Starbucks Market Segmentation and Positioning

Starbucks Market Segmentation and Positioning

Introduction

Starbucks was opened in 1971 in Seattle. Starbucks started the business by selling roasted coffee beans, and various accessories for brewing and roasting the coffee. In 1971, the company was owned by Jerry Baldwin, Zev Siegel, and Gordon Bowker. However, in 1982, an entrepreneur Howard Shultz joined the firm. Inspired by the Italian coffee culture, Shultz decided to replicate the culture in the United States (Robbins, 2008).

Discussion

Starbucks Coffee Company is now among the coffee retailer giants. The company has as many as 10,000 coffee shops in more than thirty countries. Starbucks aims to become the most recognized brand of coffee. In order to achieve long term growth, Starbucks is utilizing effective marketing strategies. Currently, the company is relying on retail expansion along with the product and service innovation to achieve growth and success. In order to implement these strategies, Starbucks has opened new stores in both existing and new markets (Willmott et al, 2010).

Target Markets

During the initial years, the target market of Starbucks included:

Affluent customers

Well educated customers

White Collar Patterns

The age of the target market was between 25 and 44. With the passage of time, the company realized that opportunities for growth also exist in other market segments. Eventually, the company decided to expand its target market to include young, less-educated and low-income consumers. A large portion of coffee drinkers is found in urban areas of the United States. It is because most of educated and working professionals live in the urban areas.

With the rapid expansion, Starbucks targeted customers of every age group. Starbucks expanded the target market to include customers of every age. The target market of Starbucks expanded to include rural communities, ethnic neighborhoods, rest stops, and others.

Market Analysis

The business of gourmet coffee is at its peak. A number of players have entered into this market ranging from multinational chains to road side cafes. Specialty coffee in the United States is the fastest growing business. The credit of Starbucks' success goes to the projection of its stores. The stores of Starbucks coffee offer customers a venue where they can socialize. This strategy increased the customer base of Starbucks. A lot of customers prefer Starbucks as a place to socialize.

Starbucks has positioned itself as an upscale brand. The company has differentiated itself by providing not only coffee but a rich experience. The rich experience has proved itself to be the selling point of the company. With this positioning, the company targeted young students. The company also targeted different social groups and neighborhoods who would appreciate the idea of buying coffee and spending time with their friends.

Market Demographics

The target market of Starbucks composed of young, affluent, and tech-savvy customers. Starbucks coffee attracted the attention of a number of customers who needed a place a part from their home and office. Starbucks positioned itself as a third place for its customers. The place becomes a preferred option of moms with strollers, and working professionals who needed a ...