12A – Figuring Out Buyer Behavior No. 1

Segment/Target Segment: The audience segment for Starbucks are men and women ages 25 to 40. The core marketing strategy of Starbucks focuses on segmentation, targeting, positioning, and differentiation. The target market is affluent or high-income consumers, but multiple Starbucks are also surrounded by middle-income neighborhoods, due to these people spending their discretionary income on the brand’s beverages. A segment of Starbucks consumers consists of people with positive life attributes and are concerned with their image and status, as opposed to the cost of the actual product. The three segments of the PRIZM cluster that fall under the target segment are midscale middle age mostly without kids, midscale younger mostly without kids, and upscale middle age mostly with kids. The segment I chose is midscale younger mostly without kids because they are a progressive mix of tech savvy, young singles, couples, and families ranging from students to professionals who lead busy schedules, resulting in them relying on Starbucks for a “grab and go” beverage when commuting between classes or to work compared to competitors.

Interview 1:

How frequently do you visit Starbucks?

Interviewee: Maybe once a week.

Have you enjoyed your experiences at Starbucks?

Interviewee: Yes, I like coffee, I’m not super into Starbucks but I like good coffee.

What is your current impression of Starbucks?

Interviewee: My main impression is that they are a global chain.

How has Starbucks advertising impacted you?

Interviewee: I feel that Starbucks is everywhere.

Do you think Starbucks has an advantage in the market compared to their competitors?

Interviewee: Yes, I feel that they have an advantage because they have a larger market share. I think that this happened in part because they are everywhere. It is the only store where if you go to a city like New York that you can see two on the same block.

What methods or reasons might help brands today to maintain loyal customers?

Interviewee: Brands can retain customers by using things such as membership rewards, punch cards, and incentives to come back. Another way is to have great customer service and be unique.

Interview 2:

How frequently do you go to, or visit Starbucks?

Interviewee: I go rarely. I know there are a lot of Starbucks on campus, but I would rather go to Dunkin’ because of the prices. Starbucks is a bit too much for my budget.

Did you enjoy your experience at Starbucks?

Interviewee: I enjoy my experiences in Starbucks. I just don’t visit much because of the prices. But I believe Starbucks does a good job at providing good customer service.

What is your current impression of Starbucks?

Interviewee: I think they are kinda overrated. Dunkin’ has like the same products at a cheaper price and Starbucks is just everywhere; it’s annoying.

How has Starbucks advertising impacted you?

Interviewee: I don’t feel impacted by any advertising from Starbucks. It’s whatever to me.

Do you think Starbucks has an advantage in the market compared to their competitors?

Interviewee: Yes, they have established themselves everywhere, so they are pretty much unavoidable.

What methods or reasons might motivate brands today to maintain loyal consumers?

Interviewee: I think that they have managed to do that by creating new drinks and keeping the ones that people like.

Interview 3:

How frequently do you go to, or visit Starbucks?

Interviewee: I go maybe 3 times a week for breakfast.

Did you enjoy your experience at Starbucks?

Interviewee: Yeah, it’s always chill.

What is your current impression of Starbucks?

Interviewee: I like their coffee and their establishments.

How has Starbucks advertising impacted you?

Interviewee: Yes, I love when they come out with new drinks and they photograph the drink and put it on their ads. It’s so mouthwatering!

Do you think Starbucks has an advantage in the market compared to their competitors?

Interviewee: Yes, the experience they provide along with the drinks is how they have managed to stay on top of the competition and the industry.

What methods or reasons might motivate brands today to maintain loyal consumers?

Interviewee: They get loyal customers by serving drinks of the best quality all the time every time. It’s never a bad tasting coffee that I get from Starbucks.

Need Awareness: The need awareness of Starbucks is that they have reached a saturation point in the home market, along with the struggle of not attracting new customers. Starbucks has appealed to a large target market by offering customers luxury in the form of a coffee beverage, along with a “home away from home,” to do work or take time for themselves. The brand has changed the coffee experience in the United States, along with the rest of the world, and opens stores in upscale neighborhoods in order to prioritize their customers with above average wages in the industry. However, a current issue with the coffee chain is that Starbucks currently has too many stores open around the world, which happened in the mid 2000s. Despite the fact that the coffee chain’s same-store sales went up 2% in the last quarter, this was due to higher averages checks in comparison to higher traffic. The deceleration in same-store sales growth correlates with an increase in store unit growth. If this need is not addressed soon, the brand may become overly saturated.

Information Search: The very first thing the people I was interviewing did when they became aware of the need was wonder how the brand, Starbucks, was going to solve the issue. Full responsibility was placed on the brand to address the needs of its customers and consumers. Currently, Starbucks frequently advertises its beverages, focusing predominantly on coffee. While the brand is renown for being a coffeehouse, their customers consist of serious coffee drinkers, along with non-coffee drinkers, Frappuccinos, teas, sandwiches, baked goods, etc., due to the brand trying to accommodate the basic needs of its audience. Starbucks advertises and sells its products with a sole purpose in mind and does not want to be portrayed as the giant global corporation that it is. The brand can enhance their social media engagement by focusing on customer wants and needs. Social media is a tool that is utilized by corporations and has become a predominantly driving force for Starbucks proficient public relations on social media by focusing on needs.

Summary: Overall, what I learned in the interviews was that the people that fall under the target segment, midscale younger mostly without kids, frequently visit Starbucks due to convenience and the fact that the brand is a dominant chain globally. The consumer market for Starbucks is predominantly located in North America, followed by China and Japan, and the brand is number one in coffee marketing in the United States. One of the major weaknesses affecting Starbucks are their prices, the price of coffee can be high at times and some people may not be able to afford it. The brand can strengthen their brand loyalty by frequently offering deals and discounts to the target audience through social media, such as Facebook, Twitter, and Instagram. Starbucks has fortified their brand strategy through the delivery of high-quality products and services throughout the past years and can strengthen their brand loyalty in similar manners. By consistently introducing new and engaging customer platforms, the company can reinforce their firm brand strategy and employ customer’s ideas for the company to expand and improve the products or services.

Conclusion: Based on what I know about this segment and what I learned in the interviews that were conducted, the segment leads busy schedules, resulting in them relying on Starbucks for a “grab and go” beverage when commuting between classes or to work. Most of the segments share being tech savvy and are the most likely to check out the latest products that are released. Due to the fact that they rely on advanced technology, it is implied that the target segment uses social media frequently. This may lead to them following and eagerly awaiting the newest and trendiest drinks available on social media platforms such as Facebook, Instagram, and Twitter. While technology innovation is ingrained into the company, it is not emphasized towards consumers to maintain the homely environment. For Starbucks, media vehicles should still be utilized in order to create awareness of the brand’s superior quality, service, and dedication to its consumers. By doing so, a positive association is generated with the brand along with opportunities.