Starbucks Coffee Company

Company Profile

 1971: Starbucks started as coffee bean

retailer in Seattle
 Over 7,225 in 32 countries
 2002/2003: annual turnover of $1.1 billion
 Starbucks’s Success

 World-class Service Provider

 Consistency of Service and Product
 Starbucks Experience
 Starbucks Service Offer

 Starbucks Message: “…drinking a cup of

coffee is more than that, it is something that
offers hints of mystery and romance to elicit
an emotional response”
Key characteristics of services
 Intangibility
 Inseparability
 Variability
 Perishability
 Cannot be owned
 The Starbucks Core Service
 The Core Service: Consistency of Service
and Product
– Employee Training: Learning to be a Barista
– Ensuring Product Quality
– Service Standards
– Star Skills
 The Starbucks Secondary
Services
 The Secondary Services:
– People (Customer service oriented to deliver the best service;
world-class service provider)
– Process (Customers willing to enjoy Starbucks experience;
they have to take some actions such as going to the shop, queuing
to order and pay and then waiting to get their drink)
– Service Delivery (Consumers can have their drink in the
shop or take it away, mail order and delivery)
– Physical evidence (Staff uniform and behaviour,
magazines, brochures, website)
 The Starbucks Secondary
Services

– Branding (World-class Service, High Price for a Premium

Product/Experience, PR )
– Styling (Sophisticated atmosphere typical of the Italian Coffee
houses, music, interior design, artwork)
– Features (Outlets positioned in high street locations; stores also
located within other businesses)
– Quality (Service processes must transmit a consistent level of quality
to deliver a positive service to the customer)
 Consumer’s Evaluation of
Service Attributes
 Security (Did I feel secure?)
 Consistency (Is the service predictable?)
 Attitude (How did I feel?)
 Completeness (Was the service comprehensive?)
 Condition (Was the environment pleasent?)
 Availability (Did everything come at the right
time?)
 Timing (How long did it take?)
 Starbucks Service Encounter

 High-consumer contact in the service

 Critical incidents: Evaluation of the service
provider and of the service quality
 Blueprinting of Starbucks
Service
Stage in Obtain Take Make Deliver Pay for
production process seat order tea tea tea
Repeat if tea
Target time (minutes) 1 1 is 1
Critical time 5 5 unsatisfactory 3
3
8
Is incident critical? Y N N Y N

Participants Customer Customer Cook Customer Customer

Waiter Waiter Cashier

Visible evidence Furnishings Appearance Tea, crockery, Cash-collection

of staff manner of service Procedures
Delivery
‘Line of visibility’
Invisible processes Cleaning of Preparation of tea Accounting
tea room Ordering of supplies procedures
 Critical Incidents

 Critical incidents:
– Pre-purchase
– Post purchase (Ex. The Starbucks Coffee Terrorist)
 How is this going to affect the Service?
 Consumer Analysis

 Starbucks buyer-decision process:

– Need Recognition (Maslow’s esteem/social needs level)
– Information Search (Different information sources: Point of
Purchase, Personal Selling, Word-of-mouth, Personal experience,
Brochures, Catalogue and Website)
– Evaluation of Alternatives (High level of brand awareness:
Communications, PR, Different products, Introduction of WiFi
Technology, High Concentration in one location)
 Consumer Analysis

– Decision (Customers, Environment, Friends, Family, Promotion,

etc.)
– Post-Purchase Evaluation (Quality and satisfaction are
based on customer’s perception of the service; all parts of the service must
work efficiently)
 Consumer Segmentation
 Starbucks targets younger consumers (over
20s), educated, socially conscious
 Predisposed to pay a premium price for a
differentiated product (Upscale market)
 Willing to extend their knowledge of coffee
The Starbucks Marketing Mix:
4Ps
 Product: Concept of the “Starbucks
Experience”(The product is a combination of goods and service)
 Price: High Price (as a key differential and to present the product
as an affordable indulgence and a premium product)

 Promotion (PR, Sales Promotion not really relevant, Advertising,

Seasonal offers, Tasting of new flavours)

 Place: High Street Location and Website

 And the 3Ps

 People and Customer Service: Vital (Key factor in

the Starbucks Strategy from the outset)

 Physical Evidence: Consistent (Environment,

furniture, music, artworks: all these tangible aspects are consistent with the
Starbucks Concept of delivering a unique experience)

 Process (Responsible for the Customer’s Satisfaction)

 Conclusion

 Company ownes-service/franchising
 People and Customer Service
 Services are perfomances delivered by
HUMANS
 References
 Palmer A. (2001), Principles of Services Marketing, 3rd
ed., Maidenhead: McGraw-Hill
 Hill C.W.L. (2002), Starbucks Corporation in
International Business – Competing in the Global
Marketplace, 3rd ed., New York: McGraw-Hill
 www.starbucks.com
 “Customers from Hell: Nightmare or opportunity”, On
Achieving Excellence, December 1995
Thank you