A CASE STUDY BY:

NAKUL

STARBUCK’S: DELIVERING CUSTOMER SERCIVE

The central issue around which all the problems lying is that “company services are not meeting customers expectation”.

How to differentiate STARBUCKS from competitors?

Should the company roll out $40 million plan for reducing the serving time under 3 minutes?

How to link customer satisfaction to increase in sales & profitability?

CHALLENGES

SWOT ANALYSIS

Gap between scores on key attributes and customer expectation.

Customers perception about brand: Starbucks cares primarily about making money

Up from 54% to 61% Starbucks cares about building more stores

Up from 48% to 55%

Changes in the target customer.

How can service time of 3 minutes can assure customer satisfactions already service time of 3.10 minutes has been achieved.

ROADBLOCKS

Instead of rolling out $40 million for increasing labor hours company should focus on the following aspects:

Right guidance for baristas during first 90 days.

Promotion campaigns for regular customers.

To convert satisfied customer into highly satisfied customer.

SOLUTIONS

Concluding, we would like to add that an investment in adding more labor to stores might help the company increase some of its satisfaction levels and maybe even get a good return out of it, but from the data available in the case it appears that Starbucks has a lot of other problems that needs to tackle. They need to re‐evaluate their value proposition, examine how their expansion strategy has led to the deterioration of their brand image and find new ways to satisfy the customer

Few Recommendations Launch a program to improve staff’s friendliness and offer a

free coffee after certain visits Pilot projects in selected locations Loyalty program like Loyalty card CRM based application

SUMMARY

HOPE WE MADE DAY’S DAY

Risks in rolling out $40 million plan:Company profit rises to $33.9 million during

FY02 and if company is investing $40 mill there is chance that next year company will have net profit zero.

Company is planning to open 525 company operated and 225 licensed outlet so they need capital.

SUMMARY

If the baristas lasted beyond 90 days, there is chance he will stay for three or more years which in turn can make regular customers more recognizable by the staff and friendly approach can be there.

19% of customer feel if they can get free coffee (promotions)after particular visits they will feel “valued customer”.

Service time can be reduced by using “automated machines.

The company should follow ROCE. (asset management).

SUMMARY

As compare to satisfied customer , highly satisfied customer will visit 67.44 % more per month.

Can do joint ventures as only 4% market share in home utilized coffee.

Advertisement in mass mediaCorporate tie ups as coffee is becoming more

official these days. ( meeting & interviews).Can improve the ambience of the outlets

turning them into more greenish and natural as the theme of STARBUCK logo goes.

SUMMARY