Starbucks Marketing Case
Essay Preview: Starbucks Marketing Case
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Answer1.
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Vision: the most recognized and respected brand in the world
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Brand image – experiencing branding strategy:
“Live coffees” mantra – to keeping the national coffee culture alive.
Creating an “experience” around the consumption of coffee
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Three components to this experiencing branding strategy:
First, coffee itself — offering the highest-quality coffee in the world, coffee standards by controlling the supply chain as possible and the distribution to retail stores
Second, service — customer intimacy
Third, atmosphere. To make customers want to stay. Based on human spirit, a sense of community, the need for people to come together.
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Channels – Broad distribution strategy
Want to reach customers where they work, travel, shop, and dine
Good Location: Company-operated stores located in high-traffic, high-visibility settings
Product mixed tended to vary depending on a store’s size and location
non-company-operated retail channels, food-service accounts, domestic retail store licenses
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Good Starbucks Partners
All Starbucks employees were called “partners” -Most hourly-wage employees
Generous policy of giving health insurance and stock options
High partner satisfaction rate (80% to 90%), well above the industry norm.
Lowest employee turnover rates in the industry (just 70%, compared with fast-food industry averages as high as 300%)
Lower managers turnover rates & encouraged promotion from within its own ranks
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Delivering on Service and good measuring service performance
Training: hard skills and soft skills
Treated as a valuable customer (75%), friendly staff (73%) and highest quality coffee (67%).
A variety of metrics, including monthly status reports and self-reported checklists.
“Customer Snapshot” measurement tool
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Less competition
A variety of small-scale specialty coffee chains (regionally concentrated).
independent specialty coffee shops & Donut and bagel chains
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Product innovation
New products were launched on a regular basis ( 12 to 18 months cycle)
R&D, in-store experiments and market test, rely on partner acceptance
By 1995, introduction of a coffee and non-coffee-based line of Frappuccino beverages
Leadership: after Schultz took over
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Opening new stores – after Schultz took over
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Quality products- whole beans and premium-priced coffee beverages by the cup
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Target customer-catered primarily to affluent, well-educated, white-collar patrons (skewed female) between the ages of 25 and 44.
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By 1992, Schultz decided to take the company public пє allowed to open more stores across the nation.
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Spent almost nothing on advertising пє point-of-sale materials and local-store marketing
Answer 2.
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Expectancy disconfirmation
The company’s service didn’t decline in Exhibit 7.
Unsatisfied customer is the newer customers пє performance falls below expectations
Emotional response depends on relationship between perceived performance and expected performance
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Starbuck’s brand meaning was misconceived
Little image or product differentiation between Starbucks and the smaller coffee chains
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Brand image had some rough edges
Was perceived as corporate which cares primarily about making money53% in 2000 to 61% in 2001)
Was perceived as a corporate giant which cares primarily about building more stores (up from 48% to 55%)
Not clearly communicating their value and values to their customers, instead of just their growth plans. (See Table B)
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A service gap between Starbucks scores on key attributes and customer satisfaction
Was not meeting customer expectations in terms of customer satisfaction.
Vocal customers may not be representative
Unsatisfied customer profile ( See Exhibit 9)
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
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A variety of small-scale specialty coffee chains
Most of which were regionally concentrated
Each tried to differentiate itself