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Analysis of Starbucks Delivering Customer Service

In: Business and Management

Submitted By Saniya88
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Analysis of Starbucks Delivering Customer Service

Problem statement:
• In 2002, market research has shown that Starbucks has a gap in meeting its customer’s expectations in terms of customer satisfaction.
• On interpretation the marketing research data, Christine Day, Senior Vice President concluded that the speed of service was the main reason for this decline in customer satisfaction. So she proposed to improve the service time such that each order is served within 3 minutes.
• However, this solution would cost Starbucks 20 additional labor hours per week thereby $40 million per year. Is 20 seconds increase in speed of service really worth $40 million per year?

Situation Analysis:
Customers: The demographics of a typical Starbucks customer have changed drastically in the recent years.
• From Exhibit 8 in Starbucks case document newer customers of Starbucks are younger, less well-educated, low income, less frequent visited to the coffeehouse and had very different perceptions.
• The overall attitude of Starbucks is very low on 25% by new customers whereas the regular customers stood in 44%.
• While many factors influenced customer satisfaction, overall service and speed of service were identified as the most influential; a quick glance at Starbucks's recent customer satisfaction (Exhibit 10 and Exhibit 11 in Starbucks case document) reveals that customers did in fact express dissatisfaction with the efficiency and speed of service.
• From Exhibit 9 in the Starbucks case document we can learn that greater customer satisfaction directly results in higher potential sales.
• Since there was a strong and positive relationship between customer satisfaction and future potential sales, achieving high customer satisfaction is a key factor to Starbucks’s sales growth. In fact, it can be made known that by transforming unhappy customers to satisfied ones,…...

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