2. About the CompanyEstablished in 1971 at Seattle, Washington Famous for its quality fresh-roasted coffeebeansand stylish atmosphere. Over 9,000 stores worldwide Product lines include :− beverages (coffee, Tazo tea, soda, juices)− pastries− whole coffee beans− coffee-related hardware and equipment− merchandise (mug, CDs)
3. Delivering Customer Service @STARBUCKSHoward Schultz’s idea with Starbucks in the mid 1980’s wasto create a chain of coffeehouses with a product differentiationof specialty “live coffee”, service or customer intimacy with an“experience”, and an atmosphere of a “third place” to add totheir work and home alternatives.The original stores sold whole beans and premium-pricedcoffee beverages by the cup and catered primarily to affluent,well educated, white-collar patrons (skewed female) betweenthe ages of 25 and 44.Starbucks research indicated that customers did perceivemany independent coffee houses as a “third place”, butStarbucks was seen more as a convenient, quick, andconsistently good coffee provider. This is in contrast to the wayStarbucks management viewed the company. By 2002, there were over 5,000 stores around the globe.
4. Background & ProblemBaristas (employees) were encouraged to interact with customers in afriendly and prompt manner, and were paid higher than average wagesand benefits. Employees were considered partners and promotions wereusually from within the company.While Starbucks was the largest specialty coffee chain, many otherchains competed directly with Starbucks, and many other chains could atany time enter retail specialty coffee sales (e.g. Dunkin Donuts,convenience stores, and many similar retail food stores.Baristas jobs were complicated by the fact that many products requirednumerous steps to complete the order. They had installed automatedespresso machines in some stores for the customers use to reduce waittime. Introduced a prepaid card that could be used to pay for products inthe stores.Starbucks had no centralized marketing program. Sales data wasaccumulated, and it was the responsibility of management to request thatspecific data be analyzed.
5. Alternatives & EvaluationsRedefine their marketing strategies starting with a proper research andevaluation of what the customer wants. Starbucks has lost track of thecustomer when their determination of what is served to the customer isdetermined by what makes the barista happy.Create a centralized marketing department which can attempt to coordinateall marketing efforts. There appears to be a lack of harmony betweencollecting data and the proper evaluation of the data. The snapshotmethodology they used may not reflect a universal measure of customersatisfaction.Advertise more to establish the branding of Starbucks. Why is Starbucksdifferent? While Starbucks may think they know what distinguishes Starbucksfrom others, they should do more research and develop a real strategy prior toinitiating any major advertising campaign. They have developed over time, andtheir customers are different than before.
6. Solution Starbucks should pursue all of these alternatives Starbucks appears to consider competition asminimal, and that they are somewhat insulated.Probably, entertaining either idea is a strategicmistake.