Questions for Discussion
1. What factors accounted or the extraordinary success of Starbucks in the early 1990s? What was so compelling about the Starbucks value proposition? What brand image did Starbucks develop during this period?
• Factors: It is own value, creating an uplifting experience every time customers walk through the door; located in high traffic, high visibility, retail centre. Innovation e.g. set up an espresso bar in their downtown Seattle shop. Specialty coffee, premium, 50% sales of beans. Relax consumer – intimacy – baristas, knowing customer’s name and drink hard skills & soft skill; atmosphere furnishing, music, aroma.
• Value proposition: ...view middle of the document...
• Measuring satisfaction the wrong way: didn’t differentiate frequent buyer and non- frequent buyer
• Metrics for judging stores: speed – 3 mins goal; clean; friendly/ service oriented (great service); product quality/ complexity. speed and great service/ speed and product quality/ complexity:: not consistent.
• Inexperience managers + new customers + product complexity = long lines grumpy employees grumpy customers lower satisfaction.
• New customers: younger, less well educated, lower income, 1st experience with Starbucks not in Starbucks coffee shop. Consumption pattern: less frequent, don’t linger, coffee on the run, established customers might also be new customers. Brand perceptions/ image: less positive image of company.
3. How does the Starbucks of 2002 differ from the Starbucks of 1992?
• 1992: 140 stores in North West and Chicago; selling whole bean and premium prices beverage; target customer group affluent, well-educated, white collar female between the age of 24 to 44; before 1992, company not yet public.
• 2002: customer base, younger, less well educated and in a lower income bracket; 5000 stores around the globe, average 3 new stores a day; these stores sold rich brewed coffees, Italian-style espresso drinks, cold blended beverages, and premium teas; provided different product mix such as pastries and coffee related accessories and equipment, depending on the store size.
4. Describe the ideal Starbucks customer from a profitability standpoint. What would it take to ensure that this customer is highly satisfied customer to Starbucks?
• Ideal Starbucks customer: affluent, well-educated, white collar female between the age of 24 to 44.
• Actions to be taken: Meet the customer expectations by...