Starbucks: Delivering Customer Service
DATE OF SUBMISSION-19.11.2012
SECTION-C, GROUP 13:
Abhijit Das- 2012PGP005
Ashwin Vijayan- 2012PGP073
Kumar Abhishek- 2012PGP178
Payal Anand- 2012FPM10
Sumit Bapuji Gedam- 2012PGP382
Vikash Kumar- 2012PGP438
Affluent, well-educated, white-collar patrons(skewed female) between the ages of 25 and 44 Most loyal customers visit Starbucks as often as 18 times a month, but typical customers visited just 5 times a month Context:
Stores located in high-traffic, high-visibility settings such as retail centers, office buildings and university campuses Along with whole-bean coffees, company-operated stores also sold rich-brewed coffees, Italian-style espresso drinks, cold-blended beverages, premium teas, pastries, sodas, juices, music CDs, games and seasonal novelty items Beverages accounted for the largest 77% of sales in stores. This represented a change from 10 years earlier, when about half of store revenues had come from sales of whole-bean coffees. Company encouraged promotions within its own ranks. About 70% of the company’s store managers were ex-baristas, and about 60% of its district managers were ex-store managers Not easy to strike up a conversation with customer as before because today every customers orders a handcrafted beverage Coffee consumption was on rise in the United States. More than 109 million populations drank coffee every day, and an additional 52 million drank it on occasion. Consumption of specialty coffee was rising and it was estimated that about one-third coffee will be consumed outside of the home New product development process took 12-18 month cycle and its success mainly dependent on partner acceptance Starbucks’ customer base was evolving. Newer customers tended to be younger, less well-educated and in the lower income bracket. Company:
Dominant specialty-coffee brand in North America
Starbucks owned close to one-third of America’s coffee bars, more than its next five biggest competitors combined Serving 20 million unique customers in well over 5000 stores around the globe and was opening on average 3 stores a day Starbucks operated over 300 company owned international stores and about 900 licensed stores across globe Marketing consisted primarily of point-of-sale materials and local-store marketing(Most fast-food chains had marketing budgets in the 3%-6% range) 11 consecutive years of 5% or higher comparable store sales growth Excellent product(coffee), awesome service and lounging environments were the three components of branding strategy Starbucks controlled as much of the supply chain as possible Lowest employee turnover rate(70%) compared to industry average of 300% Partner satisfaction rate consistently hovered in the range of 80% to 90% range
Starbucks worked directly with coffee growers to purchase green coffee beans JV with Pepsi-Cola to distribute bottled Frappuccino beverages in North America and partnership with Dreyer’s Grand Ice Cream to develop and distribute a line of premium ice creams Competitors:
Regionally concentrated small-scale specialty coffee chains differentiated itself on the basis of store environment and freshest coffee Starbucks also competed against thousands of independent specialty coffee shops which also sold beer, wine and liquor. Some of them offered satellite televisions, internet connected computers. Donut and Bagel chains like Dunkin Donuts with 3700 stores also competed with Starbucks. It has started offering flavored coffee and non-coffee alternatives SWOT Analysis
Starbucks was operational in retail centers, office buildings and university campuses.
Starbucks took care of its employees through Health Insurance and Stock options.
Starbucks introduced at least one new hot beverage every holiday season
Starbucks sales were...
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