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Service Starbuck's Style - Case Study Example

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The paper "Service Starbuck's Style" describes that the main reason which Starbucks must concentrate upon raising the service level and not particularly on providing less expensive beverages is that Starbucks is still working upon its original model, which is to provide a superior experience to customers…
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Service Starbuck's Style

Miss Day has identified from the research which the company has done that customers are waiting too long to get their coffee. She proposes to ``invest additional $40 million annually in the company's 4,500 stores, which would allow each store to add the equivalent of 20 hours of labor a week.``
Customers who were surveyed noted that the length of time they had to wait was too long, and the research also found that the typical customer base was also changing. The team also learned that, although the company's most frequent customers averaged 18visits a month, the typical customer visited just five times a month (see Figure A below).
This is a key element of marketing that the customer base is changing. The most frequent customers are less affluent and spend less money per visit. Therefore, to accommodate this change, Starbucks needs to do two things: provide faster service and increase the visits from the new customer base.
According to the graph above, the new base comprises 80% of the traffic but visits fewer than eight times per month. Since this base is less affluent, they contribute only 40% of the total transactions for revenue. However, the waiting time for service may be contributing greatly to the fewer visits, since the less affluent base is likely to have less leisure time. As long as Starbucks continues to provide high-quality beverages and a welcoming atmosphere, their affluent customer base will continue to visit up to 18 times per month, and their contribution of 60% of the revenue in stores will continue. It is the new customer base that has to become more pleased with the service, and increasing the throughput will likely increase this base also as word gets around that waiting time is short. Lessening the waiting time for service will make the entire customer base happier, so will not cause any harm to the 60% transactions. ... Read More
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