sale plan

Starbucks Coffee Company

EXECUTIVE SUMMARY

A hot cup of coffee is what comes to mind for a college student walking to class on a crisp winter day. The venti cup of coffee is the Holy Grail for students with the long study sessions and all-nighters. The past few years, Starbucks overall goal is to expand brand recognition. One aspect of expansion, is hiring a district manager and two territory sales representatives to sell new Starbucks vending machines. The overall target market for Starbucks vending machines, it to provide students at universities with convenient coffee. With Starbucks mission statement being, “To inspire and nurture the human spirit, one person, one cup, and one neighborhood at a time”, the Vending Machines venture is the right strategic move. Through our strong presence in the vending machine industry, Starbucks will utilize all possible resources to promote growth and increase profitability.

Universities are expanding throughout the east coast and are untapped business opportunities. With our two territory sales representatives, we plan to begin our venture by selling a minimum of three vending machines in the first quarter. There is high competition in the vending machine and coffee shop industry. Starbucks has a great brand recognition, which provides them with a higher chance of meeting their minimum quota.

In the next few months, Starbucks coffee company will begin production of these vending machines. Starbucks will contract outside company engineers to create and produce these vending machines. Building the vending machines will take two weeks to produce and be

ready for installation. The quality of these machines will be sold for $8,000 to universities. The vending machine will provide a variety of hot coffee, specialty coffee, and seasonal coffee. The machine will quickly dispense the hot beverage into the signature Starbucks paper cup. This machine will pour coffee similar to how a Keurig dispenses.

Expanding the Starbucks coffee company brand throughout the Mid-Atlantic and New England regions, will allow the company to reach a new level of the coffee industry. Starbucks will be the first well-known brand to ever venture task of convenient coffee vending machines.

SITUATION ANALYSIS

COMPANY BACKGROUND

The history of Starbucks dates back in 1971, when the first store opened its doors in Seattle, Washington. The store initially sold coffee beans and coffee making equipment rather than drinks. They waited to sell drinks until they noticed profits coming into the business. After waiting about ten years, Howard Shultz was hired as director of retail operations and implemented a strategy to sell drinks in Starbucks around the country. After receiving many profits, Starbucks decided to expand to the rest of the United States and Internationally. “Today Starbucks has more than 6,000 locations in over 30 countries” (Starbuck Coffee Company). The 6,000 locations are a pure example of how Starbucks has dramatically expanded.

Starbucks objective is to maintain high company standing as one of the most recognized and respected brands in the world. To achieve this, Starbucks is continuing the disciplined expansion of their global store base by adding stores in both existing and developed markets. These markets are in the United States, and are expanding to markets such as China. In addition, by leveraging the experience gained through the traditional store model, they continue to offer consumers new coffee products through a variety of diverse channels. Starbucks also believes in their global responsibility strategy. The global responsibility strategy is related to ethically sourcing high quality coffee and reaching out to the community to promote their brand.

In 1996, Starbucks launched their Frappuccino. Starbucks currently partners with PepsiCo to bottle the ready-to-drink Frappucino. “Yearly, Starbucks sells over $1 billion of Frappucinos, and $714 million out of the billion dollars is from bottled Frappuccinos” (Starbucks Coffee Company).

Recently, Starbucks has introduced the new VIA instant. The company has noticed that its competitors had been selling instant coffee. This gave Starbucks the incentive to invent instant coffee for those who consume coffee many times a day, but do not have the opportunity to access a Starbucks store. The entire research process took about ten years until they were able to introduce the concept. Once Starbucks introduced the new VIA, they noticed sales were increased dramatically and customers were more satisfied. Customers could then simply brew their own Starbucks coffee at their convenience. This new product was successful for Starbucks Company, their customers, and their employees.  

INDUSTRY OUTLOOK

Starbucks Coffee Company vending machines will fall under two industries; vending machines and coffee shops. The vending machine industry does offer hot coffee drinks, but they do not offer the quality that Starbucks will provide. Starbucks believes the start of their business comes from high quality coffee beans and water used to make their many famous beverages. Starbucks specializes in providing exceptional customer service while being a profitable company worldwide.  Starbucks Coffee vending machines are entering two industries that are rather strong and consistent.  

