Las Vegas Case

1.

Using the full spectrum of segmentation variables, describe how Starbucks initially segmented and targeted the coffee market.

Initially Starbucks target market was a very defined profile. The customer they wanted to reach were a wealthier, better educated and more professional than the average American. It was likely to be Female and between the ages of 24 and 44; Starbucks wanted to make the customer fall in love with the Starbucks Experience and make her/him loyal to the brand.

2.

What changed first--the Starbucks customer or the Starbucks Experience? Explain your response by discussing the principles of market targeting.

Starbucks customer started to change first, so the Starbucks Experience needed a change. It began with the new kind of customer that filled each store, a less educated, less professional, and less affluent clients; it means that the target audience had change, Starbucks needed to determine a new effective way to market their products. So, they started focusing in a different Starbucks Experience, it will be an expanded menu, less talk with the baristas, a "Hustle and Bustle" atmosphere, the mixed of those aspects lead Starbucks to be "good coffee on the run. It was a place to meet and then move on". As a result, the new goal in the company was to increase the speed of services more than talk to the customer; and it worked for Starbucks they went from 1,000 stores to 15,000 and beyond.

3.

Based on the segmentation variables, how is Starbucks now segmenting and targeting the coffee market?

Starbucks reframe radically a growth strategy for the next years; they are looking for the roots and recreation of Starbucks store experience. So, they create a 3 steps program to their new market targeting:

1- Fist strategy is centers on Via, an instant coffee. It promotes to have a one Startbucks coffee cup for under 1$. According to global chief marketing officer for Starbucks: "half of all Via serving occasions are at home, 25 percent are in the office, and 25 percent are "on the go."

2- The second strategy is focuses on the grocery business but through ground-flavored coffee. Starbucks is launching flavored coffees that you can brew yourself.

3- The last part is to going after customers who normally do not buy Starbucks coffee. They have placed Starbucks coffee shops in places that usually they wont put it to gain new customers.