Coffee and Starbucks

1. What factors accounted for Starbucks’ extraordinary success in the early 1990’s? What was so compelling about the Starbucks’ value proposition? What brand image did Starbucks develop during this period? Is the value proposition still valid in 2002? The extraordinary success Starbucks experienced during the early 1990s resulted from Howard Schultz’s passion and vision to create a coffee culture in the United States similar to the coffee culture he experienced while traveling to Italy. Schultz’s vision of the Starbucks brand evolved around providing a quality product while delivering exceptional customer service in an inviting atmosphere. Starbucks’ success can be attributable to the following factors: * Quality Coffee: Starbucks was able to provide the highest quality product by controlling as much of its supply and distribution channels as it could. The company enforced exacting coffee standards and worked directly with the various growers. This allowed them to purchase the green coffee beans and roast them based on the Starbucks’ specifications. * Customer Service: According to Jim Alling, Starbucks’ senior vice president of North America retail, Starbucks’ goal was to create an uplifting experience every time a customer walked through their door. To accomplish this the company encouraged its partners to develop customer intimacy which included making eye contact with the customer while smiling and engaging the customer in conversation, learning the customer’s name especially regular customers and adhering to the company’s “Just Say Yes” policy which required partners to go beyond company rules to satisfy customers. * Atmosphere: Starbucks created an atmosphere that changed the perception of a coffeehouse as a place to just buy coffee. Instead Starbucks strived to create a coffee culture in the US that became a part of everyday life. Starbuck created an ambience in each store that was inviting and encourage customers to linger and socialize.