Starbucks – Analyzing Performance Segment
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Analyzing Performance Segment
Total Segment Market
20.685 Million Cases
Procter and gamble have two brands operating in the given segment
12.1%
14.1%
In all the two given brands capture 223 Million out of 298 Million which makes up to 75% of the market share in the given segment.
Analyzing Mildness Segment
Total segment Market
21.867 Million Cases
Procter and Gamble have brand Ivory in the given market segment.
Ivory
15.5%
The given brand will make up to 42% of the market.
The Company does not have any product in the price market segments.
FUTURE TRENDS
As per the information given in the case the given market will increase only marginally and the individual segment is not expected to change much. Hence the company need to formulate its strategy based on the current scenario.
TARGETING
The company already has 2 brands in the performance segment and their market share in the performance segment is almost 75%. We feel that a new brand in the performance segment will cannibalize the market share of the existing products.
We would target the mildness segment since this is a growing market and also there is a room for improvement in the segment.
We propose launching a new product in Mildness segment.
Initial cost Capital
$20 Million
Marketing Cost
$60 Million
Assuming that the new product can gain 60% market share of the competitor, we would like to predict the sales in the first year.
The market share that the new product is likely to grab from the competitors
Total Market
59.1 Million cases
Mildness Segment
.37 * 59.1 = 21.867 Million Cases
Competitors Share =
59.1 * (.37 – .155) = 9.1 Million Cases.