Customer analysis: Segmentation & Targeting

This post goes through the first part of the  STPV -framework - segmentation and targeting. First, we provide basic guidelines for analyzing and categorizing our customer. In addition, we present customer profiles for  Subsequenly we choose a particular segment that we want to target as our primary customer group.

Segmentation

As defined by Business Dictionary1, segmentation refers to the process of defining and subdividing a large homogenous market into clearly identifiable segments having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment.Four basic factors that affect market segmentation are:

1. Clear identification of the segment
2. Measurability of its effective size
3. Accessibility through promotional efforts
4. Appropriateness to the policies and resources of the company.

Based on this, we analyze the potential Starbucks customer profiles using our field investigations 2 (observing and interviewing existing Finnish customers) and the profiles used in other countries.

Meet the Starbucks family - 3 customer profiles

Johanna

Having watched plenty of American TV shows, such as 'Sex in the city' or 'Gossip Girl', Johanna has known Starbucks brand well before it ever launched in Finland. She's currently studying in senior secondary, and just starting her coffee experiencing. She reads Cosmopolitan and likes to browse lifestyle blogs regularly. In the future she wants to become a celebrity, or at least possess enough money to support the lifestyle she craves for. Currently she's supported by her parents.

Paula

A busy freelancer, Paula likes to work in a cozy environment while enjoying great coffee. She works for herself or in a bigger corporation but always has freedom to work remotely. Paula's did her dream trip last year, when she visited New York. During the visit she had Starbucks coffee several times and now she wants to experience that same atmosphere in Finland. She excercises regularly and loves yoga, sipping wine with good friends, and shopping in smaller boutiques.

Teemu

Running his third tech startup, Teemu knows what entrepreneurhsip is all about. His favorite working environment is filled with a smell of great roast coffee, interesting people, and a feeling like you're home. He regularly reads Mashable, TechCrunch, and visits local entrepreneurship events such as Slush or GEW. 

Targeting 

Our field observations within the Starbucks Akateeminen revieled that customer profile 'Johanna' is currently the most dominant group. However, when thinking of future expansion in other Finnish cities, it might be more reasonable to target the profiles of 'Paula' and 'Teemu that are very close to each other in terms of needs and requirements. They also possess purchasing power and are represented in all big cities with a growing number of entrepreneurs, freelancers and remote workers within Finland.

Read next article: Positioning and Value Proposition
Read previous article: Market Approach

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1  http://www.businessdictionary.com/definition/market-segmentation.html#ixzz2lepb2KMn

2   field observations performed on 27th of November in Starbucks Helsinki