The vending machine industry produces large amount of sales throughout the world. The main goal of the vending machine industry is to quickly dispense products in seconds for the consumer's convenience. Our Starbucks vending machine will quickly dispense the hot coffee to college students and professors rushing to get to class on time. One main type of vending machine is the hot drinks and coffee vending machine.

Vending machine industry has high start-up cost and is hard to enter the industry without brand recognition. Fortunately for Starbucks, they already have a strong brand recognition. The prices for vending machine fluctuate which cause vending machines to depreciate in value rapidly. The major competitors that Starbuck’s vending machine will be competing against are Outerwall Inc., Compass Group PLC, and Aramark Corporation. These are well-known vending machines that are all over globally. Many of the competitions products are soft drinks, cold beverages, food, office coffee services, movies, games, and other products. These companies

provide a wide range of products all in a few generic models of vending machines. The vending machines target all demographics.

The other industry that Starbucks Vending machines will be included in are coffee shops. Coffee shops began targeting the baby boomer generation demographic. Today it has grown from young adults such as teens to adults in the professional industry. Just like vending machines, it is hard to enter the industry. Coffee shops are becoming a popular trend and domestic demand in the United States. Once in the industry, there is a high demand for the coffee shops. Mom and Pop shops have become ever more popular for the hipster generation. According to IBIS Database in Johnson & Wales Library it states, “Concentration is considered high if the top players account for more than 70% of industry revenue”(IBIS Database). Although Mom and Pop shops have become even more popular, more than 70% of the industry is controlled by the top four competitors. The two major players are Dunkin’ Donuts and Starbucks Coffee. Americans are willing to spend their money on coffee because it is a less inexpensive product. The major products are specialty coffee, coffee, and other products including bakery items. Additionally, volatility in the industry is very high in coffee shop businesses.

COMPETITIVE ANALYSIS

Starbucks primary competitors for coffee beverage sales are quick-service restaurants and specialty coffee shops. In almost all markets in which the company does business, there are

numerous competitors in the specialty coffee beverage business. The company believes that their customers choose among specialty coffee retailers primarily on the basis of product quality, service and convenience, as well as price. Starbucks continue to experience direct competition from large competitors in the US quick-service restaurant sector and the US ready-to-drink coffee beverage market, in addition to well-established companies in many international markets. They also compete with restaurants and other specialty retailers for prime retail locations and qualified personnel to operate both new and existing stores. Their coffee and tea products sold through our channel development segment compete directly against specialty coffees and teas sold through grocery stores, warehouse clubs, specialty retailers, convenience stores, and US foodservice accounts and compete indirectly against all other coffees and teas on the market.

Dunkin’ Donuts is Starbucks main competitor in the coffee industry. Dunkin ‘Donuts is an American global doughnut company and coffeehouse chain based in Canton, Massachusetts. The company was founded by William Rosenberg in 1950. Over half of the company’s business is in coffee and baked good sales.  Dunkin Donuts is a large competitor of our Starbuck’s vending machines. They have a very well-known name that attracts many consumer whether they are simply coffee drinkers or breakfast and lunch eaters. When consumers think about coffee, Dunkin Donuts or Starbucks immediately comes to mind. Dunkin is continuing to improve the development of their products they offer to consumers. “The group continues to play a key role in franchising, which accounts for almost fifty percent of all retail business done in America” (Dunkin Donuts).

“When McDonald’s began to introduce their first premium coffee, they were selling 500 million cups a day” (McDonald's Goes Big). McDonald's perked up their customers by introducing the new McCafe brand. This brand consisted of espresso based coffee drinks including lattes, cappuccinos, frappuccinos, and mochas. Consumers scrambled to the brand these products were cheaper than other coffee brands in the market. “This is despite a McDonald’s latte costing only around $2.50, compared to around $3.50 for a Starbucks latte. But that price is hurting them – McCafe in the USA is seen as too cheap, too nasty” (McDonald’s Goes Big).

