Starbucks : Delivering Customer Service
PROBLEM STATEMENT Starbucks has discovered that they are not always meeting their customers’ expectations in the area of customer satisfaction. Starbucks has to come up with an action plan to address this issue, considering its significant correlation and impact to sales and profitability.
SITUATION ANALYSIS
Company
Starbucks is acclaimed for its superior value proposition in the early 1990’s by creating an experience around the consumption of coffee, a ‘third place’. The brand is positioned to offer the highest quality coffee, close customer intimacy, and warm atmosphere or ambience. Customers However, data from the market research team has shown that there is a shift on Starbucks’ brand recognition in customers’ perception, as indicated by the increase in the number of respondents who strongly agreed with the following statements (data 2000 and 2001 respectively):
‘Starbucks cares primarily about making money’ --> up from 53% to 61%
‘Starbucks cares primarily about building more stores’ --> up from 48% to 55%
Exhibit 1, ‘The Top Five Attributes Consumers Associate with Starbucks Brand’, has further convinced the fact that being welcomed - only 39% respondents strongly agree - is the last attribute among the five.
While this market research data might partially be true, there is another justification confirming its validity. Although there are significant changes and expansions in customer base and demographic profiles, customers tend to use the stores the same way from 1990’s to 2000’s. Unfortunately, newer customers tend to have lower appreciation towards Starbucks’ brand (Exhibit 2).
These findings are quite daunting even though revenues from these years remain positive and increasing. Sooner or later, this shift will be reflected on sales as customer satisfaction has a direct, close relationship to the number of visits, average spending, and customers’ loyalty (Exhibit 3).
Surveys and analysis have been carried out to gather
SITUATION ANALYSIS
Company
Starbucks is acclaimed for its superior value proposition in the early 1990’s by creating an experience around the consumption of coffee, a ‘third place’. The brand is positioned to offer the highest quality coffee, close customer intimacy, and warm atmosphere or ambience. Customers However, data from the market research team has shown that there is a shift on Starbucks’ brand recognition in customers’ perception, as indicated by the increase in the number of respondents who strongly agreed with the following statements (data 2000 and 2001 respectively):
‘Starbucks cares primarily about making money’ --> up from 53% to 61%
‘Starbucks cares primarily about building more stores’ --> up from 48% to 55%
Exhibit 1, ‘The Top Five Attributes Consumers Associate with Starbucks Brand’, has further convinced the fact that being welcomed - only 39% respondents strongly agree - is the last attribute among the five.
While this market research data might partially be true, there is another justification confirming its validity. Although there are significant changes and expansions in customer base and demographic profiles, customers tend to use the stores the same way from 1990’s to 2000’s. Unfortunately, newer customers tend to have lower appreciation towards Starbucks’ brand (Exhibit 2).
These findings are quite daunting even though revenues from these years remain positive and increasing. Sooner or later, this shift will be reflected on sales as customer satisfaction has a direct, close relationship to the number of visits, average spending, and customers’ loyalty (Exhibit 3).
Surveys and analysis have been carried out to gather