...Starbucks - Segmentation and Target Market Paper MKT 571 March 11, 2014 Starbucks - Segmentation and Target Market Paper Company History Starbucks Corporation is the largest coffeehouse company in the world. Offering the world’s finest fresh-roasted whole bean coffees, this global American company’s history began with the opening of a single store in Seattle Washington’s Historic Pike Place Market in 1971 (Starbucks Corporation, 2014). Inspired by a roasting entrepreneur Alfred Peet, the founders, English teacher Jerry Baldwin, history teacher Zev Siegl, and writer Gordon Bowker created the current Starbucks name and green and white Siern Greek Mythology logo (Madison, 2011). Inspired from early traditions in coffee trade and the first mate from the novel Moby Dick, the unusual company and logo emerged. In 1981, Howard Schultz (Starbucks chairman, president and chief executive officer) first experienced coffee and was drawn to join Starbucks a year later. In 1983, after travels to Italy and becoming captivated by Italian coffee bars, Schultz brought back the Italian coffeehouse traditions to the United States (U.S.) (Starbucks Corporation, 2014). Schultz’s romance with the coffee experience had begun and within a few years he sought local investors and purchased Starbucks. Since Schultz’s purchase, Starbucks has partnered and dissolved its partnership with Kraft, added free Wi-Fi to their stores, placed product on supermarket shelves, partnered with Apple for an iTunes...
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...Market Segmentation Market Segmentation is a process of dividing a market into distinct groups of buyers with different needs, characteristics, or behavior that require separate products or marketing programs. Starbucks uses socio-economic segmentation in consumer markets, concentrating on social classes. 1. Young urban adults, particularly the business class population who works in offices and wants to have a cup of coffee with a good atmosphere and facilities, are the main segment it focuses on. According to Howard Schultz, Chairman of Starbucks, this segment is what the company refers to as its “core customers”, educated, average age of 42, and average income of $90,000. (The New York Times, 2006). They are people of diverse income and age groups that possess varying tastes and interests. Starbucks focuses on embracing diversity by providing good customer service and also by offering a large base of products that cater to different appeals. They are willing and interested in trying new products and innovations and by primarily reaching this target segment; it would then be easier to persuade other age groups to try Starbucks’ products. 2. Teenagers like college students are not its target group as teenagers do not necessarily have the money and if they do, are not as willing to spend their money on a pricey cup of coffee. Although teenagers are a large segment, they do not fit in to the image that Starbucks is creating. In addition they are not high consumers of coffee products...
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...The role of marketing has changed over time; beginning with the simple trade era, a time when everything was either made or harvested by hand (White, 2010), to the Social Media Marketing Era. The following eras will be described using different business types to explain what companies did during the era; Production Era, Sales Era, Marketing Concept Era, Market Orientation Era, Customer Experience Management Era, and Social Media Marketing Era. The production era began in the mid 1800s and lasted for 60 years. The revolution of mass production began during this era and business’ main focus was on selling their products rather than satisfying customer needs (Crane, 2014). The Ford Motor Company played a big part in the production era, this is when Henry Ford introduced the first moving assembly line. The moving assembly line at the Ford Motor Company was able to to meet the ever growing demands of a motorized vehicle by producing one Model T vehicle every 24 seconds (History, 2009). The main focus of The Ford Motor Company was the amount of vehicles the assembly line could produce and sell; this was done by creating using production plants where the parts being used to produce the vehicles could be interchangeable on the assembly line, and the ability of the assembly line to move instead of being static. After the production era came the sales era, beginning in the 1920s and lasted until the 1960s. Industries, like the flour industry, were producing more than customers could...
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...Business Research Starbucks, Bank One & Visa Launch Starbucks Card 1. What types of research were done at each stage? Discuss the strengths of each different type given the stage of the project. Starbucks used the scientific method which consists of three different studies based on product functionality, product optimization, and brand tracking. The scientific method used to gather information about the target markets that they had or trying to approach. The product functionality study was carried out at the concept testing stage of the research, through the use of an online survey. The purpose was to understand which of the two credit card concepts customers preferred of the dual-function or two separate cards. This would determine if the product would or would not function as Starbucks desired, the findings of this study would be pertinent information to assist Starbucks and its affiliates in determining the strengths and/or weaknesses of the study’s design. The study of product optimization was used to see the concept stages of research. Starbucks used this study to see if certain features from the dual action card would determine if customer’s decision to apply for a credit card. The brand tracking was used to measure the return on the marketing investments based on the feedback after they launched the card. 2. Build the management-research question hierarchy for this project. The first question Starbucks had to answer was whether or not they would...
