Starbucks Case Study

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To: Dr. Michael T. Greenwood
From: John Day
Subject: Week 6, Case 6 Starbucks
Date: Thursday, February, 28 2013

Question 1
Using the full spectrum of segmentation variables, describe how Starbucks initially segmented and targeted the coffee market? Starbucks initially targeted the coffee market using several segmentation variables such as,

A. Geographic segmentation: dividing a market into different geographical units such as nations, states, regions, countries, cities or even neighborhoods. By placing their Starbucks locations in areas where the upscale more educated female customer would be able to access it.

B. Demographic segmentation: dividing the market into segments based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation and nationality. Starbucks initial customer was a highly educated, wealthy individual, who is predominantly white and more times female. Their target customer was someone who was able to come into the location and shoot the breeze with the barista, who would come into the location on a daily basis, or even twice a day. The locations where set in an upscale neighborhood or in city. That allowed the person a third place to go other than work or home. A place to sit and read or meet up with friends and hang out.

C. Gender segmentation: dividing a market into different segments based on gender. Starbucks target customer was scaled towards females. They wanted people that were set to a certain lifestyle. That liked the personal experience that was being offered, the personalized greeting and the chance to talk with the baristas.

D. Psychographic segmentation: dividing a market into different segments based on social class, lifestyles, or personality characteristics. Again Starbucks was clearly using this segmentation, going after the upper class, the female who had the time to spend and get that experience that they were trying...
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