Starbucks Case Study Analysis Essay

2298 Words Oct 20th, 2012 10 Pages
What factors accounted for the extra-ordinary success of Starbucks in the early 1990s?
1. by 1992 Starbucks had 140 stores and was competing against small scale coffee
2. Starbucks went public in 1992 which helped them raise 25 million, allowing expansions to continue.
3. Almost no spending in marketing
4. Controlled supply chain – enforcing standard quality
5. Focused on service and the partners
6. Created ambiences with universal appeal
7. Company operated stores, not franchises which usually lack on quality standards
8. Location location and location!
9. Branched and started serving other products ( sodas, pastries, juices etc…)
10. Distributed through other channels – food service, domestic retail, partnerships, online and
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Starbucks was known for being widely available, their gourmet/specialty coffee, and being trendy. Customers also though that the stores were clean and overall satisfied with the Starbucks product. However, the market research team discovered that Starbucks’ brand image was declining. The number of respondents that agreed with the statement, “Starbucks cares primarily about making money,” was up from 53%to 61%. The number of respondents that agreed with the statement, “Starbucks cares primarily about building more stores,” was up from 48% to 55%. Starbucks brand image was becoming more about the growth plans of Starbucks rather than the value they wanted to provide to their customers.
Why have Starbucks’ customer satisfaction scores declined?
Customer satisfaction declined because there was very little image or product differentiation between starbucks and the smaller coffee chains. The image people had was that the company was only interested in achieving profits and expanding and not so much delivering good coffee quality and friendly service – always feel welcome had only 39% of agreement on the 2002 survey. No clear communication of value and values to customers. There is also the shift in customers from well educated to less educated and with lower income, who had a different perception of the brand compared to more established customers.

Starbucks customer satisfaction scores began to decline despite the fact of Starbucks’ overwhelming presence and

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