Question

Question 3: The marketing mix and innovation (40 marks, 500 words)

Starbucks’s marketing strategy consists of market segmentation, targeting, positioning and the marketing mix. Starbucks’s marketing strategy enables the company to be a successful player in the global market. Using your B207A course material, evaluate how the innovation in Starbucks’s marketing mix elements is used to position the products within the minds of consumers. Your answer should contain the following:

1. Starbucks’s market segmentation and targeting
2. What is positioning. How is it related to the marketing mix?
3. Examples of Starbucks’s marketing mix elements and their contribution to brand positioning.

Answer 1

Starbuck market segmentation and targeting

The segmentation is based on demographic, geographic, behavioral and psychographic factors. The geographic segmentation reveals targeting urban area and as the company has worldwide business; its main markets are US, Europe, Latin America, Pacific region, China, Asia, Africa and Middle-East. Demographic factors reveal that the company targets people between the ages of 22 to 60. The company targets both males and females. The life cycle stage of customers reveals that Starbuck Company targets young people who are single or newly married. It also targets families with young and dependent children. The main target customers are employees, students and professionals.

Behavioral factors reveal that those customers seeking quality coffee and relaxation are targeted. Those customers who seek to spend time with relatives and friends are also targeted. The personality of target customers is ambitious people who are easygoing. The psychographic factors reveal that the company targets people having upper and middle class and who are aspirer and reformer.

Positioning and relation to marketing mix

Market positioning refers to promoting product through creating an image of it to the desired target customers. Marketing positioning is done by using marketing mix. To better position the product or service to customers, product or services traits knowledge is compulsory. With knowledge of target market needs, and wants, a company can create an effective positioning statement. Positioning is also related to promotion. For example, a cosmetic product intended to be sold to young girls, in advertising, company will show a young girl using the product. Therefore, promotion supports positioning of product. Another element of marketing mix is place; therefore, if the company intends to sell products to urban market, it can position its product to urban areas. Price is also considered for positioning. High pricing of product or service determines a high quality in the product or service. On the other hand, when the price of product or service is low, customers feel that the quality of product or service is also low. Thus marketing mix is closely associated with positioning.

Starbuck marketing mix elements and contribution to brand positioning

Starbuck uses a mono segment positioning. This positioning targets those customers who can pay higher price for superior quality of services and product. If we consider the product of Starbuck, it sells premium coffee and teas. Therefore, the positioning statement and offering superior quality reveals that product features strengthen the positioning statement of the company. The company charges premium prices from customers. Thus, it also suggests that the positioning statement is well supported by pricing strategy. Distribution of products reveals that the company serves premium beverages and tasty hot drinks in urban market. As most of the affluent customers live in urban areas, it reveals that distribution strategy also supports positioning statement of the company. Starbuck also intensively advertises its products and provides loyalty coupons to attract customers. Playing corporate social responsibility attracts educated and rich customers to use the company’s products. Thus, Starbuck takes into account every initiative to support its positioning statement.