Individual Report Atikah

INDIVIDUAL REPORT
ATIKAH 0161200028
STARBUCKS: Delivering Customer Service
Questions:
1. What are the three elements of Starbucks’ original value proposition so differentiated
compared to alternatives for coffee consumers at the time when Starbucks was
introduced.
Explain briefly (few sentences) why they are so compelling to coffee lovers.
The Starbucks value proposition mostly focus on three key points: the coffee
quality, service philosophy and store atmosphere designing.
Firstly, it’s about the quality of the coffee. Starbucks carefully selected their
coffee beans from the best sources of coffee all around the world. Naturally,
Starbucks sources arabica coffee from three key growing regions, Latin America,
Africa, and Asia-Pacific, and their signature coffee blends are mostly from the Asia-
Pacific region in Indonesia for example from “Takengon, Aceh” which made 100%
Arabica beans with high acidity and taste like chocolate. One of the unique things
about Starbucks coffee beans is that they change their "house blend" every month. So
that customers can taste various types of coffee flavors from various countries. Even
though now there are many other coffee shop brands that may have a better taste than
Starbucks, Starbucks always makes the latest innovations with its drinks. So that
customers can also have the experience of drinking coffee, which is usually bitter but
has the aroma of rasberry, blueberry, and so on.
Secondly, it’s the store atmosphere designing. All starbucks outlets that we
visit around the world have a very nice design. If we look at the interior design is also
similar to one another. Starbucks was very successfully to offer their customers a
“third place” outside their work place and their home, making a Starbucks’ store a
sanctuary place to escape from the real world. The interior design, the music, the
light, the layout was designed to invite customer to stay longer in the store and take
the real time with their real cup of coffee.
Thirdly, it’s the service philosophy. For Starbucks, great service quality means
“customer intimacy”: The friendly connection between the baristas and customers.
Personnel were trained to treat the customers in best possible way. Greeting
customers properly, remembering their name and engaging them in conversation are
some examples. This leads to customer satisfaction and customer loyalty. Besides that
sometimes we can also order menus that are not on the menu board. We can chat with
baristas like "what's the special coffee bean today?" Then the barista will direct you to
choose their best house blend of the day. We can also adjust our taste exactly in our
coffee so in the other words that coffee cups can meet customers expectation.
2. You have to describe the consumer behavior as a reflection of the so called
“lifestyle”.
The premium coffee “lifestyle” brand image that suitable for their target
customers. In their customer perception, Starbucks is a best-quality, classy &
European style, sophisticated, upscale coffee brand, and Starbucks’ store is a warmly,
sociable place to come, a sanctuary to escape from the real world. In my point of
view, when I saw the starbucks brand image, most loyal starbucks consumers are
hardworking, slight life enjoyers, and someone who is used to getting up in the
morning and going straight to work or who likes to stay up all night to finish
deadlines. When pictured will be, A male wears tight sweater or tight shirt to show he
works out, has a fancy watch, uses a debit card and never carries cash. and of course
has more than one apple product.
3. Review your answer on no. 2. and insights drawn from Exhibit 8
Exhibit 8 shows customer retention information. We can find from this data,
that established customers and new customers are quite different in respect of
education, income and attitudes toward Starbucks. According to the exhibit, customers
who first visited Starbucks five years ago have higher degree of education and higher
income level. Beside that, new Starbucks customers do not see it as a brand of high
value, while established customers believe Starbucks to be brand they trust (50%),
offering high quality product (51%). Next exhibit suggests, who customers visiting
Starbucks stores often, are more satisfied, than customers who buy coffee from the
company average four visits per month. However, the fact Starbucks is facing is that
the customer satisfaction scores have declined. The reason is the difference between
the old customers and new customers’ expectation in Starbucks service.
Starbucks has developed a new customer base that becomes the growth engine
for the company to expand quickly during 10 years. However, the new customer
segment is an obstacle for the company to maintain the company’s brand image and
service philosophy. The problem of two different target customers with opposite
expectations has made the service quality score decreased and challenged Starbucks
to offer the “best service” to the both kind of customer at the same time to satisfy this
segment of customer means dissatisfying the other. Finally in 2002 Starbucks has
developed a new customer base that becomes the growth engine for the company to
expand. However, this new customer base has made the service quality and brand
image so different from 1992. The expectation and brand perception of Starbucks of
new customers is different. In their perception, Starbucks is a brand of convenient,
reasonable-price, consistent and good coffee on-the-go. Starbucks’ store is a good
place to meet with friends and move on to the next places. New customers expect
their drinks to be made as quick as possible.

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INDIVIDUAL REPORT

STARBUCKS: Delivering Customer Service

3. Review your answer on no. 2. and insights drawn from Exhibit 8

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