Starbucks: A Case Study

1718 WordsApr 26, 20147 Pages
STARBUCKS A venti issue: blending together a solution to satisfy the needs of customers, new and old.” Customer satisfaction is a key component to any successful business, especially one in the coffee industry. Starbucks started as a small coffee shop in Seattle in 1971. Howard Schultz, the chairman and chief global strategist, joined the marketing team in 1982 with a vision—a vision to capture “the live coffee mantra.”[1] Until the early 2000s, before Starbucks took off, there were limited places for people to socialize outside of work and home. When Starbucks infiltrated the market as a “third place”, it found sudden success. In 2002, Starbucks was the dominant specialty-coffee brand in North…show more content…
The mismatch between meeting new and traditional consumer needs is also demonstrated through the failure of Starbucks’ rewards program. My Starbucks Rewards aimed to give benefits to loyal consumers. While a good plan in theory, the program ended up angering their most loyal customers rather than strengthening their loyalty. A loyal customer is expected to earn 30 “Stars” per year to maintain their Gold Member benefit status. Regardless of the number of years the customer has been a Gold Member if they do not maintain their level, they automatically are demoted and their Star balance resets to zero and they are demoted to a Green Member without any warning [5]. According to Forbes, “Starbucks’ satisfaction rating sank 4 points, ending up with 76-point rating of satisfied customers, while Dunkin’ made its debut on the Index with a 79. Starbucks’ higher prices are dampening customer enthusiasm, the ACSI report noted” [6]. Customer satisfaction plays a major role in the success of a company and higher prices prove to directly decrease satisfaction, therefore loyalty programs are playing a bigger role in the satisfaction of customers than ever before. Starbucks has been known to always have a large contingency of loyal customers, but recently the “My Starbucks Rewards” program has turned loyal consumers away from Starbucks’ doors. Our last piece of evidence presented itself after conducting a Customer Retention Management model, in which there were satisfaction issues

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