Premium Essay

Starbucks: Delivering Customer Service

In: Business and Management

Submitted By yybing525
Words 1821
Pages 8
Introduction
Company
Three coffee fanatics-Gerald Baldwin, Gordon Bowker and ZievSiegl-opened a mall coffee shop in Seattle’s Pike Place Market in 1971; which, it specialized in selling whole Arabica beans to a niche market of coffee purists. Schultz joined the Starbucks marketing team in 1982. He traveled to Italy and became fascinated with espresso bars and Italian cultures. Later on, when Schultz got the chance of buying Starbucks, he began opening new stores that are designed as his idea of coffee house. By 1992, Starbucks had 140 stores; Schultz then took the company public that year. By 2002, Schultz had established Starbucks as the dominant specialty-coffee brand in North America. Sales grow rapidly and the stores are keeping expanding.

Consumers
In year 1992, Starbucks sold whole beans and premium-priced coffee beverages by the cup and catered primarily to affluent, well-educated, white-collar patrons (skewed female) between the age of 25 and 44. This profile had expanded. Since lower priced coffee is never Starbucks’ goal, consumers of Starbucks are middle or high level of income. Most customers favored coffee drinks back then, while coffee and non-coffee-based drinks or beverages are more popular. Customers used to hang out at the coffee house and chatted with the baristas while most of them just get the drink and leave nowadays. Also, customer types have widened: customers choose to online ordering as well. According to the market research, customers tended to use the stores the same way now. There are types of customers, like most frequent customers averaged 18 visits a month and typical customer visited five times.

Competition
In U.S, Starbucks competed against a variety of small-scale specialty coffee chains that tried to differentiate itself from Starbucks; whether is on store environment (Caribou Coffee) or by offering the freshest coffee…...

Similar Documents

Premium Essay

Starbucks: Delivering Customer Service

...copied 3) Besides hard work and persistence.Papers of the Research Society of Commerce and Economics, Vol. XXXXVII No. 1 ― 112 ― 4) According to this homepage, this was intentional to provide a source of interchangeable parts. 5) According to Wikipedia (Toyota Motor Corporation [TMC]) the name was changed from Toyoda to Toyota for three reasons: (1) to differentiate the founders’ work from his personal life, (2) ease of pronunciation, and (3) to give the company a happy beginning as “Toyota” has eight strokes in katakana (トヨタ) and eight is considered a lucky number in Japan. from a Ford. 4) ” That same year production of the G1 truck began. According to Stephenson: Early units broke down a lot, so customers were carefully chosen for loyalty. Aftermarket sale support was so strong that entire trucks were often replaced without question. Development and production engineers were loaned to dealers so that repairs could be done and so that the engineers could learn about what needed to be changed in production. And, in 1936 Toyota came out with its first production car, the Model AA Sedan. In 1937 the Toyota Motor Co (TMC) 5) was established as an independent company. One year later the first TMC plant started operations and the just-in-time system was launched on a full-scale basis (HOT). This plant (Honsha), near Toyota’s head office in Aichi Prefecture (near Nagoya), is still operating making......

Words: 18612 - Pages: 75

Premium Essay

Analysis of Starbucks Delivering Customer Service

...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...

Words: 2403 - Pages: 10

Premium Essay

Starbucks: Delivering Customer Service

...Overview: * Starbucks is a global coffee shop chain and it's headquarter is based in Seattle – U.S. It is considered the largest coffee shop company in the whole world. * It was established by 3 partners (Gerald Baldwin, Gordon Bowker and Ziev Siegl) Seattle – U.S. in 1971. In 1982 Schultz joined the team. Years later, the founders agreed to sell Starbucks to Schultz who took the company public. * The idea behind Starbucks was to make the coffee shop a "third place" beside home and work. * Starbucks operates 16,635 stores in 50 different countries. 11,068 of them are located in U.S. The company's product lines are the following: * Beverages (coffee – juice – tea) * Merchandises (mugs..) * Whole coffee beans * Pastries Starbucks strategy: * providing high quality products * Create profitability * Maximizing market penetration * Offering attractive and comfortable atmosphere The questions: Q1) What factors accounted for the extraordinary success of Starbucks in the early 1990s? The factors accounted for the success of Starbucks in the early 1990’s are: 1. Atmosphere: Starbucks is a coffee shop but the purpose behind it is not just offering coffee, instead providing the customers with a comfortable environment. Customers can relax, enjoy a cup of coffee or whatever Starbucks offers and read the newspaper or simply meet friends. This will result in customers staying more and more inside the coffee shop and makes them...

