In 1992 about half of the companys sales came from

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Unformatted text preview: the Starbucks customers to view it as more corporate and caring about making money. The establishment of smaller coffee stores without lounging areas had also taken away the “atmosphere” component of the value proposition that the Starbucks of 1992 had built on. The Starbucks of 2002 was also more complex than the Starbucks of 1992. In 1992, about half of the company’s sales came from sales of whole‐bean coffees whereas in 2002 about 77% of the sales came from beverages. The company had added new products such as food items and new beverages in its menu and also sold equipment and accessories. The beverage menu expansion along with the drink customization led to partners spending more time than before to prepare a handcrafted customized beverage. In addition to that, the “product innovation” strategy through which the company introduced at least a new beverage every holiday season meant further menu expansion, additional training times for partners and possibly additional service times until a partner mastered the making of the new beverage. The drink combinations that could be prepared at a Starbucks in 2002 were many more than the ones that could be prepared at a Starbucks coffee store in 1992, making the whole process more complex and the delivery service slower. Another big difference between the Starbucks of 2002 and the Starbucks of 1992 was the demographic profile of the customer base. In 1992, the customer base of Starbucks consisted of affluent, mid to upper class professionals who went to Starbucks to enjoy their coffee and the culture of it. The retail expansion of Starbucks resulted in changing the norm from “customers going to the Starbucks” to “Starbucks going to the customers”. The customer base of Starbucks in 2002 was changing to a younger, less‐educated and with a lower income demographic profile. Finally, the Starbucks image to the public started changing. The image of 1992 consisted of a place which you can call “third place”, where you can get the best quality coffee and where you can relax. In 2002, the image had changed to...
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