Starbucks coffee a case study

Topics: Marketing, Coffee, Starbucks Pages: 20 (4507 words) Published: December 2, 2014
1. INTRODUCTION OF STARBUCKS COFFEE

The company, Starbucks Coffee was initially incorporated in the year 1971 by 3 entrepreneurs in Seattle where the business of the company is mainly selling whole bean coffee. Throughout the years of 1990s, Starbucks Coffee under the leadership of Howard Schultz, the company had expanded and growth rapidly with several efforts done. Starbucks coffee started its global expansion from year 1996 opening its first store outside of North America in Japan. Opening globally made Starbucks Coffee Company to record total net revenues of USD 9.8 billion for its business sales and operation. One of the Starbucks Coffee Company globally expansion market is Malaysia Food and Beverages Industry.

Starbucks Coffee Company expanded to Malaysia in year 1998. The mode of entry of Starbucks Coffee Company to Malaysia expanding and operating its business through the mode of licensing. Berjaya Corporation Berhad is the company that obtained the license to operate Starbucks Coffee Company locally. Berjaya Starbucks Company Sdn. Bhd. Is formed and jointly owned by Starbucks Coffee International and Berjaya Corporation Berhad. Starbucks Coffee Malaysia opened its first store on 17th December, 1998 at KL Plaza Bintang, Kuala Lumpur.

The business of Starbucks Coffee Malaysia basically are selling of espresso and coffee beverages, non-espresso and coffee beverages, coffee-related accessories and equipment, gift and merchandise, souvenirs, pastries and confessions. To date, in Malaysia itself, Starbucks had more than 141 stores operating the coffee business, and more than 700 stores across six Southeast Asian markets, including Indonesia, Malaysia, the Philippines, Singapore, Thailand and, most recently, Vietnam.

2. WHAT IS MARKET SEGMENTATION

Market segmentation is a process of dividing a market into distinct groups of buyers with different needs, characteristics, or behavior that might require separate products or marketing programs (Kotler and Armstrong, 2006). Initially Starbucks was based as a Socio-Economic segmentation base in consumer markets as it has concentrated on social class particularly the business class people, those who are working at the office and wanted to have a cup of coffee with good atmosphere and facilities. Starbucks also had segmented his market by geographic and demographically by selecting the store location where they can find the educated and coffee lovers (Dibb and Simkin, 1996).

2.1 SEGMENTATION OF CONSUMER MARKET OF STARBUCKS COFFEE

2.1.1 GEOGRAPHICAL SEGMENTATION
Starbucks in Malaysia is operated by Berjaya Starbucks Coffee Company Sdn Bhd., a joint-venture between Starbucks Coffee Company and Berjaya Group Berhad. From its first store opening in Kuala Lumpur on 17 December 1998, It has expanded to Sabah and Sarawak and surpassed the 140 stores milestone in January 2012. Now into our 14th year operation, Starbucks has grown not only to become the favorite coffee place for Malaysians but also a productive member of communities across the country. In its efforts to adapt as the world rapidly evolves, Starbucks Malaysia introduced the new drive-thru concept stores with consistency in mind. This new platform gives customers the option to enjoy their favorite coffee on the go, or at the store should they prefer to stretch their legs and relax. In Malaysia, Starbucks drive-thru concept stores are located in Johor Bahru, Shah Alam, Cyberjaya, and Petronas Kajang along the highway as well as Penang, the northern region of peninsular Malaysia.

2.1.2 DEMOGRAPHIC SEGMENTATION
This divides the market into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality. Demographic factors are the most popular bases for segmenting customer groups. Starbucks targets both males and females, mainly 18-44 year olds, but really does cater for everybody’s...
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