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Transcript of starbucks
The Starbucks Value Proposition
Delivering on Service
Caffeinating the World
Starbucks’ Market Research: Trouble Brewing?
Rediscovering the Starbucks Customer outline “I think we’ve demonstrated that we are close to a recession-proof product.”
“We’ve always taken great pride in our retail service, but according to the data, we’re not always meeting our customers’ expectations in the area of customer satisfaction.” $40 million annually investment in the company's 4500 stores which would allow each store to add the equivalent of 20 hours of labor a week.
“The real question is, do we believe what our customers are telling us about what constitutes ‘excellent’ customer service? And if we deliver it, what will the impact be on our sales and profitability?” commodity into an upscale cultural phenomenon
In 1971, three coffee fanatics—Gerald Baldwin, Gordon Bowker, and Ziev Siegl—opened a small coffee shop in Seattle’s Pike Place Market Company Background 1982: Schultz joined the Starbucks marketing team
1992: the company had 140 such stores in the Northwest and Chicago
Schultz decided to take the company public
2002: Starbucks became the dominant specialty-coffee brand in North America Most fast-food chains had marketing budgets in the 3%–6% range experiential branding strategy: "live coffee"
There were three components to this experiential branding strategy:
service (customer intimacy)
atmosphere The Starbucks Value Proposition Channels of Distribution:
many Starbucks stores located in high-traffic, high-visibility settings such as retail centers, office buildings, and university campuses
Starbucks also sold coffee products through non-company-operated retail channels; hotels, airlines, restaurants, and the like
cooperation with big firms like pepsi-cola and dreyer's grand ice cream Starbucks Partners:
All Starbucks employees were called “partners”
“From day one, Howard has made clear his belief that partner satisfaction leads to customer satisfaction. This belief is part of Howard’s DNA, and because it’s been pounded into each and every one of us, it’s become part of our DNA too.”
Starbucks had one of the lowest employee turnover rates in the industry—just 70%, compared with fast-food industry averages as high as 300% two types of training:
“Just Say Yes” & "self-selection process"
created a tension between product quality and customer focus for Starbucks Delivering on Service Labor was already the company’s largest expense item in North America and Starbucks stores Measuring Service Performance:
Service—Did the register partner verbally greet the customer? Did the barista and register partner make eye contact with the customer? Say thank you?
Cleanliness—Was the store clean? The counters? The tables? The restrooms? Product quality—Was the order filled accurately? Was the temperature of the drink within range? Was the beverage properly presented?
Speed of service—How long did the customer have to wait? The company’s goal was to serve a customer within three minutes, from back-of-the-line to drink-in-hand. This benchmark was based on market research which indicated that the three-minute standard was a key component in how current Starbucks customers defined “excellent service.” differentiation Competition Retail Expansion
Service Innovation Caffeinating the World despite of being known one of the most effective marketing organizations, Starbucks had marketing strategy deficiency
no chief marketing officer
a marketing department that worked as 3 seperate groups
1. a market research group which gathered and analyzed market data
2. a category group that developed new products
3. a marketing group which was involved with quarterly promotional plans Starbucks’ Market Research: Trouble Brewing? “Legendary Service” This structure led Starbucks;
to confront some contradictions of their assumptions about its brand and its customers
Day pointed out that:
“We tend to be great at measuring things, at collecting market data, but we are not very disciplined when it comes to using this data to drive decision making.” According to Day, the problem was
no one was actually seeing the “big picture”
the base of these contradictions and the point laying behind the ‘big picture’ was ;
“the organizational structure also meant that market and customer-related trends could sometimes be overlooked” Starbucks’ Brand Meaning:
After the notice of the ‘big picture’ the market research team discovered that;
the brand image of Starbucks had some lacks
- the notion that “Starbucks cares primarily about making money” was up from 53% in 2000 to 61% in 2001,
- “Starbucks cares primarily about building more stores” was up from 48% to 55%,
the facts above brought the question;
“Are we focusing on the right things?” The Changing Customer:
the team also discovered that Starbucks’ customer was expanding as well
- Its customers now less well- educated, younger and with lower income Measuring and Driving Customer Satisfaction:
the marketing research team discovered a very significant fact that
- Starbucks wasn’t successful enough in providing customer satisfaction
Day believed that customer satisfaction gap could be the indication of service gap
To make the customers more satisfied, valued “the improvement to service” was needed The plan was to add 20 hours of labour to the stores in order to achieve;
3 minutes service time
increase in customer satisfaction
improve customer throughput Rediscovering the Starbucks Customer thank you...