SALES PLAN

TEAM STRUCTURE & ORGANIZATIONAL CHART

The team structure Starbucks Corporation will be implementing is the generalist sales force organization. Through this organization, the two regional sales representative will cover the New England region and the Mid-Atlantic region. Each regional sales representative will be assessing all the universities located within these two regions. The overall district manager will obtain the goal of overseeing the two territory managers and ensuring they are meeting their quota each month along with developing exceptional customer relationship management among their customers. The two territory managers will communicate with the district manager on a daily basis and strive on bringing new business into the company. The territory managers will also have to obtain a strong customer relationship with all customers.

This is the least complicated sales force organization, therefore the district and two territory managers can focus more on their customers. Dalrymple’s sales management textbook states “generalist salespeople typically have geographically small sales territories and minimal travel time and spend a high percentage of their time face-to-face with customers” (Cron DeCarlo 156). This structure would be most beneficial to our sales representatives because spending more one-on-one time with universities will result in a higher chance to close the deal. We will only be focusing on one product line which hot Starbucks coffee is sold in vending machines on universities campuses.

ROLES AND RESPONSIBILITIES

Job Title:	Starbucks Vending Machine District Manager	Job Category:	Sales
Department/Group:	Starbucks Sales	Job Code/Req. #:	1234
Location: (Territory)	New England, Mid-Atlantic	Travel Required:	Yes
Level/Salary Range:	$80,000, Bonus, Commission	Position Type:	Fulltime
HR Contact:	Scott Pitasky	Date Posted:	November 1, 2015
Will Train Applicant(s):	Yes	Posting Expires:	November 30, 2015
URL:	http://www.starbucks.com/careers/interview-tips
Applications Accepted By:
Phone and E-mail: (800)-782-7282 or 1-206-447-1575 [email protected] Subject Line: Starbucks Key Account Sales Rep. Position Attention: HR Department	Mail: 2401 Utah S. Seattle, WA 98134
Job Description
Company Description The history of Starbucks dates back in 1971 when the first store opened its doors in Seattle, Washington. The store initially sold coffee beans and coffee making equipment rather than drinks. They waited to sell drinks until they noticed profits coming into the business. After waiting about ten years, Howard Shultz was hired as Director of Retail operations and implemented a strategy to sell drinks in Starbucks around the country. After seeing many profits, Starbucks decided to expand to the rest of the United States and then Internationally. Today Starbucks has more than 6,000 locations in over 30 countries. Roles and Responsibilities Responsibilities and essential job functions include but are not limited to the following: Leadership- setting goals for the work group, developing organizational capability, and modeling how we work together · Demonstrates a calm demeanor when interacting with customers or unusual events and manages territory managers to set a positive example to customers and two territory sales representatives · Displays a customer comes first attitude by training and holding partners accountable for delivering exceptional customer service · Assist in the development and execution of sales plans and pitches for Starbucks vending machines alongside sales territory managers · Own execution and results at national level · Conduct monthly meetings with territory managers to gather recommendations to aid in the strategic business plan of the Starbucks corporation, and relay those recommendations to upper level management · Must be able to properly manage a team and encourage results, as this is a new division, development and growth will need to be proven by quantified results Qualifications and Education Requirements · Bachelor’s Degree · Any Master’s degree from an accredited University · 6 years of previous sales experience · Sales Skills – Ability to adapt to a variety of demographics and regions, ability to close sale, adapt to customer needs, and identify the campuses’ the need for the sale. Preferred Skills · Full detailed knowledge of Coffee products · Leadership and Motivation Skills · Time Management and Organization Skills · Required to assure his/her territory sales representatives meet a minimum quota requirement · Business analysis of the Universities · Opportunity identification · Ability to form Customer Relationship Management with buyers · Cost Control · Ability to forecast sales to exceed quota next quarter · Follow-up evaluations · Ability to closely work with Sales Executives from Starbucks Coffee Company · Ability to finalize and close sales · Effective communication skills with customers and territory sales representatives Additional Notes · Sales Representative must travel in the designated region given · Must have flexible working and traveling hours
Reviewed By:	Scott Pitasky	Date:	November 1, 2015

