Market Analysis Total Achievable Market By 2020 it is estimated that Starbucks

Market analysis total achievable market by 2020 it is

This preview shows page 18 - 21 out of 48 pages.

Market Analysis Total Achievable Market By 2020, it is estimated that Starbucks location will have 750 daily customers per store. For Starbucks, an expanded food menu, mobile applications enhancements, and mobile payment capabilities will continue to drive that future growth and ability to service more customers. As of June 28, 2015, Starbucks' mobile payments accounted for 20% of the net transactions in the United States, with nearly nine million transactions each week (Trefis, 2017).
Image of page 18
Fig ure 4: Starbucks Daily Customers per Store (Trefis, 2017) Alvarez (2017) provides a 2016 IBISWorld database industry report for coffee and snack shops in the United States. Starbucks’ market share is 43.3% of the industry, with its top competitor Dunkin Donuts having 22.1% of the market. Starbucks’ primary target market are adult men and women aged 25 to 40, who account for about 49% of Starbucks’ clientele. The bulk of the Starbucks’ consumers are in cities or upscale suburban areas. This target audience has grown at a rate of approximately three percent per year. Young adults, aged 18 to 24, account for approximately 40% of Starbucks’ sales. These consumers are largely captured in college settings, use technology and social networking, and is attracted by the “cool” image of Starbucks. This audience grows at about 4.6% per year. Kids and teens aged 13 to 17 accounts for only two percent of the consumer demographics, where most transactions are completed by their parents. While Starbucks does not cater directly to kids, it does try to make its stores a welcoming environment for parents to bring kids and has some kid-friendly offerings, and special sizing available for kids (Goodman Lantern LTD, 2015).
Image of page 19
Figure 5: Market Share for US Coffee and Snack Shops (Alvarez. 2017) Starbucks offers the largest and most robust mobile ecosystem of any retailer in the world, with more than 12 million Starbucks Rewards Members (up 18% year on year), eight million mobile paying customers, and one out of every three customers now using Mobile Order and Pay . In 2016, more than six billion dollars was loaded onto prepaid Starbucks cards in North America. Starbucks also uses big data to customize members for up sell opportunities through customized suggestions of additional options at the Mobile Order and Pay checkout. This is also paired with greater reward incentives for larger order, thereby reducing order splitting and producing more order delivery efficiency (Starbucks, 2016). Total Available Market, Total Achievable Market, and Total Addressable Market Total Available Market, Total Achievable Market, and Total Addressable Market can be calculated using the data analytics that Starbucks collects from its six million Starbucks Loyalty Rewards members. These rewards members account for nearly 25% of all of Starbucks transactions, and by using this information Starbucks have been able to identify 11 key indicators that keep customer grabbing for another cup of coffee (van Rijmenam, 2016). This data is used to deliver the targeted advertising and discount directly to the mobile devices of its customers.
Image of page 20
Image of page 21

You've reached the end of your free preview.

Want to read all 48 pages?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture