Starbucks: Delivering Customer Service

Starbucks: Delivering Customer Service

I. Intro & Background

Since 1971, Starbucks enjoyed great success based on its’ explicit core values of delivering high quality coffee, outstanding customer service, and a relaxed atmosphere. In the last 11 years, despite the post-9/11 recession, Starbucks experienced 5% or more store sales growth. The vision of the owner, Howard Schultz, was to create a chain of coffeehouses that would become America’s “third place”, a place for people to go and relax, enjoy others, or spend some quiet time alone. In the United States, Starbucks not only competed against small-scale specialty coffee chains, but also the thousands of independent specialty coffee shops and donut/bagel chains. Starbucks’ overall goal was to establish Starbucks as the “most recognized and respected brand in the world.”

II. Problem Statement

Recent research conducted for Starbucks reflected declining customer satisfaction, which was directly linked to customer loyalty. To correct this issue, Christine Day suggested a plan to add an additional $40 million annually for an extra 20 hours of labor per every store in an effort to improve speed-of-service and thereby customer satisfaction.

III. Analysis

The Starbucks customers in 2002 were on average men, age 36, without a college degree, and with an income of about $65,000. This customer drank about 15 cups of coffee/week. The new customer is younger, less educated, has a lower income, and drinks less coffee than the average customer that first visited 5 or more years before. The average customer most associates “satisfaction” with a clean store, convenience, being treated as a valuable customer, a friendly staff, great coffee, and fast service, in that order.

The Starbucks value proposition focused on three main aspects that helped to enhance the “experience” of the brand. The first aspect of Starbucks’ brand strategy was in the coffee itself by offering the highest-quality coffee in the world. Starbucks...