1. Starbucks: Delivering Customer Service Section G: Group
4
2. Executive Summary Established in 1971, made public in 1992
Operates 5886 stores all over the world as of FY2002 11th
consecutive year of 5% or higher sales growth Continuously into
retail expansion, product and service expansion Controlled supply
chain to maintain coffee standards Product Variety Customized
drinks Specific target audience Affluent Well educated Whitecollar
people
3. STARBUCKS - 1992 Establishment of Brand Company became
public 140 stores in US Major sales from Whole Bean Coffee Less
number of Drink Combinations Small customer base (Affluent , Mid
& Upper class Prof.) Third Place, where Best Quality coffee is
served STARBUCKS - 2002 4500 stores in US and Internationally 77%
of Sales from beverages Product variety Slow and complex process
Customer Base ( Younger, Less-educated and lower income group)
Image has changed to Convenient Place
4. Executive summary (Continued) Branding strategy Coffee
Service Atmosphere Employee relationship Lowest employee turnover
in the industry. Ranked 47th in the list of best places to work by
Fortune Customer relationship Aim to become Americas Third place
Just say yes
5. Executive summary (Continued) Value Proposition To create an
experience around the consumption of coffee, an experience that
people would weave into their lives To create an o uplifting
experience in Customer Intimacy To create an ambience based on
human spirit and need to get people together. Brand Image Present
Everywhere Good Coffee on the run Place to meet and move on
Convenience oriented Accessible and consistent
6. Current issue Data Research: Changing customer perception
Goal: Tie customer satisfaction to bottom line Is it correct that
Starbucks diverted from customer service to retail expansion and
product diversification ? Whether to invest $40 million in 4500
stores? Can it be believed what customers are telling about what
constitutes excellent customer service ? Heaviest users are most
demanding. Customization lead to slow down of service ?
7. The Mystery Shopper Service Cleanliness Product Quality
Speed of Service Over the time, snapshot method is showing
increased positive results.
8. Competition Each competitor differentiated in atleast one
factor Special attention to the Dunkin Donuts chain Retail
Expansion The company considered itself a growth company due to
following reasons: No presence in 8 states Increasing coffee
consumption Saturation level not yet reached.
9. A look into the issues New Customer Baseline Values of
starbucks was not efficiently visible to customers Direct link
between customer satisfaction and customer loyalty Most frequent
feedback found to be increase in service speed
10. Declining Customer Satisfaction Customer satisfaction gap
could primarily be attributed to a service gap between Starbucks
scores on key attributes and customer expectations Premium Starbuck
Experience was gone, as now it was the product for everybody High
waiting time due to customized drinks Increased Competition from
Small Specialty stores Customer intimacy did not exist anymore
Despite minute flaws in the research methods, customer satisfaction
has declined due to changing expectations of the new customer base
and actual service decline.
11. Qualitative Analysis- SERVICE GAPS Personal Needs Word of
Mouth Past Experience GAP 1 Management does not always correctly
perceive what customers want Exhibit 10 Expected Service 1. 2. 3.
4. 5. 6. GAP 5 Perceived Service GAP 1 Service Delivery ( Pre Post
Contacts) GAP 3 Transition of perceptions into service quality
specifications GAP 2 Management Perceptions of consumer
expectations External Communication to consumers GAP 4 clean store-
83 % convenient 77% Treated as valuable customer 75% Friendly
staff- 73 % Taste/flavor 72% fast service- 65%
12. Qualitative Analysis- SERVICE GAPS Personal Needs Word of
Mouth Past Experience GAP 2 Management might correctly perceive
customers wants but not a performance standard. Well tackled, by
giving a performance indicator of 3 minutes However, noting was
mentioned about standardization of processes. Case does mentions
about new machines. Expected Service GAP 5 Perceived Service GAP 1
Service Delivery ( Pre Post Contacts) GAP 3 Transition of
perceptions into service quality specifications GAP 2 Management
Perceptions of consumer expectations External Communication to
consumers GAP 4
13. Qualitative Analysis- SERVICE GAPS Personal Needs Word of
Mouth Past Experience GAP 3 Employees might be poorly trained or
incapable of or unwilling to meet the standards ; they may be held
to conflicting standards, such as taking time to listen to
customers and serving them fast. Expected Service Customers want
friendliness and responsiveness as in exihibit 10 and 11. Here
dilemma is that customer wants Quick service as well as discrete
level of customization GAP 5 Perceived Service GAP 1 Service
Delivery ( Pre Post Contacts) GAP 3 Transition of perceptions into
service quality specifications GAP 2 Management Perceptions of
consumer expectations External Communication to consumers GAP
4
14. Qualitative Analysis- SERVICE GAPS Personal Needs Word of
Mouth Past Experience GAP 4 Consumer expectations are effected by
statements made by company representatives and ads. Starbucks find
usage of ads etc for promotions. Outsourced third party to share
the same commitment and values. Aprox 40% converts are from these
sides Expected Service GAP 5 Perceived Service GAP 1 Service
Delivery ( Pre Post Contacts) GAP 3 Transition of perceptions into
service quality specifications GAP 2 Management Perceptions of
consumer expectations External Communication to consumers GAP
4
15. Qualitative Analysis- SERVICE GAPS Personal Needs Word of
Mouth Past Experience GAP 5 When the customer misperceives the
service quality. Tackled well by researching on Exhibit 11 ( How
could Starbucks make u feel more like a valued customer) -
friendlier- 19% - faster 10% - incentives- 31 % Expected Service
GAP 5 Perceived Service GAP 1 Service Delivery ( Pre Post Contacts)
GAP 3 Transition of perceptions into service quality specifications
GAP 2 Management Perceptions of consumer expectations External
Communication to consumers GAP 4
16. Quantitative analysis Opportunity Cost
17. PRIMARY DATA (Present) Feedback Link on the bill. Breaks to
Baristas Best pay in business Instant replacement International
Training for Managers
18. Primary Survey All employees trained for 1 month before
joining: Managers go to Malaysia Other employees trained in Gurgaon
Loyalty Cards will be introduced soon. Customer feedback taken in
store through Random Sampling, online. Weekly internal and Monthly
external Audits STARBUCKS PHILOSOPHY: "PRESERVE AND NURTURE THE
HUMAN SPIRIT, ONE PERSON, ONE CUP, ONE NEIGHBORHOOD AT A TIME".
Customer voice survey (customer feebdack program) started 2.5
months ago. Attrition rate is 7% Structure of Outlet: Shift
Mgr>Asst. Store Mgr>Store Mgr>Area Mrg>District Mgr
Staff Rotation is very common (All over Delhi) CSS Sheet
