Starbuck’s Market Segment

Matrix
Team 4: Nina Huynh, Travis Lanthier, John
Ly,
Bradley Thomson, Christien Wilhem

February 14, 2008

 Market Segment Matrix

• Identifying Various Markets

• Porters 5 Competitive Forces
• Ansoff’s Growth Matrix
• Recommendation of one Market Segment for
“YOU”
• Identifying Major Competitors
 Various Markets

• Gourmet Coffee
• Regular drip Coffee
• Skinny Platform
• Non- Coffee Gourmet Drinks (tea, chai,
smoothies)
• Image
• Bottled Coffee
 Various Markets

• Gourmet Coffee
– 18-34 year old coffee
drinkers want something
more than just coffee
– Unique and Different,
Starbucks Exclusive
– Examples: Caramel
Macchiato and Gingerbread
Latte
 Various Markets
• Brewed Coffee
– Older in Age
– Generally just want coffee for a caffeine fix
– People that are in a hurry.
• Image
– Well known brand
– Work fast
– Status
 Various Markets
• Bottled Coffee
– People on the go
– Mid-day pick me up
– Usually found at Grocery Stores.
– Examples:
• Double Shot
• Caramel Frappuccino
• Vanilla Frappuccino
• Mocha Frappuccino
 Various Markets
• “Skinny Platform”
– Lower in Calories
– Sugar-Free Syrup, Skim Milk and no Whip Cream
– Enjoy great coffee without the calories (only 90
calories!)
– Examples:
• Skinny Cinnamon Dolce Latte
• Skinny Mocha
• Skinny Caramel latte
 Various Markets
• Non- Coffee Gourmet Drinks
– Ideal for people that are non-coffee drinkers
– Examples:
• Green Tea Frappuccino
• Tazo Chai Latte
• Blended Smoothies
• Hot Chocolate
• Iced Tea
 Segmentation Strategy

• Concentrated Targeting
– Focusing on the niche of gourmet coffee drinkers
– Make our coffee stand out compared to others
– Expanded product line after establishing the
niche.
Porter’s 5 Competitive
Forces
 Porter’s 5 Competitive
Forces
• Entry of Competitors (How is easy is it?

• Threat of substitutes

• Bargaining power of suppliers

• Bargaining power of suppliers

• Intensity of Rivalry
 Ansoff’s Growth Matrix

Present Product New Product

Present Market Penetration: Hotels, Product Development: Salads and
Market Grocery Stores, Schools, New bold Fresh lunch Program.
Businesses, Industries Cafeteria Examples: Fiesta Chicken Salad, and
and Airlines. Fruit and Cheese Platter.

New Market Market Development: Diversification: Music CDs, Clothing,

Open Stores all over the world. Coffee Mugs, and Chocolate.
Brazil, Russia, Romania, as well
as putting the first Starbucks
logo in Cairo Egypt
 Focus on 18-24 year olds

• Starbucks is the most visited Coffee shop!!

• Averages around 5.3 visits per month per
person
• 55% of 18-24 year olds have visited a coffee
shop in the last month
• 75% with the average being 63% “use cream-
type or whitener-type products with my
coffee”
 18-24 year olds
• 18-24 year olds are the largest segment of
consumers (61%) that drink coffee for an
energy boost (average is 43%) as well as, to
help them concentrate (26% vs. 18% average)

» Mintel
 How Coffee Houses are Used

• 18-24 year olds

– 80% go to get coffee and snacks
– 49% go to socialize
– 43% go to unwind and relax
– 26% go to study or work

Mintel
 Reasons for visiting a Coffee
House

• 18-24 year olds

– 68% for reasonable price
– 61% for the wide variety of coffee, tea and other
beverages
– 69% Conveniently located
Two Major Competitors
 Conclusion
Questions Anyone??

• Thank You and Have a Happy Valentines Day!