SHI VANGI ANUPRI YA

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Starbucks: Delivering customer
service
Company Background
1971: Started
as a small
coffee shop
in Seattle by
Gerald
Baldwin,
Gordon
Bowkar and
Ziev Siegl
1982:
Schultz
joined
marketing
team
Few years
later,
founders
sold the
company to
Schultz
1992:
Company
had 140
stores in
Northwest
and Chicago
1992:
company
became
public
Mid 2002:
Dominant
speciality
coffee brand
in North
America
Vision
To create a chain of coffeehouses that would become
Americas third place to relax and enjoy

No expenditure on advertising
- point of sale materials
- local store marketing
Factors for Starbucks success (1990s)
Large Market
Value
proposition
Distribution
High delivery of
service through
training
Employee
stability
Product
Innovation
Value Proposition
Brand strategy: Live coffee mantra
Creating an experience around consumption of coffee
Coffee
Service Atmosphere
Highest quality coffee sourced
from Africa, central and South
America, Asia-Pacific regions
Controlled supply chain :
worked directly with growers,
oversaw custom roasting process
and controlled distribution to
retail stores
Customer
intimacy : create
uplifting
experience every
time
Ambience
Seating areas to
encourage lounging
Promotes sense of
community- need
for people to come
together
Brand Image developed
Speciality/gourmet coffee
Widely available
Trendy
Place to meet and move on
Convenience oriented; on the way to work
Accessible and consistent
Measuring service performance
Monthly status
reports and self
reported check lists
Mystery Shopper
Program : 3 times a
quarter, rate on Basic
Service
Legendry Services
Service
Cleanliness
Product Quality
Speed of Service
Behaviour that created a
memorable experience for
a customer that inspire him
to return or tell a friend
Changing trends
Changing Starbucks Brand Meaning
Starbucks cares primarily about making money or building more stores
Decreasing differentiation with smaller coffee chains
Changing customer
New customers-> younger, less well educated, lower income bracket, visited
stores less frequently
Increase in affluent, well educated, white collar female
Changing Customer behaviour
Lesser number of visits
Reasons for decline in customer satisfaction
Direct link between
satisfaction level and
customer loyalty
Customer satisfaction gap due
to service gap (scores
measured and customer
expectations)
Main factor: improvements in
service (speed of service)
Value of customers to Starbucks
Just say yes policy
High focus on Soft skills to connect with the customers and
encourage to create conversations
Providing customized services
Increase the speed of service (3 minutes)
Stored value cards (SVC) and T-Mobile HotSpot wireless
internet services
Investment in labors
Starbucks should make $40 million investments in labor
Objective: to bring the service time down to 3 minute
level in all stores regardless of the time of day. This will
help in
- increasing customer satisfaction
- building long term relationship
- improve customer throughput
Yes, it is possible for a mega brand to deliver customer
intimacy through better service, better incentive
programs, trained staff for addressing changing trends