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Marketing Plan: Caribou CoffeePrinciples of MarketingAlexandra Hansen, Kelli Alexander, Ann Horrigan, Rebecca Wagner, Alexander BoyerPART ONE:Executive Summary Our report first begins with analyzing the internal and external environments of Caribou Coffee. Following this we will introduce the analysis of the company’s strengths, weaknesses, opportunities, and threats. The goal of the marketing plan is to help enhance Caribou Coffee’s brand along with introducing a new C.A.R.E section to our menu. This marketing plan will then conclude with the implementation and control plan with the action process, timeline, and also responsible members are listed along with an explanation of evaluation plans. Company BackgroundCaribou Coffee is a speciality coffee and espresso retailer around the United States and was founded by John Puckett. After a trip John and his wife took to Alaska, they decided to raise money to begin a coffee company together in Minnesota. Initially, Caribou was aimed at selling coffee to downtown office workers, but then turned into more of a neighborhood-like business. Stated below in the “Previous Companies Activities” section, we have some more information of Caribou Coffee’s history. Internal EnvironmentMission and ObjectivesCaribou Coffee, as a corporation, does not have a set mission or vision, according to . Instead, they have a set of “aspirations, experiences, and values.” Caribou’s main aspiration is to be “The Community Place I Love.” Caribou accomplishes this through their company culture which includes Wildly Important Goals, or WIGS. These WIGS are broken down into industry leading brand value proposition, excellent customer service and operations excellence, thriving commercial businesses, vibrant coffeehouse expansion, and a winning culture and performance, as well as their “Do Good” project. Each Caribou Coffee location puts a large emphasis on human capital. Each and every employee is put through an extensive training process which focuses on customer satisfaction, and this attention directly relates to the customer’ experience. This then relates back to the companies aspiration. Each of the marketing sections of Caribou Coffee is focused on the customer and their experience. Whether that is the exceptional customer service, quality of the products, or the coffeehouse environment itself, customer satisfaction is at the forefront for Caribou Coffee locations everywhere. OrganizationAccording to Caribou Coffee’s website, Caribou Coffee is owned and operated by stakeholders and senior leadership. The leadership team consists of six officers including the President, the Chief Executive Officer, the Chief Financial Officer, the Senior Vice President- General and Secretary, the Senior Vice President of Marketing, and the Vice President of Human Resources. These officers all have other leadership team members that assist them and are integrated into the many decisions that occur to work on improvements of Caribou Coffee.Financial HighlightsIn Appendix A there is the consolidated statement of operations, according to a financial report from the United States Securities and Exchange Commission. The numbers are reported in thousands, except per share data. Social ResponsibilityAccording to Caribou Coffee Company on their website, Caribou uses a Do Good Report to show social responsibility. Do Good is one of six company strategies that is used to provide guests, consumers, employees, and suppliers with a scorecard of the company’s progress. This scorecard allows Caribou to celebrate their accomplishments, outline what they can do differently in their future endeavours, and enables them to hear from people whom have helped them along the way. Caribou Coffee Company prides themselves in that we work hard to ensure our guests get the highest quality coffee, but also the peace of mind that the coffee is sourced in an environmentally, socially, and economically sustainable manner, according to their website. These three pillars are the building blocks of the Rainforest Alliance. This is a nonprofit organization that involves forestry, agriculture, and conservation that has helped tremendously with ensuring the farms Caribou sources from are also committed to social responsibility. Not only does Do Good focus on coffee, but it also addresses water conservation, recycling, waste reduction, and energy efficiency throughout the company. Looking at the bigger picture, Do Good also plays a role in global communities as well as the local ones. The Do Good Report highlights Caribou’s giving efforts which include volunteering and monetary as well as product donations. Previous Company ActivitiesIn December of 1992 Caribou Coffee was founded by John Puckett. He opened the first coffee shop in Edina, Minnesota. Business was up and down for the first few years so he decided to sell the business for $120 million in 