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Service Operations - Starbucks Case

Starbucks' value proposition focuses on offering high quality coffee, an uplifting customer experience, and an inviting atmosphere. Starbucks works directly with growers to ensure consistent quality worldwide and understands customer preferences to provide good service. Stores are located strategically in high traffic areas so customers can enjoy premium coffee anywhere. Starbucks aims to "sell" a premium lifestyle where customers feel psychological satisfaction from the warm greeting and relaxed environment, in addition to the coffee. However, as Starbucks' target market migrated to younger, lower income customers with different expectations, a gap emerged between what customers wanted and what Starbucks delivered, affecting customer satisfaction. To address this, Starbucks must understand changing customer needs and identify gaps using tools like QFD and Kano analysis.

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204 views2 pages

Service Operations - Starbucks Case

Starbucks' value proposition focuses on offering high quality coffee, an uplifting customer experience, and an inviting atmosphere. Starbucks works directly with growers to ensure consistent quality worldwide and understands customer preferences to provide good service. Stores are located strategically in high traffic areas so customers can enjoy premium coffee anywhere. Starbucks aims to "sell" a premium lifestyle where customers feel psychological satisfaction from the warm greeting and relaxed environment, in addition to the coffee. However, as Starbucks' target market migrated to younger, lower income customers with different expectations, a gap emerged between what customers wanted and what Starbucks delivered, affecting customer satisfaction. To address this, Starbucks must understand changing customer needs and identify gaps using tools like QFD and Kano analysis.

Uploaded by

martinus linggo
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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INDIVIDUAL REPORT

STARBUCKS: Delivering Customer Service

1. Three elements of Starbucks’ value proposition are:


1) Product: offer the highest-quality coffee in the world
2) Service: create an uplifting experience every time the customers walk to their
shop
3) Atmosphere: provide an upscale yet inviting environment atmosphere
Starbucks is very attractive to coffee lovers because the quality of the coffee is not in
doubt. Starbucks works directly with the growers and has an excellent control system so
that coffee from various regions have the same quality. Starbuck also provides good
service by understanding what customers like. Other than that, every Starbucks stores are
provide a comfortable, attractive and suitable atmosphere for hang out with friends or
relatives.

2. Starbucks seeks to promote a new lifestyle where consumers indulge themselves by


paying a premium price for a premium coffee drinking experience. Starbucks stores are
located in a strategic place with high-traffic and high-visibility settings so that customers
can still enjoy a cup of premium coffee even though they are in offices, universities or
retail centers. In addition to the quality of its coffee, Starbucks wants to "sell" another
value so that when customers pay a premium price, they not only get the premium coffee
but also gets psychological satisfaction. Every time they come to the Starbucks stores, the
customers can feel a pleasant atmosphere by being greeted warmly by employees, having
eye contact, smiles, little conversations, and the employees will try to remember their
names and orders if they come regularly. Customers not only come to enjoy the coffee, but
also to enjoy the comfortable and relaxed ambience at the Starbucks store with their
relatives.

3. Why are Starbucks not always meeting their customers’ expectations in the area of
customer satisfaction?
Based on analysis of answer on number 2 and insights from Exhibit 8, Starbucks has a
migration of the target market. The average age of the established customers were 40 years
old, while the new customers are tended to be younger with lower levels of education,
lower income and less coffee consumption. Starbucks value proposition as mentioned in
answers number 1 and 2 might compatible for its original target customer. But as the
business grew, there is an expansion of its customer base which causes migration of the
target market. As the target market changes, the expectations of customers will also
change. Due to their characteristics, new consumers may prefer affordable coffee
regardless of brand, expertise, or quality.
The mismatch between what customers expected and what was delivered by Starbucks
creates a "gap" which was the source of their problem. As the target markets change,

1
Starbucks also have to make adjustments, such as by changing their value proposition that
matches to the new customers’ expectation or changing the target market back to the
original target market. But this is not easy, Starbucks must first define the customer needs
or expectations and then identify the "gap" that occurs. In this context the use of Quality
Function Deployment (QFD) and Kano Model tools will be very helpful.

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