What are Starbucks’ past and present target markets and how has it tried to appeal to these markets? What problems are they likely to face in the future? Solution The success of Starbucks is not hidden to any one. It is the largest coffee house in the world, that holds around 33% of the total market share of coffee. All its success Starbucks owes to a well defined and well served market. At its launched, Starbucks at first targetted only Youth. Young College students, with slightly higher than average income, were the centre of all the marketing strategies of Starcuks. To target this market, it positioned itself, in the beginning, as a place where young college students can hang out, study, discuss and write term papers and meet friends. Starbucks appeals to this consumer directly through introducing technology as soon as it comes available, focusing on social networking and actively cultivating a “cool” image. The young adult audience grows 4.6 percent each year. Now Starbucks has realized that they could target specific neighbor hoods of the initial target as well. It then tried to attract specific upward social classes. Different customers are more willing to pay for luxury good now more than ever. With that in mind, through Starbucks aggressive expansion techniques they have begun targeting almost every demographic. Adults, Youth, Kids and Teens, obviously with slightly higher than average income, have now become several groups that the company now target. Starbucks’ primary target market is men and women aged 25 to 40. They account for almost half of its total business. Starbucks’ appeal to this consumer age group through hip, contemporary design that is consistent in its advertising and decor, and working to keep its products current as status symbols. Customers tend to be urbanites with relatively high income, professional careers and a focus on social welfare. This target audience grows at a rate of 3 percent annually. A small share is also contributed by kids and teens in the revenue of Starbucks. They provide steamed milk that Starbucks refer to as “babyccinos” . It is whipped cream topped coffee drinks that are so popular with teenagers, kids and teens form a large part of Starbucks business. Kids go there with their parents; both mother and child leave with cup in hand. It is the change in target market that has made them to change their Mission Statement: Previous: Establish Starbucks as the premeir purveyor of the finest coffee in the world while maintaing our uncompromising principles while we grow. Now: To inspire and nurture the human spirit- One person, One cup and ONe neighbor hood at a time. Despite such a strong launch and a big success story, it has started witnessing fall. In the recent years, the market has shown Starbucks to be in constant decline, as their stock has dropped about $15/share, a value they have been above since 2004. Starbucks consider itself as a premium coffee provider and this could be the main probl.

1. What are Starbucks’ past and present target markets and how has it tried to appeal to these
markets? What problems are they likely to face in the future?
Solution
The success of Starbucks is not hidden to any one. It is the largest coffee house in the world, that
holds around 33% of the total market share of coffee. All its success Starbucks owes to a well
defined and well served market.
At its launched, Starbucks at first targetted only Youth. Young College students, with slightly
higher than average income, were the centre of all the marketing strategies of Starcuks. To target
this market, it positioned itself, in the beginning, as a place where young college students can
hang out, study, discuss and write term papers and meet friends. Starbucks appeals to this
consumer directly through introducing technology as soon as it comes available, focusing on
social networking and actively cultivating a “cool” image. The young adult audience grows 4.6
percent each year.
Now Starbucks has realized that they could target specific neighbor hoods of the initial target as
well. It then tried to attract specific upward social classes. Different customers are more willing
to pay for luxury good now more than ever. With that in mind, through Starbucks aggressive
expansion techniques they have begun targeting almost every demographic.
Adults, Youth, Kids and Teens, obviously with slightly higher than average income, have now
become several groups that the company now target.
Starbucks’ primary target market is men and women aged 25 to 40. They account for almost half
of its total business. Starbucks’ appeal to this consumer age group through hip, contemporary
design that is consistent in its advertising and decor, and working to keep its products current as
status symbols. Customers tend to be urbanites with relatively high income, professional careers
and a focus on social welfare. This target audience grows at a rate of 3 percent annually.
A small share is also contributed by kids and teens in the revenue of Starbucks. They provide
steamed milk that Starbucks refer to as “babyccinos” . It is whipped cream topped coffee drinks
that are so popular with teenagers, kids and teens form a large part of Starbucks business. Kids
go there with their parents; both mother and child leave with cup in hand.
It is the change in target market that has made them to change their Mission Statement:
Previous: Establish Starbucks as the premeir purveyor of the finest coffee in the world while
maintaing our uncompromising principles while we grow.
Now: To inspire and nurture the human spirit- One person, One cup and ONe neighbor hood at a
time.

2. Despite such a strong launch and a big success story, it has started witnessing fall. In the recent
years, the market has shown Starbucks to be in constant decline, as their stock has dropped about
$15/share, a value they have been above since 2004. Starbucks consider itself as a premium
coffee provider and this could be the main problem. With the economic slow down, it has also
encountered decline in revenues because of reduced people habit of having premium coffee. Less
Luxurious coffee serves as a great substitute threat to it.
Recently, serious competition has presented itself. Several companies are developing coffee
products that rival those of Starbucks. Companies such as Peet’s and the Coffee Bean have
grown large enough to seriously compete with Starbucks. Other companies, such as McDonalds,
Dunkin Donuts, Burger King, etc, already have the infrastructure in place and are instead adding
quality coffee to their menus to compete with Starbucks.