Question

How might Starbucks try to target those most likely to purchase a $5 coffee? How about a $2 coffee? How about an $8 coffee?

Answer 1

Starbucks try to differentiate the market basis customers purchasing power, locality they live and also basis locality of salaried class and business class.

For selling its $5 coffee to the right kind of customers, i.e. within the locality of high income group and the areas where property rates are usually high is the right kind of segment for selling this $5 coffee since here people will be most likely and willing to purchase this type of coffee and moreover by giving the different varieties in coffee, Starbucks can induce them to purchase this type of coffee.

Starbucks can sell $2 coffee to suburban people who usually are urbanised people but live near to urban areas and exhibits all characteristics of urban people and will most likely to purchase a $2 coffee since this is the age group which is between 22-40 years old and commute daily between urban areas for their work and then commute back to suburban areas where they live.

Starbucks can target business class people who are not salaried but are employers and generally discuss many business related things or generally meet with their clients at cafe's/coffee shops and so to open their shops at their locality and also within the markets of commercial buildings is a good idea to promote and sell their $8 coffee since these type of people will not mind to purchase and will not see into their pockets while purchasing the $8 coffee and Starbucks can easily and successfully sell this type of coffee to them. Moreover by offering different kind of coffee within the same range of $8 Starbucks can induce this type of customer segment to purchase.