Retail Services Characteristics

Topics: Service system, Starbucks, Coffee Pages: 6 (2095 words) Published: October 22, 2012
In this paper the most common services characteristics, namely perishability, intangibility, inseparability and heterogeneity will be applied to a well - known retail services brand. In this case the focus shall be on how the aforementioned characteristics apply to Starbucks. In order to better understand the problem the history of the company alongside current corporate objectives will be briefly described. In the following paragraphs the notice will be mainly on the retailer’s ability to cope with the theory’s implications. The first Starbucks coffee shop was opened in 1971 in Seattle. The name was inspired by Moby Dick and the logo which has now become somehow of a cult figure is a twin-tailed mermaid. However it wasn’t until 1987 when a major breakthrough came and the brand started to receive a world – wide recognition. In August, Howard Schultz backed with the capital from local investors bought the Starbucks. Since then the company grew in an exponential manner which resulted in opening more than 16,000 stores in over 55 countries to this day. Similar as the majority of large enterprises Starbucks also incorporates its own business and social objectives. The goal is to project the brand image in a consumer and environmental friendly way. Their mission statement is to inspire and nurture the human spirit through their exceptional service and high quality coffee. In a very holistic approach they are aiming to improve every aspect of the business, from the customers and employees to the suppliers and shareholders. Moving on from this brief description of Starbucks the focus will now shift to the retail services characteristics, more precisely on intangibility and its implications. Experts agree that a service is intangible because the customer cannot sense it (Newman and Cullen, 2002). It is an abstraction which cannot be directly examined before the purchase. In the case of most goods a prospective buyer is able to inspect the quality of the good by relying on his senses, whereas a pure service has to be purchased and consumed to fully verify its quality. The level of services’ tangibility can be seen from tangible goods, which are included and consumed within the service offer, it can also be extracted from the physical environment which surrounds the service or with the tangible evidence of the service performance (Palmer, 2005). In the case of various food and drink outlets, goods form an important component of a service offer. This also applies to Starbucks and therefore it is possible to place it somewhere in the middle of the tangible to intangible service dominant scale (Shostack, 1977). Starbucks uses scent of fresh coffee to attract customers and make them sense a tangible good which can be purchased at the premises. The physical environment also plays a big part in customer’s perception of service quality. Starbucks acknowledged this and therefore their outlets are usually very well furnished with comfortable chairs, Wi-Fi and other features which give a customer a sense of quality and comfort. Tangibility can be further provided with the evidence of service production methods. This is certainly the case in Starbucks where you can see the whole process of making a cup of coffee. A lack of physical evidences of services quality can increase the level of uncertainty that a customer faces when choosing between competing services. However, Starbucks developed a strong brand associated with quality of services provided and the company values therefore creating a positive image in consumers’ perception. From describing how intangibility applies to Starbucks we shall now turn the attention to another service characteristic, namely heterogeneity. Services heterogeneity means that the quality of services depends on who provides them as well as when, where and how they are provided. Products can be standardized and basically the same for every customer. However, services on the other hand can be delivered in different...

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