Case Study on Marketing

Starbucks and City Café: Friend or Foe? (pg 265-267)
Case Objectives
To understand how to define different market segments based on the variables used to
divide the market
To be able to identify and explain the marketing actions used to reach the target
To draw a perceptual map and explain the positioning strategy of the different brands
Case Synopsis
President Chain Store Corporation (PCSC) was established in Taiwan in 1987 and
runs a host of subsidiaries that engage in businesses ranging from retail to logistics to
food and beverage. It operates over 7,000 stores both within and outside of Taiwan.
Its revenue for 2013 was over NT$126billion.
The Taiwanese local coffee scene is a booming market that is home to over 10,000
coffee establishments. These range from specialty cafes such as Orsir and Mojo
Coffee to medium sized café chains such as 850C and Bakery. Coffee in Taiwan is a
NT$10billion a year market. Coffee consumption per capita was over 1kg in 2012.
In Taiwan’s local coffee market, PCSC is a major player with two brands: Starbucks
and City Café. It operates around 300 Starbucks coffee outlets in Taiwan under a joint
venture arrangement and has more than 2,000 City Café outlets located within its 7-11
chain stores.

Question 1
What variables should be used to segment the coffee market in Taiwan? How many
groups can you identify in your segmentation exercise? What are the responses and
behaviours of each group?

1.1 )

The variables for segmentation are:

Coffee Quality: Are they coffee connoisseurs or casual drinkers

Price consciousness: Would they be willing to pay relatively high or low prices for their

Outlet Type: Do they commonly get their coffee from a convenience store or in a café

Brand consciousness: Are they particular about the brand of coffee they are seen drinking

Coffee Type: Do they look for common varieties of coffee or custom brewed specialty...