Ch. 8 Segmenting and Targeting Markets

Marketing segmentation helps marketers to group their customers and identify the specific needs for each group more precisely. After doing this, resources can be allocated accurately and the marketing mix can be adjusted perfectly.

Starbucks uses a combined strategy to break down their  own market from others in order to sell their products more effectively. The coffee company mainly uses demographic - and psycho-graphic segmentation. Starbucks focuses mainly on married,well educated 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 represents women in the age of 18 - 43, 42% of them have children, 33% of them are college graduates and 54 % of them are married. However, Starbucks target market also have common psycho-graphical characteristic. Main Starbucks consumer are college graduates with high income who like to socialize and  share a neighbor hood. The coffee house locates its retail stores in central spots of a neighbor hood such as train stations because these spots are easy to reach for everybody in a community.

Also, Starbucks practices a concentrated targeting strategy by focusing only one segment which is the gourmet coffee drinker. This is how Starbucks defines its niche and label themselves as a high quality product. After establishing their niche, Starbucks continually expanses its product line to keep its only segment excited.