Would you pay $12 for a cup of coffee? Starbucks is betting enough people will say "yes" as it launches a chain of luxury coffee shops called Starbucks Reserve.

1. Which generation(s) do you expect Starbucks Reserve to attract:
- Baby boomers (ages 53 and over)
- Generation X (ages 33 to 52)
- Millennials (ages 13 to 32)?

Briefly explain your reasoning.

2. To be successful as a luxury coffee bar, how does Starbucks need to distinguish Starbucks Reserve coffee shops from its standard Starbucks coffee shops?

Starbucks Reserve aims to attract millennials by offering a luxury coffee experience that includes exclusive selections, upscale service, and a sophisticated environment. Millennials are likely targets due to their desire for experiences and tendency to spend more time in coffee shops.

Explanation:

Starbucks' decision to launch luxury coffee shops known as Starbucks Reserve is strategically aimed at attracting a specific demographic, most likely the millennials (ages 13 to 32). This generation is known for valuing experiences over products and may be more willing to pay a premium for a high-end coffee experience that emphasizes quality, exclusivity, and social status. Furthermore, millennials have a stronger tendency to integrate café culture into their lifestyle, seeing coffee shops as places to socialize, work, and relax, rather than just locations to get a quick caffeine fix.

To ensure success, Starbucks Reserve must differentiate itself from standard Starbucks coffee shops. This can be achieved by offering an exclusive selection of single-origin coffees, providing a more personalized and upscale service, and designing a sophisticated and comfortable environment that enhances the overall customer experience. The emphasis should be on luxury, uniqueness, and a heightened level of customer engagement.