Market Planning for Starbucks: Target Segments, Positioning Strategy, and Marketing Mix

This report discusses the marketing plan and strategy of new items to be offered by Starbucks in the market. It identifies target segments based on different factors and aspects, discusses the ideal positioning strategy, and presents an effective marketing mix. The report also includes an evaluation and control plan for Starbucks, followed by an implementation plan.

Running head: MARKET PLANNING
Market planning
Name of the student
Name of the university
Author note

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Executive summary
The aim of this report is to discuss about the marketing plan and strategy of new items to be
offered by Starbucks in the market. In this report, the target segments for Starbucks are being
identified based on different factors and aspects. In addition, this report also discussed about the
ideal positioning strategy for Starbucks in offering their new products in the market. An effective
positioning statement and positioning map is being done that will help Starbucks in the long term
in the pushing the sales of their products. Marketing mix for the new products of Starbucks is
also discussed based on its four main elements. The latter half of the report is based on the
evaluation and control aspect of the organization. The report has presented an Evaluation and
Control plan for Starbucks whereby certain metrics have been provided. This is followed by the
implementation plan where a Gantt chart with the one year schedule has been provided. The
conclusion and recommendations wrap the report.

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Table of Contents
Introduction......................................................................................................................................3
Identification of target market segments.........................................................................................4
Demographic segmentation.........................................................................................................4
Psychographic segmentation.......................................................................................................5
Geographic segmentation............................................................................................................5
Identification of positioning strategy...............................................................................................6
Strategic positioning map............................................................................................................7
Marketing mix strategies.................................................................................................................8
Product.........................................................................................................................................8
Price...........................................................................................................................................12
Promotion..................................................................................................................................12
Place...........................................................................................................................................14
Evaluation and Control..................................................................................................................14
Conclusion and Recommendations................................................................................................18
Reference.......................................................................................................................................19

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Introduction
Marketing plays an important role in generating competitiveness for the business
organizations. This is due to the reason that in the current competitive business scenario,
effectiveness of the marketing helps the organizations to tap the target market effectively along
with generating more brand identity and value among the customers (Paley, 2017). However,
initiation of the marketing plan involves determination of different elements such as
identification of the target market, designing the positioning strategy and evaluation plan.
Determination of the target market is important due to the reason marketing approach is designed
in accordance to the taste and preference pattern of the target customers. On the other hand,
marketing mix is another major and important element in the marketing plan (Lamb &
Crompton, 2017). This is due to the reason that marketing mix elements help in determining the
product attributes along with their respective pricing, distribution and promotional strategy.
Similarly, implementation and evaluation plan is much important in the market plan due to the
fact that success of the marketing plan is depending on these factors.
Starbucks is one of the leading chains of café in the world with having their presence in
different countries around the world. The first store of Starbucks opened in 1971 and currently,
they are having thousands of stores across the world (starbucks.com, 2018). However, in the
recent time, number of new entrants entered in the global market and posing challenges for
Starbucks. Thus, an ideal and effective marketing plan will help Starbucks in creating positive
business environment.
This report will discuss about the target market segments of Starbucks along with their
targeting and positioning strategy. In addition, the marketing mix elements for Starbucks will

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also be discussed including the major four elements. Lastly, evaluation and implementation plan
will also be discussed along with proper time frame. This report will conclude with a few
recommendations for Starbucks in their future strategic intent.
Identification of target market segments
It is identified that Starbucks follows both differentiated and concentrated marketing
strategy. This is due to the reason that products of Starbucks are not targeted towards the mass
market rather it is more targeted towards a particular niche target segment (Cross, Belich &
Rudelius, 2015). Thus, differentiated and concentrated marketing strategy helps Starbucks to
design the marketing approach in accordance to the particular customer segments. The following
sections will discuss about the different customer segments based on these elements.
Demographic segmentation
In terms of age groups, the target segments for Starbucks are customers between the ages
of 18 to 45 as the primary target market. Younger age group is targeted due to the reason that
younger set of customers are having more preferences for café culture. In addition, the updated
products offered by Starbucks are also presented in accordance to the taste and preference pattern
of the younger age groups (Sandy, Gosling & Durant, 2013). However, on the other hand,
secondary target market for Starbucks includes the children below the age of 18 and elders above
the age of 50. Teenagers below the age of 18 can be targeted due to the reason that in case of
family outing, children are also present. In addition, there are significant amount of elderly
people who prefers café for their business meeting. In terms of gender, both males and females
are being targeted due to the fact that coffee is having equal acceptance from both the genders
(Hess & Doe, 2013).