Job Title:	Starbucks Territory Sales Representatives	Job Category:	Sales
Department/Group:	Starbucks Sales	Job Code/Req. #:	1234
Location: (Territory)	New England or Mid-Atlantic	Travel Required:	Yes
Level/Salary Range:	$80,000, Bonus, Commission	Position Type:	Fulltime
HR Contact:	Scott Pitasky	Date Posted:	November 1, 2015
Will Train Applicant(s):	Yes	Posting Expires:	November 30, 2015
URL:	http://www.starbucks.com/careers/interview-tips
Applications Accepted By:
Phone and E-mail: (800)-782-7282 or 1-206-447-1575 [email protected] Subject Line: Starbucks Key Account Sales Rep. Position Attention: HR Department	Mail: 2401 Utah S. Seattle, WA 98134
Job Description
Company Description The history of Starbucks dates back in 1971 when the first store opened its doors in Seattle, Washington. The store initially sold coffee beans and coffee making equipment rather than drinks. They waited to sell drinks until they noticed profits coming into the business. After waiting about ten years, Howard Shultz was hired as Director of Retail operations and implemented a strategy to sell drinks in Starbucks around the country. After seeing many profits, Starbucks decided to expand to the rest of the United States and then Internationally. Today Starbucks has more than 6,000 locations in over 30 countries. Roles and Responsibilities · Develops and executes sales plans and pitches accurately for Starbucks Vending · Builds sustainable partnerships at all distributors and key accounts by emphasizing Starbucks brand and product value along with the support staff of Starbucks headquarters and sales force management team · Benchmark business data and sales trends for key accounts and provide monthly recommendations to the district manager to aid in execution of the strategic business plan · Must be able to “hit the ground running”, as this is a new division and development and growth will need to be proven by quantified results Qualifications and Education Requirements · Bachelor’s Degree · 4-7 years of previous sales experience · Ability to be able to walk several miles on Campuses · Ability to stand for several hours · Sales Skills – Ability to adapt to a variety of demographics and regions, ability to close sale, adapt to customer needs, and identify the campuses’ the need for the sale. Preferred Skills · Full detailed knowledge of Coffee products · Persuasive skills · Time Management and Organization · Ability to form Customer Relationship Management with buyers · Cooperation with Vending Technicians · Dedicated attendance through every aspect of sale (business proposal, actual sale, delivery, set up, tests, and explanation of actual machines) · Cost Control · Merchandising and Manufacturing skills · Effective communication skills with customers and regional manager to initiate results Additional Notes · Sales Representative must travel in the designated region given · Must have flexible working and traveling hours
Reviewed By:	Scott Pitasky	Date:	November 1, 2015

Mid-Atlantic:
ABC Classification:	Universities:	Student Population:	Universities (Cont.):	Student Population:
A Accounts (22 Accounts)	Ohio State University Kent State University   Miami University Pennsylvania State University University of Pittsburgh Temple University The University of Pennsylvania Carnegie Mellon University Villanova University West Virginia University Marshall University	64,868 41,214 18,456 95,973 34,934 37,788 24,806 13,285 10,739 29,175 13,279	University of Delaware Georgetown University George Washington University Howard University American University University of Maryland John Hopkins University Towson University Loyola University of Maryland Rutgers University Ohio University	22,680 17,858 25,613 10,265 13,061 37,610 21,726 22,285 15,902 66,013 29,217
B Accounts (7 Accounts)	University of District of Columbia Catholic University of America Frostburg State University New Jersey Institute of Technology	5,667 6,699 5,385 9,558	Seton Hall University Princeton University Xavier University	9,800 8,125 6,325
C Accounts: (21 Accounts)	Wilmington College Notre Dame of Maryland University Goucher University Centenary College College St. Elizabeth Georgian Court University Oberlin University Kenyon College Ohio Wesleyan University	1,435 2,982 2,173 2,694 2,112 2,885 2,978 1,676 1,850	Franciscan  University University of Dayton Wittenburg University Bryn Mawr College Haverford College Swarthmore College Franklin & Marshall College Lincoln University Albright College Dickinson College Bucknell University Wheeling Jesuit University	2,548 11,368 1,910 1,738 1,187 1,534 2,324 2,361 2,391 2,339 3,618 1,500

