1. Star Bucks
A CASE STUDY

2. CONTENTS
• Channels of Distribution
• Services marketing Mix
• Target marketing position
• Delivering of service / Service performance
• Services Gap analysis
• Service blue print
•Conclusion

3. STARBUCKS - An Overview
•The Starbucks Coffee, Tea, and spices company was founded in
Seattle in 1971
• It is the largest Coffee house company in the world, with 20366
stores in 61 countries.
“To inspire and nurture the human spirit --- one person, one cup, and one
neighborhood at a time.”
---- Starbucks Mission statement

4. Target Market and Positioning
•Positioned it self as an upscale brand - not just coffee
products but a “rich experience” – Selling point
• Social Classes
• Small towns, rural communities, ethnic neighborhood.

5. THE HISTORY OF STARBUCKS

6. SERVICES MARKETING MIX - 7P’s
PRODUCT
•30 varieties of whole bean coffee to ecofriendly cappuccino, pastries,
Smoothies, wraps.
• Live coffee Mantra
•Sodas, juices, coffee-related accessories, equipment, music CDs, novelty
Items.
•Varied from store to store.
•JV with Pepsi-Cola for Frappucino, Dreyer’s for premium ice
Creams.

7. SERVICES MARKETING MIX - 7P’s
PLACE
•Located in high traffic, high visibility settings – retail settings, office
Buildings, university campuses.
•In-store at Barnes & Noble and Target.
•Target - Individuals on the go.
•Localization – “Stealth outlets”.
“we want to reach customers where they work, travel,
shop, and dine.”
-----Starbucks philosophy.

8. SERVICES MARKETING MIX - 7P’s
PRICE
•Priced high – perceived upscale image.
•Later introduced “value strategies”.
•Breakfast pairings.
•The average ticket price is $3.85.

9. SERVICES MARKETING MIX - 7P’s
PROMOTION
•Starbucks card – referral system.
•Corporate sales card.
•Delivery to offices without restriction.
•Appealing to diverse customer base – international products.
•Philanthropy – contribution to non-profit organizations.

10. People
SERVICES MARKETING MIX - 7P’s
Process Physical
Evidence
People
•Core ingredient
•“Happy customers” start with “happy staff”
• “ we are not employees – we are partners”
•Employee turnover rate of 70% compared to the fast food industry averages
of 300%

11. People
SERVICES MARKETING MIX - 7P’s
Process Physical
Evidence
Physical Evidence
• Custom made cup of beverage.
• Clean, friendly environment , cozy chairs, sofas.
• Alluring pastries menu , “tasty” show cases, tempting coffee pictures.

12. People
SERVICES MARKETING MIX - 7P’s
Process Physical
Evidence
Process
• Legendary Service
• Sequence service reducing queue.
• Contact less payment – Barclay , I phone and Android app

13. Company
Owned Outlets
Franchise
Channels Of Retail Store
Distribution licenses
Grocery Stores
and Warehouse
Clubs
B to B, Airlines
restaurants

14. Service Blueprint
Stage in Production Obtain Take Make Deliver Pay for
Process Seat Order Order Order Order
Target time (minutes) 1 1 3 3 1
Critical time 5 5 8 8 3
Participants Customer Customer Cook Customer Customer
Waiter Waiter Cashier
Visible evidence Furnishings Staff Tea, Crockery, Manner Cash Collection
Appearence of service Procedures
Line of visibility Cleaning Preparation of Accounting
Invisible process of room Ordering of Procedures
supplies

15. Layout

16. Expected Service
Perceived Service
Service Delivery
Customer driven service designs and standards
Company perception of consumer expectations

17. Gap Analysis
• Customer satisfaction gap could primarily be attributed to a service gap
Between key attributes and customer expectations.
• Speed of Delivery considered as critical
Bridging the Gap
•An additional 20 hours of labor, per week, per store
•Service time down to a strict 3 minute level.

18. Conclusion :
“ We aren’t in the coffee business, serving people. We are in the people business
Serving coffee”
--- Howard Schultz (Serwer, 2004)
Starbucks claimed their leadership by focusing on a strategy of new products,
A stronger connection with customers, rapid expansion, and
uncompromised quality