Chapter 8 - Segmenting and Target Markets

Through the use of market segmentation, marketers can address and their customers specific needs for each group more accurately. In doing so, resources can be distributed correctly and the marketing mix can be adjusted to fit marketers expectations.

Starbucks incorporates a strategy to break down their own market from others in order to sell their products more efficient and effectively. The coffee company predominantly uses demographic and psycho-graphic segmentation.

 Starbucks focuses mainly on married, upper class and sophisticated men and women with children in the age of 40. Therefore, the coffee house created a mature and high prestige image and also provides beverages and food that appeal to children in order to appeal to their ideal segment. The actual segment turned out to be younger and less educated than expected. The main segment shows women in the age of 18 - 43, 42% of them have children, 33% of them are college graduates and 54 % of them are married. A large demographic of Starbucks consumers are college graduates with higher-end income who like to socialize with friends and community. The coffee house locates its retail stores in central spots of a neighbor hood such as train stations because these spots are more convenient for everybody in a community.

Starbucks practices a concentrated targeting strategy by directing their attention at one segment, which is the gourmet coffee drinker. This is how Starbucks’ defines its niche and label their selves as a high quality product. After establishing their niche, Starbucks constantly blankets its product line to keep its only segment excited.