Starbucks : Delivering Customer Service

The “Coffee Wars – The Big Three: Starbucks, McDonald’s and Dunkin’ Donuts” article focuses on the company analysis of the Starbucks brand and how its main competitors, McDonald’s and Dunkin Donuts, has affected their brand and driven competition higher. Even though there are many companies trying to enter the specialty coffee market, these three companies own the majority of the market share. With Starbucks’ top quality and above average prices they hold a different market than the fast coffee/food market of Dunkin’ Donuts and Starbucks; yet the competitive moves Dunkin’ Donuts has made over the years in order to compete with Starbucks and surpass McDonald’s has driven competition up between all three companies. The competition has stiffened ever more in the past ten years due to the changing economy. This led to “the big three” to come up with different techniques to gain competitive advantage over the other. Although the competition between these companies is to gain most of the market share, consumers are still loyal to a certain brand; this makes it difficult to gain each other’s clientele. McDonald’s continues to appeal to customers who want value and speed, Dunkin’ Donuts focuses on the middle-class, while Starbucks a customer who desires a higher quality product along with being recognized for using the brand.

Adopting a qualitative approach, this report provides an evaluation and critical analysis of the service process and service environment to evaluate the specialty coffee house chain, Starbucks Singapore. The report evaluates the purpose and value of the Starbucks servicescape design, a descriptive illustration of the service environment with a detailed and clear blue-printing of the service process

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

Starbucks will be the first come in your mind when you want to have a cup of coffee. Don’t you feel curious about why is Starbucks so successful? This report explains how Starbucks take advantage in consumer purchase decision making process, how does Starbucks attract customer, how does Starbucks segment its market and new trends in society affect purchasing process.

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.

This assignment is based on the Starbucks case study; Trouble Brews at Starbucks written by Lauranne Buchanan and Carolyn Simmons (2009). The aim of this paper will be to discuss the the changing consumer experience, competitive landscape and external circumstances affecting marketing opportunities for Starbucks, while determining how Howard Schultz can provide Starbuck’s customers a greater long-term value.

The story of Starbucks transformation from a small independent coffee shop tucked away in a corner of Seattle’s Pike Place Market to a cultural phenomenon spanning the globe is legendary. A number of factors have been attributed to the success - one being a keen understanding of its patrons. There are multiple methods used to obtain customer information and the value derived therein. Customer lifetime value is one.

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?

The elusive goal of customer satisfaction has long provided companies with endless headaches and difficult decisions. In the end, associating specific customer satisfaction metrics to company profit and loss would provide the undeniable proof needed to make changes, and then invest the required capital to address any concerns. Starbucks, not unlike the rest of the business world, has found itself in the same situation. At a basic level, the argument that more investment in customer service creates higher customer satisfaction has already been fundamentally agreed upon. However, more specifically, Starbucks must decide if a reinvestment of $40M annually in

Starbucks has put heavy concentration on product innovation, new product launches and branding strategies and as a result, the company has lost sight of the customer’s wants and needs. Ultimately, Starbucks is not properly or correctly measuring customer satisfaction. They are basing these scores on characteristics affecting the product, and not precisely measuring the quality of their services. As Exhibit 10 from the case study shows, Starbucks’ customers ranked a clean and convenient store as the most important attributes of creating customer satisfaction. As marketing research is beginning to reveal, this should not be the only focus. Starbucks needs to shift their priorities and rank fast service, customer experience, and atmosphere as most important, as new studies suggest.

Small businesses are mighty minnows, reflecting the competitive spirit that a market economy needs for efficiency; they provide an outlet for entrepreneurial talents, a wider range of consumer goods and services, a check to monopoly inefficiency a source of innovation, and a seedbed for new industries; they allow an economy to be more adaptable to structural change through continuous initiatives embodying new technologies, skills, processes, or products (Ibielski 1997, p. 1).

Problem statement: In 2002, market exploration has exposed that Starbucks has an opening in gathering its consumer’s outlooks in relations of customer pleasure. On explanation of the marketing research statistics, Christine Day, Senior Vice President determined that the speediness of service was the foremost motive for this deterioration in customer contentment. So she proposed to increase the service period such that each order is served within 3 minutes. Nevertheless, this explanation would price Starbucks 20 supplementary employment hours per week thus $40 million per year. Is the 20 seconds escalation in speed of service actually worth $40 million per year? I am trying to examine evidence in this brief case, while looking for different methods, in demand to accomplish greater profits.

In general the coffeehouse industry in the United States was experiencing an increase in coffee consumption per capita due to the “Starbucks effect”. At this time Starbucks was operating approximately 20,000 stores in the United States and was living a fast expansion strategy worldwide.

The CEO (Chief Executive Officer), Howard Schultz pointed that the main reason from the decline of “Starbucks Experience” was that the number of Starbucks shops increased sharply from only 1,000 to 13,000 within ten years. Other people considered their brand has been commercialized, and the customers hadn’t had enough enthusiasms to appreciate every moment of their coffee any longer. He suggested that Starbucks should re-find its origin. Nevertheless, his advice apparently was opposite to the