Starbucks Case Study
Starbucks Case Questions 1. What factors accounted for the extraordinary success of Starbucks in the early 1990s? What was so compelling about the Starbucks value proposition? What brand image did Starbucks develop during this period?
In 1971 Gerald Baldwin, Gordon Bowker and Ziev Siegl opened a specialized arabica beans coffee shop in Seattle’s “Pike Place Market”. In 1982 Schulz joined the team and he went to Italy to understand more about coffee shops. Some years later Schulz bought the company from the other 3 members.
Starbuck’s major success was that the company went public in 1992 and raised $25 million. With that money they could afford to open more coffee shops around the country.
Moreover, Starbucks specialized in offering to the public a place where they could have a specialty coffee in a nice location where they could relax and enjoy the experience. In Italy Schulz noticed how people enjoy coffee everyday as a part of their life. He had the idea to offer a 3rd place (not at home, not at work) in a nice location where you could enjoy quality coffee in a comfortable environment.
The brand strategy during the 1990’s was to sell their coffee as a “life coffee”. To sell not only coffee, but the “everyday life experience” that drinking coffee promotes. Where are you? How does it taste? Are you going to talk to someone?
The 3 elements of branding strategy were: * High-quality coffee from Central and South America, Africa, and Asia-Pacific regions * Service: Recognizing loyal customers and knowing their drinks * Atmosphere: Comfortable place to stay for a while
Starbucks increased tremendously their brand image. They didn’t spend much time on advertising; however, their sales increased 40% a year since 1992. In 2002 Starbucks was the major specialty-coffee brand in North America.
2. Why has Starbuck’s customer satisfaction scores declined? Has the company’s service declined, or is simply measuring satisfaction
In 1971 Gerald Baldwin, Gordon Bowker and Ziev Siegl opened a specialized arabica beans coffee shop in Seattle’s “Pike Place Market”. In 1982 Schulz joined the team and he went to Italy to understand more about coffee shops. Some years later Schulz bought the company from the other 3 members.
Starbuck’s major success was that the company went public in 1992 and raised $25 million. With that money they could afford to open more coffee shops around the country.
Moreover, Starbucks specialized in offering to the public a place where they could have a specialty coffee in a nice location where they could relax and enjoy the experience. In Italy Schulz noticed how people enjoy coffee everyday as a part of their life. He had the idea to offer a 3rd place (not at home, not at work) in a nice location where you could enjoy quality coffee in a comfortable environment.
The brand strategy during the 1990’s was to sell their coffee as a “life coffee”. To sell not only coffee, but the “everyday life experience” that drinking coffee promotes. Where are you? How does it taste? Are you going to talk to someone?
The 3 elements of branding strategy were: * High-quality coffee from Central and South America, Africa, and Asia-Pacific regions * Service: Recognizing loyal customers and knowing their drinks * Atmosphere: Comfortable place to stay for a while
Starbucks increased tremendously their brand image. They didn’t spend much time on advertising; however, their sales increased 40% a year since 1992. In 2002 Starbucks was the major specialty-coffee brand in North America.
2. Why has Starbuck’s customer satisfaction scores declined? Has the company’s service declined, or is simply measuring satisfaction