STP of Starbucks

This assessment for MMK101 Trimester 1 2018 discusses the STP strategy of Starbucks. It covers their market segmentation, target market, differentiation and positioning strategy. Starbucks differentiates their products and services by offering unmatchable products and excellent services. Their target market is people who love to sip coffee frequently. Their positioning statement is 'Sip coffee, say bye to stress and concentrate'.

RUNNING AHEAD: STP of Starbucks 1
50@50 ASSESSMENT 2
MMK101 TRIMESTER 1 2018
SEGMENTATION,
TARGETING,
DIFFERENTIATION AND
POSITIONING STRATEGY
Student Name:

STP of Starbucks 2
Student Number:

STP of Starbucks 3
Table of Contents
1.1. Background...........................................................................................................................3
1.2. Market Segmentation............................................................................................................3
1.2.1 Market Segmentation of Starbucks.....................................................................................4
1.3. Target Market.......................................................................................................................5
1.3.1 Target Market for Starbucks...............................................................................................6
1.4. Differentiation and Positioning Strategy..............................................................................6
1.4.1 Differentiation strategy of Starbucks..................................................................................6
1.4.2. Positioning Statement of Starbucks...................................................................................7
1.4.3. Positioning Map of Starbucks............................................................................................7
Reference List..................................................................................................................................8

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1.1.Background
Every business needs to plan their marketing strategy so that they can stand out from that of their
competitors. With the help of appropriate marketing strategy analysis, the business would be able
to understand the various segments available for the business, the segments which are right for
the business and also the way, the product needs to be placed among the customers.
Starbucks was found in 1971 in Seattle. Starbucks wanted to create the Italian Expresso Bar
experience for the American customers. They were consciously trying hard to achieve the market
leader position and they were able to achieve the same, by way of offering unmatched experience
at the café. The only vision of Starbucks was to educate the customers about the fine coffee that
is available.
1.2.Market Segmentation
Market segmentation is a process of division of available potential, on the basis of characteristics
possessed (Laroche 2014). Each segment would consist of customers with one or more common
characteristics. Few of the common types of market segmentation are as follows: -
 Demographic segmentation – Demographic segmentation considers the age, family size,
gender, marital status, religion, race, income and other such factors to divide the product.
This allows the marketer to target the right group of people who could be interested in
their product (Rashid 2013).
 Geographic segmentation – This segmentation allows the marketer to mark the region in

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which they would like to sell their product. This also allows the marketer to draft a
strategy that would be suitable for people from different regions.
 Psychographic segmentation – This segment is made up of personality, attitude and
lifestyle of people. These factors create a great impact on the buying decisions that an
individual makes (Sund 2013).
 Behavioral segmentation – This segmentation is done on the basis of the preference,
choice, behavior, usage and decision making of the buyer. The knowledge about the
product allows the buyer to make buying decision about the product (Pagani 2016).
1.2.1 Market Segmentation of Starbucks
Starbucks have considered the various segments and have decided on the customers based on the
segment. The segments that can be served by Starbucks are as follows: -
 Geographic segmentation – This may not be considered appropriate for Starbucks as they
have their presence in most of the countries.
 Demographic segmentation – Few of the demographic factors that are considered for
segmentation by Starbucks are as follows: -
o Age – Starbucks targets audiences between the age of 20 and 60
o Life-cycle stage – College goers, bachelors, married couples with no children,
married couple with children and older married couples are considered as an
important segment to serve
o Occupation – Employees, students and professionals are considered by Starbucks
 Behavioral segmentation – Few of factors that are considered by Starbucks for behavioral
segmentation are as follows: -
o People who love to sip coffee frequently

