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 – 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

Entry of Competitors (How is easy is it? Threat of substitutes Bargaining power of suppliers Intensity of Rivalry

Ansoff’s Growth Matrix Present ProductNew 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 MarketMarket 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 year olds Starbucks is the most visited Coffee shop!! Averages around 5.3 visits per month per person 55% of 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 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 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 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!