1998 to Arcapita. After they bought the business they began to expand the business to more locations. In 2005 Caribou Coffee became a publicly traded company. In 2012 they announced their acquisition by the German company, Joh. A. Benckiser for $340 million. The German company also purchased Peet’s Coffee & Tea in 2012. In May of 2013, Caribou Coffee decided to convert about 80 shops to Peet’s Coffee & Tea. In 2014, Caribou Coffee and Peet’s Coffee & Tea bought Einstein Bros. Bagels. Currently there are close to 500 locations of Caribou Coffee. We are located in over 16 states and many other countries outside of the United States. Even though Caribou Coffee has had a few owners over the years of the businesses existence, the company has always kept the same mission. The mission is, “To aspire to be the community place I love.” The company currently has three partners. They are Kemps, Keurig, and the Rainforest Alliance. Caribou Coffee has a partnership with Kemps to provide Caribou Coffee Ice Cream. They have four different delicious flavors available. Another partnership is with Keurig and they provide single cup brewing coffee in eight different types of coffee. Caribou Coffee partners with the Rainforest Alliance to ensure that most of the coffee being imported comes from Rainforest Alliance-certified producers. Caribou Coffee wants to make sure their coffee is being produced in environmentally and socially friendly ways. External EnvironmentMarket NatureCaribou’s market is a privately held, and neighborhood-based speciality retailer of high quality coffees, teas, bakery goods, and other related types of merchandise. In order to compete with their competitors, Caribou aimed for each coffee shop location to reflect the personality of each neighborhood they reside in. This neighborhood vibe creates a unique feel for the different locations while also keeping up with the competition. There are many Caribou’s located around the United States. Sixteen states and the District of Columbia house roughly 500 company owned Caribou coffeehouses. Looking at the worldwide market, there are nearly 126 other franchise locations. Caribou Coffee is working on expanding their franchise program as the number of alternatives for potential franchisees increases. As Caribou expands their ability to recruit, retain, and contract with qualified franchisees, it will be very important to maintain our high standards of operations as we expand. There are many people who are devoted to Caribou’s great coffee variations, the bakery items, delicious tea variations, and their friendly environment. These are the people that prefer Caribou’s brand over the competitors, and it is them are who keep the industry going. Other people that may buy the product are those that live near the location so it is convenient, those who just want a delicious cup of coffee or even those who want to try something new. Competitor EnvironmentThe main coffee and coffeehouse competitors for Caribou Coffee are Starbucks, Dunkin’ Donuts, McDonald’s McCafe, as well as small locally owned coffee shops, Panera, and Bruegger’s Bagels. Most of these competitors have different marketing strategies than Caribou Coffee does. The three focused on competitors are majorly focused on coffee and all provide a fast quick coffeehouse service, many without even leaving your car. More information about the competitors of Caribou Coffee is found in Appendix B.Technological EnvironmentThe introduction of single-serve coffee pods, such as K-cups for Keurig, has changed the industry landscape over the past five years for Caribou Coffee. The high demand and popularity of K-cups has created an entire new market for the coffee industry. According to The Seattle Times, coffee made from single-cup brewers accounts for more than a quarter of every dollar that consumers spend for at-home coffee consumption. As a result, the introduction of Caribou K-cups has benefited Caribou greatly by expanding their market to Keurig users across the United States. Additionally, Caribou Coffee has recently made a commitment to energy efficiency, by mandating compact fluorescent lamps in its lighting design for corporate-owned locations. This initiative is expected to save each coffeehouse up to seventy percent in lighting costs. Cultural and Social EnvironmentCaribou emphasizes their “Do Good” message through their move toward fair trade coffee, which is a label intended to guarantee that the farmers growing the beans are paid a fair price. Caribou’s Fair Trade coffee blend is known as the Rwanda Blend. Caribou Coffee is also 100% Rainforest Alliance certified. Rainforest Alliance farms comply with a variety of environmental, social, and sustainability standards. Caribou was the first major U.S. coffeehouse committing one hundred percent Rainforest Alliance certification for all of our coffee blends. Regulatory EnvironmentAccording to , The Food Safety Modernization