Using Segmenting to Better Serve Your Marketing Messages to Your Audience
By: Kimberly Grant
They say “variety is the spice of life.” American consumers know this saying all too well. Since the United States is a capitalist society by design, Americans are used to having choices. After all, it is the Land of the Freedom to Choose. Just going into a local Starbucks yields a variety of choices? Venti, grande, or tall? Regular milk, soy milk, or almond milk? Coffee, caffeinated tea, herbal tea, or hot chocolate? Hot or iced? The variations are endless.
Myself, in particular, I love having choices. And, I love coffee more than I love having choices; Starbucks in particular. It’s actually my happy place.
Of course, having variety is a part of Starbucks’ brand. The barista gives you exactly how you want it, the way you want it and we, as consumers, give them payment for that premium product. It has worked well for Starbucks since their first opening in Pike Place Market in Seattle, Washington, in 1971. Fast forward 50 years and you have a global brand with an easily recognizable company logo that is synonymous with great coffee and service at a premium cost. One could easily spend $10 on a venti pumpkin spice Frappuccino with extra caramel drizzle, crafted with soy milk, and topped with whipped cream.
Picture it: Getting that $10 Frappuccino and happily skipping out of a Starbucks location, not thinking twice about the high cost of that beautifully crafted, extra large cup of blended ice coffee and that healthy dollop of whipped cream. It brings back many fond memories.
But Starbucks didn’t start off getting consumers to happily pluck down $10 for something that should cost less. If we were to think about ways in which a luxury coffee company could market their coffee today, it would probably begin with segmenting the market.
Sure, in the 1970s there was a market for people who drank coffee. Anyone who has gotten less than five hours of sleep would need a cup of joe to reinvigorate their day. Coffee also has increased health benefits like being a diuretic and improving cognition. But there wasn’t a large market for people who wanted gourmet coffee. That required segmenting an untapped market.
There are three reasons as to why market segmentation is beneficial:
- Segmenting allows a marketer to focus on narrowing their marketing efforts to a specific group of consumers.
- Segmenting gives a marketer an opportunity to make a brand distinctive in the minds of a specific group of consumers.
- Segmenting allows marketers to inform industry consumers about product alternatives within a specific market.
Today, well after Starbucks cemented its position as a global brand for gourmet coffee, other companies have gotten into the gourmet coffee alternative market. These days, there are people who have described themselves as “coffee connoisseurs” or “coffee snobs”, who pride themselves in knowing the difference between Sumatra and Kenyan coffee beans that can be purchased at the local, hipster Panther Coffee shop. Even McDonald’s has its frappes and lattes and Dunkin Donuts has its coolattas.
There are various segments in the gourmet coffee market that exist today that didn’t back in the 1970s. There are: lattes, Frappuccino-types, ice coffee, pour-over, and cold brews. The idea of a “black coffee” is now a thing of the past. Consumers want variety.
By segmenting the gourmet coffee market, it’s also easier to market to all types of coffee drinkers. Marketers can even use differentiated marketing across segments. Those who like cold brew coffee may like iced coffee. Those who like lattes may be interested in pour-over coffee. The possibilities are as varied as the coffee options and then some.
While being a coffee snob can make someone un-endearing to their friends, they make the perfect target audience for gourmet coffee segmentation. The gourmet coffee market is a great industry to segment. With so many options in the market, it’s always fertile ground for creating a larger variety and increasing market share. That way, more people will gladly skip out of their neighborhood coffee house, expensive drink in hand; and keep coming back.