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In terms of social status, only the top of the pyramid customers are being targeted and
products and services of Starbucks are being positioned as more status symbol. Thus the value
creation for the customers of Starbucks is not only the taste of the coffee but also the social status
and class attached with them. Mainly the professionals are being targeted along with college
goers (Rupp,Kern & Helmig, 2014). This is due to the reason that professionals are having busy
daily schedule and they mainly come to café for leisure. On the other hand, college goers are
targeted due to the reason that they prefer café for occasional outings. In terms of income level,
premium customers are being targeted with the exclusive and premium products of Starbucks.
Psychographic segmentation
In terms of lifestyles of the customers, people with having active lifestyles are being
targeted. This is due to the reason that customers with active and updated lifestyles will be more
aware about the café culture and they will be more updated with the latest offerings of Starbucks
(Park & Jang, 2014). In terms of adopter categories, early adopters and early majority customers
are being targeted. This is due to the reason that early adopters prefer the products of Starbucks
as trying something new while on the other hand, the major follows the trend in the market,
which falls under the early majority category.
Geographic segmentation
In terms of geographic segmentation, customers from the tier I cities are being targeted.
This is due to the fact that Starbucks stores are only having their presence in the metropolitan
cities around the world. In addition, Starbucks is having their stores mainly in the developed
countries and a few in the developing countries (Yu et al., 2016). Thus, customers only from

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these countries are being targeted. Urban customers are only being targeted and involved in the
marketing approach of Starbucks.
Identification of positioning strategy
The major unique selling proposition for Starbucks is unique taste, aesthetic value and
distinctive service offerings. Coffee of Starbucks is known for their rich and strong taste and
aroma. Thus, it is important for Starbucks to more focus on their product attributes in generating
unique selling proposition. In addition, aesthetic value including the store ambience and service
quality can also be leveraged in gaining the competencies (Khan, 2013). This is due to the reason
that logo and green color used by Starbucks now became synonymous and brand recall for the
customers is also high. Added with the high social value, the status quotient offered by Starbucks
is well ahead of their competitors and it can also be considered as their unique selling
proposition.
Currently, the positioning statement or slogan of Starbucks is “rewarding taste buds”.
This refers to the fact that taste is the major positioning factor for Starbucks and their product
offerings are designed in accordance to different tastes. Positioning strategy of Starbucks is
based on different elements such as product attributes, meeting need not fulfilled by the
competitors, social class and exclusivity. Product attributes for Starbucks include taste and
design of the service offered to the customers. Apart from coffee as core offerings, there are
number of other offerings such as cappuccino and bakery items are offered by them, which are
unique in terms of tastes and their service delivery process. Some of these products are only
being offered by Starbucks only. Thus, they are positioning their products based on these
attributes.

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Higher pricing
Lower pricing
Higher product
attributes
Lower product
attributes
Starbucks
McDonalds
Costa Coffee
Dunkin Donuts
Starbucks
(New position)
Some of the factors such as exclusivity and social class are not being fulfilled by majority
of the competitors for Starbucks. This coupled with the premium pricing of the products of
Starbucks is offering an added social or status symbol for the customers. It is also helping
Starbucks in positioning their products as more premium in the market by offering less
distinctive products over their competitors.
Strategic positioning map

