Starbucks Marketing Case

Answer1.

пÑ"ј Vision: the most recognized and respected brand in the world

пÑ"ј Brand image - experiencing branding strategy:

o “Live coffees” mantra - to keeping the national coffee culture alive.

o Creating an “experience” around the consumption of coffee

пÑ"ј Three components to this experiencing branding strategy:

o First, coffee itself вЂ" offering the highest-quality coffee in the world, coffee standards by controlling the supply chain as possible and the distribution to retail stores

o Second, service вЂ" customer intimacy

o Third, atmosphere. To make customers want to stay. Based on human spirit, a sense of community, the need for people to come together.

пÑ"ј Channels - Broad distribution strategy

o Want to reach customers where they work, travel, shop, and dine

o Good Location: Company-operated stores located in high-traffic, high-visibility settings

o Product mixed tended to vary depending on a store’s size and location

o non-company-operated retail channels, food-service accounts, domestic retail store licenses

пÑ"ј Good Starbucks Partners

o All Starbucks employees were called “partners” -Most hourly-wage employees

o Generous policy of giving health insurance and stock options

o High partner satisfaction rate (80% to 90%), well above the industry norm.

o Lowest employee turnover rates in the industry (just 70%, compared with fast-food industry averages as high as 300%)

o Lower managers turnover rates & encouraged promotion from within its own ranks

пÑ"ј Delivering on Service and good measuring service performance

o Training: hard skills and soft skills

o Treated as a valuable customer (75%), friendly staff (73%) and highest quality coffee (67%).

o A variety of metrics, including monthly status reports and self-reported checklists.

o “Customer Snapshot” measurement tool

пÑ"ј Less competition

o A variety of small-scale specialty coffee chains (regionally concentrated).

o independent specialty coffee shops & Donut and bagel chains

пÑ"ј Product innovation

o New products were launched on a regular basis ( 12 to 18 months cycle)

o R&D, in-store experiments and market test, rely on partner acceptance

o By 1995, introduction of a coffee and non-coffee-based line of Frappuccino beverages

Leadership: after Schultz took over

пÑ"ј Opening new stores - after Schultz took over

пÑ"ј Quality products- whole beans and premium-priced coffee beverages by the cup

пÑ"ј Target customer-catered primarily to affluent, well-educated, white-collar patrons (skewed female) between the ages of 25 and 44.

пÑ"ј By 1992, Schultz decided to take the company public пÑ" allowed to open more stores across the nation.

пÑ"ј Spent almost nothing on advertising пÑ" point-of-sale materials and local-store marketing

Answer 2.

пÑ"ј Expectancy disconfirmation

o The company’s service didn’t decline in Exhibit 7.

o Unsatisfied customer is the newer customers пÑ" performance falls below expectations

o Emotional response depends on relationship between perceived performance and expected performance

пÑ"ј Starbuck’s brand meaning was misconceived

o Little image or product differentiation between Starbucks and the smaller coffee chains

пÑ"ј Brand image had some rough edges

o Was perceived as corporate which cares primarily about making money53% in 2000 to 61% in 2001)

o Was perceived as a corporate giant which cares primarily about building more stores (up from 48% to 55%)

o Not clearly communicating their value and values to their customers, instead of just their growth plans. (See Table B)

пÑ"ј A service gap between Starbucks scores on key attributes and customer satisfaction

o Was not meeting customer expectations in terms of customer satisfaction.

o Vocal customers may not be representative

o Unsatisfied customer profile ( See Exhibit 9)

o The Changing Customer: attracted a new breed of younger, less well-educated, lower income, less frequently visiting customers.

Answer 3.

We compare the following items in Exhibit 1.

a. Starbucks’ store size & growth b. competition c. customer d. products e. brand image f. leadership g. employees h. revolutions i. strategy

Answer 4.

Competition

пÑ"ј A variety of small-scale specialty coffee chains

o Most of which were regionally concentrated

o Each tried to differentiate itself

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