Starbucks is widely recognized by its trademark green and white logo of a siren, displayed on each of its coffee cups, storefronts, and products. Market segmentation is a very resourceful strategy for organizations to fulfill their mission and gain profits. Overview of the segmentationtargetingpositioning model segmenting the customer base the principle of segmentation is to understand the various customer segments present in the market space and to select the segments that are most likely to bring the best results to the specific loyalty program. Demographic segmentation starbucks main target market is men and.
Starbucks ceo kevin johnson unveils innovation strategy to. Strategy on market segmentation targeting and positioning. This paper analyzed the positioning strategy and target markets of starbucks while it was launched. The company launched in 1971 as a coffee roaster across from seattles pike place market and it wasnt until 1984 that they opened their next storefront, but theyve grown at an incredible pace ever since. Starbucks corporation report contains the application of the major analytical. With this finding, an expert in marketing was engaged in an interview to further analyze the market segmentation strategy used to segregate the market of. A target market is a set of buyers with common needs that the company decides to serve. Starbucks has spread in all cities in america and other 48 countries all over the world. The last group which are apart of starbucks target market are kids. Psychographic segmentation of starbucks essay 2212.
The fundamental strategy for starbucks is by positioning themselves in the coffee industry as a superior product through building a high standard. Currently, the company is relying on retail expansion along with the product and service innovation to achieve growth and success. It sells a variety of beverages which includes espresso, teas of different flavor, sandwiches, pastries, and other snacks. A strong strategic plan should include a set of strategies which will create desire for starbucks products among customers.
Starbucks started the business by selling roasted coffee beans, and various accessories for brewing and roasting the coffee. This case study will consider how market research has strengthened starbucks entry into the chinese markets. In 1971, the company was owned by jerry baldwin, zev siegel, and gordon bowker. Demographic segmentation starbucks main target market is men and women between the ages of 2544, which accounts for almost half 49% of its total business. Download as docx, pdf, txt or read online from scribd. To acquire the maximum market share in the industry, starbucks key strategy has been its close attention to its market segments. It also deals in packaged coffee which is sold in grocery stores. Starbucks is the largest international coffeehouse, operating in more than 50 countries and sweeping the american market share by a staggering 20%. It not only uses demographic segmentation in terms of gender, income, age and ethnic background but also employ geographic segmentation drawing upon country or region of the world and its market size in that specific. Marketing strategy of starbucks starbucks marketing strategy. The report illustrates the application of the major analytical strategic frameworks in business studies such as swot, pestel, porters five. The starbucks goto strategy was to bring the already established product in different cultural and geographical space into the new market the coffeeculture deprived united states. This research conducted a survey on the main coffee consumer population in taiwan and found that the reason why both of unipresidents coffee brands starbucks and city cafe enjoy high market shares lies in the successful market segmentation strategy.
Starbucks market segmentation and positioning strategy. Strategy on market segmentation targeting and positioning with the marketing mix 1. Starbucks segmentation, targeting and positioning comprise marketing decisions directed at identifying appropriate group of people among the general public as future customers for the business and targeting this segment via positioning products and services that resonates well with their needs and wants. The main segmentation criteria used by starbucks is psychographic segmentation, targeting customers based on their lifestyle and attitudes. Market analysis in the marketing strategy of starbucks coffee consumption in globally is growing at the rate of 2%. Starbucks uses a large variety of channels to market their product from social media to tv. Starbucks strategy on market segmentation targeting and positioning with the marketing mix 1. Starbucks mainapproachto gain greater market share in the industry is by paying a close. An analysis on the market segmentation of starbucks and.
Initially they were selling of whole bean coffee in one seattle store and by the year 1982 the business had grown tremendously and has. Marketing strategy of starbucks marketing strategy refers to the process of carrying out segmentation, positioning and targeting kerins 2009. Realizing the need of a digital marketing strategy in todays world, the. Starbucks enjoys a stronger than normal brand loyalty factor which is an essential aspect. Starbucks aims to create loyal customers and reduce brand switching by offering a wide variety of products and special coffees regularly. Hence, it was targeted towards the affluent and well educated individuals. Starbucks segmentation, targeting and positioning targeting. Howard schultzs task was to closely observe how italians treat the product and figure out a way to bring it home with minor changes. After completing this chapter, student should be able to understand. Young adults, aged 1824, are the next large group that starbucks targets. How did starbucks initially use segmentation to targeted coffee markets. Focusing on this multiple segmentation marketing strategy will enhance the overall marketing mix and provide starbucks with a specified target market for maximization of advertising dollars.