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...McDonald’s Corporation (McDonald’s): Mobile Commerce (Smart Phone App) Lisa Delao John Heisner Gloria Rios University of Redlands School of Business Abstract E-commerce is rapidly changing the business world. Through the use of the internet and the web, businesses have realized billions of dollars in sales and revenue. Mobile commerce or m-commerce is a rapidly expanding facet of e-commerce that utilizes mobile digital devices to conduct business transactions. With great success restaurants have now launched smartphone apps that allow customers to order food online. Through the strategic implementation of a new m-commerce business plan, McDonald’s should also launch its own innovative smartphone app. The app will give customers the capability to order and purchase McDonald’s products with the use of their smartphone. McDonald’s Corporation: Mobile E-Commerce (Smart Phone App) E-commerce has revolutionized the business world. With the use of the internet and the web to conduct business transactions, e-commerce has created billions of dollars in sales and revenues for businesses in many different industries. Being that e-commerce is ubiquitous, “meaning that it is available just about everywhere at all times” (Laudon, 2012, p. 375), business transactions can take place virtually from anywhere and from any device that has access to the internet and web. The most rapidly growing form of e-commerce is mobile commerce or m-commerce,...
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... página 219: Just who is the Starbucks custumer? 1 1.1 Using the full spectrum of segmentation variables, describe how 2 Starbucks initially segmented and targeted the coffee market. 1.2 What changed first, the Starbucks customer or the Starbucks 3 experience? Explain your response by discussing principles of market targeting. 1.3 Based on the segmentation variables, how is Starbucks now 4 segmenting and targeting the coffee market? 1.4 Will Starbucks ever return to the revenue and profit growth 5 that it once enjoyed? Why or why not? 2 Mini simulación: Segmentation, targeting, positionating. 6 JUST WHO IS THE STARBUCKS CUSTUMER 1.1 Using the full spectrum of segmentation variables, describe how Starbucks initially segmented and targeted the coffee market. Exist many posibilities to segment any market, the variables always will depend of the enviroment aspects, like the goverment situations, economy aspects, the cultural diferencies etc. (Kotler, 2012), for this reason the marketing professional have to segment all the market in small groups to be closer to the best market option for his business. The variables study are geographic, demographic, psychographic and behavioral. Starbucks initially segmented his market combining the variables before mentioned, geographically the market was located in United States of America, in urban areas, with any kind of weather. Demographically his market was people between 24 and 44...
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...most joint venture is 50/50 venture，and each of parts holds a 50% ownership stake and contributes a team of managers to share operating control. It is quick and easy way to new market by using local partner’s knowledge, local network. Joint venture has a number of advantages. Firstly, IJVs enable companies to access complementary assets and resources. Secondly, it requires less investment compared to complete ownership. It can help reducing operating and political risks, this means the risks and costs will be shared. Thirdly, it can help companies overcome host-government regulations. Eg Tata group enter into China by joint venture with Chery Car Company in order to address regulations. The disadvantages of JV include: firstly, firms have risk of potential leakage of intellectual property. Secondly, The JVs does not give a firm the tight control over subsidiaries. Thirdly, different goals and culture will lead to conflicts between firms. Partner selection In selecting the IJV partners, companies must evaluate the potential partner’s resources, motivation and compatibility. Such as physical assets (buildings, plant, equipment); intangible assets (brands, contacts, quality of customer relationships); organizational capabilities (managerial competence, employee loyalty); moreover, current markets, product ranges and production locations; complementarities. In the case, JV with western partners require a relatively highly-skilled work-force because they are technologically...