Act is an act that places new fees on coffee importers, imposes new safety requirements on importers, and grants the Food and Drug Administration wider powers to enforce these regulations. Additionally, the Bioterrorism Act requires that coffee importers register with the Food and Drug Administration (FDA), and give the FDA prior notice of any shipments of imported coffee. All imported coffee from Caribou face these regulations and fees.Economic EnvironmentEconomic factors could potentially affect Caribou Coffee either directly or indirectly. The estimated market share of Caribou Coffee is about 1.4% in the market for coffee in the United States, and this year we are expected to generate $376.4 million in industry-relevant sales. In regards to indirect economic impacts, in the next year the price of coffee is expected to skyrocket due to fluctuations in harvest yields in global coffee plantations, which may pose a threat to the coffee industry as a whole, including Caribou Coffeehouses. SWOT AnalysisStrengths SOur “Do Good” Initiative.We have a smaller more focused market.We have an outreach program.Our strong partnerships with Kemps, Keurig, and Rainforest Alliance. Weaknesses WCaribou Coffee has a smaller and more condensed menu then other competitors.There are fewer locations of Caribou Coffee’s and therefore people are not as familiar with the chain.The coffee and products at Caribou Coffee tend to be a little bit higher priced than those of our competitors.InternalFactorsOpportunities OCaribou Coffee could expand their food offerings to grow their business.Caribou Coffee could create more varieties, flavors, and low-fat/low carb options. Threats TStarbucks and their well-known name and products. There are cheaper coffee options such as McDonalds.The price of coffee beans is rising which affects our coffee prices. There is an increasing availability of coffee at fast-food restaurants. ExternalFactorsPositiveNegative Marketing ObjectivesTo continue to have Caribou Coffee provide the best customer service while providing excellent food and drink choices and introducing a new line of healthy drink and food alternatives. This will be achieved through the launch of the Care-About-You Initiative. PART TWO:Target Markets and PositioningWith the addition of our new Care-About-You product line, we will continue to be consistent with the marketing patterns and efforts we currently utilize, only our customers will be more motivated to buy products from this line knowing it is better for their health. We will emphasize the nutritional benefits of the line, appealing to a health conscious consumer segment seeking a healthier option for food and beverages at Caribou. While the healthy eating movement is spreading across all demographics, Mothers, predominantly married professional females with young children are very health conscious consumers who are willing to pay more for food products that are considered healthy. College students and young adults entering the workforce are additional segments in which we’ve selected to target. According to a study by the Healthy Beverage Expo, Millennials (ages 19-32) are more aware of and involved in health and wellness than previous generations. Millennials are the next big market segment in the healthy food and beverage business. This generation includes independent thinkers who prefer choices and transparency in their product brands. We will position our product to our target market by marketing the Care-About-You line as a new product line unlike anything we’ve ever offered before. We will present the new line and create the message as a healthy alternative that provides various wellness benefits to consumers. Transparency in food and drink products is very important to our target market, therefore we will position our product by disclosing information about all of the contents and health benefits within our new line (This including the calories, vitamins, and other contents in the products). Product StrategiesOur marketing goal is to continue providing the best customer service while providing excellent food and drink choices and introducing a new line of healthy alternatives. Our core product consists of a healthy line of drink and food options. We plan on creating a CARE section on our menu showing that Caribou does Care-About-You by providing some healthier drink and food options. This menu will consist of three different drink options and two food choices. The drinks consist of CARE Caramel Brulee Latte, CARE Frosted Cookie Crumble Cooler, and a CARE Double Chocolate Mocha. These will be branded the same way every other product already is with the Caribou logo, but we plan on creating special napkins and cup sleeves to help advertise. An example of the napkin is shown in Appendix C. The food options will involve a CARE Coffeecake and a CARE Flax Seed Oatmeal. Our new products do not differ much from what is already on our menu. We