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Starbucks: Brand offering and Positioning

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Starbucks: Brand offering and Positioning

  1. 1. Starbucks: Delivering Customer Service Section G: Group 4
  2. 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 White‐collar people
  3. 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. 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 America’s “Third place” – “Just say yes”
  5. 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. 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. 7. The Mystery Shopper • • • • Service Cleanliness Product Quality Speed of Service Over the time, snapshot method is showing increased positive results.
  8. 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. 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. 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. 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. 12. Qualitative Analysis- SERVICE GAPS Personal Needs Word of Mouth Past Experience GAP 2 • Management might correctly perceive customer’s 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. 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. 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. 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. 16. Quantitative analysis • Opportunity Cost
  17. 17. PRIMARY DATA (Present) – – – – – Feedback Link on the bill. Breaks to Baristas Best pay in business Instant replacement International Training for Managers
  18. 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
  19. 19. Thank You

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