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Analysis of Starbucks' Market Segmentation and Targeting

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Analysis Of Starbucks’ Market Segmentation And Targeting

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Starbucks has more than 28,000 stores in 75 countries. It is easy to mitigate that people all over these countries must be Starbucks’ target audience. Starbucks transformed the coffee shop impression so that customers queue up for the delight of their favourite coffee blend made with the finest beans, created for distinguished taste, and served to their preference. The stores diversely cater to even non-coffee drinkers with their menu items which include desserts, sandwiches and other snacks. The company has succeeded by having precise knowledge of who its target audience is, every moment and renders its service to them.

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Geographic Segmentation

The trend of “going green” continuous to grow globally. Since Lifestyles of Health and Sustainability (LOHAS) concept rose in early 2000, maintainable living has spread to all facets of society including power, buildings, development and agriculture. In Asia, many countries have risen to the challenge with different country-specific creativities such as Singapore’s ‘Saving Gaia’ and its Green Label Scheme, Indonesia’s Ekolabel, Taiwan’s Green Mark, and China’s Environmental Labeling Program. Continuous growth is expected from this prodigy in Asia as more countries have recognized the importance of integrating green development policies and eco-friendly contemplations into their national progression plans to implement sustainability. These legislative efforts have increased eco-friendly consumers in Asia who are conscious of the consumptions’ consequences and implications on the environment.

Demographic Segmentation

Businesses have a vital role in supporting national vision through the prudent use of limited resources in products. Initiatives like Project Zero Waste put the spotlight on beautiful ecosystems that have been blighted by filth, pollution and garbage. Riding on this, this edible straw product will also work alongside with the goal to reduce packaging waste as the consumer can choose the taste of his/ her preference and consume it. This product ensures that there is no wastage in our resources. Green concepts can effectively improve the efficiency of Starbucks, by saving production costs in the long run. By using 100% edible materials, Starbucks is able to save costs on the raw material of packaging itself and also the energy costs of making new packaging of the straws. Participating in the green movement benefits the society and the manufacturing process and also eventually responds to the uprising demand for sustainable products from the consumers in Singapore. Having an environmentally-responsible image will be received positively by domestic consumers and leads to repeated purchases.

Psychographic Segmentation

Starbucks’ targeted customers are defined as prosperous or high salaried (around $90,000). This can be observed by the number of outlets within proximity in every neighbourhood. These populaces are prepared to spend their flexible revenue on the finest coffee and occasionally treat themselves. A recent Nielsen survey revealed that the increasing cost of living in Singapore over the past year has moulded consumers to be price-sensitive, with over 62% of Singaporeans observing caution in household expenses. Many have developed a strong inclination towards making value-for-money purchases, with 43% opting for affordable grocery brands. However, other researches have also specified that consumers who are eco-conscious, are exerting their acquiring power by choosing environmentally responsible products. In Singapore, despite heightened price-sensitivity, 72% of consumers claimed that they are willing to pay price premiums of up to 11% on average for green-certified items.

Behavioural Segmentation

With its first store which was LEED-certified, built to adhere to green standards in 1995, Starbucks’ promises to shield the earth and make a transformation to the communities have been apparent. The choices to endorse maintainable growing of coffee, reduce the company’s personal footmark, open support centres for farmers and the use of recycled fibre cups to improve neighbouring societies, attract their customers who share the company’s mission of optimistic transformation. Starbucks’ target audience is flexible to change. They know that moving forward entails flexibility and, like their favourite coffee store, they welcome the changes that arise with growth. As the audience has amplified and grown older, Starbucks and its loyal customers perceive prospects rather than problems and continue to be passionate about what the future may bring.

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