Starbucks Case Report

Starbucks’ Report

Since 1971, Starbucks has been committed to ethically sourcing and roasting the highest quality arabica coffee in the world. In 1982, Howard Schultz joined the Starbucks marketing team. In 1983, Howard traveled to Italy and became captivated with Italian coffee bars and the romance of the coffee experience. That’s when he discovered his long-term vision: They wanted to be America’s third place, because most of American had two places where to go: home and work. A place for conversation and sense of community. It’s not unusual to see people coming to Starbucks to chat, meet up or even work. At the beginning the average Starbucks’ client was a well- educated, white-collar patrons (skewed female) between the ages of 25 and 44. The value proposition its about “live coffee” mantra, keeping the national coffee culture alive. And that brand strategy has tree components:

1st: Coffee itself, Starbucks controlled as much of the supply chain as possible.

2nd: Service, costumer intimacy, their goal is to create an uplifting experience every time you walk through our door,

3rd: Atmosphere, the ambience is what makes them want to stay, that’s why they have confortable areas based on the human spirit and the need for people to come together.

About their distribution strategy is pretty straightforward they want to reach customers where they work, travel, shop, and dine. In order to do this, they sometimes have to establish relationships with third parties that share their values and commitment to quality, the non-company-operated retail channels, so- called “Specialty Operations”. That’s why  40% of their new coffeehouse customers have already tried the Starbucks brand before they walk through a Starbucks’ door.

The Starbucks employees are called “partners” and Schultz’s belief is that partner satisfaction leads to customer satisfaction. Starbucks had one of the lowest employee turnover rates in the industry , because manager stability is key, not only decreases partner turnover, but it also enables the store to do a much better job of recognizing regular customers and providing personalized service. Also, they encourage promotion from within its own ranks. About 70% of the company’s store managers were ex-baristas, and about 60% of its district managers were ex-store managers.