Starbucks Hbs Case Study Essay

2209 Words Nov 20th, 2012 9 Pages
Chad Ogle MGMT 620 HBS Case 9

Starbucks: Delivering Customer Service History In 1971, Starbucks started as a small coffee shop which targeted a specialized market of coffee purists. Howard Schultz, who later owned the company and initiated the high growth period, joined Starbucks’ marketing team in 1982. Main concept of Schultz marketing strategy was too make Starbucks “America’s third place” considering home and work the two other places where Americans spend most of their time. In 1992, Schultz acquired Starbucks and made an initial public offering. Despite Wall Street’s doubts about the IPO, $25 million was raised by Starbucks. By 2002, Starbucks had opened over 5,000 stores and average
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The most significant difference in Exhibit 8 was the discrepancy in perception of price. While 32% of established customers stated that Starbucks coffee was worth paying more for, only 8% of new customers agreed. This statistic indicates that competitors have a better chance to take sales away from Starbucks’ new customers than they do established customers. Since the customers first established 5 or more years ago represents only 23% of its retained customers, the perception that its coffee is overpriced should be very troubling for Starbucks. Exhibit 11 only accentuated this since 31% (second highest response) of customers surveyed stated that Starbucks need to offer better prices and/or incentive programs. Many competitors, including Dunkin’ Donuts have loyalty programs there are much more rewarding than Starbucks’ loyalty programs.

Personal Evaluations I recently visited three different Starbucks locations near my home and evaluated stores on the same four criteria that Starbucks used for its mystery shopper program. The results of the evaluations provided by this program were called Customer Snapshots. I am creating my own Customer Snapshots of the three locations near my residence. The four components I am evaluating are service, cleanliness, product quality, and speed of service. The store I visited first was located in Michigan City, Indiana. The customer base varied

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