Marketing Research- Starbucks vs. Coffee Beans

1327 Words Mar 11th, 2002 6 Pages
Market segmentation is defined as the process of dividing a market into distinct subsets of consumers with common needs or characteristics and selecting one or more segments to target with a distinct marketing mix (Schiffman, Bednall, Cowley, O'Cass, Watson and Kanuk, 2001). Different companies have different abilities that enable them to serve their target market better, which is why some companies choose to focus much of their attention to specific segments. Starbucks primarily chooses to focus on the demographics, psychographics and lifestyle of their customers. It is with the information gathered regarding these segments that Starbucks can better serve its customers.

Demographics are things such as age, sex, marital status, education,
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Starbucks sells a lifestyle, to both customers and employees, and has followed the successful examples of other big corporations such as Coke, Nike and Sony by linking its brand with all things "cool" and "in". Starbucks has created a style and ambience that has infused a certain new chic and appeal into coffee, an age-old beverage, making it the hippest drink of today.

Starbucks chooses to associate itself with all things bustling, active and vigourous. That is why locations of all the stores are carefully selected for convenience and Starbucks specifically targets places that are heavy with pedestrian street traffic. Some of the places that you would find a Starbucks, either in the form of a large store or a just a small kiosk (both ideal for just popping in for a quick take away coffee or for a nice light lunch break) would be at shopping centres, airport terminals and supermarket foyers, which are all places that are always hectic and filled to the brim with people who have busy lifestyles and are always on the go.

Starbucks competes directly against specialty coffees sold at retail through supermarkets, specialty retails, and a growing number of other specialty coffee stores. In addition, Starbucks competes for whole bean coffee sales with franchise operators and independent specialty coffee stores. In virtually every major
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