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Jentry Placido

on 14 May 2013

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Transcript of Starbucks

Problem Statement How Starbucks Can Improve Starbucks’s Value Proposition Alternate Solution #2: Back To Basics After a review of Starbucks case study, we have determined that the major problem that Starbucks is facing is not adapting their marketing strategies to the changing demographic of customers created through their market expansion which has resulted in lower customer satisfaction. Alternate Solution #1: Earn Your Shining Star •Implement the The Star Card program
•It will have two levels, a platinum and gold
•Enable us to add value to the brand and product

•Pros: Enable us to measure the conversion rate
•Cons: Only gain insight from customers enrolled in the program Customer Survey Results Customer Importance Rankings
Friendly staff Retail Landscape Changing Stores expanded from 1,886 to 5,886 in 4 years
Now in more neighborhoods
Consumer demographics expanded
New customers vs. established customers Areas of Focus
Friendlier more attentive staff (19%)
Incentive: Free Cup/visits (19%) Value Proposition
Highest quality coffee in the world
Provide customer intimacy
Provide an atmosphere
Lost focus during expansion
Emphasize soft skills
Introduce new programs
Sean will explore these concepts •Train baristas to focus on “soft skills”
•Management claims the issue comes from long lines and long wait time

•Pros: Will no longer need to invest the $40 million in extra work hours per store.
No additional costs required for Soft Skill Training
•Cons: Soft skills not the only issue affecting customer satisfaction Data suggests additional labor will not resolve Customer Service Scores Alternative Solution #3: New Menu Increase customer value by offering a new simplified menu with exclusive flavor

Pros: Will offer flavors exclusive to Starbucks brand alone and will attract new customers.
Cons: Might scare away loyal customers. Consumers are often afraid of trying new things. Alternative Solution #4: Changing With the Times •Due to the increase of opening new stores, there is an increase in new customers
•Change the marketing towards the newer, younger, less educated customers

•Pros: Can tend to the new and changing marketing
•Possibility of finding a even balance to market to both target markets successfully.
•Cons: Risk losing the already-established loyal customers
•Will deter Starbucks from the original values and principles that the founders had in mind Solution The solution our team has chosen is to offer an incentive program that will be available to all customers who will be offered to join the program upon ordering a drink at Starbucks or by going online at Starbucks.com. Product Problem Statement Problem Statement Price Enrollment and maintenance of Star Membership is free
The new and established customers have expressed a desire for an incentive program. Place Available at
ALL Starbucks Locations
Online - Starbucks.com Promotion The incentive card program will be introduced and marketed through three primary advertising mediums.
The advertising mediums were selected to reach the expanding consumer base of Starbucks’ customers. “The Star Card” features
Starbuck’s logo with a large “Gold” or “Platinum” Star in the middle
Two Levels of Cards
Star Points
Rewards program Sign-Up Is a simple questionnaire
Your Name
Phone Number
Email Address
Preferred Drink
Includes 50% off your first beverage purchase as a "Star" member Conclusion Starbucks’ best option is to implement the Star Card incentive program. This will enable Starbucks to continue to meet the needs of its new and established customers while adding additional value and personal services.
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