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
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.
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...