Starbucks' extraordinary success and brand positioning in the early 1990s

Starbucks Case Analysis

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?

Many factors accounted for the extra-ordinary success of the Starbucks in the early 1990's. The Starbucks nearly wanted to be the leading branding company for the coffee all through the world. For sure they nearly owned one-third of the America's coffee bars given that they had the highest quality product that was widely recognized. The Starbucks Company never spent its money in advertisements however the product was recognized through the word of mouth. The other factor that made the company to be more successful is the way they were selling their coffee to many people as well as, making the company to be public. There are many factors that also contributed to the success of the Starbucks; these factors includes the variety of the products which was sold, the customer service, the reach, the experiential branding strategy and the Starbucks transformation behavior.

The Starbucks had three value propositions which on the other hand, acted as the factors for success of Starbucks in 1990's. The value proposition of Starbucks focused on the brand strategy. The first value proposition was the special offering and coffee that was given to the customers. The coffee was majorly sourced from Central America, Africa and Asian-Pacific regions, this showed that, the product that the company offered to their customers was most superior compared to its competitors. The second value proposition was the service. The information given showed that at least an average customer spent 18 days per month at Starbucks "Our most loyal customers visit us as often as 18 times a month, so it could be something as simple as recognizing you and knowing your drink or customizing your drink just the way you like it." This made the company to really know what to expect and could continue drinking coffee as much as they would wish to. The third and last value proposition is the atmosphere. The company wanted to create a good atmosphere for their customers, a place where customers would relax and come together.

During this period, the Starbucks also managed to brand their image; however, the developed brand image was not the best given that the company was known for being widely available and trendy. When the market research team discovered that the company brand image was declining, the team solved the problem by creating a good atmosphere where different people could meet while taking hot coffee. The Starbucks brand image was also the different places that brought people together while taking a wonderful coffee experience and the good coffee on the run which seemingly captured the Starbucks image completely. Different coffee brands across the country also enabled different people to come together. The Starbucks Company also managed to build a work environment for their customers enabling them to work from anywhere they wished to (Herlpern, 2004).

Why has Starbucks customer satisfaction scores declined? Has the company's service declined, or is it simply measuring satisfaction the wrong way?

The Starbucks customer satisfaction scores declined because of lost site of the initial vision making the company to lack attention to some petty problems within the company. The Company hurried in expanding their business unfortunately it failed since there was less customer satisfaction. The Company also declined because they paid their attention to the marketing research team who gave false information, the results being negative from what the customers wanted. Customers are the key success of many businesses. The customer satisfaction is measured through the service and product quality. The Starbuck Company failed to satisfy their customers due to lack in speed of service and the means of how quickly the customer were receiving their coffee; for that reason the company's service also determines the customer's satisfaction side.

The Company's service did not necessarily decline, however they were simply measuring customers satisfaction in the wrong way. What mostly pleases the customers are the quality of the product and the atmosphere. The wait time steadily increased in the Starbuck Company and this brought a big problem. Some customers went to the company since they were much experienced and many people would get their coffee as well as waiting at the door. The issue of time is very significant to customers' satisfaction and actually this is the point where satisfaction started to decline. The customers' satisfaction also varies with different types of customers. The Starbucks Company is only busy measuring on the way people view their company as they try to expand the company, rather than knowing how the customers view the product they sell. It is true that the customers got satisfied with the type of the coffee the Company was selling even though the service declined (Grigoroudis & Siskos, 2010).

How does the Starbucks of 2002 differ from the Starbucks of 1992?

The Starbucks of 2002 differ from the Starbucks of 1992 in that; the Starbucks of 1992 was in the beginning stages of their company establishment. In 1992, the company was able to have at least 140 stores as well as, competing with other coffee companies. The only customer the company was able to attract was the individuals who always were on the go making the business at that time to boom and grow at a high speed. In 1992, many people were using coffee rather than personalizing their orders making it easier for the company to understand the personal level of the customer. Generally the business was huge even though the businessmen tried to talk about it. The Starbucks of 2002 was a bit different given that it became public to people for many years. There were around 20 million diverse customers who were being served at this period with about 5,000 stores. The major prominent difference between the Starbucks of 1992 and the Starbucks of 2002 is the customer satisfaction. The Starbucks of 2002 is different from the Starbucks of 1992 because the company has grown so much and so quickly that the company has lost sight of the customer.

Describe the ideal Starbucks customer from a profitability standpoint. What would it take to ensure that this customer is highly satisfied?

The ideal Starbucks customer from a profitability standpoint is any person who does business and he/she makes sure that they are on the go. Their ideal customers are somehow diverse since they are allowed to enjoy the atmosphere provided by the company as well as, provided with the internet to enable them to do their business work. In case of new customers, they choose someone who is well rounded, and educated. The company also offered a faster service in order to make sure that their customers are fully satisfied. These things can build a better relationship with the customer (Herlpern, 2004).