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Case Study: Starbucks
Why have Starbuck's customer satisfaction scores declined? What impact is this having on their brand image?
Starbucks has seen an enormous growth since 1998 (see chart below), such expansive growth can cause quality control issues in the product and service areas. While it does not seem to have affected the product the customer satisfaction ratings have taken a hit. Starbucks growth has been in both company stores and licensed stores which account for almost one third of the total stores in FY 2002. Starbucks may be feeling a bit of the backlash of being too big, too corporate, driving the local coffee houses out of business.
Total Number of Starbucks Stores
? Starbucks has experienced over 300% increase in number of stores over a 5 year period.
? Licensed stores (kiosks in grocery stores, hotels, airports, etc.) has seen an 800% increase
Starbucks used 3 components in branding strategy to create a loyal customer base.
The coffee, controlling the supply chain as much as possible
The service, create an uplifting experience or customer intimacy
The atmosphere, seating areas to encourage lounging, in an upscale yet inviting setting
By growing the number of kiosks in such numbers, Starbucks has been able to offer customers easy access to Starbucks but most of the kiosk locations do not have the atmosphere that the Company-operated locations have such as seating areas to encourage lounging in an upscale yet inviting setting. This has compromised the 3rd component in Starbucks branding strategy and w ...