Segmentation, Targeting and Positioning for Coffee: Why “Coffee Lovers” Is Not a Segment

 

Almost every coffee business says it targets “coffee lovers.” It sounds reasonable, but it tells us very little about who the business is actually trying to reach.

A university student buying an iced latte, a home brewer searching for fresh single-origin beans, and a café owner ordering espresso blends may all love coffee. Yet they have different budgets, buying habits, expectations and reasons for choosing a supplier.

That is the problem with “coffee lovers” as a marketing segment. It describes a broad interest, not a specific group of customers with a shared need that a business can serve in a distinctive way.

Segmentation, targeting and positioning usually called STP help a coffee business make three decisions: which customer groups exist, which groups it should prioritize, and why those customers should choose its brand. This framework is well established in marketing management, including the work of Philip Kotler and Kevin Lane Keller. [1][2]

Why “coffee lovers” fails as a segment

A useful segment should help a business make practical decisions about its products, prices, distribution and marketing. “Coffee lovers” does not explain whether customers want an affordable daily drink, a comfortable place to work, specialty beans for home brewing or a reliable wholesale supplier.

Consider three customers:

- The commuter: Buys a cappuccino on the way to work and values speed, convenience and consistency.

- The home brewer: Buys whole beans, experiments with brewing methods and wants freshness, origin information and practical brewing advice.

- The café owner: Purchases beans in larger quantities and needs consistent quality, reliable deliveries, technical support and workable margins.

All three buy coffee, but their purchasing decisions are driven by different needs. A single marketing message is unlikely to address all three equally well.

A more useful segment might be office commuters who want a consistent coffee they can collect quickly before work. This description points towards specific business decisions: convenient locations, fast service, pre-ordering and a menu built around familiar drinks.

The distinction is important. A segment is not useful simply because customers share an interest. It becomes useful when their similarities help a business serve them differently from other customers.

How to segment coffee customers

Marketers commonly use four broad bases for consumer segmentation: demographic, geographic, psychographic and behavioural. These can be useful, but the best approach depends on the business and the decisions it needs to make. [1][2]

For coffee, it is often practical to start with the customer's needs, buying behaviour and occasion, then use demographic or lifestyle information to understand the group more clearly.

• Customer segment| Main need| What matters most| Possible offer
• Morning commuters| Coffee before work| Speed, convenience and consistency| Pre-order pickup and a simple breakfast menu
• Remote workers| A comfortable place to work| Seating, Wi-Fi, power outlets and a suitable atmosphere| Work-friendly seating and suitable food and drink options
• Home brewers| Better coffee at home| Freshness, flavour information and brewing guidance| Whole-bean options, grind choices and brew guides
• Social café visitors| A place to meet people| Atmosphere, menu variety and location| Signature drinks, desserts and comfortable seating
• Specialty coffee enthusiasts| Quality and discovery| Traceability, processing methods and brewing detail| Single-origin releases, tasting sessions and cupping events
• Independent café owners| A dependable coffee supplier| Consistency, delivery, training and commercial terms| Wholesale blends, staff training and equipment support

These groups are illustrative, not rigid categories. One person may be a specialty enthusiast at home and a convenience-driven commuter during the week. A business should segment customers according to the decision it is trying to improve, rather than assuming every person belongs to only one group.

The key question is: What shared need makes these customers respond to a particular product, service or message?

Targeting: choosing which customers to serve

Identifying segments is only the first step. A business must then decide which groups deserve its attention and resources.

A segment can be attractive but still be the wrong choice for a particular company. A small roastery, for example, may struggle to compete for national supermarket contracts because of its production capacity, working capital or distribution limitations. Independent cafés or home brewers might be more suitable starting points.

Before selecting a target segment, ask four questions:

- Demand: Are enough customers willing to pay for the offer?

- Accessibility: Can the business reach them through affordable and practical channels?

- Competitive opportunity: Is there a meaningful reason for them to choose this business over alternatives?

- Capability: Can the business deliver the promised product and service consistently?

Classic marketing literature also identifies five useful tests for evaluating segments: measurability, substantiality, accessibility, differentiability and actionability. In simple terms, a business needs to understand the segment's size, ensure it is worth serving, reach its members, distinguish it from other groups and develop a workable strategy for serving it. [2]

For example, a small roastery in Dhaka might initially focus on home brewers and independent cafés rather than trying to appeal to every coffee consumer. That choice could allow the business to concentrate on fresh roasting, product education, wholesale relationships and dependable delivery.

