Starbucks: Customer Satisfaction Case

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Why have Starbucks satisfaction scores declined? Has the company’s service declined or is it simply measuring satisfaction the wrong way? Based on the data in the case, we can’t conclude if the company’s service is declining or is there is an error in measuring satisfaction the wrong way. What is clear though is the fact that the customer perception, customer’s attitude and the overall differentiation of the Starbucks brand have declined. It is possible that competition, shift in customer demographics and overall higher expectations are causing the low customer satisfaction scores. Analysis:

The Mystery shopping program is a biased tool to measure customer satisfaction, in that it depends on the shopper and his/her own criterion for each of the basic service criteria (Service, Cleanliness, Product Quality and Speed of service). If the program was backed by training that defined standards for the parameters and the criterion for judgment on individual attributes, then the data could have been used to make a valid conclusion. There seems to be other reasons because of which the consumer satisfaction could have declined, the topmost of which are change in customer expectations and competition. It is also possible that the overall service has declined because of the rapid company expansion, product innovation, and customization of drinks had a detrimental effect on the Starbucks brand and caused it to have a lower value proposition. Starbucks had about 160% increase in the number of retail stores from 1998 to 2002. By opening stores in new markets and specifically geographically clustering its store, Starbucks compromised its value proposition. Specifically, many stores (small or stores in groceries) did not have the upscale inviting environment, which initially had brought its loyal customers to Starbucks. The increase in locations also changed the image of Starbucks from being a place for niche customer to being a place for everybody – it started appealing to a...
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