simply want to create healthier options for our customers.In order to push our new products we will need to gain consumer awareness using wide distribution. We need to make sure our current customers know of our new products, while using our advertising tactics to get new customers to buy from Caribou. Since our product is a new version of products we already sell, continuous innovation will be used since our customers don’t need to learn new buying behaviors. The benefit of this simple innovation is that effective marketing mainly depends on generating awareness, so there is no need to reeducate customers. Caribou already already pays much attention on excellent service quality. We believe that if Caribou simply continues with the strategies we are already using, it will keep our current customers returning while encouraging new customers to give Caribou a try. Pricing StrategiesTo push the awareness of our new products to our target markets, we will be pricing our products so that they will be below the customary market price. Our main goal is to promote our “Care About You” initiative and to promote healthier lifestyles, especially to our target market of those 18-32 year college students and young adults. In today’s society, it has become the norm for the healthier products to be priced higher than the other, less healthier options. We at Caribou Coffee want to be the exception to this rule. We want our new, healthier products to stand out from the crowd first and foremost by offering these products at a lower price than other comparable products in the market. Promotional StrategiesPerhaps the largest of our strategies will be the promotion of our new product line. The “CARE About You” initiative will include scratch off coupons, radio announcements, information on our website, and a very large social media campaign. We believe this will be the most beneficial when trying to spread the word about our new products. There is a detailed description of each of the following in Appendix D.Supply Chain StrategiesWe will be able to get our products to customers by many different tactics. We plan on handing out coupons on local college campuses and by doing this we will be able to best reach our target market. We also will have a large social media campaign, aimed at the college aged students in our target market. Part of this social media campaign will include encouraging those who already come to Caribou to bring along friends. We plan on generating a lot of buzz and we will have a launch week with a well promoted, consistent date.We will work with the American Heart Association to help promote a healthier lifestyle. They will be supportive of the innovative new menu we have created.The supply chain elements will be incorporated in many different ways. At the most basic level, the raw materials that we currently used will still be used. We will incorporate new designs onto napkins, sleeves, and cups. The products will be sold at all Caribou Coffee locations.Action PlanAction ItemWho’s Responsible?TimelineCostEffect1.Manufacture all of our actual products.CorporateJanuary 11th, a month prior to products launch date.UnknownOn the launch date our CARE menu will be complete and customers will be able to purchase the products. 2.Manufacture Scratch Coupons.Marketing Department, CorporateWant them to be mailed to the stores by January 5th, a week prior to launch date.$5,000At the end of this time period, our scratch-off coupons will be ready to give out to customers. 3.Manufacture napkins and cup sleeves.Marketing Department, CorporateWant them to be mailed to stores by January 5th, a week prior to launch date. UnknownOn the launch date the napkins and cup sleeves will be used. 4.Have a presence on college campuses.Individual Stores with locations near college campusesDuring the week of the product launch, January 11 through January 17.NoneDuring the week mentioned, we will have representatives on campuses handing out scratch-off coupons. 5.Follow through with pursuing radio advertisements.Marketing Department, CorporateHave all radio advertisements submitted no later than December 28.$50,000Our social media campaign will begin two weeks prior to our product launch to promote our products. 6. Social Media Campaign.Marketing Department, CorporateHave all social media set up at least two weeks prior by utilizing Hootsuite.FREE!We will be tweeting and posting videos and pictures to keep encouraging and reminding customers of the new products to come. Measurement and ControlThe effectiveness of this new product launch and campaign will be measured by the social media action, the amount of new customers, through the amount of new product sold during and after the campaign, compared to the amount of regular products sold before the launch. We hope the best for our new product, and think we have taken the necessary steps to succeed. Appendix AYear End January 1, 2012Year End January 2, 2011Coffeehouse sales$242,293$232,108Commercial and franchise sales84,21151,889Net sales326,504283,997Cost of sales and related occupancy costs162,667131,094Operating costs105,993101,169Depreciation and amortization11,42512,284General and administrative expenses31,22629,343Operating income15,19310,107Income before benefit from income tax14,9269,721Net income35,6029,797Less: Net income attributable to noncontrolling interest379397Net income attributable to Caribou Coffee Company, Inc.