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...Individual Case: Coffee Wars in India Café Coffee Day is the leader specialist coffee chain in India, holding over 60% of market share. The major issue that C.C.D. is facing is the entrance of the dominant global brand, Starbucks, in India’s coffee business. Not only Café Coffee Day has to deal with it, but also face all other international brands currently at the market while having global ambitions. In these last years, the competition in the coffee market has been increasing and even though Café Coffee Day has been managing to maintain its place as the leader, the entrance of Starbucks with a positive and stronger brand image, could threat the whole business. The challenge and goal, for now, is for the management of Café Coffee Day evaluate and analyze the situation and then figure a way to beat Starbucks while keep being the biggest player of the growing market. The coffee market in India is growing faster than the tea market, and comparing it with the market in the USA, it still has a long way to go, which means is not mature yet. It could be considered a trend among the youngsters and it has not been long since its boom. The different stores ended up delivering value to young customers who saw at the cafés a place to hang out, to customers who did a job interview on its lounges, to customers who wanted more than just coffee (“a place between home and work”), to customers who just wanted to do quick purchase at the express kiosk, or even buy coffee beans to breed at home...
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...Future Trends Charmaine Saint Surin OI/466 June 6, 2016 Fred Greifenstein Future Trends According to Webster.com dictionary, a trend is usually known as something undergoing change or is developing into something or going into a general or specific direction. Innovation is about timing, but there is not a theory behind it. It includes processes and new ideas and then they are converted into new useful products. It creates value for customers who pay for it. Disruptive Innovation is an all-out risk taker, creating new markets with more practical approaches towards buyer's purchasing power. What we know is that innovation does not have an end, it's the fact that what we want and what we need continues to change. Innovation is not the goal but everything we do to get to that point. I think collaboration within innovation is an revolving trend. This is the concept of an open source. With the internet age, there are so many people connected worldwide, so there is the fact of collaboration. It creates alternatives for companies who which are smaller to have the ability to remain small and agile. If that is the choice, it also allows those less ended businesses to be a part of the larger agenda in innovation. Innovation is a connected function of communities. It seems like we are all trying to come up with new solutions that capture the technologies we encompass and maybe even working with alternatives reworking those technologies. An example of this is universities...
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...M512 MARKETING STRATEGY Starbucks: Delivering Customer Service Alkis Marangos I have neither given nor received unauthorized aid on this assignment 1. What factors accounted for the success of Starbucks in the early 1990’s? What was so compelling about the Starbucks value proposition? The success of Starbucks in the early 1990’s can be attributed to Howard Schultz’s vision of the Starbucks brand. Schultz inspired of a company which would make the customer the centre of its success and would change the coffee drinking experience in the U.S. In order to achieve this, Schultz successfully utilized his human resources by establishing benefits that would force those resources to create value in the process of the coffee drinking experience. Starbucks was successful because it placed value to the customers first in its value proposition. Following is a number of factors that accounted to Starbucks success in the early 1990’s: a. Atmosphere: Schultz’s idea was to make Starbucks America’s “third place”. By recreating the Italian coffee culture he met in Milan, he managed to make Starbucks a place where people can enjoy their social interactions, relax, or just spent some time by themselves. In essence, the Starbucks idea changed the norm from “buying coffee as a drink” to “the experience of enjoying coffee”. People viewed Starbucks as a place they wanted to be at and they spent as much time as they could in the stores...
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...1. What specific direct and indirect competitors can you name for Red Bull? XS Energy, Monster, Rockstar, NOS, 5 Hour Energy, and Burn Energy are direct competitors for Red Bull. These brands focus on developing and selling energy drinks, and have their market shares in the market. Coca-Cola, Minute Maid, Pepsi, Mountain Dew, Fanta, and Starbucks are indirect competitors. These brands provide beverages except mental and physical stimulation drinks. People buy drinks from all the beverage brands if they did not need energy shot. 2. Describe Red Bull’s target market(s). Red Bull has three major target markets that are the athlete, the worker, and the clubber. The athlete, which group needs mental and physical simulation, undoubtedly is a target market for Red Bull. Red Bull for an athlete is an easy and good way to hone his or her stamina, and improve his or her speed. The worker, for example, a long-distance truck diver and a blue-collar worker, is very physical and demanding when he or she works. Red Bull is used as a popular mixer with vodka. It can remain young people and white-collar workers who have fun in a club active, so that the consumer will spend more time there and spend more money there. On the other hand, Red Bull has targeted on youth (16-29 years old) with buzz. 3. How would you describe Red Bull’s product position? Besides the original product line, Red Bull has expanded their product lines Red Bull Sugarfree, Total Zero, Energy Shot, and Red Bull...
