Starbucks faces a difficult and controversial management challenge. The company’s most recent market research has revealed unexpected findings implicating that Starbuck is not always meeting customer’s expectations in the area of customer satisfaction. The purpose of this memo is to analyze and provide recommendation on whether or not the company should go forth with a $40 million investment in additional labor in the stores. This $40 million investment is necessary in order to bring service time down to a three-minute interval and ultimately increase customer satisfaction. A marketing strategy and corresponding recommendation will be provided for your approval.
Numerous factors accounted for Starbucks’ extraordinary success in the early 1990’s. To begin, Starbucks was the first coffee house to provide a premium coffee based on Italian values to the United States population. This high quality coffee attracted a great deal of people, especially affluent, well-educated, white-collar women between the ages of 24 and 44. They were able to achieve such high standards for their products by controlling as much of their supply chain as possible. In addition to their high quality products, Starbucks offered the public great product variety. They introduced and launched an array of products on a regular basis, ranging from new holiday beverages to their Frappuccino beverages, distributed by PepsiCo. This product innovation is one of the leading factors contributed to Starbucks’ positive sales growth throughout the years. Customer service also played a key role in Starbucks’ success in the early 1990’s. The company offers extensive training to their “partners” or “baristas” in order to provide customers with the most optimal, personalized experience. Starbucks trains their employees on both hard and soft skills, allowing them to ensure product quality and also provide the best service possible. Lastly, Starbucks’ ability to