Vincent's Cappuccino Express Case Study

The specialty coffee industry had seen steady growth for years and the trend was expected to continue until at least 2015. Of the various segments within the specialty coffee industry, most of the growth was attributable to beverage retailers “Coffee and kiosks”. In 1979 there were approximately 250 specialty coffee retailers. The number quadrupled by 1989 to approx 1000 outlets, and it exploded to roughly 15000 by 2002. Nationally, specialty coffee sales totaled over $ 10 billion in 2005.

While the leading drinks in 2004 were espresso-based beverages with sales averaging $50,395 per store, drip-brewed coffee beverages – which Expresso Espresso does not offer – came in second at $33,336 per store. It is understandable that Todd insists on providing quality products, but refusing to add drip-coffee beverages to his menu is the equivalent of refusing to cater to his customers’ needs. Unlike any of the local competitors, Expresso Espresso and the eventual Starbucks are the only Mobile coffee shops that offer a drive-through service. The drive-through contributes to 40 percent of Expresso Espresso’s total revenues, so needless to say, it’s a very important contributor to the business. If Todd hopes to stand a chance against Starbucks, his biggest competition, he will need to add drip-coffee beverages to his menu. Otherwise, it will be just as easy for a customer to drive off 400 feet east to Starbucks and request a drip coffee there instead.

Understanding and listening attentively to the customer is important to the success of a business.

Answer: Design quality means the product attributes that enhance the utility of the product for the customers. It is that making products for consumers to use the products better with more conveniences and values.

How is Starbucks attempting to re-create its uniqueness? Do you think it will be successful? Why or Why not?

Customers expect safe and strong products, sold to an affordable and suitable selling price, otherwise they will refuse to buy it. The aim of big companies is to fulfil and exceed customers’ expectations and offer them quality products.

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.

Coffee, a cup of Joe, Java or brew, it goes by many names. It can be your morning jump-start or even used as an afternoon pick me up, to be enjoyed alone or with the company of others. It is a drinkable source of energy that is enjoyed in the United States and in many other places around the globe as well. It’s no wonder that coffee is such a popular commodity. Companies such as Starbucks and Peet’s Coffee have revolutionized the coffee shop industry in the United States by making it easy and convenient for consumers to purchase single-serving cups of coffee on a regular basis. Not only is the service quick and convenient, but it also allows consumers the ability to personalize their drinks to make it to their desired preference, making it a more enjoyable experience rather than just having a cup of instant coffee at home. In this paper, I will be exploring the coffee shop industry, which will be defined as firms who sell single-serving cups of coffee to their consumers.

Despite the recent downturn in revenue, the Coffee and Snack Shops industry is mature. For these reasons, industry research firm IBIS World has updated a report on the Coffee & Snack Shops industry in its growing industry report collection. According to IBIS World Industry Report, in the five years to 2014, industry revenue is expected to increase an annualized 2.7% to $30.2 billion. This trend is expected to continue into 2014, with an expected growth of 1.4%. Major operators like Starbucks and Dunkin ' Donuts are expected to expand their menus in the five years to 2019 in order to increase sales and access higher profit margins. Both Starbucks and Dunkin ' Donuts plan on rolling out hundreds of new stores over the next five years, making up for lost ground they experienced during the recession. Dunkin ', which is highly concentrated in the east, is aiming to expand westward to steal market share from local competitors. The major chains are also expected to invest more in international growth as part of a long-term strategy, because many larger players view emerging economies as markets with huge potential for growth and long-term profitability. (Lauren Robi, An Analysis of Starbucks as a Company and an International Business, 2011)

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?

Starbucks faces a difficult and controversial management challenge. The company’s most recent market research has revealed unexpected findings implicating that Starbuck is not always meeting customer’s expectations in the area of customer satisfaction. The purpose of this memo is to analyze and provide recommendation on whether or not the company should go forth with a $40 million investment in additional labor in the stores. This $40 million investment is necessary in order to bring service time down to a three-minute interval and ultimately increase customer satisfaction. A marketing strategy and corresponding recommendation will be provided for your approval.

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.

Starbucks has become a victim of over-saturation. The abundance of stores available is partially to blame for altering the consumer’s view of Starbucks as a quality of coffee shop. A brand seen as a luxury item in the coffee industry has now become rather accessible to consumers. This increase in availability of Starbucks brand and products provided is responsible for the decrease in appreciation consumers had for the corporation. Consumers are also taking into consideration their trips to Starbucks are no longer special experiences due to the rise in their availability. There is also a growing enthusiasm from health consciousness consumers in the United States and more people are cutting down on caffeine.

This case assignment discusses the history of Starbuck’s accomplishments as they entered the American coffee culture heritage. In 1983, The chairman and CEO Howard Schultz traveled to Italy and had a dream to carry the Italy coffeehouse ritual back to the United States. Schultz was focused on creating an environment meeting company that makes good coffee but also be a social experiment. Starbucks today opened more than 19,000 stores functioning in 62 countries. Starbucks has numerous rewards that globalization has offered and they have significantly benefited from it, while in the coffee industry. Starbucks has a wide-range in marketing strategies to benefit the customers. During the different obstacles that Starbucks has encountered, they must stay reliable in quality and uphold to adjust to different customer values.

Sureshchandra, Rajendran and Anantharaman (2002) identified five critical aspects of service quality from the customers point of view namely core service/service product, human element of service delivery, systematisation of service delivery, tangibles of service and lastly social responsibility in order to conceptualise service quality. Table 1 will further provide an explanation to the five critical aspects of service quality as outlined by Sureshchandra et al (2002).