New England:
ABC Classification:	Universities:	Student Population:	Universities (Cont.):	Student Population:
A Accounts (10 Accounts)	University of Connecticut Yale University Boston College Harvard Notheastern University	31,119 12,336 30,009 21,000 19,798	MIT Tufts University University of Massachusetts Johnson & Wales University University of Vermont	11,319 10,872 28,6235 10,974 12,856
B Accounts (8 Accounts)	University of District of Columbia Catholic University of America Frostburg State University New Jersey Institute of Technology	5,667 6,699 5,385 9,558	Seton Hall University Princeton University Xavier University	9,800 8,125 6,325
C Accounts: (5 Accounts)	Quinnipac University Suffolk University Brandeis University	8,803 9,101 5,945	Brown University Dartmouth College	8,848 6,298

TERRITORY DESIGN

Account management is a key factor to maintaining current accounts and developing new ones. The universities that purchase Starbucks Coffee Company Vending machines will need to be ensured a quality product in maintaining the machine. In doing so, it will create customer satisfaction and high brand quality. Obtaining those two factors will help introduce Starbucks Coffee Company vending machines to future new accounts. Introducing new accounts is crucial for growth of the Starbucks vending machine industry. On top of that, these vending machines have a major competitive market as fast food and vending machine industry ever-more expand. Customers want products with high quality and quick. In providing customers with all these factors, it will help generate Starbucks to become number one competitor of quality, customer service, and quick service. The main steps in account management are ensuring product rotation, maintaining quality of machine/products, building a customer relationship management, and managing cash flow.

ENSURING PRODUCT ROTATION IN THE VENDING:

Quality is what Starbucks strives to execute. Starbucks strives and reach their goals. With these Starbucks Coffee Company vending machines, sanitation and food safety is very important. With the purchase of these vending machines, a $100 yearly maintenance fee is required. The maintenance fee ensures product rotation, product examination for expiration, and adding new seasonal products.

In addition to the $100 maintenance fee, it also provides bi-weekly tests from Starbucks Coffee Company themselves. It ensures that the drinks are held at 39 degrees, the machine is working properly, outside of the machine is sanitized and thoroughly washed. In doing so, this provides consumers with safety and quality products.

CLIENT / ACCOUNT MANAGEMENT

Most students would enjoy having a more convenient way of getting coffee in the morning. Universities are highly populated and any Starbucks line will be at least a fifteen minute wait. Many students and professors are on-the-go and need an instant coffee buzz to get them through the day. Since students and professors are tight on time, Starbucks vending machines are a convenient and a more time saving alternative. Many students at universities are already dissatisfied with their dining plans and on-campus vending machines. Only 35% of college students are satisfied with their school’s dining program (Cron Decarlo). Furthermore, Starbucks stores are only open for a certain amount of hours a day, Starbucks vending machines provide students with a 24-hour access which is perfect for their all-nighter study sessions. University students and professors are the perfect clients for Starbucks vending machines.

The universities will be organized into ABC Classification. The “A” account universities are going to be universities with 10,000 enrolled students or more. The “B” account universities are under 10,000 to 5,000 enrolled students. The “C” account universities are under 5,000 students enrolled. The reason why we chose this classification ranking is because universities with higher student population, will have a higher revenue due to amount of tuition and publicity they receive.

  Each sales representative should initiate 8 to 10 calls per-day with the universities. The sales reps will be required to make 6 calls to “A” accounts, 2.5 calls to “B” accounts, and 1.5 calls to “C” accounts. The average work day is 9 hours for the territory sales representative. That requires them to complete the day’s travel, administrative tasks, and make calls to university executives.

