The company has been globally accepted and has a high visibility of their brand. (Source from website http://instruction.bus.wisc.edu/obdemo/may%20not%20need_2/starbucks.htm)
Starbucks has been renowned for its customer service. A "service" is any act of performance that one party can offer to another, that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product. ( Kotler, 2000) By creating a unique atmosphere, Starbucks has differentiated themselves from their competitors and catered to their customer's preferences.
A company's offering to the market place will include some kind of service. It may be a major or minor part of the product. It may be purely tangible goods that require no service, a mix of goods and services in varying proportions, or just pure service. Services can be equipment based or people based. Some services require the client's presence while some do not. Services may be a personal need or a business need. It could be for profit or non-profit and be private or public depending on ownership. ( Kotler, 2000)
Intangibility- Services cannot be seen, tasted, felt, heard or smelled. This makes evaluating service quality very difficult. Service quality is therefore ascertained by the potential consumers by perusal of other evidences like place, people, equipment communication etc. as indicators of quality.
Inseparability- Services are produced and consumed at the same time and cannot be separated from their providers. There is no stocking or distribution. The provider and client must interact for the service to occur and therefore both parties become part of the service provided. Both of them influence the outcome of the service.
Variability - As the consumer and producer are both part of the service, the quality of services depends largely on who, when, where and how they are provided. Therefore, service providers become the representative of the organization as a whole and service quality depends on the quality of the service providers themselves.
Perishability- Services must be consumed as they are provided and cannot be stored for future use. Therefore, a missed opportunity will create a loss of service that needed to be rendered. The demand and supply needs to be carefully monitored and services offered as needed during the time period.
Non-Transferability- Services cannot be owned by the user. An excellent service has good retentivity though and acts as an incentive to the customer to opt for the same service again.
Starbucks has survived and grown in the new economy because of its innovative capability to adapt to a dynamically changing environment. Their customer-focused strategy has allowed them to garner sales selling the humble coffee at a premium value due to the perception of value inculcated in the customer.
Quality of Service
Providing the level of service to desired expectations is of prime importance. Quality management is a way of doing business that allows an organization to design products and services that meet or exceed customer needs and build operational processes that achieve high levels of performance and quality. A good service company understands the psychology of the consumer, adds in a qualitative