GURILEM Starbucks Final

8/13/2019 GURILEM Starbucks Final

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DELIVERING CUSTOMER SERVICE


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GURILEM

Rany Reza Deru Joddy


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VIDEO INTRO


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1971

Founded byBaldwin,Bowker, andSiegl

1982

HowardSchultz joinedthe marketingteam

1988

Owned bySchultz

1992

Went public

HISTORY


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VISION

To be the third place


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Product

Highest qualitycoffee from Asia,Central & SouthAmerica, Pacific

Merchandise

People

Service frompartners (barista)

Customerintimacy

Our goal is tocreate anupliftingexperience

Place

The atmosphere

The aroma

Interior, invitespeople to linger

Building a senseof community

Creating experience

BRAND STRATEGY


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PRODUCT


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77%

13%

6%4%

Coffee Beverages

Food Items

Whole Bean Coffees

Equipments &Accessories

SALES

(2002, North America)


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DISTRIBUTION CHANNEL

Office Retail Campus


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Small-scale SpecialtyCoffee Chains

Regional

Differentiation onstore environment

Independent SpecialtyCoffee Shops

Wide range of food

and beverages Satellite TV and

internetconnection

Donut & Bagel Chains

Different product

offerings Coffee as

complementaryproduct

COMPETITION


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PeopleRetail

ExpansionProduct

InnovationService

Innovation

KEY SUCCESS FACTORS


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Partners = barista

17-23 years old

Generous policy

Health insurance

Stock option

Lowest turnover rates(only 70%)

Knowledge sharing

All senior executives had totrain and succeed asbaristas

PEOPLE


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TRAINING

HardSkills

SoftSkills

Partner


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Partner satisfaction leads to customer satisfaction

The success of a new beveragedepended on partneracceptance

recognizingregular customers and providingpersonalizedservice

PARTNERS


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Become the most recognizedand respective brand in the

world

Ultimately have 15,000international stores

RETAIL EXPANSION GOALS


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The rising of coffeeconsumption in US

109 million people in USnow drank coffee everyday

The markets biggest growth

to drinkers of specialtycoffee

Coffee consumption tookplace outside of the home

Still 8 states in US without

specialty coffee shop The business was far from

reaching saturation levels inexisting market

OPTIMISTIC GROWTH PLANS


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38%

62%

Market share of Specialty

Coffee in US (2000)

Starbucks

Others42%

58%


Coffee in US (2002E)

Starbucks

Others

50%50%


Coffee in US (2005E)

Starbucks

Others


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Area demographic

Coffee consumption

level

Competition

intensity

Real-estate

availability

SELECTING RETAIL SITES


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*Tinkered

withproduct

formulation

Ran focusgroup

Conductedin store

experimentMarket test

NEW PRODUCT DEVELOPMENT PROCESS


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Ergonomic flow of operation

Handcrafting speed

Partner acceptance

NEW PRODUCT SUCCESS FACTORS


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SERVICE INNOVATION


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No unifiedmarketing

department

Shiftingbrand image

amongcustomers

Decliningcustomer

satisfaction

MAIN PROBLEMS


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PotentialNew

Entrants

Substitutes

BuyersBargainingPower

SuppliersBargainingPower

COMPETITION


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New Entrants

Low barriers toentry

Generic product

Costly in fastretail expansion

Different pricingstrategy

Substitutes

Varioussubstitutes ofcoffee (tea,beverages,

candies)

Low switchingcost

Lower priceoffered

Healthy issues of

coffee

Buyers

Low switchingcost

Many otherchoices for coffeeproducts

Price sensitivity

Searching fordifferentatmosphere

Suppliers

Many suppliersfor qualifiedcoffee

Low switchingcost

Volume-basedpurchasing(volume isimportant tosupplier)costrelative to totalpurchase

Marketdetermines thecommodity price

COMPETITION ANALYSIS

high high high


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The market is still far from saturation Starbucks is not a single-player

Drinking coffee becomes part of life-style

Opportunity for product differentiation

HIGH INDUSTRY ATTRACTIVENESS


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The combination of those competencies are

difficult to imitate by competitors

CORE COMPETENCIES

Product People Place THEBRAND


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No Chief of Marketing Officer

3 separate groups of marketing department

gather and analyze market data

develop new products and manage the menu andmargins

develop the quarterly promotional plans

Everyone has to get involved in a collaborative

marketing effort

LACK OF STRATEGIC MARKETING DEPARTMENT

no one was really looking at the big picture


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SHIFTING CUSTOMER PERCEPTION ON BRAND

Customer-Oriented

Everywhere

Good coffee onthe run

Place to meet

and move on Convenience

oriented

Accessible andconsistent

Capitalist

Starbucks

cares primarily

about money Starbucks

cares primarilyabout buildingmore stores


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Affluent

Well-educated

White-collar

24-44

Younger

Less well-educated

Lower income than

established customers

Visited the store less

frequently

THE CHANGING CUSTOMERS

establishednewer


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Baby Boomers(1946-1964)

Work-centric

Independent Goal-oriented

Competitive

Generation X(1965-1980)

Individualistic

Tech-adapt Flexible

Value work-lifebalance

Generation Y(1981-2000)

Tech-savvy

Family-centric Achievement-

oriented

Team-oriented

Attention-craving

legalcareers.about.com

CHARACTERS OF GENERATION


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How could Starbucks make you feel more like a valued customer? %

Improvements to Service 34

Friendlier, more attentive staff 19

Faster, more efficient service 10

Personal treatment 4

More knowledgeable staff 4

Better service 2

Offer better prices/incentive programs (total) 31

Free cup after X numbers of visits 19

Reduce prices 11

Offer promotions, specials 3

Other (total) 21

Better quality/variety of products 9

Improve atmosphere 8

Community outreach/charity 2

More stores/more convenient locations 2

Already satisfied/Dont know 28

FACTORS DRIVING VALUED CUSTOMER PERCEPTION


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THE IDEAL CUSTOMER

Generation X with this

demographic

College degree

SES AB

Regular/social coffee

drinker

Like to hang out after-

work

The reason Because the trend is

expanding to the

younger generation

more promising market


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Faster service Internet service

Provide atmosphere supporting both relaxing &workingenvironment

Better price Membership

Special offerings

Discounts

TumblerCredit card

Special holidays

HOW TO SATISFY THE IDEAL CUSTOMER


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Should Starbucks make the $40 millioninvestment?

Add moreemployees

Createinnovation incoffee making

process(coffee

machines)

Do storeImprovement

(interior &facilities)

Giveprivileges to

frequentbuyers

Maximize theuse of

databasesystem (sales& customer

profile)

THE QUESTION

Yes!


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Adapt localcharacteristic /taste (ex : Mexican foodsmenu on South USA states)

Periodic researchinconsumer behavior &preferences

Retain customers bycontinuous promotionprograms (ex : free x after ydrinks)

Create eventsto promoteand engage customers-partners relationship (ex :coffee tasting)

RECOMMENDATIONS


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Gen Y

College students

young office workers

Tech savvy

Linger for studying,

socializing, gathering

TODAY AT STARBUCKS


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In service marketing, its important to monitor

changesthat happen in consumer demographic &

behaviorto create dynamic, up-to-date strategy.

Therefore, company can give better service. Customer engagement is the foundation taking

place in every service encounter. Therefore, it is a

mustthat thefront-line people represent thevalue and knowledge of the company at the best

level.

LESSONS LEARNED


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VIDEO OUTRO


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GURILEM Starbucks Final

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