Case Report 1: Starbucks Customer Service
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?
There were several factors that contributed to the extraordinary success of Starbucks in the early 1990’s. First, the long-term vision was to create a coffee chain that would become America’s “third place”. People needed a third place outside of home and work where they could sit, relax, and enjoy their time alone or with others. Second, as soon as Howard Schultz took over as the Starbucks Owner, he began opening several new stores in key locations throughout Chicago and the northwest. Soon after, Shultz decided to take the company public. Doing so boosted the company tremendously in the right direction by raising $25 million and allowing even more stores to be opened. Lastly, despite great success, Starbucks spent nothing on advertising freeing up even more money towards other company resources at the time. These factors were of key importance in boosting Starbucks success in the 1990’s. Most importantly, Starbucks had a compelling value proposition for the company that created and developed the brand image of Starbucks. It was best explained by its “live coffee” theme that expressed the importance of keeping the coffee culture alive and creating an attractive experience that people could inject into their busy everyday lives. The brand developed with three key components that have formed to become the image of Starbucks Coffee. First, was the coffee itself. Starbucks takes pride it serving the highest quality coffee in the world. Second, is the service that Starbucks offers or what they call “customer intimacy”. They strive to create a pleasurable experience every time a customer comes in. Lastly, is the atmosphere