The Starbucks case is about the times when Starbucks did well and when it went poorly. It begins when Howard Schultz buys the company and put his plan in action. Schultz had a vision to make a chain of coffee shops and that would become the Americans “third place”. This “third place” would be a place where you could go and small talk with people and enjoy a cup of coffee, or perhaps be by yourself and drink your coffee. It was supposed to be a place between home and work.
Schultz idea proved to be a good one and he could proceed to open up several coffeehouses across America. This would later be seen as a mistake. As Starbucks grew in recognition, Schultz expanded the business fast. The people at Starbucks had an ideal to follow; customer satisfaction. As the business grew, people would lose faith in Starbucks nice atmosphere and only see the company as a money making machine. Why was that? The ideal they followed was for the customer to be satisfied, to be met by a nice clerk and get the coffee fast.
What the higher ups in the company first thought was that if they increased the hours of labor a week it would bring more time to small talk with customers and give them their coffee even faster. But they soon realized that the problem was in the marketing department. Starbucks had three sections that concerned marketing; the market research group, the category group and the marketing group. Starbucks lacked a strategic group that focused on the big picture. They also needed a chief marketing officer that could make decisions.
The Term Paper on Starbucks New Tap App Marketing Plan Phase I, II, & III
September 11, 2013 Starbucks New Tap App Marketing Plan Phase I, II, & III The new Starbucks Tap App will revolutionize the coffeehouse industry. This App will be the first to take the industry by storm, and effortlessly provide a quicker service in an industry driven according to time. The ability to save the consumer the needed time to prepare and get to work or the next meeting is ...
This meant that the entire decision making process had to be done by all of Starbucks senior executives. All the data that was collected was for nothing if no one looked at it and saw what was wrong. However, now they knew what the problem was. At first Starbucks primary customers were people with education, mostly women between ages 24 and 44. They were still there but the new customers were less educated and had lower income bracket. These were the persons that only saw Starbucks as a money making machine.
So now Day, Starbucks senior vice president of administration proposed that an investment of 40 million dollars per year to add additional 20 hours of labor a week. It met a lot of resistance in the company but Day said to look at it as a customer-oriented investment rather than seeing labor as an expense. This meant that Starbucks, a company with the policy to have as high customer satisfaction as possible rather than as much profit as possible were neglecting the customer. They were still using their original idea but now on the wrong customers.
