1. Think about the comparison between Starbucks and Kusmi Tea
The key difference between Starbucks and Kusmi Tea is the brand experience. Starbucks offer fresh-made coffee that is generally to be consumed in-store. Because of this Starbucks has to ensure a consistent experience in all their stores. Kusmi Tea’s key product is packaged tea, and tea consumption is more geared towards in home consumption where out of home tea consumption is driven by need for premium tea experience. These different expectations of their customers will lead to different retail strategies for the two brands (see question 3).
Brand Awareness in France
Awareness but no preference
High awareness in premium tea segment
Starbucks and…show more content… 5% Normal time.
2. Conversion rate: Unlike Starbucks store, Kusmi store don’t provide ready-to-drink tea in the store; therefore different conversion rate represent different situation.
3. Items: Taken from current products offering in Kusmi France, customers usually place an order per visit.
4. Average Price: According to the case information, we don’t take extreme such as gift box of different size, the average price is between € 11.7~ € 14.5; therefore, we decide an average price on
Best, base and worst case Scenario calculations and annual net income figures are presented respectively: EUR -243,700/ EUR 872,130/ EUR 2,045,600.
Other Costs (2%)
Total Operating Expense
Net Income (profit/loss)
1 Gross Margin%: the gross margin of Kusmi was 68.5% in 2011. With the increasing sales tendency, we assume the Gross Margin of 2013 could be 70%
2 Salaries: 2-4 staffs per store, depending