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o People who believe in sipping coffee and spending quality time in a peaceful and
calm atmosphere
o People who want to sip coffee, pull their laptop out and start working
o People who want to sip coffee and chat with their friends or family
 Psychographic segmentation – Under this segment, Starbucks believed middle class and
upper class people would prefer to come down to taste coffee (Racioppi 2014).
Types of Segmentation Considerations
Demographic segmentation  Age
 Lifecycle stage
 Occupation
Behavioral segmentation  Frequent coffee sipper
 Coffee and comfort time
Psychographic segmentation  Middle class
 Upper class
1.3.Target Market.
Targeting is a process in which the business would evaluate each segment and understand the
attractiveness and concerns associated with each segment. Accordingly, they would decide on
one or more segments that the business can serve. The target market should be such that the
business can meet their requirements and at the same time, the customers can be retained over a
period of time (Hunt 2017).

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1.3.1 Target Market for Starbucks
For Starbucks, segments identified on the basis of behavioral segmentation can be considered.
Especially, people who love to sip coffee at regular intervals should be targeted. Few of the
reasons for the same are stated below.
People who have a love for coffee would always prefer to taste the finest possible coffee and
they can get the same at Starbucks. Few people may prefer to sip coffee for fun, while others
may prefer it for stress. If the professionals feel that they would feel fresh by sipping Starbucks
coffee then they would love to come back repeatedly to taste the same (Haskova 2015).
1.4.Differentiation and Positioning Strategy
Differentiation is strategy used by the marketer to differentiate their product offerings from that
of the competitor. This will allow the product and service to be positioned differently than that of
the competitors. This is one of the strategies that would allow the business to survive when the
business model is copied by other competitors in the industry (Slater 2015).
1.4.1 Differentiation strategy of Starbucks
Starbucks would differentiate their products and services on the below basis so that they can
survive in the competitive market. Starbucks would choose the below bases: -
 Product offered by Starbucks is unmatchable by any competitor and hence, they can be
rest assured that the competitor would never be able to copy the product offered by
Starbucks.
 The services offered by Starbucks are always good. A regular coffee sipper would find
that they are recognized by the staff at Starbucks and at the same time, they will also
realize that the customers don’t have to wait long for the coffee to arrive at their desk .

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1.4.2. Positioning Statement of Starbucks
The perfect positioning statement for Starbucks would be as follows: -
“SIP COFFEE, SAY BYE TO STRESS AND CONCENTRATE”
1.4.3. Positioning Map of Starbucks
The perceptual map of Starbucks is as follows: -

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Reference List.
Laroche, M, 2014, Globalization, culture, and marketing strategy: Introduction to the special
issue, Journal of business research, vol. 67, no. 9, pp. 931-933
Pagani, M, 2016, Integrating strategic thinking and simulation in marketing strategy: Seeing the
whole system, Journal of business research, vol. 66, no. 9, pp. 1568-1575
Hunt, S, 2017, The prospects for marketing strategy and the marketing discipline in Era V: is the
prognosis promising or problematic?, Journal of marketing management, vol. 20, pp. 1-10
Slater, S, 2015, Factors influencing the relative importance of marketing strategy creativity and
marketing strategy implementation effectiveness, Industrial marketing Management, vol. 39, no.
4, pp. 551-559
Rashid, Z, 2013, Service quality and the mediating effect of corporate image on the relationship
between customer satisfaction and customer loyalty in the hotel industry, Gadjah Mada
International journal of business, vol. 15, no. 2, pp. 99-112
Sund, K, 2013, Scanning, perceived uncertainty and the interpretation of trends: A study of hotel
directors’ interpretation of demographic change, International journal of hospitality
management, vol. 33, pp. 294-298

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Haskova, K, 2015, Starbucks marketing analysis, Viewed on April 13, 2018,
https://www.degruyter.com/downloadpdf/j/cris.2015.2015.issue-1/cris-2015-0002/cris-2015-
0002.pdf
Racioppi, D, 2014, Segmentation Task: Starbucks Coffee Company, Viewed on April 13, 2018,
http://community.mis.temple.edu/danielleracioppi/files/2014/07/SegmentationTask.pdf