Effective Market Segmentation

In the segmentation, a group of the people is divided into the various groups. The people belongs to the same group are identical that means have same needs and wants in order to income, age and family life cycle etc.. In this process, one group is totally different to the other group. Segmentation provides easy way to launch a new product into the new market so it should be effective.

To make the process of segmentation more effective the Starbuck has to focus on the following terms:

·        How it is getting the data about the need of the particular group. Basically the number of surveys and questionnaire is conducted to collect the information.

·    After the collection of data the analysis should be placed in the right manner. Always try to take a large number of people to conduct a survey. The information which is get from the group would be more clear as large as the number of the people of the group would.

·      Promotion is also plays a very important role to collect the information. Company can use the different mode of the media such as newspaper, television, radio etc.

·      The market segments must be on equal capability level with Starbucks, otherwise it will be of no use.

A criterion for the segmentation varies organisation to organisation depending on the type of product or the type of the customer present in the market. Starbuck is using geographic segmentation and demographic segment with the promotional strategy.

Geographical segmentation: in this segmentation, the market is divided into location, market size or market density. Starbuck cafe has chosen segmentation according to the location of cafe. In this cafe prefers to locate store near offices and college campus to generate the profit.

Demographic segmentation: in this, the population is divided according to age occupation gender etc. Starbucks divides the population according to age and occupation such as age group 18-20 belongs to student and 20-30 professional etc.

Targeting strategy for a selected product/service:

Almost 33 percentage of market share of this industry is in the hand of Starbuck and the only reason to hold such large amount of customer is that it knows about its target audience very well. Basically, the target market for Starbuck is the people aged 25 to 40includes teenagers, adult, young adult. Starbuck focuses on this group because the peoples come under this target market are student, tech savvy and young and they always keen to taste the new product launched by the cafe. For the college student, Starbuck positioned itself as a place they can hang out with the friend, study and can also plan a party and for the office going people, it positioned as the third place out of home and office where they can relax and meet the people. The target market of Starbuck is not only limited to this age group but also it has expanded to the kids aged 6 to 17. Even it is known that this target market would give only 2 to 3 percentage of Starbuck sales but this would also attract the parents who don’t prefer to go coffee house. So now it is also focusing on the steamed milk and Starbuck provide this a new name “babyccinos”. Now Starbuck is a brand name and the company has decided to open some new coffee house at a new place with some special discount to attract the new customer of target market.

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