STARBUCKS:

Delivering customer service

• Aadil KHAN
• Monia LADJIMI
• Phillipe MAALEK
• Yuka YOON
• Sarah ZHAI
• Haili ZHANG
 Success factors in early 1990s
STARBUCKS
Products Services

Niche segment Successful World-Of-

Aadil KHAN
Premium priced Mouth
Monia LADJIMI
beverages Less competitors
Phillipe MAALEK
Yuka YOON
Accessories Premium customers
Sarah ZHAI
Haili ZHANG
Store expansions
Customer intimacy
 Value proposition
STARBUCKS
“Live coffee”
Deliver highest quality in coffee

Aadil KHAN
“Experience”
Monia LADJIMI
Phillipe MAALEK
Customer intimacy and loyalty
Yuka YOON
“Feel good” factor
Sarah ZHAI
Haili ZHANG
Atmosphere and sense of community
 Brand image in 1992
STARBUCKS
Best in quality
Premium pricing
Sophisticated customized service
Aadil KHAN
Monia LADJIMI
Phillipe MAALEK
Yuka YOON
Sarah ZHAI
Haili ZHANG
 Customer Satisfaction Scores
Customer satisfaction scores declined due
to:
Service – gap between ideal and reality
Focus – shift from customers to products
Perception – primary focus on business performance
Change in Target – expansion of segments
Marketing data – no analysis
Organizational structure - no marketing department
Competitive advantage – no differentiation from
competitors
 1992 vs. 2002
Stores Stores
Localization Globalization
140 in the US 5,000 stores worldwide
(open 3 per day)
Product range by sales Product range by sales
revenue revenue
50% beverages 77% beverages 13% food
50% coffee beans 4% accessories 6% beans
Increased product ranges
Customers Customers
White-collared affluent & Younger
patrons Less educated & lower
Aged 25-44 males income
Services Services
“Just Say Yes” services Simplified process, bottle
Personalized and intimate neck eliminated
services Tech. Innovation, viz
Automated coffee machine
Competitors Competitors
Small-scaled competitors Big brand and international
Coffee chains competitors
Food and beverage chains
Distribution channels Distribution channels
Company-operated retail International-licensed,
stores online, mail-order
food service accounts, retail
stores, offices, joint
ventures
Service innovation
Store-value card (SVC)
Wifi
 Ideal Customers
from Profitability Standpoint
Gender Female
Age 30 – 50
Income $70,000 – $90,000
Education College degree
Coffee/ week 20
SB visit /month 8
$ /visit $5.00
 To ensure ideal customers
Starbucks has to maintain:
• Clean Store
• Convinient to approach
• Treat customer as a prime value
• Maintain a friendly staff
• Maintain quality coffee taste/flavour.
 How valuable?
Highly satisfied customers
Annual = $ 382
Lifetime = $ 3170
Satisfied customers
Annual = $ 209.50
Lifetime = $ 2514
Unsatisfied customers
Annual = $ 181.6
Lifetime = $ 199.8
 $40 million program
Investment Goal
Increase labour capacity by 20 hours per week
Reduce serving time by 3 minutes per store
Increase customer throughput
Increase customer satisfaction
Increase long-term relationship
Increase process efficiency
Increase weekly sales revenue by $20,000 per store
Increase EPS by $0.07 per share

Starbucks should invest in labour through $40 million program

 $40 million program
Possible to deliver customer intimacy?
Customer intimacy is the initial core value of Starbucks
It is possible to put all the efforts to reach, control and
regain its competitive advantage

232,029 customers need to be converted from Satisfied to

Highly Satisfied

Realistic?
232,029 customers / 4,500 stores
= 52 customers per store per year
Realistic!!
THANK
YOU