Starbucks Introduction of Kind Bars
“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.
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) 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. 5 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. om/2009/07/01/business/smallbusiness/01snackbar. html? ref=marketing http://www. kindsnacks. com/kind-store/buy-kind-bars Periodical Exercise 1. ) Problem/Decision Statement According to an article in BusinessWeek in 2012, titled, “Taco Bell introduces Doritos taco shell”, on March 8th Taco Bell introduced Doritos Locos to over 5,600 stores nationwide. Doritos Locos are like regular crunchy tacos but, it has a shell made with nacho cheese Doritos. This is considered one of the biggest product launches in the history of the company.
Taco Bell has already confirmed their budget of $75 million to promote their new launch (BusinessWeek). This is over three times more of a budget than for previous new products. Doritos Locos is just the latest of many things Taco Bell has been trying to do to improve their menu. But the question is whether or not this is the right time to be taking on such a big market introduction, with the recent bad publicity caused by lawsuits attacking the quality of their beef. 2. ) SWOT Analysis- Taco Bell Strengths * Huge popular brand name and high brand loyalty Adopted a healthy trans-fat free formula which is a key competitive advantage over other competitors who has not yet switched to the healthier recipes. *
Has the acknowledgment as the best Mexican style fast food restaurant in the U. S. * Owns over 5600 restaurants across the nation and 250 outlets internationally * Strong parent company, Yum! Brands, owns Pizza Hut and KFC as well * Open very late Weaknesses * High fat and high calorie food not good for health conscious people * Lost goodwill when customers were hospitalized due to traces of E. oli bacteria * Bad publicity due to lawsuits against quality of beef * Also lost goodwill for human rights protest in ’05 and rodent problem in ‘07 Opportunities * New flavors and recipes should be introduced especially focused on more health conscious ingredients in their menus * Introduce home delivery *
Venture into new markets such as India, like Pizza Hut and KFC, that has a growing consumption of fast food Threats * Research and the raised awareness among consumers about the harmful health impacts of fast food consumption. The trans-fats, sugars, oils and salts which are ingredients of the fast foods being offered, are thus consumed in low proportions by the aware and educated consumers * Highly labor intensive which increases the subjectivity involved in the delivery of services * Threats from competitors of Taco Bell such as McDonalds and Subway 3. ) Identification, Evaluation and Analysis of Alternatives Since the Frito Lay Corporation is obviously the market leader in any type of corn chip, tortilla chip or any chip for that matter, there are not really any big alternatives that would be better than Doritos.
Even if Taco bell would have gone with Tostitos or Santitas, other tortilla chip brands, instead, it wouldn’t have made much of a difference because they are still owned by Frito Lay. An alternative that Taco Bell should have considered is the Baked Doritos in place of regular fried Doritos. For the reason that many empty calories and trans fat comes from “hidden” oil and Baked Doritos might help with Taco Bell trying to gain an edge on the competition through the health conscious route. 4. ) Recommendations and Conclusions
Doritos Locos would be very appealing to Taco Bells consumers for numerous reasons and this makes it obvious to Taco Bell that it will be a good investment. Honestly I believe that Taco Bell’s decision to launch Doritos Locos is an incredible idea for many reasons but at the same time it does have some drawbacks. Doritos are one of America’s top favorite snacks and to combine that with Americas top Mexican style fast food restaurant just seems like the great idea never before had. Doritos come in many flavors and so should Doritos Locos, such as Cool Ranch, Smoky Chipotle BBQ and Fiery Habanero (Frito-Lay).
This new rollout may also shift consumers focus from the negativity of the recent lawsuits and bad publicity to the positivity of this inevitably delicious and profitable collaboration. Then again, because of the large percentage of overweight and obese Americans and a strong desire to switch to health smart ingredients, Doritos Locos may just be perceived as another fattening product line put out by the gluttonous fast food industry.