Question
Find a product of two examples in your country or region, or from your own reading. the products of the companies should be mainly a service and good respectively.
a) explain how the example businesses have segmented the market for its major product and what its marketing mix strategies are?
b) if you were the marketing manager involved, what part of (a) would you do the same and what would you do differently? why?
About Starbucks:
Starbucks as well as Costa coffee both are amongst top-ranked coffee shop which also has gained vast appreciation through their aimed and targeted marketplace. They have proper aim of supplying higher quality beverage goods chiefly coffee at premium prices with the rich experience which would enhance customer’s knowledge in outlets. The firms also have capitalized all their positioning within market through developing the outlets which are furnished along with the premium quality furniture which would be comfortable for consumers with supporting facilities like music and facilities for internet as well as handicapped admittance so that customers are supplied a complete excellent experience in stores. These firms have also successfully made their position like best place intended for meeting people except office plus home (Hadjinicola, Charalambous and Muller, 2013). The mere way towards entering novel markets also is to execute that similar international marketing strategy which the companies also have been subsequent for every of its extension plan. Thus, they must also slowly enter markets of the Trinidad & Tobago for the customers to enter the area accept concept of field coffee shops as well as carry an excellent understanding in coffee shop. Starbucks as well as Costa Coffee were both initiated as a very small shop for coffee and also have totally revamped the image through growing into single coffee retailer intended for people who actually want specialty coffees.
Segmentation
It is procedure by which any market is actually divided into separate groups of users with dissimilar needs, wants and demands. Presently, both Starbucks and even Costa coffee in Trinidad and Tobago are utilizing psychographic segmentation and target their users on the basis of values, opinions and lifestyle as well as personal characteristics. Within extra competitive market, the firms must try to properly diversify by source of appropriate demographic segmentation within which the firms could section its market on the basis of age, education as well as occupation. Starbucks as well as Costa coffee must also try towards appealing younger generation that goes to colleges as well as universities. Additionally, couples aged amid 25-55 through children could also be a good target market for the firms where whole family could indulge within sole experience and knowledge (Kotler, 1964). These segmentation plans and strategies could also increase customer base intended for both the firms.
Demographic- The firms target its market on basis of age, sex and also divides the target market according to the demography on basis of variables like age, gender and even occupation as well as education level. Like the firms tries to attract people going to schools and colleges and even working professionals who like to spend behind meeting friends at luxurious places and in relaxing ecology. As per perceived advantages which the products provide the firm segments people who demand for exotic coffee and exclusive bread products. Benefits might also be perceived in a different way depending upon a user’s stage within life cycle.
Psychographic Segmentation- This type of segmentation is done by both the firms where they divide the market as per the Lifestyle of human beings using the goods and services of the firms. The firms measure this by studying activities, interests, as well as opinions of the customers. Both the companies also consider the way in which people expend their free time as well as which outside influences they also are mainly responsive to plus influenced by. This segmentation is greatly important for these firms as it supplies products that are expensive and exclusive and also unique (Gronroos, 1994).
The actual target segment of the firms can be explained as:
Age: 18 to 40 years
Gender: Male as well as Female
Occupation: on the basis of life-stage yet majority of students and faculty members plus managers, housewife as well as business person
Lifestyle: daring, Fun-loving, socializing, Value exceptional customer service, Achievers, Thinkers, Innovators plus Experienced people
Income level: on the basis of life stage yet slightly upon higher range
Technology: People that are technology confident come to coffee shop in order to carry on their vital work plus love to use tablets, iPad, Mac etc.
Targeting
Targeting indulges making proper decision related to prioritization of the segments of the market for Starbucks as well as for Costa coffee increasing their total future share of the market. These firms must also continue towards targeting with all its psychographic segmentation through help of discrimination by supplying extra value to users (Charny and Farrow, 1986). Further, the companies also use proper customized targeting towards attracting the young generation using all proper attractive children’s foods and fruit drinks as well as milkshakes. Additionally, the firms include innovative and new energy drinks to the target youth. The firms also use competitive discrimination strategies for drawing customers to them other than towards their other competitors.
Positioning
Positioning is related to the way in which Starbucks and also Costa coffee products actually are perceived by all of its users and customers. Starbucks products also have forever been perceived through its impressive brand image (Alpert and Gatty, 1969). And costa coffee has always been expensive brand for users. Users here like to pay any price even a premium one for quality, reliable taste, ambience as well as accessibility towards the goods and services it provides to the users. While expanding their product line by introduction of the all novel fruit drinks as well as energy drinks intended for younger generation, the firm retains their greater quality as well as is ecologically friendly, because these are the aspects which youth are particularly aware of. Additionally, offering greater quality goods at their present price variety also helps the firms to enhance sales plus also keep users satisfied with quality as well as value.
Marketing Mix
Product- To be proper premium product within coffee trade, the firms aim at higher standards, opening of pioneering products as well as providing outstanding service collective with memorable experience. Both the firm’s products and their mixes prolonged from 8 vital categories of the drink types as well as 7 food categories to maintain with momentum plus to satisfy extra customer needs and requirements. They also have been continually introducing novel products, like four fresh “VIA flavored coffees” and tiresome towards attracting the tea drinkers through introducing all new “Tazo Tea”. Recognizing the customer detailed needs the firm also introduces fatless milk to its product line. They also have many seasonal offerings like strawberry and cream Frappuccino within summer plus gingerbread latte within Christmas. Going beyond, they even offer coffee as well as cappuccino makers intended for users who also like to buy them from any stores of these two firms (Matsumura and Matsushima, n.d.). To make sure that brand richness, above and beyond bringing best ingredients as well as quality management, they declare that all firm’s employees are regularly involved plus aware of all its total mission as well as aims and objectives.
