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

Market Penetration: Hotels, Grocery Stores, Schools, Businesses, Industries Cafeteria and Airlines.

Product Development: Salads and New bold Fresh lunch Program. Examples: Fiesta Chicken Salad, and Fruit and Cheese Platter.

New Market Market Development:Open Stores all over the world.Brazil, Russia, Romania, as well as putting the first Starbucks logo in Cairo Egypt

Diversification: Music CDs, Clothing, Coffee Mugs, and Chocolate.

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!