Starbucks - Analyzing Performance Segment

2. Analyzing Performance Segment

Total Segment Market = 20.685 Million Cases

Procter and gamble have two brands operating in the given segment

Joy - 12.1%

Dawn - 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.

3. 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.

4. 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.