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Currently, the positioning location for Starbucks is higher pricing and higher product
attributes. This refers to the fact that target customers are from the top of the pyramid and they
are getting attracted only with the product proposition offering by Starbucks irrespective of the
price. However, in the above strategic map, it is shown that offering more competitive price
along with offering higher product attributes will help Starbucks to cater to larger customer
segments and more sales revenue (Derdenger & Kumar, 2013). This is due to the reason that
even though the premium pricing is maintaining the exclusivity of Starbucks but it is also
restricting the market potentiality for them. The above positioning map is showing that Starbucks
is not posing any challenge for other major competitors due to the differences in the pricing
level.
Marketing mix strategies
Product
The main product line for Starbucks consists of range of coffee, tea and other beverages,
while the secondary product line includes baked pastries, salads, sandwiches and fruit cups.
Secondary product line of Starbucks mainly acts as the complimentary offerings over their
primary products. However, primary and secondary product line of Starbucks is all in the same
category of bakery and café. One of the major attributes of the products of Starbucks is
packaging due to the fact that distinctive packaging and package design of Starbucks helps them
in branding and offering unique servicing to the customers (Helm & Gritsch, 2014).
Furthermore, the top quality ingredients used in making the food and beverages helps in
maintaining their taste. However, it should be noted that Starbucks maintains global product
strategy with having focus on the market adaptation.

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Another major product element for Starbucks is their deep product assortments. This is
due to the fact that in terms of beverages and baked food, Starbucks is having is huge variety in
size and flavors. This is helping them in catering to different taste and preference pattern of the
customers from a certain segment. Though the product offerings are being initiated according to
their global approach, service delivery approach is differentiated according to the target market
needs. Some of the most popular items of Starbucks are Seattle coffee, Caffe Misto and Iced
Brewed coffee. On the other hand, in the food category, the major items are almond croissant,
chicken strips, Butterscotch cookie and Blueberry muffin (Mintz & Currim, 2013). These new
products will help Starbucks in diversifying more customer segments apart from their existing
customer base. In the comparison to the product portfolio of Starbucks, competitor’s products are
less assorted. For example, Costa Coffee is also offering similar brew of coffee as Starbucks but
the variants offered by them is less than that of Starbucks.
Figure: 1
Blueberry Muffin

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Figure: 2
Butterscotch cookie
Figure: 3
Almond croissant

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Figure: 4
Iced Brewed coffee
Figure: 5
Caffe Misto

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Price
Pricing structure should be based on retail price. This is due to the reason that in order to
make the products of Starbucks more competitive, retail market price level should be considered.
Thus, price differences between the products of Starbucks and their competitors will get reduced
and more customer segments can be targeted. However, it is also being recommended that a
premium should be maintained over the retail price in order to have the existing brand identity.
In this case, the selling price will be determined by means of adding the cost price and the
premium value initiated (Li, Xu & Li, 2013). The cost price will be fixed and premium will be
variable. In terms of pricing strategy, geographic pricing and product bundling pricing will be
maintained. This is due to the reason that pricing of Starbucks should be based on the economy
of the target market. For instance, products can be sold in more premiums in the developed
countries over the developing countries.
Adaptation strategy will be followed in providing discounts due to the reason that trend
of festive discounts will be different in different regions. Thus, the festive discounts will be
offered based on the timing of the festivals in different regions. Price of Starbucks will be
adjusted based on the geographical price zones due to the reason that change in the price level
will determine the change in the pricing level of the products. This will also enable Starbucks to
align their pricing level with the market economy.
Promotion
The new positioning slogan for Starbucks will be “something more for everyone”. This
depicts the larger target segments for Starbucks with having the fact that value proposition will
be more compared to their competitors. The new advertisement approach will be more emotional

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and comparative, which will help to find the right chord with the emotional attachment of the
customers. Moreover, comparative approach will aware the customers about their distinctive
value proposition. Choice of media will include both offline and online media (Gangwar, Kumar
& Rao, 2013). Social media will be used to tap the younger segments and determining the
feedback of them. On the other hand, traditional media such as TV and print media will be used
to communicate the newly launched products and offers.
Media Jan Feb Mar April May June July Aug Sep Oct Nov Dec
Radio
TV
Outdoor
media
Social
media
Online
website
Print media
Scheduling of usage of promotional mediums
In terms of loyalty programs, Starbucks cards will be provided to the customers in which,
loyalty points will be stored with every purchases. This will enhance the external push of the
customers in buying more from Starbucks. Customer and customer support will be given more
focus due to the fact that service quality will determine the satisfaction level of the customers.
They will have live chat options along with having dedicated community in the social media.
Thus, customers will have less time incurred in getting the response in case of their queries.