The right target is not necessarily the biggest group. It is a group whose needs the business can meet effectively and profitably.

Positioning: giving customers a reason to choose you

Positioning is the next step. It concerns the distinctive place a brand aims to occupy in the minds of its target customers relative to competing options.

Kotler, Keller and Chernev describe positioning as designing a company's offering and image to occupy a distinctive place in the target market's mind. The practical purpose is to give customers a clear reason to choose one offer over another. [1]

Consider two hypothetical coffee brands.

Brand A: Convenience-led coffee

For busy commuters who need coffee before work, Brand A offers a consistent espresso-based drink with quick service and convenient collection.

Its priorities would include service speed, staff training, reliable equipment, accessible locations and a menu that customers can order easily.

Brand B: Coffee education for home brewers

For people who want better coffee at home, Brand B offers freshly roasted beans with clear origin information, practical brewing instructions and guidance on choosing the right coffee.

Its priorities would include roast freshness, accurate product descriptions, useful educational content and consistent customer support.

Both brands sell coffee, but they compete on different benefits. Brand A makes the daily routine easier; Brand B helps customers improve their home-brewing experience.

Neither positioning is automatically better. Each must fit the needs of its target segment and be supported by the business's actual operations.

A positioning statement can follow this simple structure:

For [target customer], [brand] is the [product or service category] that provides [distinctive benefit], because [credible reason to believe].

The final part matters. A brand should not promise exceptional consistency, traceable sourcing or rapid service unless it has evidence and operational systems to support that promise.

STP must influence the whole marketing mix

Segmentation, targeting and positioning are not just exercises for writing a marketing plan. They should influence what a business sells, how it prices products, where customers can buy them and how it communicates.

A commuter-focused coffee business may prioritize convenient locations, fast service and a compact menu. A specialty roastery may invest more in sourcing information, brewing education, product descriptions and direct online sales. A wholesale supplier may focus on supply reliability, technical support, delivery schedules and clear commercial terms.

The connection between STP and the marketing mix is also reflected in coffee-business research. A 2026 case study of Mobagu Coffee Shop in Indonesia examines how segmentation and positioning can guide product, pricing and promotional decisions. It is a useful illustration of the framework, although a single case study should not be treated as proof that one strategy works for every coffee business. [3]

The principle is straightforward: if your customer segment does not change any business decision, it may not be specific enough to guide your strategy.

The practical test

Before describing a target audience as “coffee lovers,” make the definition more precise.

Ask:

1. When and why do these customers buy coffee?

2. What problem are they trying to solve?

3. What do they value most when choosing between alternatives?

4. Where and how can the business reach them?

5. What can the business offer that fits their needs better than competing options?

The answers should lead to decisions about the menu, product range, pricing, distribution and communication. If they do not, the segmentation exercise has not yet done its job.

The bigger lesson

Coffee is a broad product category, and people consume it for many different reasons. Some want an affordable daily caffeine fix. Others value the café experience, brewing as a hobby, specialty flavours or a dependable business supplier.

A successful coffee business does not necessarily need to serve only one type of customer. But it does need to understand which customers it is prioritizing and why.

“Coffee lovers” may be a useful starting point for describing an audience. It is not a complete marketing strategy.

Good STP begins when a business stops asking who likes coffee and starts asking which customers it can serve best—and what will make them come back.

References

[1] Kotler, P., Keller, K. L., & Chernev, A. Marketing Management, 16th edition. Pearson, 2021. See the discussion of positioning in the "publisher's book preview" (https://www.oreilly.com/library/view/marketing-management-16th/9780135323199/xhtml/fileP7001017702000000000000000001426.xhtml).

[2] OpenStax. “Essential Factors in Effective Market Segmentation.” Principles of Marketing. Explains the five criteria used to evaluate useful market segments: "Read the chapter" (https://openstax.org/books/principles-marketing/pages/5-4-essential-factors-in-effective-market-segmentation).

[3] Turangan, M. M., Erlangga, D., & Wiadi, I. “An STP-Based and Marketing Mix Strategy for Increasing Sales and Competitive Advantage: A Case Study of Mobagu Coffee Shop.” Multidiscience: Journal of Multidisciplinary Science, 3(1), 2026, 65–75. "Read the published study" (https://doi.org/10.59631/multidiscience.v3i1.468).