Segmentation, Target Market and Positioning
A successful marketing strategy specifies particular targeted customers. Starbucks is an international coffee and coffee chain based in Seattle. Starbucks sells brewed coffee, cold drinks, hot drinks and snacks. Most of their products are specific to stores depending on locality and seasonal.
Market target for Starbucks is students, professionals and family members. It aims at providing a third place apart from home and work, where people feel welcomed and enjoy quality coffee at friendly prices. Star bucks have attracted attention to customers who wanted an optional place apart from their workplace and homes. They offer premium coffee to people who like coffee and different specialty beverages developed in Starbucks. They also target professionals who work in executive and managerial positions. Therefore, their marketing strategy targets affluent and educated customers. They also expanded their market to provide coffee, to the less educated and low-income consumers. This ensures that all people from different walks of life can afford coffee from Starbucks, hence increasing their sales and profits.
Similarly, social factors influence the competitiveness of business, because social component profiles, relates to strategic analysis of addressable markets. In the United States, for instance how people live, work, consume and produce is shaped by different trends. Starbucks has put such trends into considerations to improve competitiveness and ensure increased coffee consumption, because coffee consumption is still focused on the morning breakfast.
With the rapid expansion of Starbucks, it has expanded to include ethnic neighborhoods, rural communities and rest stops. They target the urban areas with mostly in large cities, with the large population of students and faculty members.
Another marketing strategy for Starbucks is formation providing a wide range of products to different customers, through formation of alliances with other companies. This has helped in improving the companies’ reputation while selling the brand at the same time. An excellent example is their partnering with Noble bookstores and Bernes since 1993, forming plenty in house coffee. Similarly, they have partnered with airlines and ice cream manufacturers (forming Starbucks flavored ice cream), hence selling their brand. Accordingly, through such alliances, Starbucks has been able to offer a totally different brand experience for their customers through providing a wide range of products apart from coffee. The experience includes excellent customer service, unique drinking names, elegant coffee stores, a broad range of products, not coffee alone and exceptional customer treatment, hence increasing their range of customers.
The other target market for Starbucks is the socializing community. The coffee business has been at its peak and coffee specialty in the United States is the fastest growing business. Therefore, star bucks stores have also provided their customers with a venue where they can meet and socialize, thus increasing customer base. This is seen as another strategy used in increasing customer base, as they use star bucks as a place for socializing. Therefore, Starbucks has differentiated itself by providing a rich experience apart from quality coffee.
Starbucks company segmentation is seen to have stayed in the upper- scale, and competing for customer comfort. Starbucks is not seen to compete for convenience which is the case with most of the other competitors, like Dunkin Donuts and McDonald’s (Lussier, pg. 126).
Starbucks has also positioned its brand as experience, thus differentiating itself from other coffee retailers. This ensures that they have repeat customers because of an excellent first impression. This also ensures loyalty as it entices customers to visit their locations.
Starbucks is the most major name in coffee promotion throughout the world. It is an international leader in bringing coffee and coffeehouse experience. They have gained popularity due to their continuous expansion. Starbucks specializes in coffee retailing and produces a variety of coffee and other beverages, cold or hot. The company has coffee shops in over 37 countries with over 10, 000 coffee shops which give the company a strong brand, which is well known, hence differentiating it from other coffee producers. Consequently, a strong brand image gives it a high bargaining power of its suppliers, hence differentiating its offers. This ensures increased sales, brand differentiation and increased customer base. Conclusively, its first position in the world as a coffee retailer ensures maintenance of customer base and continued growth.
SWOT analysis is a tool used in identifying strengths, weaknesses, opportunities and threats in an organization. It is a powerful way of looking at a company from different dimensions. SWOT analysis identifies the opportunities and strengths of the organization, and what it can do and what it cannot do.
The SWOT analysis can be used by investors of Starbucks to make a business plan which is realistic to the weaknesses and strengths of the company. It distinguishes between the positioning of the company today, and where it is headed in the future, therefore, gives the managers a place to start (Kurtz, pg. 229).
Kurtz, D. L., & Boone, L. E. (2011). Contemporary business. Hoboken, N.J: Wiley.
Lussier, R. N. (2008). Management fundamentals: Concepts, applications, skill development.
Mason, OH: South-Western/Cengage Learning.