Star Bucks 2
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Transcript of Star Bucks 2
• Aadil KHAN• Monia LADJIMI• Phillipe MAALEK• Yuka YOON• Sarah ZHAI• Haili ZHANG
STARBUCKS:Delivering customer service
Aadil KHANMonia LADJIMI
Phillipe MAALEKYuka YOONSarah ZHAIHaili ZHANG
STARBUCKS
Success factors in early 1990s
Products
Niche segment
Premium priced beverages
Accessories
Services
Successful World-Of-Mouth
Less competitors
Premium customers
Store expansions
Customer intimacy
Aadil KHANMonia LADJIMI
Phillipe MAALEKYuka YOONSarah ZHAIHaili ZHANG
STARBUCKS
Value proposition
“Live coffee”
Deliver highest quality in coffee
“Experience”
Customer intimacy and loyalty
“Feel good” factor
Atmosphere and sense of community
Aadil KHANMonia LADJIMI
Phillipe MAALEKYuka YOONSarah ZHAIHaili ZHANG
STARBUCKS
Brand image in 1992
Best in quality
Premium pricing
Sophisticated customized service
Customer Satisfaction Scores
Customer satisfaction scores declined due to: Service – gap between ideal and reality Focus – shift from customers to products Perception – primary focus on business performance Change in Target – expansion of segments Marketing data – no analysis Organizational structure - no marketing departmentCompetitive advantage – no differentiation from competitors
1992 vs. 2002Stores
Localization140 in the US
Product range by sales revenue50% beverages 50% coffee beans
Customers White-collared affluent & patronsAged 25-44 males
StoresGlobalization5,000 stores worldwide (open 3 per day)
Product range by sales revenue77% beverages 13% food 4% accessories 6% beans Increased product ranges
Customers YoungerLess educated & lower income
Services “Just Say Yes” services Personalized and intimate services
CompetitorsSmall-scaled competitorsCoffee chains
Distribution channels Company-operated retail stores
Services Simplified process, bottle neck eliminated Tech. Innovation, viz Automated coffee machine
CompetitorsBig brand and international competitors Food and beverage chains
Distribution channels International-licensed, online, mail-orderfood service accounts, retail stores, offices, joint ventures
Service innovation Store-value card (SVC)Wifi
Ideal Customers from Profitability Standpoint
Gender Female
Age 30 – 50
Income $70,000 – $90,000
Education College degree
Coffee/ week 20
SB visit /month 8
$ /visit $5.00
To ensure ideal customers
Starbucks has to maintain:
• Clean Store
• Convinient to approach
• Treat customer as a prime value
• Maintain a friendly staff
• Maintain quality coffee taste/flavour.
How valuable?
Highly satisfied customers Annual = $ 382Lifetime = $ 3170Satisfied customers Annual = $ 209.50Lifetime = $ 2514Unsatisfied customersAnnual = $ 181.6Lifetime = $ 199.8
$40 million program
Investment Goal
Increase labour capacity by 20 hours per week
Reduce serving time by 3 minutes per store
Increase customer throughput
Increase customer satisfaction
Increase long-term relationship
Increase process efficiency
Increase weekly sales revenue by $20,000 per store
Increase EPS by $0.07 per share
Starbucks should invest in labour through $40 million program
$40 million program
Possible to deliver customer intimacy? Customer intimacy is the initial core value of StarbucksIt is possible to put all the efforts to reach, control and regain its competitive advantage
232,029 customers need to be converted from Satisfied to Highly Satisfied
Realistic? 232,029 customers / 4,500 stores = 52 customers per store per year Realistic!!
THANK YOU