Starbucks: Just Who Is the Starbucks Customer?

Starbucks: Just Who is the Starbucks Customer?

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

Answer: According to the definition from textbook of marketing segmentation, is the act of dividing a market into distinct segments of buyers with different needs, characteristics, or behaviors who might require separate products or marketing mix. In this case, Starbucks fist evaluates its potential customer base and the company's growth characteristics to segment the customers in order to provide a "Starbuck Experience". The way of their segmentation is more like a geographic segmentation. Market targeting is to narrow down the segment Starbucks had closed from the market. In this case, Starbucks is using the differentiated marketing to provide the customer a "third" place than its competitors.

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

Answer: The definition from the textbook about market targeting is to evaluate each market segment's attractiveness and selects one or more segments to serve. Market targeting consists of designing strategies to build the right relationship with the right customer. In this case, Starbucks initially targeted their customers as more educated, wealthier, more female than male and most of them are Caucasians. The age of their customers are more of younger generations age from 22 to 44. However, with the rapid growth of Starbucks, their customer bases had changed with more and more shop opened. The place environment of Starbucks became less attractive. More and more people chose to shop outside the Starbucks store and more people prefer to have instant coffee on the go. The lag between re-targeting their customer had made a huge impacting which resulted in the increasing customer dissatisfactions.

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

Answer: Segmentation variables are geographic variables, demographic variables, psychographic variables and behavioral variables. Starbucks started to look at all these variables in order to better adjust their target market of customers. For geographic variables, Starbuck started to look at the customers in different region may have different on the services they provided. The demographic variables were not only just wealthy, educated, young female. The new customers are more diversified into different ages, wages, occupations and genders. The psychographic variables for Starbucks to look at are the new customers who have more complex social classes, life styles and different personalities. The behavioral variables