Kristin Carder04/28/2009

Media Plan: Starbucks

Executive Summary

It is recommended for Starbucks coffee company to target college students and business

employees between the ages of 18 and 49 living in the top 10 markets, in addition to

Omaha and Lincoln markets, for this media execution. Starbucks is advised to deliver a

message that reminds consumers of their superb quality, high-end brand, and welcoming

attitude toward students and business workers in downtown communities of large cities.

It is also recommended that Starbucks advertise year-round using cable TV and

magazines as their prime media classes while carefully considering media vehicles

compatible with their target audiences. The main objective is for Starbucks to

accumulate 1,000 gross rating points over a 12-month period, reaching 50% of the target

market an average of 2 times per month under a $40 million budget.

Introduction

Starbucks coffee opened as a single store in the 1970’s, Seattle. Since then, Starbucks

has thrived and become the top household brand name coffee company. They have

received worldwide notoriety through personal contact with their foreign coffee

distributors and through their ownership of approximately 9,000 shops in 10 countries.

However, the recent economic recession has forced Starbucks to close approximately 900

stores since March of 2008, and 88 Starbucks have closed in California alone. Starbucks

currently faces the challenge of regaining composure in the current economic crisis.

Starbucks’ main concern is their price positioning among competitors. They are

notorious for their high menu prices, but these menu prices are also seen as a status

symbol: They sell their coffee at slightly higher prices because they have the best quality

and service. Though some consumers may be turned off by Starbucks’ prices, many

people are still dedicated Starbucks customers.

Starbucks’ primary competitors are Dunkin’ Donuts, Nestle, Caribou Coffee and local

coffee houses. These companies are quite successful marketers, but competitors like

Nestle and Dunkin’ Donuts have greater relationships to donuts and chocolate as opposed

to coffee as their main selling point. In addition, Fast food restaurants such as

McDonalds have also started advertising their coffee more heavily, but the quality of the

coffee is much lower than Starbucks’ and will generally be marketed to a different target

audience.

Target Audience

It is recommended that Starbucks target adults specifically between the ages of 18 and

49. Recent studies have shown that the largest demographic of adults who consume

Starbucks coffee ranges from college students to middle-aged business workers in this

age group. Coffee consumption correlates directly with education and income,

creating favorable ties to highly coveted demographics.  College graduates consume

nearly 50% more coffee, and the numbers increase for those with postgraduate

education.  Affluent city workers are also above average consumers. A few reasons

for this is that people working in the business community consider Starbucks coffee

a trademark of superior, classy quality and status, along with a strong business

identity. It is also convenient for people who work in crowded downtown business

communities to frequent Starbucks and still make it to work on time due to

proximity and quick service. This goes hand in hand with the amount of Starbucks

in downtown areas of large cities, with special emphasis on cities along the coasts. 

Therefore, it is recommended that Starbucks target markets almost mathematically

according to income and education, with consideration for geographic factors. 

Geographic Areas

Geographically, Starbucks should emphasize and prioritize growth in the United

States, where they began and are historically strong. Urban areas and interstate

areas are likely to remain the strongest priority for the United States, and

international growth, which now accounts for 29 percent of Starbucks, should

remain a priority. Currently, there are

The recommendation for Starbucks Corporation in regards to distribution strategy and

priority for the Lincoln, Neb., area of the Midwestern United States is to continue

marketing as usual year-round and to maintain a strong presence in the multiple

storefronts in Lincoln, York, and Omaha, Neb. Secondary should be the University of

Nebraska- Lincoln and grocery store distribution, especially as the economy takes a toll

on retail; patrons will continue to be loyal to a brand if they can brew it at home, where a

psychological feeling of savings will allow Starbucks products to continue to be

purchased.  Particularly in the downtown area, where coffee shops are frequented by the

college-going youth, emphasis on campaigning will draw in students.

Messages Recommended

The greatest advantage Starbucks has is its well-established company. The brand of

Starbucks often speaks for itself and therefore, sells itself.

It is recommended that Starbucks reiterate the fact that they have much to offer the

public, and the depth of their contribution has come to be much more than merely a menu

of quality items.  Starbucks is pedaling a feeling, one that is all its own.  Built upon this

feeling, they have a wealth of products, beverages with some food items that are

considered the very high end of the market. This quality allows for both high prices and

high perception.  This perception is the company’s greatest asset and it must be preserved

and propagated.

It is recommended that Starbucks target 2 different audiences within their overall target

market: college students and people who work in the business community (all between

the ages 18 and 49). Each target audience should receive a slightly different message in

relation to their personal psychographics and demographics. For instance, it is

recommended that Starbucks remind college students that they understand caffeine may

be helpful for studying, and that they will be there to provide their services in a warm,

study-friendly environment. In regards to the business community, it is recommended

that Starbucks emphasize their high end marketing identity of superb service, efficiency,

and quality, reminding these Starbucks customers that they are successful and important.