$35,223$9,400Basic net income attributable to Caribou Coffee Company, Inc. common shareholders per share$1.75$0.48Basic weighted average number of shares outstanding20.12919,639Appendix BStarbucksStarbucks Coffee is a global coffee company that started in 1971 in Seattle, Washington. It was started by a trio of students at the University of San Francisco and they were inspired to sell high-quality coffee- Jerry Baldwin, Zev Siegel, and Gordon Bowker. They are the largest coffeehouse company in the world with more than 21,000 stores in more than sixty countries.They serve beverages both hot and cold, as well as a growing variety of food options. A recent expansion has come from the ground coffee and coffee beans that are now being sold at Starbucks locations for at home brew, as well as sold in supermarkets. According to the company website, Starbucks is “passionate purveyors of coffee, but everything else that goes with a full and rewarding coffeehouse experience. (, 2014)”. Their mission is “to inspire and nurture the human spirit- one person, one cup and one neighborhood at a time.” They have recently adapted a more socially responsible outlook including reducing their environmental footprint, purchasing ethically produced products, and encouraging a sense of community. They have also pushed for an increase of their reward program with their loyalty card. One of their main advertising outlets is through customer provided e-mail addresses.Dunkin’ DonutsDunkin’ Donuts is a subsidiary of the Dunkin’ Brands, Inc. The Dunkin’ Brands is a parent company for Dunkin’ Donuts as well as Baskin Robbins. They serve nearly three millions customers per day and operate in thirty-eight of the States as well as thirty-two other countries. One of their main slogans is: “America Runs on Dunkin’.” They pride their company with being America’s largest retailer of coffee-by-the-cup, according to their website. It is clear that they have an equally large emphasis on the coffee they brew as the donuts they make. According to their website, they provide great drinks anyway you want- so it is easy to find the perfect match for each person. They also have a rewards program that benefits the customer each time they make a purchase.McDonald’s McCafeRecently McDonald’s expanded it’s fast food brand reputation to a new sector, cleverly named McCafe. In 2009, McCafe went national on May 5 and includes many different coffee, lattes, cappuccinos and mochas. “McDonald’s brand mission is to be our customers’ favorite place and way to eat and drink. Our worldwide operations are aligned around a global strategy called the Plan to Win, which center on an exceptional customer experience- People, Products, Place, Price, and Promotion. We are committed to continuously improving our operations and enhancing our customers’ experience” according to their website. McCafe prides itself on creating a consistent experience at any of the locations, across more than 35,000 locations worldwide in more than one hundred countries. Their customer focused, “Plan to Win” gives the global businesses the flexibility to allow for adaptation to the specific market that they are in. Although McDonald’s will never be just a coffeehouse, they are doing pretty well as they continue to serve the 83% of adults that consume coffee daily.Appendix CShown here is an example of our Caribou napkin that will be used to help advertise our new product line. This similar design will also be used on other products that are handed out.1262063561975Appendix DCare About You Scratch CouponsWe will having scratch off coupons for this new “Care About You” line to try to get consumers to try and buy the new products. The new products include CARE Caramel Brulee Latte, CARE Frosted Cookie Crumble Cooler, CARE Double Chocolate Mocha, CARE Coffeecake and a CARE Flax Seed Oatmeal. There will be various coupons that will be handed out and they will be a scratch card. The coupons will have offers that include a free Care About You drink, a free Care about you food item, buy one get one Care About You drink, and buy one get one Care About You food item. These coupons will be distributed on college campus’, and when you sample a Care About You product.We will be headed out to college campus’ that have a Caribou Coffee near by to advertise our new Care About You product line. We will be handing out our scratch coupons to students who are interested in Caribou Coffee or in