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Segmentation and Targeting - Essay Example

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Segmentation and Targeting

Starbuck has experienced tremendous growth since it was founded. Identify the company’s target market and positioning strategy The level of coffee consumption in the United States has been on a downward trend, especially in the late twentieth century. However, Starbuck has been quite cautious when choosing its target markets. A target market can simply be defined as a group of consumers who share the same interests that a particular company selects to serve. The process of choosing a target market can be undertaken by evaluating social, environmental, political, and competitive factors. Consumers bargaining power and entry barriers all fall under the category of market factors. The prices offered by Starbucks were extremely high and the company was trying to develop a new culture for its customers. Considering that Starbuck was very careful when it came to coffee production, the company managed to maintain a stable relationship with its suppliers hence, it faced minimal threats and competition (Starbucks Corporation SWOT Analysis, 2008). Office employees with both middle and high revenue were the sole target for Starbuck. Schultz wanted Starbuck to be the place where people could meet and relax on their way home, after work and socialize with each other. Therefore, the company was aggressive in meeting the needs of the consumers. Great consideration was also placed on the arrangement of the store. Target market can be executed in various ways namely concentrated, distinguished and undistinguished (Kotler & Armstrong, 2004). The concentrated strategy focuses its efforts on a single market section and develops and maintains an exclusive approach for every section. The distinguished approach reaches out to the market by creating distinct products and promoting the programs for the various sections. The undistinguished strategy on the other targets the whole market using a single (Kotler & Armstrong, 2004). Starbuck adapted the undistinguished strategy to market their products. The company measured the whole market as one single section. The main obstacle that Starbuck faced when it employed this strategy is the development of a brand that would satisfy the needs of all customers. Nevertheless, Starbuck did not compromise any of its services hence, they did everything they could in order to produce a quality product. A company must choose which position it wishes to occupy in the market after identifying its target. The positioning entails the way consumers define a particular product in terms of quality, size, price and performance and several other factors. Previously, Starbuck had been using transactional marketing where profit was obtained mainly from reserved customers who had a long-term relationship with the company. However, the customer retention approach aims at enchantment instead of consumer fulfillment. Starbuck later discovered that public opinion was a better approach. This kind of strategy takes a long time to thrive, though the benefits are worthwhile (Brassington & Pettit, 2000). How does their product line fit with their target market and positioning? Does it make sense? Starbuck began to create high quality products and services to its consumers. Schultz was aware of the fact that coffee is indeed perishable hence, he emphasized on the production of quality products by supervising each stage of coffee manufacture. Whole bean coffee was purchased from countries such as Kenyan and Ethiopia (Stanley, 2002). The coffee was then roasted and ...Show more


Segmentation and Targeting Name Institution Segmentation and Targeting Starbuck Company Introduction The Starbuck Company was established in 1971. The founders Gordon Bowker, Jerry Baldin, and Zev Siegle had a vision of enlightening customers about fine coffee…
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