Timing

The consumer buying period for Starbucks lasts the entire year. Though sales may

fluctuate a bit during hot and cold months, the consumer buying period remains relatively

stable and continuous.

It is recommended that Starbucks advertise during all twelve months based on the idea

that their target business employees work year-round and buy coffee year-round, whether

they’re buying a hot mocha on a cold winter day or an iced latte on a hot summer day.

These consumers do not need a decision-making period (such as a period where someone

may decide to buy a boat in early spring) because Starbucks customers are purchasing a

low-involvement product—something cheap and quick. This is yet another reason for

Starbucks to advertise continuously year-round.

Media Objectives

Within a 40 million dollar budget and a 12 month period, the goal of the media in this

Starbucks campaign is to create awareness of Starbucks’ superior quality, service, and

dedication to its consumers through effective media use in specific media classes and

vehicles.

The goal of the media over these 12 months is to reach the target audience is to reach the

target audience at least 50 times each month through different media vehicles (reach),

including national and spot locations, reaching each member of those reached at least two

times on average (average frequency). Another goal is to accumulate approximately

1,000 gross rating points over this 12-month period.

The effective reach goal for this media plan is to reach 50% of the population in the

target market. The effective frequency goal for this media plan is to reach each individual

in this 50% of the target market two times in order to be effective.

Media Strategies

Media Classes Recommended

It is recommended that Starbucks use magazines and cable TV as their two main media

classes. Magazines are appropriate for this target audience because magazines focus on

specific groups of people with common interests or hobbies. According to Sissors’ and

Baron’s Advertising Media Planning, ‘Advertisers often use magazines to provide

additional media weight to upper-income, upper-education demographics that tend to be

light television viewers.’ Since the demographics mentioned are closely tied to

Starbucks’ target audience, magazines are likely to be the more effective and successful

media vehicle in this case.

An additional benefit of magazines is the advantage of controlled circulation, in which

the magazines are dispersed among people of a certain profession or occupation. These

controlled-circulation magazines are mainly found in the business world, which is a large

portion of Starbucks’ target audience.

Cable TV is also a highly recommended media class, with about 70% of all media

households who use cable TV. Today, the top 20 U.S. markets have an average of 79%

penetration of cable or satellite service, and this is especially important for spot

advertising in markets where additional weight is needed. (Sissors) Cable is also a

relatively inexpensive form of advertising.

Media Classes Not Recommended

It is recommended that Starbucks deny the use of such media classes as

newspapers, radio, Internet, direct mail, telemarketing, outdoor advertising, and

television (among others excluding magazines) for a number of reasons.

First, newspapers lack target audience selectivity and have high advertising rates.

Radio has many stations in one market, and it is difficult (if not impossible) to

determine how successful the advertisements are. The Internet is costly and

extremely cluttered. Direct mail is costly, aggravating, and wasteful, usually

resulting in negative consumer responses. Telemarketing may be even more

aggravating to the average citizen, and would be of no use to Starbucks. Outdoor

advertising may be useful to fast food restaurants, but in upscale neighborhoods

where many targeted Starbucks customers reside, outdoor ads are limited.

Television is costly, difficult to catalog, and the magazine class already reaches some

television viewers. Therefore, these media classes are not worth the expense or are

not appropriate ways to advertise Starbucks products.

Recommended Timing for each message/market/target audience

As mentioned before, Starbucks sells low-involvement products that must be

advertised year-round in order to keep its sales up. Therefore, it is recommended

that Starbucks run its magazine ads on a continuity-based schedule.

Spot vs. National

It is recommended that Starbucks advertise both nationally and locally (Nebraska,

US). Therefore, it is recommended that Starbucks focus their advertising in 12

different markets. Ten of these markets are the top ranked markets of the nation,

meaning that these markets are likely to reach a total of 30.9% of the population in

the United States. The other two markets, or spot markets, consist of the two largest

cities in Nebraska: Lincoln and Omaha. It is important for Starbucks to advertise in

these markets so that Starbucks doesn’t lose its business to local coffee houses and

other coffee companies.

Media Analysis

Ranker: Magazines

Publication Ad Cost Rating CPP

Better Homes and Gardens $454,600 (full) 20 $22,730

Cosmopolitan $215,900 (full) 13.4 $16,111.94

Family Circle $247,200 (full) 11 $22,472.73

Glamour $151,371 (full) 9.3 $16,276.45

Maxim $212,745 (full) 8.2 $25,944.51

Newsweek National $226,590 (full) 10.2 $22,214.71

O, The Oprah Magazine $119,077 (full) 10.3 $11,560.87

People Weekly $266,780 (full) 26 $10,260.77

National Geographic $188,135 (full) 15 $12,542.33

Woman’s Day $252,390 (full) 11.4 $22,139.47

Discussion of Magazine Ranker

This ranker for Starbucks magazine ads shows the selected media vehicles, or

publications recommended, along with their ad costs, ratings, and costs per point.

