Understanding and Engaging in the Customer Experience at Starbucks

This report explores the impact of internal and external factors on the quality systems and controls for customers at Starbucks. It discusses relevant marketing theories and models for evaluating the customer experience. The report also highlights the challenges and benefits of developing good customer relationships.

Understanding and Engaging in
the Customer Experience
BMSW 5103
Lecturer – Zainab Atta
Student name: Andreia Buliga 2018956

CONTENTS
INTRODUCTION.....................................................................................................................................1
TASK – 1.................................................................................................................................................1
OVERVIEW OF THE ORGANIZATION......................................................................................................1
Starbucks...........................................................................................................................................1
BREIF INTRODUCTION OF THE KEY MARKETING THEORIES...................................................................2
Pestle analysis....................................................................................................................................2
Porters five force analysis..................................................................................................................2
SWOT analysis...................................................................................................................................2
Consumer decision making process...................................................................................................3
Internal and external factors affecting the quality systems of Starbucks and controls for customers
...........................................................................................................................................................3
TASK – 2.................................................................................................................................................6
Systems supporting the quality processes at Starbucks and the manners in which they are
effective in meeting the needs of the customers and maintains good relationship..........................6
Critical comprehension of quality process (relating to customer service) in the workplace.............8
Relevant marketing (service) theories for evaluating the customers’ experience of an organisation
...........................................................................................................................................................9
7Ps marketing mix.............................................................................................................................9
The benefits and challenges of developing good customer relationships.......................................10
CONCLUSION...................................................................................................................................12
REFERENCES........................................................................................................................................13

