Transcript
1971 – Starbucks opens its first store in Seattle’s Pike
Place Market
1998– At year end, Starbucks roughly grew
400% to a total of 4,700 stores.
2008– Currently Starbucks owns 15,800 stores,
Howard Schultz recently returns as CEO to slow store growth due to declining profits in the last few years to focus on customer experience.
Overall Design• High end• Stronger Gourmet coffee
– Latte’s– Unique expresso drinks– Variety of Pastries and
dessert
Offerings
Seasonal productsWINTER– Eggnog Latte’ – Gingersnap Latte’FALL– Pumpkin spice
FOOD: – pastries, muffins, No Bagels,
Salads, sandwiches,
– TO GO FRAPPACHINOS • Double shot energy drink• Merge with retailers ex. CVS
FIRST IMPRESSIONS–Warm, inviting, cozy, quaint,
Earthy colors, Seasonal,
ATTITUDE OF EMPLOYEES– Knowledgeable, Cheerful,
Understandable
Research Problem and Questions
Research Problem and Questions
• Decision Problem– Over 600 Starbucks stores
have closed within the past 2 months
• Research Problem:– Plausible cause is over-
estimating location density
• Research Questions
1. How do consumers perceive Starbucks in relation to competitors?
2. Are they aware of Starbucks?
3. How loyal are Starbucks customers?
4. What do consumers value most when purchasing coffee?
5. How important is customer service?
6. Does convenience matter?
7. Is the atmosphere at Starbucks valued?
Research Design • Focus group Study
– Informal non-structured discussion among real consumers
“Starbucks is a wonderful place although it can get a bit expensive”
Dunkin Donuts has huge competitive advantage over Starbucks with their “BETTER FOOD”
Customers were annoyed by the fact that Starbucks is almost on every block in the city
• Depth- Interviews (5)
• Consensus of most important aspects that re-occurred.
Word Association Sentence
Completion
Escalade = Car• Not price sensitive
If you had to eat in the morning would you have a Danish or Sausage and eggs?
Problem Audit
• Starbucks locations may be too close to each other causing cannibalism.
• Some customers do not like the fact of making their own coffee to taste just right.
• Price is also more expensive than other competitive coffee shops
• Food at Starbucks is generally very snack-like– Ex. Pastries, Danish, muffins
As opposed to competitive coffee shops such as Dunkin Donuts who offer Sausage and Egg Sandwiches.
Secondary Data
We used secondary data at the beginning of the project as exploratory research design. We gathered information on
Starbucks to use in the development of a research problem. Secondary data is very
useful for many applications. It is relatively easy, inexpensive and much data is
available. We knew as a group we wanted to do something related to SB and how they
seemed to be doing so poorly as we have seen in the news. After a week of
secondary data, discussing with the group, we decided on a research problem to base
our depth interviews, surveys on.
Con’t• The findings helped us further modify
the research problem and see what other researchers on the topic conducted. We took aspects of our data design and refined our research problem and survey questions from secondary data.
• Without secondary research, we would have had to conduct primary data, gathering information specifically for the research project and would be unaware if the research has already been done on the topic.
• Starbucks Coffee Company Full List of U.S. Store Closures
www. Starbucks.com
• Data such as this helped to segment where closings coming from and if there was a trend and so on.
On July 1, 2008, Starbucks Corp. announced it is closing 600 company operated stores in the next year, due to the US economies downward spiral, that had hastened the pain caused by the companies own rapid expansion.
Con’t
• Starbucks closing 5 percent of U.S. stores
• As many as 12,000 Starbucks workers will lose their jobs when the company begins closing 600 U.S. stores this summer.
• Article from the Seattle times
• As many as 12,000 Starbucks workers will lose their jobs when the company begins closing 600 U.S. stores this summer.
• The Seattle coffee company is cutting 5 percent of its U.S. locations as part of a wide ranging effort to boost its bottom line and its stock price. The chain is accelerating international growth.
Data Collection
• Questionnaire Quantitative and Qualitative
•Sample size100 participants took the
survey
•Customers viewStarbucks vs. Dunkin Donuts
Data collection cont’• Location matter
Customers who live in the suburbs are satisfied with Starbucks
and most of the customers who live in the city is unsatisfied.
Product satisfaction55% of respondents had positive feelings about theircoffee whereas 44% had negative and neutral feelings.
