Starbucks: Delivering Customer Service

Background Vision of the company: Become America’s “Third Place”, a place that would be separated from home and workGoal of the company: Establish Starbucks as “Most Recognized and Respected Brand in the World”Marketing Objective: Coffee, Service and Atmosphere

1971Opened by Gerald Baldwin, Cordon Bowker & Ziev Siegel.

1982Howard Schultz joined the marketing team. He set up an espresso bar at downtown shop.Schultz took over and began opening new stores

1992140 Stores in Northwest and Chicago Competed Against Gloria Jean’s, Coffee Bean and Barnie’s Coffee & Tea.

Store Growth From 1971-2010

Customer Service Mission

Customer Intimacy Customer Satisfaction

Mission Statement Our Mission: to inspire and nurture the human spirit- one person, one cup and one neighborhood at a time.Our Customers: When we are fully engaged, we connect with, laugh with, and uplift the lives of our customers – even if just for a few moments. Sure, it starts with the promise of a perfectly made beverage, but our work goes far beyond that. It’s really about human connection.

Competitive Advantages

Competitive advantage is at the heart of a firm's performance in competitive markets. Competitive advantage means having low

costs, differentiation advantage, or a successful focus strategy. (Porter, 1980)

Products

Coffee ServiceAtmospher

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Growth And Development

Starbucks PartnersLarge Investment in Training Compensation and Benefits Low Employee Turnover rateHigh Employee Satisfaction Rate

Brand StrategyKeep the national Coffee Culture AliveCreate “Experience”Environmental FriendlyFusion of Local Culture

Consumer Oriented Company PhilosophyCustomized DrinksCustomer Connection: welcome, eye contact, smile, remember names and orders, create conversationsQuest for customer satisfaction Aim at creating customer loyalty, gift and membership cards.

Target MarketWell Educated White Collar Jobs

Aged 25-44

Younger Less Educated Aged 16-30

Customer Behavior

Customer Visit Frequency

Customer Satisfaction Data

Percentage of Satisfied Customers

How do they meet the customers

expectations?Product- Coffee“Live Coffee”Committed to be the highest quality coffeeSourced from Africa, Central and South America, Asia Pacific RegionsSupply Chain Control.

Measuring Service Quality

Self-Reported Checklist on Monthly Basis “Customer Snapshot”– Mystery Shopper

Atmosphere Swanky Yet Inviting

Reasons For Their Success

Design Innovation Learning from the local culture Different Menu at different locations

Product InnovationNew Coffee Products are launched on regular basis. Verismo System in 2013

https://www.youtube.com/watch?v=JwwmVTETn54(copy and paste the link in google crome)

Service InnovationWifi Hotspot in Every Store Starbucks store-value card (SVC) in 2001My Starbucks Rewards in 2012Pay with your mobile Phone

https://www.youtube.com/watch?v=BlQDttTWM6ohttps://www.youtube.com/watch?v=8UTyusMA2Pk(copy and paste the link in google crome)

Challenges Faced by the Company

Fierce Competition

Changing Customer Expectations

Reference Quelch, J, & Moon, Y 2003, 'Starbucks: Delivering Customer Service', Harvard Business School Cases, p. 1, Business Source Premier, EBSCOhost, viewed 27 October 2013.Youtube. (2008). Starbucks Coffee. Available from: http://www.youtube.com/user/Starbucks [Accessed: 26 October 2013].Starbucks Coffee Company. (2013). Available from :http://www.starbucks.com/ [Accessed: 27 October 2013].Porter, M.E. (1980). Competitive strategy, The Free Press, 1980.[Accessed: 26 October 2013].