The total cost of all the ads together for one month adds up to $2,334,788. The word

“full” indicated next to each ad price means that the ads in the magazines will all be

full page, 4 color ads. The total cost of the ads for one year is $28,017,456. The total

GRP’s for one month are 134.8. GRP’s stands for Gross Rating Points. These points

measure the total gross rate delivered by a media vehicle. This ranker shows that

when the total cost of the publication ads is divided by the total gross rating points,

the average total cost of one rating point for one month is $17,320.39. This may

seem costly, but magazine ads are effective and this is an affordable fee for

Starbucks to pay with their $40,000,000 budget.

Media vehicles recommended for magazines

It is recommended that Starbucks use the magazine publications listed in the ranker

above as their media vehicles. These media vehicles were selected because they

rank above average publications in both their ratings and index numbers. This

means that readers of these magazines were more likely to drink Starbucks coffee

than readers of other magazine publications. Another reason that these magazines

are recommended is because they are widely known and distributed nationally.

Approximately half of the publications listed target both men and women, such as

National Geographic and Newsweek National, which allows both men and women to

be exposed to the ads. However, MRI plus records show that men who are exposed

to magazines were rated at 22.9 with a 117 index, and women were rated at 49.2

with a 118 index. Therefore, the rest of the publications selected are directed

toward women, such as Better Homes and Gardens; Woman’s Day; O, The Oprah

Magazine; Cosmopolitan; and Glamour. Also, when these publications are compiled,

they may reach adults between the ages of 18 to 49, because magazines such as

Glamour and Cosmopolitan target more young readers, O, The Oprah Magazine,

Woman’s Day, and Better Homes and Gardens target women mainly between ages 30

to 50, and Newsweek National, National Geographic, and People reach adults of both

genders and most age groups—though the age group with the highest reach is

estimated between 24 and 49, most of whom are centralized in the business world.

Therefore, the media vehicles selected reach a variety of the target market while

still focusing on a concentrated target that contains more women and business

people.

Media vehicles not recommended for magazines

It is recommended that Starbucks exclude certain other media vehicles due to low

ratings, low index numbers, or are publications that do not target the right market

audience. Low ratings and index numbers indicate that the audience that reads

these specific publications is not above the average number of Starbucks customers,

and would be a wasteful advertising vehicle. A few examples of media vehicles that

are not recommended include magazines like Golf Digest, which has a large market

but had a rating of only 2.7 and an index of 97. Though many golfers live in affluent,

upscale communities and many are a part of the business community, it seems that

—overall—golf magazines are not successful media vehicles for coffee drinkers.

Other vehicles that should be excluded are publications targeting the “macho” men,

including Motorcylist, Muscle & Fitness, Guns & Ammo, In-Fisherman, and Handy to

name a few. These publications often have decent index numbers, but very low

ratings. In general, media vehicles with smaller amounts of total distribution will

have a lower chance of generating successful ratings and indexes.

Recommended timing for magazine media vehicles It is recommended that Starbucks place one full page, full color ad in each magazine

vehicle once a month each year. At this rate, Starbucks can maintain continuous

circulation during each month of the year for a fixed rate.

Ranker: Cable TV

Channel Daypart Ad Cost Rating CPP

TBS Prime Time $19,946 29.4 $678.44

TNT Prime Time $19,946 31.8 $627.23

ABC Family Prime Time $19,946 27.9 $714.91

Animal Planet Daytime $3,929 28.7 $136.90

Comedy Central Late Fringe $7,785 25.6 $304.10

Food Network Daytime $3,929 25.4 $154.69

MTV Late Fringe $7,785 23.1 $337.01

Discovery Channel Prime Time $19,946 39.8 $501.16

USA Daytime $3,929 24.9 $157.79

FX Daytime $3929 22.9 $171.57

Discussion of Cable TV Ranker

This ranker shows the media vehicles recommended for cable television, including

specific channels, dayparts that the ads will run, costs of each ad, rating of each ad,

and cost per point. As one may observe, these ads are very inexpensive compared to

magazine ads, and most have higher ratings. The total cost of cable TV ads for one

month is $111,070 if each ad runs once a month, and the total cost of these ads for

one year is $1,332,840. It seems that, since cable TV ads are so much cheaper,

magazine ads may appear unreasonably expensive. However, magazines are

important because they have longer “lives”, meaning more people pass them along

and may see them more than once, or may keep them for a long time. This ranker

shows that Starbucks has a large enough budget to afford a large about of

advertising using cable television as a media vehicle.