Starbucks market segmentation and positioning marketing. Market segmentation according to armstrong and kotler 2006 market segmentation is a process of subdividing a market into buyers distinct groups with different characteristics, needs, or behavior that required marketing programs or separate products. Arising almost overnight from a market in seattle, washington, the company today provides quality premium coffees with a. A case study of starbucks entry to china, so, the company has a unique style and atmosphere in its coffee houses.
Starbucks business strategy is associated with providing customers a starbucks experience, i. It also shows how different marketing mix variables supported their positioning. Pdf starbucks generally preferred a strategy of premium prices, using a menu and store layout somewhat modified for local tastes. Starbucks uses innovation in the products that it produces and the services so as to gain a competitive advantage over its rivals in the market. Starbucks market segmentation and positioning researchomatic. Starbucks premium store segmentation will include more starbucks reserve roasteries and up to 1,000 reserve stores, and 20 percent of. A core marketing strategy analysis looks at segmentation, targeting, positioning, and differentiation. Marketing strategy segmentation targeting positioning pdf. Starbucks unveils growth strategy at 2018 annual meeting. This is a strategy most customer focused brands employ. Starbucks coffee segmentation and target market, sample.
Starbucks corporation, an american company founded in 1971 in seattle, wa, is a premier roaster, marketer and. Players in any industry must concentrate on attracting new customers into their organization. In order to implement these strategies, starbucks has opened new stores in both existing and new markets willmott et al, 2010. Starbucks has also employed unconventional techniques for marketing its brand. Starbucks marketing strategy and objectives tactics. Market research is at the core of many of the market entry strategies starbucks is employing. Starbucks has adopted a differentiation strategy it is a strategy which seeks. Starbucks is one of the biggest company in the specialty coffee market in the world, operating in 62 countries. Starbucks corporation, 2008 when asked whether the specialty coffee market is saturated schultz stated, we currently sell to 4% of the world coffee drinking market, i think we can sell to more.
This is the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups. From its humble origins in seattle, the brand has spread throughout the world to become the number one coffee retail brand. It involves having a detailed knowledge of the marketplace into strategic decisions and the appropriate targeting of customer groups. Starbucks attention to detail and dedication to consistency are the reasons behind why the brand is so successful in its marketing. Starbucks market segmentation and positioning starbucks market segmentation and positioning introduction starbucks was opened in 1971 in seattle. There is an abundance of work going on inside starbucks right now to bring gis expertise inhouse to aid in their segmentation planning based on taking both demographic, psychographic and attitudinal segmentation criteria overlaid against potential market areas. Starbucks has developed an internationalization strategy to enable the company to open stores and franchises in countries across the globe. Home business essays strategy on market segmentation. Market segmentation, targeting, and positioning market segmentation is usually regarded as one of the main elements of marketing, with benefit segmentation commonly referred to as the most meaningful form of segmentation. We chose china because it is the worlds most populous country with over 1. Starbucks has a unique marketing strategy that starts right from its products.
It has differentiated itself from others based on the premium quality of its coffee. A perfect cup of coffee cannot be perfect if the cup is imperfect. Starbucks coffee was expensive and did not face any significant competitive threats initially. Did the starbucks customer or the starbucks experience change first. Jordan brian east tennessee state university follow this and additional works at. Strategy on market segmentation targeting and positioning of. Now you know how starbucks stays on top of the coffee industry and why so many admire their marketing strategy. Starbucks ceo kevin johnson unveils innovation strategy to propel the companys next decade of growth at starbucks 2018 annual meeting of shareholders. Starbucks has come up with a strategy of brand differentiation strategy via the uniqueness of their products as well as product differentiation so as to promote their products. Keywordsmarket segments, target market, marketing strategy. Starbucks segmentation introduction there are many companies. In order to achieve long term growth, starbucks is utilizing effective marketing strategies. A good reason for the companys growth is that starbucks marketing strategy created an iconic brand and identity.
In india, the per capita consumption of coffee is around 85 grammes while it is six kg in the us. Market segmentation and positioning is an effective marketing strategy developed on the basis of target customer behavior. Starbucks coffee uses the following types of positioning. Segmentation, targeting, and positioning cornerstones of. Doc marketing analyisis of starbucks wakib ullah academia. Marketing strategy and alliances analysis of starbucks. Starbucks offers customers an elegant taste of coffee, espresso, teas and baked goods in a single stop. The primary objective of segmentation must be how to win and retain customers. Case study of starbucks entry to china with marketing. Starbucks already holds a 75% market share in the u. Starbucks targetting, positioning and marketing mix scribd. It has been proven to be very successful in retail coffee market due to its wellplanned marketing strategy, 20. Shultz, text of letter from schultz, 2008 starbucks competes. Situational analysis market overview lifecycle stage swot analysis market environment analysis porters five force analysis pestle analysis segmentation target market profile positioning marketing objectives marketing strategies bcg matrix ansoff.
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