responsibility of the employee or manager closing each evening, to count and log how many Trail Passes were collected each day, and then used to determine a total per week. The owner and managers will regularly check this log at the end of each week, and month to review the success of the Trail Passes, in comparison to sale numbers during the same time frame. At the conclusion of the trial period, it will be the decision of the managers and owner to determine the success of the Trail Passes, and whether they will continue with this strategy. Time Line: The Trail Passes and stamps should be ordered by the first of May. The plan will begin implementation on June 1st and last until July 31st. After this time period the plan will be evaluated by the owner and managers to determine if the Trail Pass was successful and will be continued. Budget: A package of 250 “loyalty cards” from Staples is $14.99. Two packages would be purchased to come to a total of roughly $31.78. The stamp would be designed at about $20 per stamp. Three stamps would be purchased to come to a total of roughly $60. Measurement and Control:As stated in the action plans, the owner and managers will regularly check this log at the end of each week, and month to review the success of the Trail Passes, in comparison to sale numbers during the same time frame. At the conclusion of the trial period, it will be the decision of the managers and owner to determine the success of the Trail Passes, and whether they will continue with this strategy. Works Cited "About Our Coffee." Caribou Coffee. N.p., n.d. Web. 16 Apr. 2014. <http://www.cariboucoffee.com/page/1/about­our­coffee.jsp>. "Analysis of Coffee Prices at Caribou and Starbucks." Stat­Crunch. N.p., 23 Sept. 2011. Web. 15 Apr. 2014. <http://www.statcrunch.com/5.0/viewreport.php?reportid=21512>. "Cedar Falls, Iowa." City­Data. Onboard Informatics, n.d. Web. 15 Apr. 2014. <http://www.city­data.com/city/Cedar­Falls­Iowa.html>. "Starbucks Evening Menu." Starbucks. N.p., n.d. Web. 15 Apr. 2014. <http://www.starbucks.com/coffeehouse/starbucks­stores/starbucks­evening>. "Waterloo, Iowa." City­Data. Onboard Informatics, n.d. Web. 15 Apr. 2014. <http://www.city­data.com/city/Waterloo­Iowa.html>.