TEAM - 01

Principles and Practice of Management.

Topic : The Starbucks Experience.

INTRODUCTION

Starbucks originally sold coffee beans and not drinks in a cup.

Slowly, the brand developed into what we know today as the
"Starbucks Experience."
Starbucks sells much more than coffee; it's the community feeling,
cosy interior design, satisfied employees, adequate coffee quality,
and great service associated with it.

In 1971, when the first Starbucks came into being, nobody expected
much from your typical American coffee store. The act of buying
coffee at the corner store was an uninspired ritual between an
unenthused customer and apathetic cashier. And thanks to this
monotonous transaction, nobody knew there was a way one could
actually enjoy a cup of Joe.

•Starbucks has over 30,000 cafes across the globe.

• Starbucks sales account for 57% of the total cafe market in the U.S.
• Starbucks has more than 14,000 locations in the U.S. alone.
•When it opened, Starbucks didn't sell coffee drinks, but only coffee
beans.
•Some even suggest that misspelt names on their cups are a part of their
marketing strategy.

ABOUT STARBUCKS

Starbucks not only changed the customer experience for coffee

drinkers around the world, but it created a whole new universe
around coffee and how the experience of drinking it is perceived.
With its humble beginnings in Seattle, Washington, in 1971, where
a trio of partners shared a passion for dark-roasted coffee beans,
Their initial focus was to bring high-quality and carefully sourced
coffee beans to customers used to drinking instant or canned
coffee. That changed with the addition of one man, Howard Schultz
- Starbucks marketing lead at the time.

After one trip to Italy, Howard realised it wasn't enough only to sell
coffee beans. Afterward, Starbucks concentrated on creating a new
experience for their customers for them to be able to relax and
enjoy their time away from work. Starbucks is more than just a
coffee chain; it's a paradise, a workspace, a meeting point, and a
community hub. It's where the rich aroma of roasted beans
beckons, and the crafted drinks bring a sense of comfort. It's a
place where people feel at home, whether they're sipping a latte,
indulging in a frappuccino, or grabbing a quick breakfast. Starbucks
isn't just selling coffee; it's selling the whole experience.

HOW STARBUCKS EXPERIENCE IS

DIFFERENT FROM OTHER COFFEE CHAINS.

The "Starbucks Experience" refers to the overall atmosphere and

customer service that the company aims to provide in its stores. It is
designed to create a welcoming and comfortable environment
where customers can enjoy their coffee and relax. Starbucks stores
are often designed to have a warm, inviting atmosphere with
comfortable seating, free Wi-Fi and ambient music.

Starbucks also differentiates itself from other coffee chains and

independent shops by offering a wide variety of food and drink
options, including seasonal and specialty drinks, as well as a range
of pastries, sandwiches and other food items. The company also
places a strong emphasis on using high-quality, ethically-sourced
ingredients and promoting sustainability.
Another way Starbucks differentiates itself is through its loyalty
program which rewards customers for their purchases and offers
personalised discounts and offers. Additionally, Starbucks has a
mobile app that allows customers to order and pay for their drinks
and food in advance, pick up their order in-store, and reload their
gift card or membership.

Overall, the "Starbucks Experience" is characterised by a

combination of comfortable atmosphere, high-quality food and drink
offerings, and a focus on customer service and convenience.

BOOK REFERENCE

In his book The Starbucks Experience, Joseph Michelli

combines insider stories, anecdotes, insights, and strategy to whip
up a heady brew of customer experience lessons that's both rich
and refreshing.

Michelli observes that the Starbucks Experience manifests in two

areas:
01.ln its leadership-driven corporate culture defined by
empowerment, entrepreneurship, service, and quality.
02.ln the aforementioned values getting passed down to the
Starbucks partners, which play an essential role in creating unique
and personalised experiences.

Starbucks, as correctly recognized, experiences brand love.

Consumers pay a premium price for coffee because of an insatiable
desirability, and this attraction is for the experience that Starbucks
creates for them - "it's the experience of going to Starbucks". Such
brand loyalty is nurtured through social interactions, shared values
and personalization, which is evident in their mission statement: "To
inspire and nurture the human s p irit-one person, one cup, and one
neighbourhood at a time".

The Starbucks Experience entails of four quintessential pillars:

1) Customer Service : Starbucks ensures a warm and seamless

consumer interaction where there is a sense of belonging and
exclusivity. The employees aka Baristas are not just there to take
orders, but are welcoming and knowledgeable about coffee. Today's
consumers are increasingly well informed; hence, the baristas are
educated on a variety of coffees and processes to prepare them for
any questions from customers. A cordial interaction is key - making
a drink for Tim is far more personable than making it for just any
customer. Baristas go through rigorous training to be hospitable and
prepare themselves for unpleasant situations where they use
"Latte" method to resolve disputes i.e. Listen, Acknowledge, Take
action, Thank, Explain.

