Starbucks Coffee CompanyStarbucks Coffee Company

Company ProfileCompany Profile

1971: Starbucks started as coffee bean retailer in Seattle

Over 7,225 in 32 countries2002/2003: annual turnover of $1.1 billion

Starbucks’s SuccessStarbucks’s Success

World-class Service ProviderConsistency of Service and ProductStarbucks Experience

Starbucks Service OfferStarbucks Service Offer

Starbucks Message: “…drinking a cup of coffee is more than that, it is something that offers hints of mystery and romance to elicit an emotional response”

Key characteristics of servicesKey characteristics of services

IntangibilityInseparabilityVariabilityPerishabilityCannot be owned

The Starbucks Core ServiceThe Starbucks Core Service

The Core Service: Consistency of Service and Product– Employee Training: Learning to be a Barista– Ensuring Product Quality– Service Standards– Star Skills

The Starbucks Secondary The Starbucks Secondary ServicesServices

The Secondary Services:– People (Customer service oriented to deliver the best service;

world-class service provider)

– Process (Customers willing to enjoy Starbucks experience; they have to take some actions such as going to the shop, queuing to order and pay and then waiting to get their drink)

– Service Delivery (Consumers can have their drink in the shop or take it away, mail order and delivery)

– Physical evidence (Staff uniform and behaviour, magazines, brochures, website)

– Branding (World-class Service, High Price for a Premium Product/Experience, PR )

– Styling (Sophisticated atmosphere typical of the Italian Coffee houses, music, interior design, artwork)

– Features (Outlets positioned in high street locations; stores also located within other businesses)

– Quality (Service processes must transmit a consistent level of quality to deliver a positive service to the customer)

The Starbucks Secondary The Starbucks Secondary ServicesServices

Consumer’s Evaluation of Consumer’s Evaluation of Service AttributesService Attributes

Security (Did I feel secure?) Consistency (Is the service predictable?) Attitude (How did I feel?) Completeness (Was the service comprehensive?) Condition (Was the environment pleasent?) Availability (Did everything come at the right

time?) Timing (How long did it take?)

Starbucks Service EncounterStarbucks Service Encounter

High-consumer contact in the serviceCritical incidents: Evaluation of the service

provider and of the service quality

Blueprinting of Starbucks Blueprinting of Starbucks ServiceService

Stage in production process

Target time (minutes)Critical time

Is incident critical?

Participants

Visible evidence

‘Line of visibility’Invisible processes

Obtainseat

15

Y

Customer

Furnishings

Cleaning oftea room

Takeorder

15

N

CustomerWaiter

Appearanceof staff

Maketea

N

Cook

Delivertea

Y

CustomerWaiter

Pay fortea

13

N

CustomerCashier

Cash-collectionProcedures

Accountingprocedures

Repeat if tea is unsatisfactory3

8

Tea, crockery,manner of serviceDelivery

Preparation of teaOrdering of supplies

Critical IncidentsCritical Incidents

Critical incidents:– Pre-purchase– Post purchase (Ex. The Starbucks Coffee Terrorist)

How is this going to affect the Service?

Consumer AnalysisConsumer Analysis

Starbucks buyer-decision process:– Need Recognition (Maslow’s esteem/social needs level)

– Information Search (Different information sources: Point of Purchase, Personal Selling, Word-of-mouth, Personal experience, Brochures, Catalogue and Website)

– Evaluation of Alternatives (High level of brand awareness: Communications, PR, Different products, Introduction of WiFi Technology, High Concentration in one location)

Consumer AnalysisConsumer Analysis

– Decision (Customers, Environment, Friends, Family, Promotion, etc.)

– Post-Purchase Evaluation (Quality and satisfaction are based on customer’s perception of the service; all parts of the service must work efficiently)

Consumer SegmentationConsumer Segmentation

Starbucks targets younger consumers (over 20s), educated, socially conscious

Predisposed to pay a premium price for a differentiated product (Upscale market)

Willing to extend their knowledge of coffee

The Starbucks Marketing Mix: The Starbucks Marketing Mix: 4Ps4Ps

Product: Concept of the “Starbucks Experience”(The product is a combination of goods and service)

Price: High Price (as a key differential and to present the product as an affordable indulgence and a premium product)

Promotion (PR, Sales Promotion not really relevant, Advertising, Seasonal offers, Tasting of new flavours)

Place: High Street Location and Website

And the 3PsAnd the 3Ps

People and Customer Service: Vital (Key factor in the Starbucks Strategy from the outset)

Physical Evidence: Consistent (Environment, furniture, music, artworks: all these tangible aspects are consistent with the Starbucks Concept of delivering a unique experience)

Process (Responsible for the Customer’s Satisfaction)

ConclusionConclusion

Company ownes-service/franchisingPeople and Customer Service Services are perfomances delivered by

HUMANS

ReferencesReferences

Palmer A. (2001), Principles of Services Marketing, 3rd ed., Maidenhead: McGraw-Hill

Hill C.W.L. (2002), Starbucks Corporation in International Business – Competing in the Global Marketplace, 3rd ed., New York: McGraw-Hill

www.starbucks.com “Customers from Hell: Nightmare or opportunity”, On

Achieving Excellence, December 1995

Thank youThank you