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... For MKTU 605 Instructor- Virginia Silverman Table of contents Executive Summary……………………………………………..2 Company Description…………………………………………...3 Current Market Situation………………………………………..4 SWOT Analysis…………………………………………………6 Marketing Strategy...……………………………………………6 Mission………………………………………………………….6 Objectives……………………………………………………….7 Pricing…………………………………………………………...7 Action Programs………………………………………………...8 Financials………………………………………………………..9 Controls…………………………………………………………11 Resources……………………………………………………….12 Executive Summary The goal for this marketing plan is to present objectives, strategies and programs that will help bring Zoomlife Café a reality in the next 5 years. Zoomlife Café will provide an environment of social interaction and relationship building through its layout, furnishings and strong implementation of Customer Relationship Management (CRM) education and training for staff. Marketing will be paramount in making ‘Zoomlife’ a household term and synonymous with a memorable experience. To create this ‘vibe’ a strong utilization in print advertising and social media will be used in marketing efforts. Emphasis will be placed on creating an experience that makes customers want to come back. Target markets include: 1. College students 2. Local business professional and employees 3. Local musicians and artists Company Description Praveen Injeti and myself, Madhu Enjati, established Zoomlife Productions,...
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...successful publication that holds a strong grip in its market. The target segment that Men's Health focuses on is the single young and middle aged male adults, who are health and body conscious. In the past this would be a small market, but in the current trend of workout videos, such as P90X, rise of UFC fighting, and increased popularity in gyms, it has now expanded to becoming a very large and profitable market. One major strategy that the magazine focuses on is emphasizing and creating an atmosphere of manliness in every article/issue it writes. It does this by promoting ideas and keywords such as muscle gain, sex, fights, and work out to appeal to its main core audience. By doing this they are even able to make something such as eating salads, watching calories, or coping with stress/emotion interesting to its readers, similar to the strategy that Coke did with its Coke Zero brand. This creates an environment that is highly appealing to the magazine's target, men, creating something that they will turn back to time after time for advice, information, and even products related to them. Another major strategy that this magazine focuses on is creating a premium product and that would be viewed as a high end quality magazine. It does this in two ways by (1) setting a higher price than competitors and (2) having high end key advertisers. The first part of this strategy, setting higher prices, is similar to that of Starbucks where although you are paying a higher price you still...
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...Abstract In this assignment, I intend to one (1) Discuss obsolesces of home phones in terms of its repositioned target market demographic using U.S. Census Data. Two (2), determine the types of research needed to reposition the home phone. Three (3), I will discuss the method(s) I would use to increase adoption rates. Four (4), I will determine if a new service component will provide new interest for the home phone. Fifth (5), finally, I will anticipate the most likely distribution problems that I may encounter and how I would address them. Obsolesces of Home Phones, Part II Home phones are quickly becoming a thing of the past, at least according to a recent study done by the Centers for Disease Control (CDC). Nearly 18 percent of American homes use cellular phones as their primary, home phone, forgoing traditional landline versions. Discuss obsolesces of home phones in terms of its repositioned target market demographic using U.S. Census Data The targeted market demographics for home phones were 29 years old and younger; and for households that were 65 years old and older. The number of households with cell phones increased from 36 percent to 71 percent between 1998 and 2005, according to new data released by the U.S. Census Bureau. This corresponded with a decrease in households with telephone landlines, particularly households headed by young adults. One way to help promote the use of land line home phones could be to reverse the trend of the government giving and paying...
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...brands were created for their respective target markets, Workhorse and Traveler. Sales office locations were also based on the criteria provided in the simulation. For Microcomp’s purposes, two sales offices were selected to open in the second quarter, with a third sales office opening in the fourth quarter. Market research was purchased in each quarter and analyzed to determine the direction Microcomp’s competition. This key information led to changes in the compensation and benefits structure as well as the redesign of both computers. Also reviewed and analyzed were the factors used in determining whether to expand into the international market. This decision was mostly based on the sales potential for the target markets in the international arena. As a result, two of the three sales offices were international offices. Finally, various heavy investment factors for international expansion were analyzed. These factors included ethics, currency fluctuations and government policies. If these factors had been present in the simulation, Microcomp may have opened its first office domestically and used one quarter to establish a presence in the computer market before expanding globally. Brand Design Decisions Once Microcomp was set up and funds were established, the next task was deciding which two brands would be selected for production. To make a proper decision, three main factors were considered. The first factor was target market. Who wanted to buy computers and how...
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