Starbucks Delivering Customer Service

Starbucks:Delivering Customer ServiceCase Discussion:March 4 Target Solutions Marketing GroupTaiya BrandonKelvin BrownShawn CorreiaJohn KimweleDale HallIssueRecent Market Research shows a decline in Customer Satisfaction at Starbucks.To stay on plan with their aggressive growth strategy,should$40 million be invested in the 4,500 stores focusing on improving the speed of customer service?Will this improvement lead to increased satisfaction that will translate in to an increase in sales and profitability?Does this investment align with the growth strategy of retail expansion and product innovation?Starbucks:Take Home an ExperienceMission Statement “live coffee”The Starbucks Value Proposition1.To create an“experience”around the consumption of coffee,an experience that people would weave into their lives2.To create an uplifting experience in“Customer intimacy”3.To create an“ambience”based on human spirit,sense of community,and the need for people to come togetherMatters of ConcernStarbucks is suddenly in a position of:Consistent salesBUTCLow customer satisfaction-Low speed of serviceCCustomized drinks-Slows down the service process-Strain on workersCHand crafted Drinks-Involve Time-Slows down the service processCCompetition-A variety of regionally concentrated small scale Specialty coffee,bagel and donut chainsMarket ResearchRecent Findings of peoples experiences:Starbucks cares primarily about making money-Up from 54%to 61%Starbucks cares about building more stores-Up from 48%to 55%Top 5 Attributes of Starbucks:1.Known for specialty/gourmet coffee(54%strongly agree)2.Widely available(43%strongly agree)3.Corporate(42%strongly agree)4.Trendy(41.5%strongly agree)5.Always feel welcome at Starbucks(39%strongly agree)Starbucks Options1.Investment of$40 million annually to increase speed of service(impact=customer satisfaction,translates to sales)2.Alter the product mix Determine change depending on store size and location3.Process of Measuring Service performanceCategories:Service,Cleanliness,Product Quality,Speed of Service4.Retail ExpansionNew stores in new marketsGeographically cluster stores in existing marketsStarbucks Options continued5.Product innovationPriority of Mgmt given that the prices were stable in recent years6.Service Innovation Starbucks store Value Card7.Effort to identify and demonstrate in very concrete terms on how to determine Market Research DataStarbucks Fortev11th consecutive year of consistent sales of 5%or greatervCompany spent close to nothing to achieve this goalvSales climbed at an annual compound growth rate of 40%and net earnings to 50%since Starbucks went publicvGood strategic alliances with Pepsi-Cola and Kraft foods to distribute some of their productsvLowest employee turnover rates in the industry(just 70%as compared to 300%the average of the fast food industry)vImplemented good policies to insure competitive advantage“Just say Yes”policyMeasuring service performancevExpect business projections to rise and be steady and consistentPlan of Action Plan based Starbucks strengths relative to the presented issues 1.Proceed with investing the$40 million annually in the 4,500 stores to increase service efficiency(impacting customer satisfaction.Goal customer retention in the competitive coffee house market)2.While the investment enables additional labor hours,research efforts to increase efficiency through set-up and equipment(e.g.automated espresso machine,specialized work stations)3.Use secondary market research data to identify,analyze,and alter product differentiation strategies,with respect to smaller chains and Starbucks obliquities4.Alter the product mix depending on the store size and location of the outlet(demographics)Sample to find out what customers mainly look forSample data results would narrow the customization and train baristas with those special concoctionsPlan of Action cont.Plan based Starbucks strengths relative to the presented issues 5.Marketing Research showing that existing markets are far from saturationAnalyze this particular area with specific concrete terms targeting a particular objective6.Continue with Product and Service innovation,proactively conduct an environmental scan to launch new products7.Validate Market Research metrics and methods of sampling,data analysisService Performance categoriesDoes the data translate in to measurable metrics that can impact sales and profitability?