1.

Which features of the Starbuck’s app are most important to consumers and which ones are
most valuable to Starbucks? Why?

The features most important to consumers are:

• Mobile Order and Pay: This is important because it brings a great deal of convenience to the
customer buying process. Customers being able to order, pay and tip ahead of time saves
customers a great deal of time that would have otherwise been spent waiting in line and
paying in-store.
• Rewards: – The obvious benefit is the perks that customers get. Being a part of the rewards
program through the app also gives Starbucks data that provides deeper insights into the
customers buying behaviors. This helps Starbucks make more personalized
recommendations of products and rewards to each customer.

I want to add that while these are what I call most important for the customer they are also
critically important for Starbucks. This is because any features of that app that make customers
happy and lead to more engagement and more use of the app will ultimately be beneficial to
Starbucks. There also more practical benefits to Starbucks beyond customer satisfaction and
happiness. For example, the Mobile Order and Pay feature helps Starbucks with its overhead costs.
It will not need to have as big stores to accommodate large lines and queues of customers waiting
to make orders.

The features most important to Starbucks are:

• Mobile Payments: This is important to Starbucks because it helps with their goal of cost
reduction. It is mentioned in the case that processing payment through the mobile app cost
less than through traditional credit cards.
• Loading Funds: This is not mentioned explicitly in the case study but from my research it
does provide Starbucks with some key benefits. The loaded balance on the cards is almost
an interest free loan to Starbucks from its customers. Considering that customer don’t ever
use their complete balance as soon as it is loaded. With proper planning, Starbucks that use
these funds for several purposes. It can reinvest it back into its business for short term
activities. It can also even place it in short term money market interest
• Data Collection: This is also not directly mentioned in the case, but it is hinted at several
times. The mobile app provides Starbuck with a wealth of information on its customers.
Analytics can be carried out using this data to help Starbucks gain invaluable insights into its
customers. It can then use these insights to further improve its products and services.
 2. What is the difference between a reward and a discount? How does this affect the Starbucks
brand?

A reward is an incentive (digital or physical) that encourages customers to make more purchases.
A discount is a reduction in price. Discount programs provide the customer with a deal intended
to entice the customer to make a purchase from Starbucks or any other business using them. For
certain customers, discounts are very motivating, and could lead to customers making more
purchases. However, these customers will be more interested in the discount and saving as
opposed to building a relationship with the Starbucks brand.

However, reward programs incentivize customers to build loyalty to the Starbucks brand rather
than the idea of saving money. If customers want to really benefit and take full advantage of the
Starbucks rewards program, they will need to be frequent customers and build that relationship.

I believe that the biggest impact of the rewards program for Starbucks is that leads to higher
customer retention and engagement. Customers who frequently use discounts are typically moving
around looking for the best deal as opposed to building a relationship with a brand; I understand
this very well as an avid user of discounts. On the other hand, customers who use rewards programs
will be more attached to the brand and will also be more likely to stay loyal to the brand when faced
with a discount from a competing brand.
 3. What other marketing tactics noted in the case were significant to encourage broader brand
awareness, engagement, acquisition, retention, advocacy, etc.?

Free Store Wi-Fi: This helped drive more foot traffic to their stores. More foot traffic in stores means
more purchased. This also made Starbucks coffee shops a place people can go hang out and do some
work.

Product Standardization: The fact that a cup of Starbucks on a university campus in Toronto tastes
and smells like the same cup of from a store in an Airport in London gives Starbucks a reputation of
reliability among its customers. This helps to bolster the attachment that customers have with the
Starbucks brand. I have several experiences of having a cup of Starbucks on different continents and
having the same feeling each time; it a feeling of familiarity and trust that I know some things will
stay the same (in a good way) no matter where I am.

Exclusive App Content: This helped drive more traffic to the app and the rewards program. This in
turn leads to a better relationship with Starbucks and its customers.