our new healthy alternatives during the launch week of our new product line, January 11th through January 17th. We will be handing out scratch off coupons in the Caribou Coffee shops during the launch week to make consumers aware of our new products. From 11am-2pm, January 11th through January 17th, the new Care About You product line will be launched. Each day we will feature one of the new products as a sample. If you come into the coffee shop and try the sample you simple receive a scratch coupons for trying one of our new products.Radio AnnouncementWe will be having two radio announcements about our Care About You products. The first radio announcement will be announced two weeks before our Care About You products launch. The announcement will be, “Have you heard about Caribou Coffee’s new Care About You products? The new products include CARE Caramel Brulee Latte, CARE Frosted Cookie Crumble Cooler, CARE Double Chocolate Mocha, CARE Coffeecake and a CARE Flax Seed Oatmeal. We know you want to care about yourself while still getting in your daily Caribou Coffee. Stop in to Caribou Coffee next week as we launch all of these delicious new products!” The second radio announcement will be announced the first week of the launch of our new products. This announcement will be, “Caribou Coffee has now launched their new product line, Care About You. Stop in to Caribou Coffee this week to sample one of our new products and receive a scratch coupon with a great offer inside. We know you want to care about yourself and have some delicious Caribou Coffee!” These two radio announcements will be announced on radio stations that are located near a Caribou Coffee.InternetThe Caribou Coffee website, home, will be a main place where we will be promoting our new product line. We will be promoting the Care About You line on the home screen under the features tabs in the middle of the page. The home screen constantly rolls through each of the features. The tab will say, “Care About You Products.” Included in the tab under features will be all of the new Care About Your products with a picture of what they are. We will include this tab on the home page two weeks before the launch of our new line and keep it there for two months after to promote our new products, or until the products run out. Social Media The use of our social media when launching our new Care About You products is a great way to take advantage of free advertising, a method for creating buzz between our consumers, and a great way to show the positive image of our company. We have decided to utilize Facebook, Twitter and Instagram when beginning the process of launching our new product line. This will allow us to develop and maintain a consistent message about our products on all of the social mediums. We have decided to use three social mediums to maximize the number of consumers we will reach when posting about our new products. FacebookAnnounce the new “Care About You” product line and that we will be bringing healthy alternatives to our menu.Post about when the launch date of our new product line will be. Post individual new product spotlights, including what the product is and why it is healthy. (include a picture of the item)Post about the scratch card coupon to inform consumers to come in and sample one of the new products and receive a scratch card coupon. TwitterAnnounce the new “Care About You” product line and that we will be bringing healthy alternatives to our menu.Post about when the launch date of our new product line will be. Post individual new product spotlights, including what the product is and why it is healthy. (include a picture of the item)Post about the scratch card coupon to inform consumers to come in and sample one of the new products and receive a scratch card coupon. Post quotes from customers who enjoyed one of the new products and why. InstagramAnnounce the new “Care About You” product line and that we will be bringing healthy alternatives to our menu.Post about when the launch date of our new product line will be. Post individual new product spotlights, including what the product is and why it is healthy. (include a picture of the item)Post about the scratch card coupon to inform consumers to come in and sample one of the new products and receive a scratch card coupon. REFERENCES"Caribou Coffee." Caribou Coffee. N.p., n.d. Web. 10 Oct. 2014. < of Beans." Rosie. N.p., n.d. Web. 10 Oct. 2014.< Coffee Company, Inc. History." History of Caribou Coffee Company, Inc. – FundingUniverse. N.p., n.d. Web. 10 Oct. 2014. < Coffee Company." Starbucks Coffee Company. N.p., n.d. Web. 10 Oct. 2014. <'s Hear It For Consistency." . N.p., n.d. Web. 10 Oct. 2014. < Profile :: ." Company Profile :: . N.p., n.d. Web. 10 Oct. 2014. < States Securities and Exchange Commission. “Caribou Coffee Company Inc.” Form 10-K/A. Web. 10 Oct. 2014. <; ................
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