Market segmentation involves dividing the market into groups with distinct needs that may require separate products or marketing programs. Initially, Starbucks segmented the market based on socioeconomic factors, targeting office workers looking for coffee and a good atmosphere. It also used geographic and demographic segmentation to select store locations near educated coffee lovers. Starbucks then evaluated the attractiveness of segments to target, initially focusing on parents with young children which was successful. It has since added more segments like teenagers and expanded its product range. Starbucks has developed a unique market position by distinguishing its products and brand. It positions itself as a highly reputed brand and aims to inspire and nurture the human spirit. Starbucks focuses its positioning strategy on customer satisfaction through excellent service

1. 2.1 Segmentation:
Market Segmentation: the processof dividing a market into different groups of buyers with
different needs, characteristics, or behavior that might require separate products or marketing
programs. (Kotler and Armstrong, 2006). At first, Starbucks was based as a Socio-Economic
segmentation base in consumer Markets as it has concentrated on social class particularly the
business class people those who are working at the office and wanted to have a cup of coffee
with a good atmosphere and facilities. Starbucks also had segmented his market by geographic
and demographically by selecting the store location where they can find the educated and coffee
lovers.
2.2Targeting:
After a company has defined market segments, it can enter one or many segments of a given
market and should make decision about how many and which customer groups to target (Dibb
and Simkin, 1996). Target Marketing is a process of evaluating each market segment's
attractiveness and selecting one or more segments to enter (Kotler and Armstrong, 2006). The
concept of target marketing is a logical implication of the basic philosophy of marketing
(Lancaster and Massingham, 1993). A company should target segments in which it can
profitably generate the greatest customer value and sustain it overtime. Starbucks wanted to
develop a reputable relationship with the customers, Most of companies enter in a new market y
serving a single segment, and if this proves successful than they add more segments, initially
Starbucks did the same thing targeted the parents with the young children and it was hit concept
and it has added more segments by including Teenagers and developed its product range also
(Kotler and Armstrong, 2006).
2.3 Positioning:
Once the company has decided which market segments to enter it should decide what positions it wants
to occupy in those segments. Market Positioning is arranging for a product to occupy clear, distinctive,
and desirable place relative to competing products in the minds of target customers. A products position
is the place that the product occupies relative to competitors in consumers’ minds. Here in this case the
Starbucks has developed a unique market position for their products because if a product is to be exactly
same like the others on the market than consumers would have no reason to buy it. Starbucks has
positioned themselves in the market as a highly reputed brand (Kotler and Armstrong, 2006). In this case
Starbucks has planned his positioning in such a way that it distinguish their products from competing
brands and give them the greatest strategic advantage in their target markets. Starbucks has a
descriptively simple statement to inspire and nurture the human spirit-"one person, one cup, and one
neighborhood at a time". Starbucks positioning strategy was customer base so that it can give the best
service more than what the customers expect. Starbucks has gained a competitive advantage over

2. customer satisfaction and employee satisfaction as Starbucks had developed its positioning strategy
based on the customer and provided the utmost facility in terms of layout, furniture to the music, and in
terms of employee satisfaction Starbucks make employee as a partners and gave them a personal
security with a freedom to participate in the every decision of the business and make it successful (Porter
& Miller, 1985, Porter, 1998).