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Starbucks Marketing Plan - Marketing Segmentation

Essay by   •  August 6, 2012  •  Business Plan  •  1,793 Words (8 Pages)  •  1,182 Views

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Marketing Plan

The following presentation will present the overall marketing plan for Starbucks and will debate the impacting factors of the potential success of marketing strategies. The segmentation criteria of the target market selection will be identified as well as the decided target market. The public consumers and potential organizational buyers of Starbucks' products will be identified along with the most influential factors that may impact Starbucks' purchasing decisions. The potential influencing factors will be debated based on its potential to impact the overall marketing strategy. Finally, there will be a complete analysis of Starbucks most current competitors for the popular coffee market along with a definition of the competitive landscape for Starbucks product market. By the conclusion of the paper, one should be able to identify the potential success for Starbucks current marketing strategy along with a clear analysis of their competitors and Starbucks plan of action to maintain their position within the coffee market.

Marketing Segmentation

Market segmentation of Starbucks target audience is the first step in developing a market strategy. Marketing segmentation simply stated is an organization beginning a strategy by grouping customers who have similar needs and wants in the same category. This allows the marketing team to determine which groups to cater most to, and how to position the product to bring in other target groups. The basic objective of segmentation is to provide customers with the best possible product, yet still make the company a profit. How this can be achieved will depend on the company; its limits and capabilities. As an example, a simple sandwich on the new lunch menu may be able to increase sales, and cut advertising costs if the target consumers are influenced correctly. Identifying which age, pay scale, or demographic is just some of the criteria necessary for determining a target market. Once all the important details are established, deciding each group's shopping influences makes marketing that much easier.

Currently, Starbucks target market is typically every age and demographic there that exists. Some studies show that Starbucks has more female customers, usually in the 35 to 44 year old range. Starbucks also houses many college graduates, business professionals, and usually from a dual income households. Aiming the marketing plan at households with two working professionals, whom have college degrees will probably be the primary target audience. If the target audience is already visiting the store, then convincing them to at least give the new menu a try should be quite easy. Marketing the new lunch menu to every crowd won't be much more difficult. Starbucks has a wide range of consumers, and being able to market a new lunch menu to all customers is broad, but will have a major impact.

Consumers and Influencing Factors

As a thriving organization, Starbucks is well aware of its position in its industry and strives to promote healthy customer relationships. According to the Starbucks mission statement, "When we are fully engaged, we connect with, laugh with, and uplift the lives of our customers- even if just for a few moments. Sure, it starts with the promise of a perfectly made beverage, but our work goes far beyond that. It's really about human connection" (2009). In creating this type of atmosphere, more customers are likely to flock to this type of environment.

A wide range of customers will be using the new sandwich bar at Starbucks. While the company currently has a specific client base, the belief is that this new addition to stores will increase the number of visitors as well as profits. According to Bill Tancer at Time Magazine and Hitwise, "the Starbucks' website has 8.3% more female visitors than does the McDonald's (one of the company's competitors) site." Tancer also states that Starbucks' clients are typically in 35-to-44-year-old age group (2008). The segment of Starbucks' clients is generally noted as college educated, dual income households (2008). With the new Starbucks sandwich bar, more high school and college students will visit locations for lunch as well as to complete school assignments in a relaxing environment. More business executives will frequent for meetings and lunch due to the atmosphere as well as the convenience offered by Starbucks.

While seeking to promote the new sandwich bar, Starbucks' marketing will change to include advertisement that welcomes students and business executives. The advertising should promote a calm environment where assignments can be completed and personal as well as business meetings can take place. In addition, the convenience of lunch as well as a favorite coffee blend should be mentioned.

Competitors and the Competitive Landscape

Starbucks currently has three major competitors: McDonald's, Nestle, and Dunkin' Donuts. While these three companies have strong positions in the coffee and tea manufacture industry, Starbucks stands apart by offering high quality coffees as well as a varying food selection and excellent customer service. According to Hoovers, Inc., "the output of US coffee and tea manufacturing is forecast to grow at an annual compounded rate of 2 % between 2008 and 2013" (2009). The industries in which Starbucks is currently competing are leisure, beverages, food, and retail. Becoming the leading company in all industries through innovative product advertising is an important factor to the company's success.

In the article from Hoovers, "consumer taste and population growth drive demand in the consumer sector, while economic growth

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