COMPENSATION PLAN

Starbuck’s vending will implement a beneficial compensation plan to ensure the district manager and both territory managers are working hard on new and existing accounts with selling vending machines to universities in the Mid-Atlantic and New England region. Compensation plans for the company not only creates a culture of high performance, but it creates a great reputation for the company which results in the company gaining top sales amongst other competitors in the industry.

Starbuck’s vending sales representatives will be paid an annual base salary along with a commission based on overall performance and sales. They will also have the opportunity to gain a small bonus of $1,000 at the end of each quarter if they exceed their quota by selling more than five vending machines in a quarter. Their set quota will be to sell three vending machines each quarter. By offering the bonus, this will encourage the district manager and territory managers to above and beyond in making sales and increasing revenue for the company.

The district manager of the company will earn a base salary of $80,000 a year with a 20% commission based on the number of vending machines sold each quarter. The Starbucks vending machines will be sold for approximately $8,000. The district manager will earn $1,600 off of every vending machine sold to the universities.

Both territory sales representatives of Starbuck’s vending will earn an annual base salary of $40,000, along with a 10% commission based on the number of vending machines sold each quarter. For example for every vending machine sold, the sales representative will earn $800.  Quarterly bonuses will be offered only if the representative exceeds their quota for that quarter. The quarterly bonus will be the same as the district manager which is $1,000 each quarter if five or more vending machines are sold.

The district manager and the two territory sales representatives will be paid on a bi weekly schedule. In addition to the base salary, bonuses, and compensation, the manager and the territory sales representatives will receive additional motivational incentives. The motivational incentives include an upgrade of their company car or an upgraded phone of their choice. They will also be offered a 401K and health insurance benefits will include health, dental, and eye for the employee, their spouses, and the children in the family. Due to the extensive amount of plane and car travel associated with the job, the company will also provide a life insurance policy in the event of an accident involved with the company. The district manager along with the two territory sales representative will have a limited credit card which will be used for gas and client business meetings. Their limit for the card will be $1,000 each quarter. Also they will have the opportunity to increase their limit by closing more accounts.

TRAINING & MOTIVATION

Every sales personnel will be required to participate in an extensive training seminar to learn how to accurately sell Starbucks Coffee Vending Machines. In the Dalrymple’s textbook it states, “Indeed research has shown that sales training can enhance selling effectiveness, improve customer relationships, and improve organizational effectiveness and retention”(Cron DeCarlo 132).

The seminar will train each Sales representative in the following areas:

1. The Starbucks Coffee Company History/Brand

2. Extensive Product Knowledge

3. Personal Selling Techniques

4. NAMA Certification

5. Demographic Targets

The first part of the training seminar will entail that sales representatives have a standing knowledge about Starbucks Coffee Company’s history and Brand. This requires carrying Starbucks mission statement wherever they go. Starbucks mission is, “To inspire and nurture the human spirit - one person, one cup and one neighborhood at a time.” With this mission in mind, selling Starbucks vending machines goes hand-in-hand. The inspiration of providing people with a little joy of Starbucks coffee is the goal every sales representative should have.

    Product knowledge will be a second valuable factor and persuasive upper-hand for Starbucks sales representatives. Sales reps are required to have knowledge on drinks such; as Cafe Latte, Caramel Latte, Cafe Mocha, Hot Chocolate, and the wide variety of seasonal drinks. Educating sales reps of Starbucks drinks provides them with an opportunity to persuade the buyers (Universities). Darymple’s textbook states “The amount of time devoted to product knowledge is frequently related to the complexity of the offering or to the introduction of new products” (Cron DeCarlo 225).

The sales representatives will have to properly explain the difference from purchasing coffee from other competitors than purchasing drinks from the vending machine. Sales representatives will adequately explain that even though the Starbucks coffee cups are instant, the vending machine still provides consistent quality drinks.  

