Starbucks Coffee and Its Target Audience - Case Study Example

Starbucks and its Target Audience Starbucks is a global coffee house. It is presentin more than 50 countries with over 17000 stores worldwide. Starbucks started off as a single store in Seattle. Since the start of its journey, Starbucks has embarked on the path of expansion. Though the company specializes in coffee but it has managed to integrate other products as well with the changing consumer needs and changing social trends. Starbucks follows the Italian tradition and tried to bring the Italian tradition of coffee to United States. According to the Italian tradition coffee houses are like a place for conversation and that provides the customers with a sense of community. From the very beginning Starbucks has been a very different company. The company has not only celebrated the coffee and rich tradition but also successfully brought a feeling of connection. The company endeavors to bring an exceptional experience to the lives of its target market (Clark, Taylor 2007; Starbucks Corporation 2011) Starbucks’ target audience mainly comprises of the upscale coffee drinkers. The coffee chain provides an opportunity to its customers to take a break from the busy and hectic lives and spend some time in a relaxing atmosphere. Starbucks has a very well defined target audience. It has a target market in each age segment whether its adults, young adults or kids and teens. The primary target market of Starbucks consists of men and women aged between 25 to 40 years from urban areas and usually with high incomes. This target segment accounts for almost half the sales of the Starbucks. In order to appeal this target audience Starbucks works keep its products current and position them in such a way that they become a status symbol. Then comes the target market of young adults aged between 18 to 24 years. This segment accounts for 40 percent of the sales of the company. This target audience looks up to Starbucks because it positions itself as place where college students can hang out and socialize with new people. Starbucks appeal to this consumer segment by introducing new technology and by projecting a cool image of the brand. A current example of new technology would be the installation of Wi-Fi that the company has managed to introduce in all its stores. It makes it easier for the students whether they want to hang in there and work on their projects or it can be that they just want to hang in there to enjoy the coffee. The relaxing atmosphere provided by the Starbucks stores is an appealing factor to both the adult and young adult target audience. Now moving to the third target market segment that Starbucks is serving, comprising of kids and teens aged between 13 to 17 years. Though this segment is not large and accounts for only 2 percent of the total Starbucks sales, but still the company focuses on this segment. The main reason for the focus is that it is mainly the parents who purchase items for their kids. There are several products that Starbucks has just made for the kids and teenagers. Starbucks do not target the kids segment directly but it does make sure that its products are kid-friendly. The company also offers special child sizes in order to attract the kids (Starbucks Corporation 2011) Starbucks has formed a strong brand image in the minds of its target audience. It has used the selective specialization, product specialization and market specialization techniques for selecting its market segments. Target audience of Starbucks trusts the brand and associates it with high quality. There are certain requirements that the target market has from this famous brand as they look up to it with great admiration. The store has created a sense of convenience in the minds of its customers. Almost where ever they go, especially in United States they’ll found a Starbucks franchise within the respective vicinity. This means that there are several places still left that do not cater to the target audience. These places do not have a Starbucks franchise and customers have to travel a greater distance in order to enjoy the Starbucks coffee experience. The fortunate thing is that such customers do not hesitate in traveling because they believe that having a Starbucks’ cup of coffee is worth traveling such distances. No wonder Starbucks has been able to acquire a large number of loyal customers through its service and quality since 1971. Convenience is just one of the few factors that target audience requires from the company. Other factors include new products, latest technology, customer feedback and fulfillment of the customer needs. The target audience of Starbucks requires it to fulfill their needs in the best possible way. They want that with their changing needs and wants Starbucks mould its products and services. Especially from the point of view of the young adults who want new technology, Starbucks need to incorporate the latest technology in its procedures and also provides its customers with the latest technology. They have managed to provide the Wi-Fi technology to its customers so that they can work and have a good time simultaneously. Starbucks is a globally renowned brand. There are several countries that lack the presence of Starbucks Coffee. These countries do have the relevant target market of the Starbucks coffee have yet not been exploited. The unexploited target audience requires from the company that it should try to cater to their needs as well by opening up franchises in the relative countries. Last of all is the most important requirement by the target audience that is customer feedback. Target segments of the Starbucks Coffee have an urge of interacting with the company. They believe that this way they can voice their opinions and guide their favorite coffee brand how to give the best quality and service to its customers. Plus the target segments believe that if their voice is being heard it gives them a sense of prestige. It makes them feel more positive about the brand and has a positive impact on their purchasing patterns and attitudes. The company connects with its customers in a culturally relevant way (Starbucks Coffee Company 2011; Starbucks Corporation 2011) Product Design and Development Starbucks started off in 1971 and its sole products that it started serving were premium coffee beans and specialty coffee equipment. With the passage of time Starbucks has innovated and expanded its