STARBUCKS CASE

I. Use the full spectrum of segmentation variables to describe how Starbucks

initially segmented and covered the coffee market.

Geographic Variables:
 World region or country: United States
 Region of the country: Pacific Northwest
 State: Washington
 Province: Seattle
 Province size: 594,210 inhabitants
 Size of Metropolitan Area: 3,263,497 Inhabitants
 Climate: Mild and moderate temperature by sea.

Demographic variables:
 Age: Between 24 and 44 years old
 Gender: Men and Women
 Income: From USD $61,000
 Education: University graduate and postgraduate degree
 Religion: All

Psychographic variables:
 Social Class: Upper Middle, Lower Middle and Upper Upper High
 Lifestyle: Successful
 Personality: Sociable

Behavioral Variables:
 Occasions: Usual
 Benefits: Quality, Service and Convenience
 User Status: Regular User
 Loyalty Status: Total

II. Which changed first: the Starbucks customer or the Starbucks experience?
Explain your answer by analyzing the principles of target marketing.

The first thing that changed was the Starbucks experience, because within the
principles of the target market is the personalization of marketing activities to
meet the needs of individual customers.

Starbucks went from a coffee shop with a personal service and an attractive
atmosphere, so much so that its customers felt at home, to become a luxury,
upscale and mass brand, so that the place became a less special experience
because the stores no longer had the same harmony and tranquility, on the
contrary, it was more interested in fast service than in making the customer feel
at home. less special experience because the stores no longer had the same
harmony and tranquility; on the contrary, they were more interested in fast
service than in making the customer feel at home in a more pleasant
environment.

After the Starbucks experience changed, it gave way to a change in its

customers, who were affluent and more educated than the average American.
To move on to less affluent and less educated and professional clients.

Growth was only aimed at attracting more customers. Leaving aside the
segmentation of the target market and also alienating loyal customers who
frequented the place on more than one occasion, because for them having a
coffee at Starbucks was more than that, it was to take a break and change the
environment and they found in their baristas a person to talk to and not just a
person serving their coffee, which felt less impersonal.They found in the
baristas a person to talk to and not just a person who served their coffee, which
felt less impersonal, and this was felt even more when the coffee dispensing
machines were installed.

To conclude, when the Starbucks experience changed its essence, it brought

with it the change of its customers, all hand in hand with the strategy that aimed
to expand and grow in the number of stores, leaving aside the current
segmentation and personalized service.

III. According to the segmentation variables, how does Starbucks segment and
cover the coffee market?

Starbucks changed its market segmentation from a target market to an

undifferentiated market.

Within the Geographic Variable: It went from having a presence in one

country and now has a presence in 12 countries.
Within the Demographic Variable: I have a market of men and women,
between 24 and 44 years of age, with a schooling level of professionals and
postgraduates, and wealthy people. To move to an undifferentiated market of
men and women, of any age, of any level of education, and wealthy and less
wealthy people.

Within the Piscographic Variable: I have moved from serving a market of

sociable, upper-middle class and very successful people. To serve a market of
all classes, regardless of lifestyle and personality.

Within the Behavioral Variable: A market of consumers with different

knowledge, attitudes and with different uses or responses to coffee was served.

IV. Will Starbucks ever regain the growth in profits and earnings it once
enjoyed? Why or why not?

Starbucks will be able to recover the growth in profits and earnings, perhaps not
in the same proportion as it achieved due to its large expansion and number of
stores opened, taking advantage of the good name of the brand. But it will be
able to recover a considerable growth in its profits and utilities, only if it devises
strategies aimed at satisfying the needs of its clients, which are associated to
the consumption of coffee or to offer products that are a good companion for it.

Because when Starbucks expanded and grew so much, it lost the essence it
had, it left a target market to address a non-differentiated market, and now with
competition, sales will not be the same, due to large brands such as
MacDonald's, which are already offering coffee in their stores. Thinking about
attracting back your former clientele is not easy.

When Starbucks was focused on its personalized service, it charged more for a
coffee and when moving to a non-differentiated market the price is lower, so it
must sell more units of coffee to achieve the same profit it obtained when selling
a single unit with its previous service.
In addition, Starbucks will have to find ways to expand its products by
conducting research to identify current customer needs. To do this, it will have
to move away from its traditional essence, all this in order to increase sales and
thus profits. Alliances could be sought or brand recognition could be leveraged
to offer new alternatives, through or by means of coffee consumption.