Words: 2305 - Pages: 10

Free Essay

Delivering Customer Value Tesco

...software; internet and telecoms services; financial services; music downloads; and DVD rental. Delivering Customer Value Tesco is one of the leading companies that focus upon the customer service delivery and creating value for them. The company creates values for its customers in the following manner: Marketing Mix Tesco has created it marketing mix or Ps (product, price, place, and promotion) in order to align these factors with the customers' needs and affordability. The entry into different markets all over the world by Tesco has been made by significant adaption to the consumers' culture in relevant markets. It has made certain changes in the service provision with respect to its four Ps which are completely in adherence to the standards inherent to the company. A. Product Tesco sets off its strategies and tactics of the product development by taking control of the regional and global markets through marketing their current services and products. They do this by exporting their products in various regions and provinces and making use of all the available opportunities of enhancing the market share and market penetration of the company. Tesco also considers the revision and restoration of the older models of its products to in order to provide its customers across the world with all that they needs and want (Tesco PLC, 2012). Thus, Tesco develops its stores and brands according to the customers' needs and markets them......

Words: 1202 - Pages: 5

Premium Essay

Starbucks Customer Service

...Summary Starbucks, one of the most successful specialty coffee brands in North America is facing a dilemma of recent market research, illustrating that the brand is not meeting customer expectations in terms of customer satisfaction. Christine Day, the vice president of administration, devised a $40 million dollar plan to rectify the issues found in recent market research. Increasing the amount of labor hours in the stores will theoretically increase worker production and speed of service, however the impact on sales and profitability along with the companies’ bottom line is unclear. Identification of several key factors play a major role in decision making; the firm’s problems, corporate strategy, market strategy, market analysis, financial analysis, and a SWOT analysis. A $40 million dollar investment will increase efficiency within stores and improve customer satisfaction to where it should be. I.  Current Situation The purpose of this report is to decide whether or not to invest $40 million in labor costs to increase customer satisfaction. Recent market research shows customer satisfaction is declining. Understanding the evolving customer plays a major role in the long-term success of a company. II.  Current Strategies Originally, the corporate strategy appeared to be more of a marketing strategy with similar properties. Focusing on the product, place, promotion, and price. Specializing in selling premium coffee, while creating an uplifting service......

Words: 1427 - Pages: 6

Premium Essay

Starbucks - Delivering Customer Service

...The case discussed here outlines a number of challenges, which the Starbucks Coffee Company is facing as of late 2002. Starbucks was founded with the intention to deliver a superior coffee drinking experience to a predominantly affluent, well-educated white-collar clientele all across America. Starbucks’ value proposition was built upon three pillars: • The coffee itself: Delivering the highest quality coffee possible • Theservice: Delivering outstanding, uplifting service, delighting customers whenever possible • The atmosphere: Providing a “third place” to its patrons, a place where lounging, relaxing and socializing is encouraged The most recent market research at Starbucks had however revealed to management that there was substantial dissatisfaction especially in the area of service. In a survey, ten percent of customers had indicated, that they would wish the service at the coffeehouse were faster and more efficient. Nineteen percent of customers indicated also, that the service could be friendlier and more attentive. The research also pointed towards an even graver issue. In the consumers perception, Starbucks as a brand was not very well aligned with the core values it wanted to communicate, but rather negatively associated with mere monetary intentions. Also, Starbucks offer was not differentiated enough when compared to independent coffeehouses. People perceived it as a convenient, standardized source of good quality coffee. What also became evident when......

Words: 408 - Pages: 2

Premium Essay

Starbucks : Delivering Customer Value

...Starbucks: Delivering Customer value Case Analysis Case facts • Howard Schultz’s idea with Starbucks in the mid 1980’s was to create a chain of coffeehouses with a product differentiation of specialty “live coffee”, service or customer intimacy with an “experience”, and an atmosphere of a “third place” to add to their work and home alternatives • The original stores sold whole beans and premium-priced coffee beverages by the cup and catered primarily to affluent, well educated, white-collar patrons between the ages of 25 and 44 • By 2002, there were over 5,000 stores around the globe • The specialty items included strategic alliances with Pepsi Cola to sell alternative beverages, Dreyer’s to develop and distribute a line of premium ice creams, Kraft Foods handled sales of coffee and alternative products to warehouse clubs, and various grocery store chains for their coffee. • Baristas (employees) were encouraged to interact with customers in a friendly and prompt manner, and were paid higher than average wages and benefits. Employees were considered partners and promotions were usually from within the company. • While Starbucks was the largest specialty coffee chain, many other chains competed directly with Starbucks, and many other chains could at any time enter retail specialty coffee sales (e.g. Dunkin Donuts, convenience stores, and many similar retail food stores. • New innovation was based upon partner acceptance. Customers rated the new innovations as......