Many buyers will ask why the vending machine is only limited to options provided. Sales reps need to thoroughly explain that due to quality assurance purposes, Cappuccino and Macchiatos would not be sold up to par as if they were hand made by a barista. Starbucks coffee company crafts each cup to cater the needs to each customer with high quality. A vending machine providing mediocre cups of coffee isn’t acceptable to Starbucks. Not only is the vending machine about quality purposes but the vending machine has technical restrictions.  

    Personal selling is a skill every sales rep already has. The training seminar will provide sales rep with mock exercises of how they would personally sell to the large universities. The seminar will prepare each sales rep for any and every question the buyers will have.

    A NAMA Certification test will be completed as well during the seminar. NAMA is a vending machine knowledge and handling test. Every sales rep will need to know how the machine operates. The sales representatives will know the sanitation, climate control, and health safety the machine must have to pass regulations. NAMA provides sales representatives with an extensive knowledge on the machine. The sales representatives will be taught the information, given an hour to study, and then be required to take the test.

Since each sales representative will be placed in a different territory, they will need to adapt to different demographics. The demographics that the sales representatives will have to adapt to will be, different states and economic status. Universities are located different states where economic status can vary. Some schools are wealthier and more abundant in revenue than others. The age demographic for this sales venture is to reach students in universities ages 17-23 years of age. The vending machine will cater the needs of female, male, and every ethnicity. The sales representatives will know regions of each state and territory they are assigned. Adapting to demographics is a key factor to creating a customer relationship with the large university buyers. Having a keen sense of the region will evermore persuade the buyer to make a sale.  

SALES FORECAST

OVERALL MARKET POTENTIAL & ASSESSMENT

The overall market potential for Starbucks Coffee Company Vending machines is to be recognized and developed through major “A” account universities. The first quarter of developing these vending machines is crucial for advertising of the vending machines.

Starbucks Coffee Company’s brand is already well-known to the public, but the vending machines are not. The goal and strategy is not to sell the coffee products, but to sell and market the vending machines.   

The Starbucks Coffee Company vending machines also provide an economic benefit for every university that purchases them. The vending machine itself is $8,000 including beginning inventory. Every machine can generate a $500 revenue from consumers purchase. When the inventory needs to be replenished, the university can contract with Starbucks Coffee Company to replenish the inventory at wholesale price. Wholesale price will be $250 to replenish the entire vending machine. The university can obtain a $250 surplus from the Starbucks products. In only 32 months, the university can pay off the entire $8,000 vending machine. This will make the vending machine ultimately an asset to the university by making their students happy, and receiving some revenue.   

GOALS BY VENDING MACHINE

The New England and Mid-Atlantic area have 32 major “A” Accounts, 12 “B” Accounts, and 28 “C” Accounts that are potential buyers. At least 22 of the “A” Accounts, 10 “B” accounts, and 8 “C” accounts will need to be funneled from potential customers to qualified customers. The goals are a minimum quota for the territory sales representatives to meet. As stated previously, Starbucks is already a well-known brand, hence the reason why the goal quota is higher. If the Starbucks coffee vending machine did not have a high brand quality, the quota would be lower. Accomplishing the quota will create more advertisement of Starbucks Coffee Company vending machines to the rest of the potential university buyers.

Every vending machine will cost $8,000 for every university. A maintenance fee of $100 per year per machine will be required. The maintenance fee includes checking refrigeration, heating monitor, rotation and replenishment of products, and bi-weekly tests. The overall quota for Mid-Atlantic and New England sales representative will have to meet a sales quota of $320,000. The quota of $320,000 is 40 vending machines and not including the maintenance fee or duplicate purchases of vending machines.  New England and Mid-Atlantic need to sell $176,000 from the 22 “A” Accounts, $80,000 from the 10 “B” Accounts, and $64,000 from the 8 “C” Accounts. New England Area will have to sell to all ten of their “A” Accounts, five “B” Accounts, and 4 “C” Accounts. Mid-Atlantic will reach 12 “A” Accounts, five “B” Accounts, and four “C” Accounts.

