Spectrum of Segmentation Variables

Using the full spectrum of segmentation variables, describe how Starbucks initially segmented and targeted the coffee market.

In 20 years' time,

Schultz grew the company to almost 17,000 stores in dozens of countries. From 1995 to 2005, Starbucks added U.S. stores at an annual rate of 27 percent, far faster than the 17 percent annual growth of McDonald's in its heyday. At one point, Starbucks opened over 3,300 locations in a single year--an average of 9 per day. In one stretch of crowded Manhattan, a person could get their caffeine fix at any of five Starbucks outlets in less than a block and a half. In fact, cramming so many stores so close together caused one satirical publication to run this headline: "A New Star-bucks Opens in the Restroom of Existing Starbucks."

Question 2

Given the industries in which Cisco competes, what are the implications for the major types of buying situations?

Competition exists when the firm is able to deliver the same benefits as competitors but at a lower cost (cost advantage), or deliver benefits that exceed those of competing products (differentiation advantage). Thus, competition enables the firm to create superior value for its customers and superior profits for itself.

"Cisco works hard to retain staff in the acquired companies as these are the most valuable asset. They are quickly integrated, provided with new opportunities and much freedom". Cisco provides various relevant trainings to make them advanced with the new products and technologies.

Question 3

What specific customer benefits will likely result from the Cisco products mentioned in the case?

Cisco moved quickly, seizing every opportunity to snatch up businesses and develop new products. During the 2000s, Cisco acquired 48 venture-backed companies. But last year alone, the company announced an astounding 61 new technologies, all focused on helping customers through and with collaboration. With these resources--and $35 billion in cash that it has stowed away--Cisco is now expanding into 30 different markets, each with the potential to produce $1 billion a year in revenue. Moving forward, the company has committed to adding 20 percent more new businesses annually. And because Cisco enters a new market only when it's confident that it can gain a 40 percent share, the chance of failure is far below normal.

Question4

Discuss the customer buying process for one of Cisco's products. Discuss the selling process. In what ways do these processes differ from those found in buying and selling a broadband router for home use?

Cisco's