Words: 1752 - Pages: 8

Premium Essay

Customer Service

...Delivering Customer Service the Right Way. In modern world there are only a few things considered harder than satisfying a customer, gone are the days where a small candy for the kid accompanying or a just a simple smile would do the trick. Customers are more spoilt than ever, they believe that they should be treated like a royalty or they could always go “next door”. Companies are spending a lot of money to train their employees to brush up their customer service skills, and I reckon it’s the right move because no business can survive without delivering customer service the right way. What exactly is the right way to deliver Customer Service? Or for that matter what is Customer Service? It’s a question very commonly asked in interviews nowadays, everyone has their own perception of it. I have worked under someone who believed good Customer Service is when a customer leaves your company smiling or content and willing to come back without hesitation. It does hold some merit, I mean isn’t pleasing the customer enough to be considered as a good customer service, well it’s one school of thought and for others it could be the opposite. I have seen some very hard working customer representatives lacking the right skills, they would complete the job like no other but if you ask the customer they might say the representative was a bit “preoccupied”. For me customer service is very simple, all you need to be good at is multi-tasking, do what they want and while you are on it make...

Words: 2084 - Pages: 9

Premium Essay

Starbucks : Delivering Customers Service

...Executive Summary Recent marketing researches have shown that customers are becoming less satisfied with the services offered by Starbucks. People are getting the perception that Starbucks only cares about “making money” and “opening more stores”. To increase overall customer satisfaction, Ms. Day proposes that Starbucks invests $40 million to increase the labor of every Starbucks store. After careful analysis, we recommend that Ms. Day focus the investment on high traffic stores that are in need of improvement in the speed of service. Stores with low customers’ satisfaction scores should also get more focus than those with high satisfaction score. Additionally, part time workers should also be hired specifically for peak hour periods. On top of the $40 million investment, we would recommend that Starbucks hire a chief marketing officer in order to create synergy between the three marketing groups within Starbucks. Corporate should also re-train store managers in order to improve their soft skills. The managers will also be able to communicate the message of “customer first” to other “partners” in the store so that they can work on delivering good brand experience to the customers. Lastly, special promotion such as free cup after certain number of visits will create additional value for the customers. All of the above recommendations are for the sole purpose of addressing the decline in customer satisfaction at Starbucks. Market Analysis The outlook for the U.S. retail......

Words: 3455 - Pages: 14

Premium Essay

Starbucks: Delivering Customer Service

...Starbucks began several years ago in a small city in Seattle, WA. Since its inception Starbucks quickly acquired several cafes throughout the state of WA and now Starbucks has cafes worldwide. The success of Starbucks lies with the dedication of providing quality products, a unique atmosphere and a commitment of providing top notch customer service. This article describes the importance of customer service and the endless possibilities to make sure that Starbucks is meeting and exceeding their customers’ needs. It also describes how the organization has evolved during the past few decades and so have their customers. This article will focus on how Starbucks loss track of providing quality customer service because of their increasing sales and how they will try to redirect the company to focus on quality customer service which will in turn create large profits in the long run. Case #1: Starbucks Delivering Customer Service 1. What factors accounted for the extraordinary success of Starbucks in the early 1990s? Several factors accounted for the success of Starbucks in its early days. The first factor was their product. Starbucks was one of the first to create a product with such distinction and the product was sold both in the cafes as well as grocery chains. Another factor was the excellent customer service that they provided and finally, the atmosphere. People came to the café to buy coffee however; they were also drawn in by the atmosphere. Starbucks success rest......

Words: 877 - Pages: 4

Premium Essay

Starbucks - Delivering Customer Service (Q&a)

...Starbucks – Delivering Customer Service 1) What factors accounted for the extraordinary success of Starbucks in the early 1990s? What brand image did Starbucks develop during this period? A: One of the most important sources for Starbucks success was its brand strategy and the elements that composed it. The brand strategy of Starbucks was best captured by its “live coffee” mantra. This phrase reflected the importance of the company attached to keeping the national coffee culture alive. They wanted to create an “experience” around coffee consumption. The three main components of this brand strategy were: * The coffee itself.- Starbucks was proud of offering what it believed to be the highest-quality coffee in the world. In fact, Starbucks controlled as much of the supply chain as possible. * Service (“customer intimacy”).- This element consists in the intentions of the company to make of the experience and customer attention something memorable, from recognizing the customers and knowing their drinks to drink customization. * Atmosphere.- According to Christine Day, Starbuck’s senior vice president of administration in North America, the ambience is what makes people want to stay. Founder and chairman Howard Schultz says that Starbucks has built something that has “universal appeal”, based on a sense of community and the need of people of gathering and being together. Also, an important driver of the company is product innovation. The......

