Starbucks: Delivering

Customer Service

Oleh :
Jolinna Michelia Bitti
148115187
Leonardo Susanto Utomo
148115190

Company Background
Starbucks

Howard Schultz

Chairman and Chief

global Strategist in
control of the company

30 Maret 1971
Pike Place Market, Seattle, Washington,
America

Tanggal/Tahun dan
tempat Berdiri

Gerald Baldwin
Gordon Bowker
Ziev Siegl

Pendiri

The Starbucks Value Proposition

High quality
coffee

Value
Proposition

atmosphere

service

In 2002, market research has shown that Starbucks has a gap

in meeting its customers expectations in terms of customer
satisfaction.

So she proposed to improve the service time such that each

order is served within 3 minutes. However, this solution
would cost Starbucks 20 additional labor hours per week
thereby $40 million per year. Is 20 seconds increase in speed
of service really worth $40 million per year?

Perkembangan Financial
Starbucks setiap tahunnya
berkembang dengan baik

Market share dari Starbucks

cukup besar dan akan
berkembang setiap tahunnya,
dimana Retail Coffee market tiap
tahunnya akan bergeser ke
Speciality Coffee Shop

Overall opinion of starbucks

sangat rendah 25% ( High Quality
34 %)

Semakin Puas Customer maka

akan meningkatkan penjualan

Christine Day, Senior Vice President that the

speed of service was the main reason for this
decline in customer satisfaction
improve the service time such that each order
is served within 3 minutes. This solution
would cost Starbucks 20 additional labor hours
per week thereby $40 million per year

Analysis
Customers: The demographics of a typical Starbucks customer have changed
drastically in the recent years. From Exhibit 8 in Starbucks case document newer
customers of Starbucks are younger, less well-educated, low income, less frequent
visited to the coffeehouse and had very different perceptions. The overall attitude of
Starbucks is very low on 25% by new customers where as the regular customers stood
in 44%.While many factors influenced customer satisfaction, overall service and
speed of service were identified as the most influential; a quick glance at Starbucks's
recent customer satisfaction (Exhibit 10 and Exhibit 11 in Starbucks case document)
reveals that customers did in fact express dissatisfaction with the efficiency and speed
of service. From Exhibit 9 in the Starbucks case document we can learn that greater
customer satisfaction directly results in higher potential sales. Since there was a
strong and positive relationship between customer satisfaction and future potential
sales, achieving high customer satisfaction is a key factor to Starbuckss sales growth.
In fact, it can be made known that by transforming unhappy customers to satisfied
ones, or moving the satisfied and unhappy customer to a highly satisfied customer the
Starbuckss revenues can be increased between 361% and 1478%, respectively.

Analysis
Competition: Starbucks is clearly ahead of its competitors in terms of size of operations and
profitability. In the US, its main competitors are small-scale specialty coffee chains like
Caribou Coffee, other independent specialty coffee shops and donut and bagel chains like
Dunkin Donuts. From Exhibit 6 of Starbucks case document we can observe that despite of
the fact that there are many specialty coffee shops on the raising, Starbucks still holds a
leading edge.
Company: Starbucks pursued its overall objective to establish itself as the most recognizable
and respected brand in the world by focusing on retail expansion and product innovation.
Starbucks had 20 million customers and 5000 stores and still growing. From Exhibit 2 and 6
in Starbucks case document it is clear that Starbucks was constantly expanding and growing
its market share in the specialty coffee market. The Starbucks market share in the specialty
coffee market grew by 29.92% between 2000 and 2002 and its expected to grow by an
additional 61.11% by 2005. Historically, Starbucks invested minimal on advertising.
Starbucks was also an employee friendly organization. Starbucks have approximately 60000
partners/employee, of which most of them were hourly wage employees called baristas.
Employees were highly valued and well taken care of by providing insurance coverage, stock
options, and internal promotions.

Analysis
Context: Starbucks was constantly investing in new product
innovation to drive sales and growth .The financial numbers
reflect this growth (Exhibit 1 from Starbucks case document). But
recent market research showed that customer service, on which
Starbucks prided itself, was perceived as unsatisfactory.
Customers viewed Starbucks as a corporate giant focused on
making money and growing in size. It showed that Starbuckss
strategy of using customer snapshot scores to measure service
performance was proving ineffective.