These competitors were more likely to offer the

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Unformatted text preview: that was true, then it is possible that customers could see an inconsistent level of service in stores that did not have the right personnel. At the same time, competition from small, specialty stores increased. As the Starbucks market research revealed, a lot of small, independent coffee stores were perceived by customers to be what Starbucks was and to deliver what Starbucks did in the previous years. In fact, the Starbucks model as described through Starbucks value proposition was very easy to imitate. Starbucks was facing fierce competition not from another chain, but from any small, independent, specialty store that was located to a close proximity to Starbucks. These competitors were more likely to offer the extraordinary service and the atmosphere that Starbucks had promised. In addition to that, the image of Starbucks had changed in the mind of the consumers who saw the fast expansion of Starbucks with the addition of stores everywhere, as a way for the company to make more money. Looking at the three factors which could have resulted to declining customer satisfaction levels (a. bad research methods, b. consistent level of service but changing needs of customers, c. actual service decline), I am more inclined to believe that the lower scores are a combination of changing expectations of new customer base and actual service decline (Exhibit 1). Even though there might be some flaws in the research methods, I do not think that they are that inconsistent to disprove that the customer satisfaction levels were declining. 4. Describe the ideal Starbucks customer from a profitability perspective. How valuable is a highly satisfied customer to Starbucks? What would it take to ensure that this customer is highly satisfied? The ideal Starbucks customer from a profitability perspective is the loyal customer who visits the store on an average of 18 times per month. If we accept that there is a high probability of correlation between number of visits and satisfaction level, then it is safe to assume that this ideal customer who visits...
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This document was uploaded on 04/02/2014 for the course ECON 101 at Sant'Anna School of Advanced Studies.

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