This paper seeks to analyze the role of market segmentation at the Starbucks, which has a number of coffee hangout joints and brands that operate under it.
1.1 Brief History
Starbucks Cooperation is an international retail establishment that specializes in coffee products with the head-quarter in Seattle, US. Starbucks buys high quality coffee beans, processes them and sells them to the licensed coffee houses and stores.
Every day, we go to work hoping to do two things: share great coffee with our friends and help make the world a little better. It was true when the first Starbucks opened in 1971, and it’s just as true today.
Back then, the company was a single store in Seattle’s historic Pike Place Market. From just a narrow storefront, Starbucks offered some of the world’s finest fresh-roasted whole bean coffees. The name, inspired by Moby Dick, evoked the romance of the high seas and the seafaring tradition of the early coffee traders.
In 1981, Howard Schultz (Starbucks chairman, president and chief executive officer) had first walked into a Starbucks store. From his first cup of Sumatra, Howard was drawn into Starbucks and joined a year later.
A year later, in 1983, Howard traveled to Italy and became captivated with Italian coffee bars and the romance of the coffee experience. He had a vision to bring the Italian coffeehouse tradition back to the United States. A place for conversation and a sense of community. A third place between work and home. He left Starbucks for a short period of time to start his own Il Giornale coffeehouses and returned in August 1987 to purchase Starbucks with the help of local investors.
From the beginning, Starbucks set out to be a different kind of company. One that not only celebrated coffee and the rich tradition, but that also brought a feeling of connection.
Our mission to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time.
Today, with more than 18,000 stores in 62 countries, Starbucks is the premier roaster and retailer of specialty coffee in the world. And with every cup, we strive to bring both our heritage and an exceptional experience to life.
1.2 Company Profile
1.0 Segmenting the Market
Market Segmentation is a process of dividing a market into distinct groups of buyers with different needs, characteristics, or behaviour that might require separate products or marketing programs is called Market Segmentation (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 a 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). After a company has defined market segments, it can enter one or many segments of a given market and should make decision about how many and which customer groups to target (Dibb and Simkin, 1996). Target Marketing is a process of evaluating each market segment's attractiveness and selecting one or more segments to enter (Kotler and Armstrong, 2006). The concept of target marketing is a logical implication of the basic philosophy of marketing (Lancaster and Massingham, 1993). A company should target segments in which it can profitably generate the greatest customer value and sustain it overtime. Starbucks wanted to develop a reputable relationship with the customers, Most of companies enter in a new market y serving a single segment, and if this proves successful than they add more segments, initially Starbucks did the same thing targeted the parents with the young children and it was hit concept and it has added more segments by including Teenagers and developed its product range also...
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