Starbucks Case

STARBUCKS CASE

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

Starbucks targeted the customer who fell in love with the Starbucks Experience who was:  better women than men, persons between 22 and 44 years old and finally moneyed persons with good education.

Starbucks had a goal and their initial segment was a Demographic segmentation. They wanted to open 10,000 new stores in four years and then get that Starbucks to open 40,000 stores. In 20 years Schultz grew the company to 17,000 stores in dozens of countries around the world.

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

The Starbucks customer changed first. There were not as many traditional customers as before, the new customers had less money, they were less educated and less professional. So, the Starbucks Experience had to adapt to this new situation to satisfy the needs of the new customers, in which the new customers came to the stores much less frequently than the traditional customers, because they only went to have a good coffee while they met and left.

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

Starbucks now is segmenting with the same method of the majority of big companies:

-Demographics (income, age, gender, costumes, etc.)

-Psychographics (values, personality, lifestyle, etc.)

-Geography (country, city, neighborhood, zip code, etc.)

1. Will Starbucks ever return to the revenue and profit growth that it once enjoyed? Why or why not?

My guess is yes, because they have a new good segmentation and targeting strategy. They are trying to regain the traditional Starbucks customer via trying to restore the Starbucks Experience. Finally they are growing outside the United States.