product line. Initially Starbucks did not rely on innovation in the initial stages of its success. But then soon the managers realized that the competition was increasing as more competitors started entering the market. It was high time for Starbucks to diversify its product range and this is exactly what they did. For its product design and development, company hired a Research & Development team. This required a heavy investment but somehow company managed to make this investment. It was the right decision on part of the company to make such an investment because up till now the R&D team has provided it with a fruitful product range. The company started with the related diversification first. To keep its market position strong and to avoid losing its market share to the competitors, the company came up with new product ideas. Related diversification helped the company to introduce different types of coffees with a wide range of delicious flavors. The R&D team of Starbucks worked day and night to come up with the desired product range and all the enticing new flavors. This was also necessary with the changing consumer needs and wants. Customers always look for innovation and change. So did the customers of Starbucks. The company introduced changes in its processes as well. It incorporated new technologies into its processes to ensure the high quality of its products. Quality is something that Starbucks never compromises on. To keep the quality of its products consistent throughout, Starbucks developed its own quality management tool. This tool was used by Starbucks in each of its franchise no matter wherever it was located on the globe. Innovations were not just a part of the franchises located within United States; instead they were made part of all the Starbucks franchises. As mentioned earlier under the target audience heading, that the company connects to its target audience in a culturally relevant way, while coming up with new product ideas and designs, Starbucks ensures the cultural relevance. The main reason for doing so is that Starbucks is present in many countries across the globe and it becomes its responsibility that any product that it offers is in accordance with the cultural norms and traditions. If it does not take care of it, the global brand image of Starbucks is likely to tarnish. If for example Starbucks is present in an area which does not have access to the latest technologies, Starbucks will take its latest technology from the developed area over there and would not care about the costs. This kind of determination has led to the success of Starbucks when it comes to product development and designing (Beckley, Jacqueline H. 2007) As the Starbucks revenues increased, they invested more and more in the R&D work. The R&D team of Starbucks not only works in the Seattle Headquarters but also work in the other countries. The company has not only used the technique of related diversification, but has also managed to successfully use the strategy of unrelated diversification. The R&D team of Starbucks has given it a wide array of products that are not just related to coffee. Other than the coffee brand it has diversified itself into the category of fresh food items, merchandise, hand-crafted beverages and the consumer products. It took a lot of time for the company to diversify into these new categories but somehow after heavy investment of time and hard work it made it to the top. The basic idea of this brand extension was to provide everything under one rooftop. Starbucks’ strongest point of differentiation is that it grows its own coffee and this helped the company to start its own merchandise. Under the fresh food category, Starbucks started offering bakery items including pastries, salads, sandwiches etc (Starbucks Coffee Company 2011) Another reason for the product development taking place at Starbucks is the changing consumer trends. With these changing trends, the company has to mould accordingly so it does not lose out on its precious customers. Since 1971 there has been a huge change in the consumer trends. They have become more health conscious. Now Starbucks has to come with products that cater to the people with healthy lifestyles. What makes it hard for the Starbucks team is that consumers want the blend of best taste and quality no matter to what extent their lifestyle changes. They want the product to be of high quality, have the best taste and it should be healthy at the same time. In 1995 the company started bottled Frappuccino which was a result of the Design and Product Development at Starbucks. In 2003, the company opened few more roaster facilities in order to meet the rising demand. Similarly in 2008, Starbucks acquired a coffee equipment company and also its brewing unit. This was a step taken to incorporate new technology into its procedures while serving its customers. In the year 2009 Starbucks launched another of its product Ready Brew Coffee. In the same year it launched few mobile applications e.g. Starbucks Card iPhone and myStarbucks. This step was taken to keep its customers engaged with the brand name. Finally in the very recent year of 2010, Starbucks expanded its coffee offerings. It came up with two product lines. One was the ultra-premium Starbucks Reserve line and the other was called Starbucks Natural Fusions which was the first naturally-flavored packaged coffee and was also nationally branded. These were just few of the numerous achievements of Starbucks’ R&D team related to the product development and design. The introduction of disposable paper cups and the bottled beverages was the work of the R&D team at the Starbucks (Beckley, Jacqueline H. 2007; Starbucks Coffee Company 2011) References Clark, Taylor. Starbucked: A Double Tall Tale of Caffeine, Commerce, and Culture. New York: Little, Brown, 2007. Print. Lyons, James. "think Seattle, Act Globally." Cultural Studies. 19.1 (2005): 14-34. Print. Starbucks Corporation. Heritage. 2011 Starbucks Corporation. Our Company. 2011 < http://www.starbucks.com/about-us/company-information> Starbucks Coffee Company. Starbucks Company Timeline. 2011 < http://assets.starbucks.com/assets/aboutustimelinefinal72811.pdf> Starbucks Coffee Company. Starbucks Company Profile. 2011 < http://assets.starbucks.com/assets/aboutuscompanyprofileq3201172811final.pdf> Beckley, Jacqueline H. Accelerating New Food Product Design and Development. Ames, Iowa: Blackwell Pub, 2007. Print. Read More