• LocationWe chose the Starbucks in
the Boston area for it’s convenience
you
Frequency Percent Valid
Percent Cumulative
Percent Valid poor 1 1.0 1.0 1.0 somewhat
satisfactory 2 2.0 2.0 3.0
Average 31 31.0 31.0 34.0 Very Satisfactory 58 58.0 58.0 92.0 Superior 8 8.0 8.0 100.0 Total 100 100.0 100.0
Ho: µ =average quality of customer service ≤somewhat unsatisfactory
Ha: µ = average quality of customer service >some what unsatisfactory
N Valid 100 Missing 0 Mean 3.7000 Median 4.0000 Mode 4.00
The number of cases in the dataset is recorded under the column labeled N... The average satisfaction of last visit to a starbucks coffee shop is contained in the Mean column. Variability can be assessed by examining the values in the Std. Deviation column. The more that individual data points differ from the mean, the larger the standard deviation will be. WE REJECT THE HYPOTHESIS (95% INTERVAL, 0.00 SIG. LEVEL,
Frequency Percent Valid
Percent Cumulative
Percent Valid poor 3 3.0 3.1 3.1 somewhat
satisfactory 4 4.0 4.1 7.1
Average 37 37.0 37.8 44.9 Very Satisfactory 44 44.0 44.9 89.8 Superior 10 10.0 10.2 100.0 Total 98 98.0 100.0 Missing System 2 2.0 Total 100 100.0
How satisfying is Starbucks Coffee?Frequency distribution
Analyze menu: analyze->descriptive statistics->Frequencies
Based on your experience how does Starbucks coffee compare with Dunkin Donuts coffee in terms of taste?
Frequency Percent Valid
Percent Cumulative
Percent Valid Starbucks is better
than Dunkin Donuts 42 42.0 43.3 43.3
Starbucks is the same as Dunkin Donuts
22 22.0 22.7 66.0
Starbucks is worse than Dunkin Donuts
23 23.0 23.7 89.7
Not sure 10 10.0 10.3 100.0 Total 97 97.0 100.0 Missing System 3 3.0
Paired-Samples T test
Rank the following Cafe's from best (1) to worst (6). N Mean
Std. Deviation
Std. Error Mean
Starbucks coffee shops are too close to each
Dunkin Donuts 33 2.8788 1.13901 .19828 Starbucks
42 2.4762 1.01784 .15706
Starbucks coffee shops are too close to each other vs. Café’s from best(1) to worst(6)
Frequency Percent Valid
Percent Cumulative
Percent Valid strongly disagree 15 15.0 15.5 15.5 2.00 24 24.0 24.7 40.2 3.00 38 38.0 39.2 79.4 neutral 10 10.0 10.3 89.7 5.00 10 10.0 10.3 100.0 Total 97 97.0 100.0 Missing System 3 3.0 Total 100 100.0
What type of setting do you live in? N Mean Std. Deviation
Std. Error Mean
How do you feel about Starbucks locations?
Rural 3 4.3333 .57735 .33333 City 75 2.2400 1.35407 .15635
Levene's Test for Equality of Variances t-test for Equality of Means
F Sig. t df Sig. (2-tailed)
Mean Difference Std. Error Difference
95% Confidence Interval of the
Difference
Lower Upper How do you feel about Starbucks locations?
Equal variances assumed
2.649
.108 2.654 76 .010 2.09333 .78863 .52265 3.66402
Equal variances not assume
5.686 2.973 .011 2.09333 .36818 .91557 3.27109
Ho: µ =relation between living settings and store location
Ha µ= in relation between living settings and store location INDEPENDENT SAMPLE TEST
small value (<.05) in the column labeled Sig. indicates that this hypothesis is false and that the groups do indeed have unequal variances. In the above case, the value <.05 in that column indicates that the variance of the two groups, rural and city, is not equal.
Concept Corrections• Adapt to the current situation
• More knowledgeable customers (expectations)
• Close inefficient locals and invest on perfect concepts. (fewer but better)
• Big, comfortable exact stores in good locations.
• Improve Customer Service.• Training, capacitating, retaining
• Improve Price/ Quality Satisfaction.• New blends, types, and qualities
Hitting the Competition
• Marketing& Advertising– Use influential people (actors, connoisseurs,
people with credibility)
• Educating– Teaching the consumer about the
products (quality, attributes, comparisons)
• Concept innovation: sub-brand– Starbucks Express: on the go, Dunkin
Donuts Concept.
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