GOALS BY TERRITORY, SALESPERSON & ACCOUNT

Mid-Atlantic and New England area sales representatives will need to sell a minimum amount of vending machines. Mid-Atlantic has 22 major A Accounts. New England has ten major A Accounts. Mid-Atlantic has a larger amount of accounts and potential buyers. New England territory sales representative will have to create stronger customer relationships with their accounts and pay closer attention to their key accounts. Furthermore, the New England territory will still follow the generic sales pitch that Mid-Atlantic also has to follow, but will need to perform abundantly. Due to a smaller territory, New England sales representative will have additional time to execute and cater sales pitch to each and every university.

There are four stages in the sales process for the territory sales representatives and their accounts. These stages will help each sales representative follow a procedure to

keep each sale organized and timely.  These stages may alter in timeline if the one sale exceeds ten vending machines or more. If the sale is more than ten vending machines, the sale will be delayed a month due to mass production, shipment, and installation.

Stage 1: Establish relationship with University executives

Stage one is the most crucial part of the entire operation and strategy. Starbucks currently has a great brand recognition, but the territory sales representatives and district manager must develop a strong customer relationship with University executives. In doing so, the territory sales representatives will be able to begin personal selling to the Universities.

Stage 2: Begin Sales Pitch and Contracts

The personal selling techniques should be altered to each individual university. The territories itself contain states with a vast amount of demographics. The sales pitches should be professional and explain full details of what the vending machine has to benefit and offer.

Stage 3: Complete contract and Close of Sale

Close the sale with the buyer and schedule installation date.

Stage 4: Install new vending machine(s) and begin scheduling product shipments

Install new vending machine(s) into the universities. Run tests of safety and sanitation. Collaborate with the university to schedule shipment of new products to replenish the vending machine(s).   

EVALUATION PLAN

PERFORMANCE METRICS

Starbucks sales personnel performance will be measured by the amount of each vending machines they sell each quarter. The sales representative’s goal will be to place at least three vending machines on three different college campuses within the first quarter of launching the new plan. The reason why the number is low is because the concept is a brand new idea. Every quarter the number of vending machines to be sold will be increased depending on the progress of the territory sales representatives. Some of the other numbers that will determine the performance of the district and territory sales representatives are the number of universities they are currently communicating with or have pending deals with, and the number of promotional events that are held at the universities for promotional purposes and the new vending machines once the brand is established. Different promotional events could consist of providing a dinner for university officials to create awareness and incentivize completion of the sale of a Starbucks vending machine and participating in events occurring at the various universities.

EVALUATION STANDARDS / PROCEDURES

Starbucks headquarters is located in Seattle, Washington, therefore the directors will want to start their line on the East Coast and then eventually expand to the Mid-west after seeing a certain amount of revenue generated each quarter. The territory sales representatives will be evaluated on how quickly they are able to introduce our new product to the various universities and how quickly they are able to close the deal. The placement of the vending machines will be crucial to Starbucks because we will mostly need to direct our attention to the larger universities where more revenue is going to be brought in rather than smaller universities where there are less students available to utilize the Starbucks vending machines.

RECOMMENDATIONS / NEXT STEPS

Within the first year of Starbucks vending, twelve vending machines are expected to be sold and placed on universities with profits coming in at the end of each quarter. If the company is successful within the first year, we will venture out to the Mid-West region and the South-East region. Venturing out to the Mid-West and South-East will allow us to offer our product to a larger amount of universities while earning more revenue for Starbucks Company. After the

success of the first year, Starbucks will then look into offering more products such as iced coffee and pastries in their existing vending machines. Also, another goal of Starbucks vending to market to high schools with a large population of students after about five years with being in business depending how sales are going with the existing accounts.

Works Cited

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Stage 1:

Establish Relationship

Stage 2:

Begin Sales Pitch & Contracts

Stage 3:

Complete Contract & Close Sale

Stage 4:

Install New Vending Machine

District Manager

New England Sales Representative

Mid-Atlantic Sales Representative

Territory Sales Quotas

(3 Year Plan)

A Accounts Mid-Atlantic New England 22 10 B Accounts Mid-Atlantic New England 5 5 C Accounts Mid-Atlantic New England 8 4