Friday, September 21, 2012

Chapter 4: The Marketing Environment

Starbucks' Target Market
Starbucks' target market is mainly adults, men and women, from the ages 25-40.  This consists of almost half of Starbucks' consumers and grows at a rate of 3% annually.  Even though this is the majority of Starbucks' business, the consumer also ranges from young adults 18-24 (40%), which grows at 4.6% annually, and even kids and teens 13-17 (2%), which most products are bought from the parents.

A main reason why Starbucks is so so successful today and continues to grow is because the people of the company takes many factors into account.  These include: social, demographic, economic, technological, political and legal, and competitive factors.

The people within the Starbucks company, management and staff, feel they have a responsibility to give back to the community.  Ever since they opened their first store in 1971, they dedicate themselves to show a balance between profitability and social conscience (social factors).  There is a whole area behind just the coffeehouse where they offer community service, create jobs for those in need, and youth action programs to prevent violence among young adults.  They are also very involved in keeping the Earth green and certain environmental factors, such as recycling and reducing waste, energy, water, and climate change.
Starbucks - Environmental Responsibility
Because Starbucks is a global company and is expanding the retail stores throughout the world, they focus on all demographics.  Although the prices of their products are more than say a street cart, they do provide some low-cost items for those who still want the quality of their coffee.  That said, if we take a look at the average income of an American household in 2011 (Per Capita Personal Income U.S.), it was calculated to be $41,663.  That suggests that Americans can buy specialty coffee drinks from an expensive, quality-oriented organization such as Starbucks.  This also covers certain economic factors Starbucks faces.
Starbucks has kept up to date with the technological factors.  For instance, they developed the Starbucks card, which is basically a pre-paid reward card.  This keeps repeat customers and as a person bumps up rank in the program, they receive greater benefits.  Everything is stored within the system and when a Starbucks employee sees a customer with the Starbucks card, special treatment is delivered.

Political/Legal factors, which affects Starbucks as a company, include the stability of the countries where Starbucks purchases its coffee and natural resources.  They receive their coffee beans from countries all around the world, even places that have many natural disasters: tsunamis, earthquakes, and wars.  If any of these events occur in a country where they are expecting their coffee from, Starbucks may not be able to produce coffee and profits will drop.  Also, Starbucks is environmentally friendly, as stated earlier.  They have to consider how to protect the brand aspect in everything they do, from providing a living wage that makes it to farmers and have production with low pollution rates.

I have mentioned in a previous post about certain competitive factors which Starbucks faces everyday.  The fact that Starbucks' products are generally more expensive then elsewhere (Dunkin' Donuts, street carts, etc.) a few reasons why Starbucks tends to strive is because it is a place for everyone, their ambiance is unique, and they're consistently convenient.  Starbucks is also very innovative and they're always finding a way to reach out to the community, which is very promising to the customers they serve.

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