Starbucks Essay

starbucks Corp., an international coffee and coffeehouse chain based in Seattle, Washington, has expanded rapidly since its opening in 1971. These outrageous success was due to its well-developed strategy vision which lay out the company's strategic course in developing and strengthening its business. Starbucks is a global corporation that sells authentic coffee in 30 countries, reporting revenues of nearly $5.1 billion in 2006. The main goal of Starbucks is to embrace diversity by applying the highest standards of excellence. Starbucks strives to perfect the relationship with the working class by making the service as fast as possible because they believe that every customer has their own personal rate. One

2) Garthwiate, Craig; Busse, Meghan; Brown, Jennifer; Merkley, Greg “Starbucks: A Story of Growth” Harvard Business Publishing, July 2012.

Additionally with its growth strategy Starbucks seemed to have lost the ability to communicate its values to its customers. Note that Starbucks research team discovered that between 2000 and 2001 there was an increase in customers who felt that Starbucks primarily cared about making money and building more stores. This is an indication that the company lost sight of the components making up its value proposition. Customer service was a major component of Starbucks value proposition but according to the research team by 2002 it discovered that Starbucks was not meeting expectations in terms of customer satisfaction. In fact the data collected by the research team indicated that 10% of customers would like to see improvements in service especially speed of service and 19% would like to have friendlier more attentive staff.

It was believed that there was a service gap between Starbucks scores on key attributes and customer satisfaction. Furthermore, according to a poll, the speed of service delivery was the biggest concerns of customers. Overall, customers are pleased with the cleanliness, atmosphere, and product quality. However, the main problem was that waiting time was steadily increasing. I believe this one of the factors that caused the decline in satisfaction.

Several key success factors exist for Starbucks, a leader in the coffee industry. They include

ticket size) X (4.4 customer life years)] $921.78. Calculating sales amount for the highly satisfied customer using the same method shows an amount of [(7.2 visits/mo) X (12 months) X ($4.42 avg. ticket size) X (8.3 customer life years)] $3,169.67. The sales figure for the highly satisfied customer is nearly three and a half times as much as the satisfied customer. This is why it is very important for Starbucks to figure out how to provide more customer satisfaction. The company needs to do research to find out if quality of service has actually declined. There is always the societal perception that a large mega brand is incapable of delivering customer intimacy. This perception is not necessarily a foregone conclusion. It’s just a matter of Starbucks collecting accurate information regarding both quality and quantity of its customer service. The company needs to take a look at itself and determine if its customer service strategy had changed from 1992 to 2002. This is an era indicative of the massive growth. Starbucks needs to answer the question, “Did we lose our focus on customer service quality by concentrating too much on opening more stores?”.

Starbucks’ lead in the specialty coffee industry exemplifies the result of deftly executing a well-planned business strategy. Moreover, Starbucks is well positioned for what is expected to be a continuing rise in the popularity of specialty coffee products. The question before Starbucks’ leadership, however, is what avenues will lead to Starbucks’ goal of remaining true to its core, the highest quality coffee products while providing a “total coffee experience” for its customers?

One of the main reasons Starbucks is so successful in the flattening global economy is because they focus on quality and experience rather than the price

However, there was a significant differentiation between Starbucks and the independent specialty coffeehouses. The brand image of Starbucks also had some rough edges. More customers were beginning to agree with the fact the Starbucks cared primarily about making money and building more stores. Also, despite the high customer snapshot scores customer satisfaction scores were declining. It was believed that there was a service gap between Starbucks scores on key attributes and customer satisfaction. In polls by customers “improvements to service,” particularly speed of service, was most mentioned for improvement.

Starbucks is a successful premium coffee retailer. Its target market sets as well-educated, white- color patrons between the ages of 25 and 44. There are three components of the brand, live coffee, service, and atmosphere. However, its brand image is losing while they focus on retail expansion.

surprised by Starbucks’ initial success in its first six months of operation. The few issues that

Their marketing research shed light on the fact that their focus had shifted from the consumer towards store growth and product expansion. The research also highlighted the fact that they were lacking in customer service. Through these studies, Starbucks was able to identify what their customers wanted in terms of satisfaction. Consumers wanted Starbucks to make improvements to their service and also start offering better prices and incentive programs.

Question 1:When Howard Schultz launched Starbucks, who was the target market and how was Starbucks positioned to appeal to this target market?

Starbuck’s main decision needing to be made is to determine whether they should allocate $40 million to extra labor in order to better satisfy their customers. Starbuck’s believes that they have created a recession proof product; however, recent marketing research determined that is not the case. Customer satisfaction has been steadily declining and their customer’s perceptions on what determines excellent customer service has changed in recent years. This change in customer perceptions is due in part to the fact that their customer base has shifted to a younger, less educated clientele that hold different attitudes toward Starbucks than the previous

In order to protect its market, Starbucks would be wise to continue to insist on the BEST customer service possible. Ultimately, it’s the experience that will continue to bring people back. “Starbucks built its brand not so much on the coffee, but on the EXPERIENCE of being in a Starbucks cafe, surrounded by like-minded people and listening to the music selections of their CD-of-the-month club and cool "baristas" who reveled in talking about the differences between the various coffee blends as if they were wine aficionados, which is cool.” (Janal, 2006) Other’s may try to replicate what they see at Starbucks in look and feel but without the excellent