Media vehicles recommended for cable TV

It is recommended that Starbucks consider the media vehicles listed in the cable TV

ranker as their media vehicles. These vehicles were selected due to the consistently

large viewer audience and their impressive ratings, along with index numbers

generally above average. Also, these vehicles reach a variety of the target audience.

For example, channels such as ABC, TBS, The Discovery Channel, and ABC Family

appeal to viewers of all ages, and generally attract much larger TV audiences than

other cable TV channels. For this reason, it is recommended that Starbucks run

their ads for ABC, TBS, The Discovery Channel, and ABC Family during the Prime Time

daypart. Media vehicles like MTV and Comedy Central are generally very popular

among the 18 to 24-year-old age group, and their ratings are also well above

average. Since the 18 to 24-year-old age group for Starbucks consists of mostly

college students, it is more likely that they will see ads during the evenings as

opposed to mornings and afternoons. Therefore, it is recommended that ads on

MTV and Comedy Central air during the Late Fringe daypart. USA, FX, The Food

Network, and Animal Planet are also popular channels that appeal to virtually every

age group, and it is recommended that Starbucks air ads for these media vehicles

during the Daytime daypart because they are slightly lower rated than those of the

Prime Time category, but many viewers are still likely too see these ads throughout

the day.

Media vehicles not recommended for cable TV

It is recommended that Starbucks use the same consideration in selecting cable TV

media vehicles that they use for selecting magazine media vehicles. This means

avoiding low audience reach, low ratings, and low index numbers, and searching for

high combinations of each. Specific vehicles need not be listed here, as it is fairly

simple to measure which vehicles possess the potential for success due to their large

audiences, ratings, and index numbers. However, it is important to note that many

channels will not yield high ratings and audiences because they appeal to

Starbucks must also keep in mind their target audience while selecting these

vehicles.

Recommended timing for cable TV media vehicles

It is recommended that Starbucks run continuous, monthly cable TV ads for the

media vehicles recommended above. These vehicles have been assigned to

different recommended dayparts after careful consideration of the target audience

for each vehicle and what time of the day each target audience will be most likely to

be exposed to the ad. For more guidance on target audiences and their relation to

specific dayparts, please refer to the dayparts recommended in the “Media vehicles

recommended for cable TV” category above.

Discussion of Flowchart

This flowchart of the Starbucks 12-month schedule shows which media vehicles will

be used to deliver Starbucks advertisements during each month, how much each ad

will cost, how many GRP’s each media vehicle will earn, how many members of the

target audience will be exposed (reach), and how many times each individual will be

exposed to a certain message (frequency).

The flowchart shows each media class being used, along with each media vehicle

that belongs to each media class. The magazine media class is divided into 3

different categories: men’s publications, women’s publications, and general interest

publications. The cost of one unit of magazine publications for each month includes

all the media vehicles each of these 3 media categories.

The cable TV section of the flowchart is divided into 3 categories as well, in terms of

dayparts: Daytime, Prime Time, and Late Fringe. The media vehicles in these 3

categories indicate which dayparts the advertisements will be running in these

months. During each month, the flowchart indicates that 20 units will be ran each

month for Daytime and Prime Time dayparts. Because there are 4 media vehicles in

each of these two categories, this means that 4 ads will be ran each month on each

media vehicle. The Late Fringe category only has two media vehicles and 16 units,

so each ad will be ran 8 times each month on these channels. Because coffee sales

tend to increase during cold months, 4 extra units will be advertised during Daytime

and Prime Time during the months of January and December.

Weight levels, R/F by month for each message/market/target audience

During the months of February through November, Starbucks delivers 56 units of

cable TV within 10 media vehicles and 5 magazine units within 10 media vehicles.

Including spot and national markets, the accumulated reach for each month from

February to November is therefore a 45.3% reach and a 1.8% frequency, which

means that approximately 45% of the target audience was exposed to these

messages approximately two times per month. During January and December, with

an increase of 8 units, the reach is 47.4% of the target audience, with an average

frequency of 1.9%. This means that, on average, the total impressions for one

month of advertising were approximately 90 impressions each month, which is

approximately 1,000 gross impressions for one year of marketing.

Discussion of delivery compared to objectives

The results of the delivery compared to the media objectives is slightly below the

original goals of reaching 50% of the target audience at least two times. The

effective frequency was slightly below 2, and therefore resulted in only a 1+

effective frequency for a 46% effective reach for national and spot markets

combined. In order to reach full potential, it is recommended that Starbucks utilize

media vehicles that are ultimately less expensive than magazine publications, or

combine a small amount of publications with other media classes in addition to

cable TV.