Starbucks Case Study

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Starbucks main target segments consist of 4 parts:1. urban professionals 2. Well educated white collar female aged between 24-44, 3. Low income bracket less well educated teenagers. 4. Different racial groups, people with different background.

In order to deliver more value to urban professionals, Starbucks should continuously improve the environment and atmosphere in each store, add more comfortable couches and tables, increase the numbers of plugs which enable them to use personal computer and connect to internet, the main purpose is to make them stay by providing them the most comfortable atmosphere to relax, chat and even work.

Well educated, white collars females are the major consumer for Starbucks, building loyalty program, special “We thank you for your business with Starbucks” gift card, long term customer rewards system. The focus is to deliver more value by giving customers the idea of Starbucks community, where Starbucks appreciate their business always.

The next segment is the low-income bracket less well educated teenagers, their perception of Starbucks is different, they might not look for the highest quality, but value Starbucks as something special for when they walk into the store. Sometimes small things like having their names written on the Starbucks coffee mug can deliver the most value for them. Although their frequency of visiting the store is low, there’s still a huge potential that they will come more often once they had that one special memory with Starbucks. Strategy like coffee beverage coupons can motivate them to come back more often, “The second cup for free” really add value to them as they can bring their friend to visit Starbucks.

As Starbucks goes global, one of its target segment can be people with special background, Chinese, Christian, Jewish, etc. in general, Starbuck must learn about the local culture and give them a special feeling that Starbucks respect whoever they are and wherever they come from. For example, adding the element of dragon and red into all Chinese Starbucks mugs and stores. This approach really helps deliver the value to the customer.