Starbucks is a fantastic example of how a business with numerous competitors and substitutes is
able to maintain a steady market and profit growth. The use of segmentation, targeting, and
positioning has further developed its core competencies over its competition. Starbucks positions
themselves as a premium coffee that is focused on customer satisfaction. Their mission statement
reads “one person, one cup, and one neighborhood at a time” (Starbucks). Starbucks aims to
reach their consumer, sell their product, and penetrate different markets. Through the use of
stimulus discrimination, Starbucks is able to differentiate themselves from a multitude of
substitute products. This is done through their outlets. It starts with a friendly cashier, who asks
for your name and allows you to choose or customize your coffee to your satisfaction. When the
coffee is ready for pick-up, the baristas will call your name out. This personalizes the product
further and strengthens customer loyalty (unless they spell your name wrong). This makes for a
customized coffee, tagged with the consumers’ name, to deepen the link between the brand and
consumer. Positioning allows for Starbucks to place their products in their consumers’ minds and
inhabit a distinct position against their competitors’ products. This differentiated strategy
involves the use of innovation in its products, product offering, and services to best gain a
competitive advantage. Starbucks’ positioning as a top coffee brand is possible through the
provision of an appealing store layout, creating a unique atmosphere, paired with the taste of
their coffee through utilization of high quality coffee beans. (Kotler & Keller, 2009). Starbucks’
main target market includes, but is not limited to, urban areas with working professionals,
businessmen and businesswomen, students of high school, colleges and universities. To further
improve their service offerings and customer satisfaction, Starbucks emphasizes heavily on the
good treatment of their employees. “In many of its regions, using surveys, focus groups, and
other forms of employee feedback, Starbucks diagnoses the biggest pain points for its young
workers.” (Ripley, 2016) Employees are able to take home a pound of coffee beans or a box of
other company products, such as Tazo tea. They also receive a 30% employee discount on food
and beverages. While employees are working, they are allowed to drink an unlimited number of
lattes. Most beverages are free for employees during work breaks (Luckerson, 2014). This
employee empowerment makes employees motivated to work and then there is a return to
customers who receive a superior service, further differentiating Starbucks from its competitors.
This level of service can be perceived by the consumers and on the whole adds to Starbucks’