2) Product Continuity : A coffee house experience would be

incomplete without a good cup of coffee. Starbucks ensures rich
taste not just through the coffee beans but also its signature
Roasting & Blending technique, which is a technological art and
unique to Starbucks. The uniformity in coffee, be it purchased in
New York or in Toronto, adds to a seamless experience.
3)Atmospherics Matter : Clues play a crucial role in enhancing
experience, be it a pleasant smile to welcome or the smell of freshly
brewed coffee. In order to manage a total customer experience,
companies need to recognize the right clues to send to
customers. From ambient lighting to cozy furniture to sights of warm
color, Starbucks has proven to be characterized as a third place, "a
home away from home". It is a community meeting spot, where
there are open conversations, comfortable seating and a warm
setting. These emotional clues makes the customer feel at home,
which further enhances brand love.

4)Catering to Evolving Customer Needs : As Covid disrupted

the "third place" environment, Starbucks shifted gears and focussed
on Pickup, Drive-Thru, and order through Starbucks App, to maintain
a safe while convenient experience for the customers. They continue
to maintain connection with their consumers through emotional
design. It's how Starbucks provides a human touch by bringing
happiness into their life through unexpected rewards on their App.

5)Starbucks offered takeout cups : By the time the coffee

industry got a bit more developed, most of the cafes only offered to
enjoy their drinks in the coffee shop. As the business world's pace
picked up, customers wanted to take their drinks and enjoy them
elsewhere.Starbucks took time and researched what its loyal
customers want. The research team talked with more than 200
people to find out what could be improved. One thing that fits in
perfectly in the lifestyles of Starbucks' customers is takeout cups.
They still wanted a premium, quality product, but with the flexibility
of having it on the go. Take out cups brought a whole new
experience for people who are in a hurry and want their morning
coffee done quickly.

6)Quality Consistency : Starbucks aimed to create high levels

of quality consistency, making it easy to know what to expect.
Starbucks makes their stores customer-friendly for newbies to
coffee drinks. Explanations are everywhere for what they sell. That
makes the experience less intimidating for new or experienced
customers in trying a new product. Starbucks tests around 1000
coffee cups throughout its stores daily to verify the superior taste
that everybody expects. When a customer walks into Starbucks, he
has a clear idea of how a coffee should taste, how long it takes to
get it, how much it costs.

7)Customer atmosphere of community: Starbucks has

succeeded in creating a feeling of belonging when you walk into
their shop. Walking into Starbucks, no matter in which city, makes a
similar feel. The familiarity of drinks, people talking or working on
their computer, it all sums up. The social aspects of coffee shops
are the part that makes them appealing, for connections that
resonate across all demographics.
Starbucks has made it a mission to create a positive experience for
their customers. Starbucks employees learn how to recognize and
respond to customer's needs and wants. They use the "latte
method" in unpleasant situations.

8)Focus on innov ative digital solutions : Starbucks

continuously developed new digital solutions and made an effort to
communicate with the customer.
One example is the Starbucks app, where customers can earn
Stars toward free items, order drinks, pay, and more. It was a great
solution during the lockdown when the company welcomed
customers back to stores with modified store operations and
pausing on seating in cafes to help create social distance. With the
app, you can order ahead, pay, and even collect stars to earn free
items.
Having a digital touchpoint with their customers enables Starbucks
to lead a digital two-way communication. They can analyse the data
about their customers, give them personalised offers, and ask for
feedback. Customers today expect personalised experiences,
tailored offers, and fun interactions.

STARBUCKS EXPERIENCE

Starbucks' 5 core principles for to improve the experience of

customer:

1.Make it your own : Starbucks "partners" (employees) think

about customer service in a way that allows each of them to
connect with their customers on a very personal level. According to
Starbucks chairman, Howard Schultz, "We are not in the coffee
business serving people; we are in the people business serving
coffee."

2.Everything matters: Paying attention to absolutely every detail

gives Starbucks a competitive advantage because it builds loyalty
among patrons. "Managers have to constantly put themselves in the
shoes of their customers, seeing everything from the other side of
the counter,"

3.Surprise and delight : Starbucks insists that it is critical to

deliver consistent product andservice to delight customers. But on
top of consistent quality, Starbucks' partners look for ways to
surprise and engage consumers in a process of discovery. In an
example of the importance of surprise, Starbucks gave out free
cups of Calm tea April 15 in anticipation that their customers would
be frazzled by their federal income tax deadline.

4.Embrace resistance : Starbucks encounters many forms of

resistance from communities, international organisations, and at
times, customers. Both at the leadership and front-line levels,
Starbucks has benefited from criticism and used it to become
stronger and better able to meet the needs of those who share their
input.

5. Leave your mark : People want to do business with and work

for companies that are socially conscientious. In addition to its
corporate philanthropy and grant-giving program, Starbucks
encourages employees to be more involved in their community by
matching cash contributions in support of their local efforts.
Furthermore, Starbucks leadership makes business decisions in
accord with their own social values.

The new Starbucks experience included:

•Espresso made by baristas in front of your.
•The specially arranged interior where the customer flow through the
store is controlled and quick.
• Interior designed for US customers taste.
• Specially arranged furniture to foster a feeling of community.
• Take out cups offer.
•Experimentation with various coffee flavors like hot chocolate, Caffe
Latte, Caffe Americano, Macchiato, etc.
• Quick service.
• Names handwritten on the cup.
• Instore Wi-fi.
• Good quality coffee.
• Consistent quality.

