Starbucks Case

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Case Discussion Questions

1.What factors accounted for the extraordinary success of Starbucks in the early 1990s? What was so compelling about the Starbucks value proposition? What brand image did Starbucks develop during this period? First of all, Starbucks has created the entire “coffee culture” in North America. From the idea to create a chain of coffeehouses that would become America’s “third place” other than home and work, Starbucks has become another place for relaxation and joy. This largely accounted for the big success of Starbucks in the early 1990s.

Starbucks emphasized three components in its value proposition. The first component was the highest-quality coffee. The second brand component was service, or what the company sometimes referred to as “customer intimacy.” The third brand component was atmosphere. Starbucks created comfortable and lingering environment to stay.

Live coffee, or enjoyable moment of life with Starbucks coffee was the brand image Starbucks developed during its early days.

2.Why has Starbucks’ customer satisfaction scores declined? Has the company’s service declined, or is it simply measuring satisfaction the wrong way?

Some customers did feel that Starbucks’ service has declined. It is not the matter of measurement. Starbucks’ customer satisfaction scores have declined because its customers feel that Starbucks’ quality of service has declined. Customers felt a service gap between Starbucks scores on key attributes and customer expectations. A service gap primarily affects customer satisfaction gap. According to the poll Starbucks had polled its customers answered most frequently “improvements to service”—in particular, speed-of-service— would make them feel more valued by the company.

3.How does the Starbucks of 2002 differ from Starbucks of 1992? By 1992, the company had 140 such stores in the Northwest and Chicago and was successfully competing against other small-scale coffee chains such as Gloria...
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