Starbucks Case

Q. 1 : Is Starbucks a product or a service? Justify your answer.

We could say that Starbucks is both a product and a service, because they sell Starbucks “Coffees” (and Starbucks “products” in general) to the consumers, however Starbucks is essentially a service.

Their goal is to satisfy the coffee enthusiasts within the service they provide. Mr Schultz worked to “shape Starbucks coffee-houses to be a blend of Italian elegance and American informality”. The stores are designed to ‘enhance the quality’ of everything the customers are experimenting with all his five senses. This is not coffee they are selling but a customer’s experience no one else offers (or offered at the time). The stores are cozy, with nice presentations of products, pictures and old-school coffee material, comfortable sofas creating an intimate ambiance, and the wireless internet service provided for free when you sit at one of these coffee-houses.

The stores are made to be a “personal treat” for the customers, providing them the place to relax after work, shopping. There are highly skilled employees trained to provide the best service when welcoming the customers, taking their orders, and meeting their expectations in the coffee/products they asked for. That is the reason customers come back over and over again. Without this service aspect, Starbucks would probably not be so profitable.

Starbucks provides their customers a quality service to offer quality products.

Q. 2 : Discuss how companies can apply the principles of service marketing (such as levels of product and service value) to achieve greater success today, giving relevant examples from the Starbucks case. Use the lecture material as well as the Reading note given with this case to prepare your answer.

Companies can apply the principles of Service Marketing to achieve greater success by organizing a service Marketing around a Core product/service. In Starbucks Case, the core service/product is providing the coffee itself.

To achieve greater success, the companies need to understand what the customers expect from the service they are buying, to meet those expectations, and maybe exceed those expectations so that the customers -when going to a competitor- expect from it the same level of satisfaction he met when he bought your service. That is what Starbucks did when they opened a retail store dedicated to selling only the finest coffee brewing equipment to brew only the highest –quality, wholebean coffe. Then the companies need to make the service tangible, by adding to the core service a brand name, a packaging, styling, like Starbucks did with the new logo, the stores made for the consumers to relax, feel at home, etc.

Finally the companies need to add elements that make the service an Augmented service, with payments solutions to make it easy, faster, and also secured, like Starbucks did with the Starbucks Duetto card. The company can also offer a service warranty or after sales services. At Starbucks, a customer knows the quality of service he will get when he comes and wants a coffee or a frappucino, he knows he will get the wireless internet, a warm and cozy ambiance, smiley and welcoming employees, etc.

Q. 3 : Discuss whether the new service of hot breakfasts that Starbucks is offering to its customers will be successful in

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