Words: 1375 - Pages: 6

Premium Essay

Starbucks Delivering Service

...Starbucks: Delivering Customer Service In late 2002, Christine Day, Starbucks’ senior vice president of administration in North America, discovered that the company was not meeting customer expectations and that there was a decline in customer satisfaction. Day attributed the decline in customer satisfaction to a service gap, particularly service speed. Day must decide whether she will proceed with her plan to invest an annual $40 million across its 4,500 company stores. The investment would allow each store an additional 20 hours of labor per week. The objective is to improve service speeds and in turn increase customer satisfaction. We recommend that Starbucks proceed with the investment in labor. Customer service and satisfaction is one of Starbucks’ core competencies. If Day does not address the decline in satisfaction levels, Starbucks can potentially dilute its brand and ultimately lose market share reversing the sales growth achievements attained in the last eleven years. Starbucks’ Success In the last decade, Starbucks had consecutively achieved 5% or higher in comparable store sales growth. This success was due to several factors, primarily to its value proposition. Starbucks’ value proposition consisted of three components: the quality of coffee, the service provided, and store atmosphere. Starbucks prided itself in serving the highest-quality coffee in the industry. To maintain its coffee exacting standards, the company strived to control as much of......

Words: 1750 - Pages: 7

Premium Essay

Starbucks-Delivering Customer Service

... Team Case Study Analysis Starbucks – Delivering Customer Service Starbucks – one of the fastest developing companies has its objective to be the “most recognized and respected brand in the world “. The company has built its position in the market by envisioning and creating “third place” beside home and work, where people could go to relax and enjoy others, or just be by themselves. Living up to the long term vision of founder Howard Schultz, who inspired the company to make the customer as the center of its success, company has become the giant of the coffee world. This success can be attributed to Schultz commitment who changed the coffee drinking experience in the U.S. With core values towards presenting quality coffee, atmosphere, and the best service, Starbucks has enjoyed tremendous achievements since its inception. The company has been doing pretty well for the last 11 years with 5% or more store sales increase, even though, the rest of the economy was still staggering from the post-9/11 recession. Problem Statement: In 2002, market research has presented that, Starbucks was failing to meet the customer’s expectations with regards to customer satisfaction. On interpreting the research data, Christine Day, Senior Vice President judged that speed of the service was the primary reason for its poor customer satisfaction. So she recommended to improve the service by serving the customer within three minutes, from back-of-the-line to......

Words: 1575 - Pages: 7

Premium Essay

Starbucks: Delivering Customer Service

...“Starbucks: Delivering Customer Service”, Harvard Business School Case (2004) 1. The target customers were the affluent, well educated, white collar patrons (skewed female) between the age of 25 to 44. Their needs and values were to relax from their work and their family, having whole beans and premium priced coffee beverages by the cup that’s to say a coffee of quality. They want to be unique and recognized. 2. The consumption pattern associated with Starbucks patronage during the early 1990 is relaxing away from work and family, enjoying a coffee of quality in this America’s “third place”. The brand image Starbucks cultivates during this period is a provider of high quality coffee, coming from the best coffee making countries (Africa, Central and South America, and Asia Pacific region), a good service close to the customer, and a special atmosphere: inviting environment which attracts people and makes them want to stay long. Starbucks’ key brand promise is having a special experience around the consumption of coffee: “live coffee”. 3. Several factors accounted for the extraordinary success of Starbucks in the early 1990. First, his success is based on his extended distribution strategy: the many stores are present in high traffic and high visibility places and Starbucks sells his coffee through third parties partners, as non-company-operated retail channel, international licensed stores, grocery stores and warehouse club. ...

Words: 284 - Pages: 2

Premium Essay

Customer Service

...Creating a Customer-Centered Organization A Harvard Business Review Insight Center Report sponsored by The HBR Insight Center is an interactive resource that highlights the emerging thinking around today’s most important issues. In this installment of the series, Harvard Business Review focused on how managers are turning their companies into customer-focused organizations. The growing obsession with customer excellence is driven, in part, by technology. Today customers can obtain and exchange more information about the good and bad of their encounters with companies than ever before. That gives companies a great incentive to work harder to make customers happy — before, during, and after their purchases. © 2011 Harvard Business School Publishing. All rights reserved. Harvard Business Publishing is an affiliate of Harvard Business School. Creating a CustomerCentered Organization A Harvard Business Review Insight Center Report CONTENTS 1 3 5 7 9 11 13 15 17 19 21 23 Create Brand Superfans Matthew Rhoden How Philips Uses Net Promoter Scores to Understand Customers Suhail Khan What Zipcar Can Teach the S&P 500 Stephen Wunker How Fidelity Used Design Thinking to Perfect Its Website Frederick S. Leichter The Coming Point-of-Sale Revolution Grant McCracken Using Mobile Phones to Capture Customer Experiences Emma Macdonald, Hugh Wilson, and Umut Konus How to Play Marco Polo When Setting Prices Rafi Mohammed Beyond Mass Customization B. Joseph Pine II......

Words: 18324 - Pages: 74