Starbucks Marketing Case

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Vision: the most recognized and respected brand in the world Brand image - experiencing branding strategy:
o“Live coffees” mantra - to keeping the national coffee culture alive. oCreating an “experience” around the consumption of coffee Three components to this experiencing branding strategy: oFirst, coffee itself – offering the highest-quality coffee in the world, coffee standards by controlling the supply chain as possible and the distribution to retail stores oSecond, service – customer intimacy

oThird, atmosphere. To make customers want to stay. Based on human spirit, a sense of community, the need for people to come together. Channels - Broad distribution strategy
oWant to reach customers where they work, travel, shop, and dine oGood Location: Company-operated stores located in high-traffic, high-visibility settings oProduct mixed tended to vary depending on a store’s size and location onon-company-operated retail channels, food-service accounts, domestic retail store licenses Good Starbucks Partners

oAll Starbucks employees were called “partners” -Most hourly-wage employees oGenerous policy of giving health insurance and stock options oHigh partner satisfaction rate (80% to 90%), well above the industry norm. oLowest employee turnover rates in the industry (just 70%, compared with fast-food industry averages as high as 300%) oLower managers turnover rates & encouraged promotion from within its own ranks Delivering on Service and good measuring service performance oTraining: hard skills and soft skills

oTreated as a valuable customer (75%), friendly staff (73%) and highest quality coffee (67%). oA variety of metrics, including monthly status reports and self-reported checklists. o“Customer Snapshot” measurement tool

Less competition
oA variety of small-scale specialty coffee chains (regionally concentrated). oindependent specialty coffee shops & Donut and bagel chains Product innovation
oNew products were launched on a regular basis ( 12 to 18 months cycle) oR&D, in-store experiments and market test, rely on partner acceptance oBy 1995, introduction of a coffee and non-coffee-based line of Frappuccino beverages

Leadership: after Schultz took over

Opening new stores - after Schultz took over
Quality products- whole beans and premium-priced coffee beverages by the cup Target customer-catered primarily to affluent, well-educated, white-collar patrons (skewed female) between the ages of 25 and 44. By 1992, Schultz decided to take the company public  allowed to open more stores across the nation. Spent almost nothing on advertising  point-of-sale materials and local-store marketing Answer 2.

Expectancy disconfirmation
oThe company’s service didn’t decline in Exhibit 7.
oUnsatisfied customer is the newer customers  performance falls below expectations oEmotional response depends on relationship between perceived performance and expected performance Starbuck’s brand meaning was misconceived

oLittle image or product differentiation between Starbucks and the smaller coffee chains Brand image had some rough edges
oWas perceived as corporate which cares primarily about making money53% in 2000 to 61% in 2001) oWas perceived as a corporate giant which cares primarily about building more stores (up from 48% to 55%) oNot clearly communicating their value and values to their customers, instead of just their growth plans. (See Table B) A service gap between Starbucks scores on key attributes and customer satisfaction oWas not meeting customer expectations in terms of customer satisfaction. oVocal customers may not be representative

oUnsatisfied customer profile ( See Exhibit 9)
oThe Changing Customer: attracted a new breed of younger, less well-educated, lower income, less frequently visiting customers. Answer 3.
We compare the following items in Exhibit 1.
a. Starbucks’ store size & growth b. competition...
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