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Starbucks DeliveringCustomerServiceCaseDiscussion March4 TargetSolutionsMarketingGroupTaiyaBrandonKelvinBrownShawnCorreiaJohnKimweleDaleHall Issue RecentMarketResearchshowsadeclineinCustomerSatisfactionatStarbucks Tostayonplanwiththeiraggressivegrowthstrategy should 40millionbeinvestedinthe4 500storesfocusingonimprovingthespeedofcustomerservice Willthisimprovementleadtoincreasedsatisfactionthatwilltranslateintoanincreaseinsalesandprofitability Doesthisinvestmentalignwiththegrowthstrategyofretailexpansionandproductinnovation Starbucks TakeHomeanExperience MissionStatement livecoffee TheStarbucksValuePropositionTocreatean experience aroundtheconsumptionofcoffee anexperiencethatpeoplewouldweaveintotheirlivesTocreateanupliftingexperiencein Customerintimacy Tocreatean ambience basedonhumanspirit senseofcommunity andtheneedforpeopletocometogether MattersofConcern Starbucksissuddenlyinapositionof ConsistentsalesBUTLowcustomersatisfactionLowspeedofserviceCustomizeddrinksSlowsdowntheserviceprocessStrainonworkersHandcraftedDrinksInvolveTimeSlowsdowntheserviceprocessCompetitionAvarietyofregionallyconcentratedsmallscaleSpecialtycoffee bagelanddonutchains MarketResearch RecentFindingsofpeople sexperiences StarbuckscaresprimarilyaboutmakingmoneyUpfrom54 to61 StarbuckscaresaboutbuildingmorestoresUpfrom48 to55 Top5AttributesofStarbucks Knownforspecialty gourmetcoffee 54 stronglyagree Widelyavailable 43 stronglyagree Corporate 42 stronglyagree Trendy 41 5 stronglyagree AlwaysfeelwelcomeatStarbucks 39 stronglyagree Starbucks Options Investmentof 40millionannuallytoincreasespeedofservice impact customersatisfaction translatesto sales AltertheproductmixDeterminechangedependingonstoresizeandlocationProcessofMeasuringServiceperformanceCategories Service Cleanliness ProductQuality SpeedofServiceRetailExpansionNewstoresinnewmarketsGeographicallyclusterstoresinexistingmarkets Starbucks Optionscontinued 5 ProductinnovationPriorityofMgmtgiventhatthepriceswerestableinrecentyears6 ServiceInnovationStarbucksstoreValueCardEfforttoidentifyanddemonstrateinveryconcretetermsonhowtodetermineMarketResearchData Starbucks Forte 11thconsecutiveyearofconsistentsalesof5 orgreaterCompanyspentclosetonothingtoachievethisgoalSalesclimbedatanannualcompoundgrowthrateof40 andnetearningsto50 sinceStarbuckswentpublicGoodstrategicallianceswithPepsi ColaandKraftfoodstodistributesomeoftheirproductsLowestemployeeturnoverratesintheindustry just70 ascomparedto300 theaverageofthefastfoodindustry Implementedgoodpoliciestoinsurecompetitiveadvantage JustsayYes policyMeasuringserviceperformanceExpectbusinessprojectionstoriseandbesteadyandconsistent PlanofAction PlanbasedStarbucks strengthsrelativetothepresentedissuesProceedwithinvestingthe 40millionannuallyinthe4 500storestoincreaseserviceefficiency impactingcustomersatisfaction Goal customerretentioninthecompetitivecoffeehousemarket Whiletheinvestmentenablesadditionallaborhours researcheffortstoincreaseefficiencythroughset upandequipment e g automatedespressomachine specializedworkstations Usesecondarymarketresearchdatatoidentify analyze andalterproductdifferentiationstrategies withrespecttosmallerchainsandStarbucksobliquitiesAltertheproductmixdependingonthestoresizeandlocationoftheoutlet demographics SampletofindoutwhatcustomersmainlylookforSampledataresultswouldnarrowthecustomizationandtrainbaristaswiththosespecialconcoctions PlanofActioncont PlanbasedStarbucks strengthsrelativetothepresentedissues5 MarketingResearchshowingthatexistingmarketsarefarfromsaturationAnalyzethisparticularareawithspecificconcretetermstargetingaparticularobjectiveContinuewithProductandServiceinnovation proactivelyconductanenvironme
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