How Starbucks Segments and Targets its Brand

The lead story in The New York Times Arts & Leisure section this Sunday was “The Starbucks Aesthetic” and it’s worth a read. It actually would have been better placed as the lead story in the Business section. What the story made clear is that Starbucks has successfully expanded its product offerings, revenues and brand value by using two core principles readers of this blog will be very familiar with, high impact segmentation and simplicity.

Starbucks is focusing on what it calls its “core customers,” college educated, average age of 42, and average income of $90k. Starbucks has identified through market research that this is the segment that will generate the greatest impact to their business and they have targeted them with products.

The article also makes clear the targeted product strategy. Starbucks presents a narrow range of products geared towards this segment. By limiting choice and presenting a few products Starbucks leverages the trust factor the brand has with users and further reinforces it by being a tastemaker. This is something that is very appealing to this time-starved demo.

Naturally all these concepts can and should be done in online marketing. It’s no wonder then that Howard Schultz, CEO of Starbucks said the most important part of Starbucks future business will be the Wi-fi access in their stores. Cool beans.