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Place
Starbucks will follow exclusive distribution strategy due to the reason that it will help to
maintain their existing positioning in the market. In addition, this will also help in maintaining
the certain standards of the service delivery of Starbucks. Currently, the tier I cities are being
catered by Starbucks and there are number of metropolitan cities where they currently do not
have their presence. These new cities will be covered. Direct distribution channels will be used
due to the presence of exclusive distribution strategy (Chen & Sheih, 2016). Thus, the entire
channels in the distribution process will be in control of Starbucks. Social media will mainly be
used in gathering the market data and information for the product strategy.
Evaluation and Control
The evaluation and control aspect of the Marketing Plan tends to play a great role
whereby it helps the organization in successfully ensuring whether they will be able to abide by
the designated plans and see to it whether their staff and other resources are working in
alignment with one another. If the evaluation and control aspect of a plan does not work
appropriately, it becomes very difficult for the organization to ensure and see to it that they form
specific evaluation as well as control plans which will assist them accordingly. Hence, with
respect to this, the given section of the marketing plan will be highlighting the different
monitoring and evaluation metrics which Starbucks can deploy into the organization in order to
ensure that it is successfully able to control its plan. The evaluations will be carried out every 3
months in January 2019, June 2019 and in January 2020. The evaluation which will be carried
out in the year June 2019, will determine the success of the marketing plan and to check whether
the Starbucks in India will be successful.

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Metric Method of
Measurement
Timing Responsibility Outcome
Increased
market share by
5% with respect
to the below 30
country.
The market share
of the
organization will
be calculated will
be measured every
3 months and the
popularity of the
competitors will
also be measured.
Along with this,
the industry sales
shall also be
analyzed
accordingly.
Every 4 months Chief Financial
Officer
Market share will
increase by 5%.
Successfully
introduce a new
product line
Post testing of the
different
advertising
methods in order
to understand the
appropriate
consumer
responses.
Measurement of
social media
Every 3 months Chief Marketing
Head
Consumer
feedback will be
taken of the
different members
and their overall
sales will be
measured

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response
Measurement of
media coverage
done by
Starbucks.
Sales and
Revenue of
Starbucks Coffee
Increase the sales
of Starbucks by
20% every year
Check the annual
sales and other
related reports.
Measure the
popularity of the
company
Profit earned by
the company
Every 6 months The Marketing
Director
The sales of the
organization will
increase in India
by 20% every
year.

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Implementation and Schedule
In order to ensure that the expedition of Starbucks in India is successful, the organization
is required to take considerable steps which will go a long way in assisting the organization to
achieve success in the long run. The 4Ps of marketing are the primary essentials need to be
finalized before any adequate step is taken. Every department needs to understand the roles
which they are required to take in order to ensure smooth implementation of the plans. The
evaluation aspect of the strategies as well as promotions will be assessed every 3 months in order
to ensure the growth as well as the development prospects.
Starbucks
Implementation
schedule
Ja
n-
19
Fe
b-
19
Ma
r-
19
Ap
r-
19
May-
19
Ju
n-
19
Jul
-19
Au
g-
19
Oct
-19
Nov
-19
Dec
-19
Ja
n-
20
Product
The development of the
specific product
Testing in the labs
The launch of the coffee
Price
Deciding upon the
Pricing Strategy
Promotion
Press release
The updating of the
website
Social Media Strategy
TV and Radio ads
Pop up events and
Sponsor Launches
Distribution
Defining of the
distribution strategy
Distribution of initial
volumes of the product
Evaluation
Growth analysis
Customer feedback
Overall analysis
Conclusion and Recommendations

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Therefore, from the given analysis it can be rightfully stated that the given Marketing
plan of the Starbucks has taken into consideration various aspects of the external environment as
well as the internal market along with the consumer and market development aspects. The report
defined the background of the company which was then followed by the analysis of the
marketing environment. The latter half of the report outlines the Marketing mix of the
organization which is then followed by the Monitoring, Evaluating, Control and the
Implementation strategy. If these steps in the marketing plan are followed, the company will be
able to achieve long term success in the market.
However, it can be rightfully recommended that for India, it first targets the capital cities
as they have a larger population base which has a huge purchasing power and thus they will be
able to afford the product. Moreover, it is also recommended that in order to ensure its brand
name prevails it needs to make use of the exclusive premium pricing which shall then assist it to
achieve long term success. The promotional activities should be followed by appropriate
feedback which shall assist in monitoringand controlling.

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