Starbucks : Delivering Customer Service

1149 Words Mar 2nd, 2009 5 Pages
PROBLEM STATEMENT
Starbucks has discovered that they are not always meeting their customers’ expectations in the area of customer satisfaction. Starbucks has to come up with an action plan to address this issue, considering its significant correlation and impact to sales and profitability.

SITUATION ANALYSIS
Company
Starbucks is acclaimed for its superior value proposition in the early 1990’s by creating an experience around the consumption of coffee, a ‘third place’. The brand is positioned to offer the highest quality coffee, close customer intimacy, and warm atmosphere or ambience.

Customers
However, data from the market research team has shown that there is a shift on Starbucks’ brand recognition in customers’ perception
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In addition, Exhibit 5 illustrates being ‘treated as a valuable customer’ and ‘friendly staff’ hold more value compare to ‘fast service’, while ‘fast service’ and ‘appropriate prices’ are perceived equally important.

Competitors
Starbucks faces competition from variety of small-scale specialty coffee chains, such as Caribou Coffee, Peet’s Coffee and Tea, Dunkin Donuts, and thousands of independent specialty coffee shops. Each of them applies different strategies to differentiate itself from Starbucks; some of them deliver highly personalized service.

Complements
Starbucks has introduced stored-value card (SVC), which is one of its successful service innovation to its customers. This prepaid and swipe-able smart card was positively accepted, resulting in sales of 6 million cards and $160 million in revenues in the first year it was launched. Starbucks has learned that cardholders tend to visit Starbucks twice as often and experience reduced transaction times. This SVC also proves to bring new customers to Starbucks’ brand.


ALTERNATIVES
After carefully analyzing the situation, the best plans are to improve customer satisfaction through improving both quality and speed of service and providing incentive programs. A few considered alternative solutions are as follows:

Reduce product variations
Pros : - Decrease transaction times
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