INITIATIVE TAKEN TO IMPROVE THE

EXPERIENCE

01. Bridging the online and offline customer experience:

The company's unique Starbucks experience is rooted in
connecting with customers. Describing the company's in-store
experience, the company's mission statement says, "When our
customers feel a sense of belonging, our stores become a haven, a
break from the worries outside."13 Now, Starbucks is extending that
customer experience into the digital world by bridging its local, in
store experience with new online channels.

02. Engaging customers through social media:

As one of the world's most recognized brands, Starbucks is also
building a leading presence in social media. The company's 54
million Facebook fans, 3.4 million Twitter followers and 900
thousand followers on lnstagram have earned Starbucks a #1
ranking among socially engaged companies.10 But, Starbucks'
social media presence has earned it more than just fans - the
company also uses social media to fuel customer driven innovation.
Through its My Starbucks Idea site, Starbucks has collected over
50 thousand customer-submitted ideas to improve its products,
customer experience and corporate initiatives.

OJ.Leading the way in mobile payments:

Starbucks has leveraged mobile channels in a number of ways
to enhance the Starbucks experience.Today, the company boasts
over 7 million mobile apps users and expects to collect 10°/o of in
store payments via mobile by the end of 2013.
Mobile payments at Starbucks have been a success for customer
convenience, but they are proving to have financial benefits as
well.The company has been able to reduce the processing fees for
transactions through its mobile app and Square. At 3 million mobile
payment transactions per week, this has made a significant impact
in reducing transaction fees.

Importance of the Customer Journey from

Starbucks

Understanding the customer journey is pivotal in deciphering

Starbucks' incredible success. Starbucks recognizes that the
 customer journey is not just about purchasing coffee; it's a holistic
experience from the moment a customer becomes aware of
Starbucks through the various stages of their journey.

ndustry: Fast Foo d

R e ve n u e: US$9 .16 8 b i l lio n (2023)
Starbucks Starbucks, t h e glo b al y recogn ized co f fee h ouse giant , isbe loved for it sd iverse
rne ri1J of e xp ertly craf te d co ffee arid t e a b e ve rages. Whe th er yo u're in t h e m o od

Customer Journey Map fo r a c lassic esp resso or a t r en d y conc o ct ion , Starbuc ks lias become t h e
u l ima t e d est i nat i o n fo r co f f ee a fic ion ado s, o f fe ring a wa rm and invit ing se t t ing
t n r fa vo ri te brew.
t o joy you
e

A w arenes s Cons id e r a t i on D ec is i on Servic e Loy a lty

1

TOUCHPOINT Social Media Website Mobi le App ln-Ston;ib:p e rieo ce Lo y alty Program

R,edee min g re wa rds

Cust o m er Se eing St ar bucks Browsi ng menu and Custo mizing o rders Or d er ing. wa it ing.. a n d
and ge t t ing
Act ions po st s a nd p ro mot io ns stor e loca t ions a nd check in g rewa rds enjoy ing t h e d rink p er sona lized off ers

.
-
i:J< p cmenco
·
..
.
.}
:r
"

DiffictJlty in finding Te c h nic alissues and Long q1.1eL1es and Limit e d r edemptio n
Pa in Points Infor mation o verload
infor mation o rd er e rrors crowde d st o r es o p t io ns a nd rewa rds

lmp ro11ed searcli Regular ap p up dates Mob ile ordering and Expan de d r e de mp tion
P o tenti al T a rge ted content and m o re e fficient in- sto re
Solution func tio n ality and d ea r and im p roved order clio ices and more
p1uson alized offors p roc e sse s
menu a c c ura cy v aluable pe rks

Starbucks has set a benchmark for creating an exceptional

customer experience. From the moment customers become aware
of the brand to their journey towards loyalty and advocacy,
Starbucks ensures they have a memorable experience. Businesses
 looking to emulate Starbucks' success can draw valuable lessons
from its customer-centric initiatives and well-structured customer
journey map.

ANALYSIS
1.How has Starbucks managed to create a unique and
consistent customer experience across its global locations?

2..What role does Starbucks brand image play in shaping the

overall customer experience?

3.How does Starbucks use technology to enhance the

customer experience, both in-store and through its mobile
app?

REFERENCE LINKS:
01. https://www.freshworks.com/the-brew-that-makes-
the-starbucks-experience-blog/
02. https://www.linkedin.com/pulse/what-does-
starbucks-experience-entail-ameek-gill
03. https://www.supersuperagency.com/blog/starbucks
-customer-experience-ex-innovations
04. https://capgemini.com/consulting/wp -
contenUuploads/sites/30/2017 /08/starbucks.pdf
5. https://www.linkedin.com/pulse/starbucks -
experience-nimesh-shah
6. https://www.questionpro.com/blog/starbucks -
customer
experience/#:-:text=lt's 0/o20where 0/o20the 0/o20rich 0/o20ar
oma,it's 0/o20selling 0/o20the 0/o20whole 0/o20experience