Price
Generally price plus quality recognizes the exact value of product. Both the firms have forever tried to supply higher value to its consumers through buying superiority beans, making sure that all their employees get effective as well as efficient training, plus mostly, creating the ecology to enjoy the coffee in a relaxing atmosphere. For all this, the firm’s customer need to pay extra; it also is expensive.
To maintain competitive edge, firms also started to offer about $1 for bottomless coffee cup, that could also be replenished anytime and also 50 cents which is less than other goods of these firms. As both the firm’s news site says that firms are even trying to apply some other services that are value added like, introducing some “breakfast pairings,” that includes breakfast goods with coffee. This is also for targeting price aware customers.
In Trinidad and Tobago, by the local standards, the firms are very luxury ones. They also never liked to decrease prices for the market even when they initiated. Coffee is also not grown within China at very large scales – as a minimum not Arabica beans. Thus the rates are also high and is not affordable for common people.
Place
Mostly the firms are involved in channels intended for direct supply which is from producer to the consumer. Along with Starbuck’s as well as Costa coffee’s line of idea all such practice also is vital and even helps to maintain a personal relation with customer. In Trinidad and Tobago, particularly the firms could be found within any locality where a potential higher traffic exists for all their outlets – particularly with the “Coffee bar” idea. Outlets could also be seen in many large chains. The main goal of both the firms is to position themselves in extremely visible locations as well as open stores in groups. It also was ideal place intended for individuals that are active and ones who enjoy the music otherwise even search for any break within busy life (Robinson, 1988).
In Trinidad and Tobago this actually was very difficult task. Although stores carried same characteristics like in US, this market was a culture focused and also had unenthusiastic reactions towards the coffee, they also had to put their outlets in extra exposed areas – like Beijing, where regional people also were exposed towards foreign rudiments compared to the suburbs.
Promotion
Their vital strategy also was not about spending money vastly upon advertising. Instead, the firms used more and more cash upon acquiring best spots. Prior to opening of novel stores, both the companies also organized vast community measures highlighting every areas personality like Community service. Further all such data were also imprinted upon the mugs as well as t-shirts for proper promotion activities. They even established the “smart partnerships” along with already understood regional representatives that acted like local ‘ambassadors’ towards promoting their brands. They even introduced cards of company; aiming all their appreciated customers towards promoting their goods. While purchasing a proper gift card, customer not merely showed brand loyalty, yet this even provided free promotion, attracting novel customers.
Current Strategy
After proper analysis of the marketing tactics it is known that Starbucks plus Costa coffee in reality are following proper differentiation strategy. Initially, vital element of the businesses actions were focused strategy along with very strong stress upon creating discriminated goods within target customer market. Moreover, the firms have realized that this also needs to reinforce its position within market through developing a delineation strategy as well as success of the firms is apparent from fact which it has urbanized an admirable marketing mix intended for all their users and consumers. For expanding their functions in global market, the firms offer same experience towards global customers through supplying them finest quality goods and aesthetically intended ambiance. They have also made sure that there exist uniformity within all of their marketing actions through using merely third party standard for supporting their goods as well as service offerings (Wang, 1997).
A key rudiment of proper differentiation strategy always has been to introduce novel plus innovative products within market as well as Starbucks and even Costa coffee also have been greater than their consumer’s expectations through offering them goods that were completely different from obtainable ones.
Recommendations
The firms named Costa coffee as well as Starbucks were intending to serve new segment in Trinidad & Tobago, they actually needs to make sure that they get into market through following similar strategy for all segments which they have always followed in every of their global expansion projects. While taking into consideration all marketing strategies, a proper PESTEL analysis as well as SWOT of the market needs to be done and then decisions are to be taken.
For successfully attaining market, marketing strategies as well as programs which need to be implemented within respective novel markets are the following:
During the first year in Trinidad & Tobago, firms need to organize proper promotion events through which people of locality will be then asked to call venue as well as interact with the workforce. On all the outlets, users must be provided some discount on purchase of beverages as well as on revisits. Advertisements would also be done as in forms of billboards plus posters with interleave with regional newspapers in order to attract extra customers to these outlets.
References
Alpert, L. and Gatty, R. (1969). Product Positioning by Behavioral Life-Styles. Journal of Marketing, 33(2), p.65.
Charny, M. and Farrow, S. (1986). Risk targetting: an approach to costcontainment. Health Policy, 6(4), pp.363-372.
Gronroos, C. (1994). From Marketing Mix to Relationship Marketing: Towards a Paradigm Shift in Marketing. Asia-Australia Marketing Journal, 2(1), pp.9-29.
Hadjinicola, G., Charalambous, C. and Muller, E. (2013). Product Positioning Using a Self-Organizing Map and the Rings of Influence. Decision Sciences, 44(3), pp.431-461.
Kotler, P. (1964). Marketing Mix Decisions for New Products. Journal of Marketing Research, 1(1), p.43.
Matsumura, T. and Matsushima, N. (n.d.). Patent Licensing, Bargaining, and Product Positioning. SSRN Journal.
Robinson, W. (1988). Marketing Mix Reactions to Entry. Marketing Science, 7(4), pp.368-385.
Wang, C. (1997). Bases for International Market Segmentation. Journal of Segmentation in Marketing, 1(1), pp.5-21.
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