STARBUCKS

Starbucks



Question 1 

 The prime concern lies that Starbucks have been so myopic about their own customer service that their own reports reveal that their customer service is in line while there is a huge gap observed with respect to the market research. Market research reveals that Starbucks has failed to meet the customer expectation which is a major cause for their decline. For this, Starbucks need to devise its plan and it must target major areas of improvement to revitalize its sales to normal.

Yet, it cannot be said that the customer satisfaction has decline because the company's service has failed to be the same. Although, there are significant evidences that Starbucks customers are not as satisfied as they used to be, but it doesn't directly point outs at the company's service. It might as well mean that the expectations of the customers have been raised due to competition or marketing or any other external forces.  In order to make a fair assessment of the situation, there are several other elements that come into play (Starbucks: Delivering Customer Service, a.1). The company has extended its product line and included too many items that are not at all related to the core product. This might have resulted in a shift of focus on the core product i.e. coffee. Starbucks has always been known for its experience and ambience that they used to offer in addition to quality product. Its loyal customer base is distorted since they are no more able to find the experience that they used to. The core reason behind this is their shift to non-coffee products. The store is jumbled with a range of food items that do not contribute to the values of traditional Starbucks. It was also observed that the smell of the food interfered with the coffee smell and was not in synchronization with the core elements of the Starbucks Brand. This is a threatening situation for the business since customers are unable to find the coffee genre for which the brand is all about. The association of Starbucks with that of coffee is becoming weak. Also, the costs of opening new stores, such as distribution costs and commercial rents would weigh on profit margins. It results in cannibalizing of sales at existing locations. Previous failed expansion initiatives showed that the Starbucks brand can become overheated outside the coffee world. Competition such as McDonalds is not missing the opportunity to penetrate in the market since coffee lovers are again in the mode of exploration.

Question 2

Customer-based brand Equity Model has following main elements (Keller, 2001, 15-19);

Salience

Salience refers to the essence and quality of an item that stands it out from that of the rivals. With respect to Starbucks, it case reveals that Starbucks has been losing its brand identity mainly because of their shift to non-coffee items. Starbucks loyal customer base is being hurt since they are unable to find the experience they used to.

Performance

Brand performance has a direct relationship with that of the products ...