INTRODUCTION
The experience of the customers is at the heart of the everything for attaining
sustainable competitive advantage however because of the pandemic of covid19, there has
evolution in this term rapidly. Due to the present global crisis of coronavirus, there has been
alteration in the behaviour of the customers and this has compelled the companies to utilized
their customer relationship management as a strategic function for improving the experience
along with engagement of their clients. With the shifting in the expectation of the clients,
experiences with the changes in the businesses as well as interactions move solely online,
firms all across the globe are adapting to the novel customer base who have a new established
priorities that might be importantly varied to those being adopted few months ago (Ferrell
and Hartline, 2014). Considering this, the current research report is being prepared with an
aim to explore the internal and external factors which has impacted the quality system and
controls for the customers in the selected organization. the company chosen for the present
research purpose is Starbucks. The report will further throw light on the ways company will
deal with this new situation and attain the objectives of the business through development as
well as maintenance of good customer relationships. In doing do, relevant marketing theories,
concepts, quality processes and models for evaluating the experience of the clients will be
applied effectively.
TASK – 1
OVERVIEW OF THE ORGANIZATION
Starbucks
Starbucks is an American multinational chain of coffeehouses as well as roastery
reserves being headquartered in Seattle, USA. It was founded in the year 1971 and opened
around 3300 stores all across the world. The sells different kinds of products such as coffee,
tea, fresh food, merchandise and handcrafted beverages. Furthermore, there are varied kinds
of products which are being sold by the firm such as while bean coffee, bottled water and
assortment of tea and coffee. Starbucks operates in the industry which is very competitive in
nature and high fragmented (Starbucks, 2019). There are different large players which are
operating in the market such as Dunkin donuts, Krispy Kreme Doughnuts, Einstein Noah,
Subway etc. who are giving fierce competition to the company. Starbucks has been operating
successfully over the years and earning good number of profits, however with the recent
pandemic of covid19, the financial and economic conditions of the company has been
severely affected. At the starting of the year 2020, the global economy was in shock.
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Moreover, there has been reduction in the demand of the customers for Starbucks which has
impacted the income of the company.
BREIF INTRODUCTION OF THE KEY MARKETING THEORIES
Pestle analysis
Speaking in context of the Pestle analysis tool, it is being utilized for gaining macro
image of the industry environment. The acronym PESTLE analysis stands for Political,
Economic, Social, Technological, Legal and Environmental factors. Further, it also enables
the company to form an impression of the factors that may influence the novel business or the
industry. Political factors are being referred as the governmental control as well as influences
over the economy or industry. Economic factors have direct influence on the supply and
demand model. Social factors such as demographics, culture and beliefs can impact the
industry environment through impacting purchasing habits (Chok, Isa and Siddiq, 2017).
Technology factors such as licensing, automation, communication and patents can have direct
and indirect affect. Legal factors include employment laws, consumer protection laws,
environmental regulations etc. the last one of environmental factors which includes weather,
global climate change and geographical location.
Porters five force analysis
Porters five force analysis is being regarded as a simple outline for assessing as well
as analysing the competitive strength and position of a business. This theory is being
grounded on the notion that there are five forces that identify the competitive intensity as well
as attractiveness of a market. This tool is quite beneficial in comprehending the strength of
the current competitive position of the firm and the strength of the position that the firm
might seems to move into. It involves five forces such as bargaining power of the suppliers,
bargaining power of the buyers, threats of new entrants, threats of substitute products and
competitive rivalry. Furthermore, this tool is quite significant and must be helpful in
considering the altering features of the industry (Buttle and Maklan, 2015).
SWOT analysis
Talking in relation with the SWOT analysis, it is being regarded as strategic planning
tool that can support the firm in evaluating what it does the best and devise a successful
strategy for the future. Further, it is a strategic management technique that is being utilized
for helping a person of the firm to determine strength, weaknesses, opportunities, and threats
in concern with the organization competition or planning of the project. It is often been
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defined as a situational evaluation oy analysis. For the preliminary stages of decision-making
processes, this technique can be utilized effectively. In addition to this, SWOT analysis is
utilized as a tool for analysing the strategic position of the firm of many kinds (Zeithaml,
Berry and Parasuraman, 1996). It is also envisioned to determine the internal as well as
external factors which are favourable as well as unfavourable for attaining the main goals of
the project. Strength and weaknesses are normally taken into account as internal and on the
other hand, opportunities and threats are being regarded as external to the business. The
amount by which the inner strengths of the company is linked with the exterior opportunities
is articulated by the idea of strategic fit. Thus, it can be said that the SWOT analysis tool can
be utilized by the company for building organizational as well as personal development
strategy (Kotler and Keller, 2016).
Consumer decision making process
Talking in relation with the consumer decision making process, it is being defined as
the process by which the consumers go through in making decisions what things to be
purchased encompassing recognition of the problems, data searching, analysis of alternatives
and making decision as well as post purchase analysis. Each and every consumer have
different requirements in their daily lives and these are those requirements which makes them
to undertaken different types of decisions. This process involves five stages such as
identification of the requirement which includes recognizing the needs by the consumers.
Then comes searching of information wherein the consumer needs obtaining of more and
more information in regards with the products. Further comes the stages where the consumers
analyse the different alternatives being present on the basis of quality, price, costs and many
other factors (Ali and et.al, 2020). The next phase is making the final purchase wherein the
consumer buys the products that suits their needs and finally, matches the expectation and
reality in the next stage that is post purchase behaviour.
Internal and external factors affecting the quality systems of Starbucks and controls for
customers
PESTLE analysis
Seeking help from the pestle analysis tool, it has been determined that there are many
external factors which have affected the quality system of Starbucks and controls for
customers. The actions and the approaches being adopted by the government which can
impact the economy can eventually influence the manner in which the firms operate
irrespective of the industry they belong to. For example, due to coronavirus pandemic the
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government has implemented different policies such as social distancing, lockdowns,
different taxes policies, public investments all have impacted the quality management at
Starbucks. Other than this, because of the economic conditions such as alteration in the ratio
of demand and supply due to coronavirus pandemic and rising level of competition, there
effectiveness and efficiency of Starbucks has been impacted a lot (Boone and Kurtz, 2014).
The market or the social factors are also being regarded as the important external factors that
impacts the controls of customers and quality system of the company.
There has been change in the preferences of the customers due to covid19 crisis. Now,
they are demanding safety protocols to be followed by the outlets of Starbucks. They are
more asking for healthier and hygienic food choices which are also changing the quality
system and management at the company. Other than this, because of the covid19, the supply
chain relationship has also been affected which in turn has disturbed the overall quality
processes of the company. Additionally, the influence of technological development along
with innovations evolving in the market are also the crucial factors that affected the quality
system and processes of Starbucks. The most common illustration are automation, new
equipment’s and awareness of technologies. With this pandemic, there has been rise in the
level of awareness in regards with the environment. Environmental aspects influence the
processes of the firm and demands of the customers (Keni and et.al, 2020). For examples,
alteration in the weather conditions, corporate social responsibility initiative and many more.
Moreover, alteration in the compliance standards and latest revisions also impacts the quality
systems. For examples ISO 9001:2015 is the latest version of ISO 9001which outlines the
requirements that the Starbucks has also follow for getting the certification. Thus, it can be
said that each and every external factor is accountable for bringing some alteration in the
whole company and all the modifications are required to be managed effectively as well as
efficiently for transforming the unfavourable conditions into improvement opportunities.
Porter’s five force analysis
From the porter’s five force analysis, it has been evaluated that there are some other
external factors as well which has impacted the quality system and control for the customers
of Starbucks. The very first is the suppliers, they have exerted a lot of impact on the
profitability of the industry. Due to the coronavirus pandemic, there has been alteration in the
supplier chain relationship. The supplies were delayed and they are charging quite high prices
for their raw-materials which has impacted the overall quality processes of the company. In
addition to this, the rising level of competition in the market also induces the company to
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make changes in their quality management processes as the company wanted to stay ahead
from their competitors (Payne and Frow, 2013). Other than this, due to fear of coming out in
public and getting infected from the disease, people altered their buying behaviour. Further,
there taste and preferences have also been changed as now they are more concerned towards
their health and demanding more cleanliness and hygiene. This has led Starbucks to loss
control over their consumers.
Consumer decision making process
This is an important method of determining the consumer journey right from the
starting to finish. From the five individual stages, different factors can be ascertained which
has impacted the quality system of Starbucks. The first stage of the process of working out
what exactly the requirements of the clients. After the pandemic, the needs of the customers
have changed significantly. They are now demanding products which are healthy and
hygienic. They want their goods to be offered via online platforms that too in short period of
time. Secondly, after determining, the consumer search out for the companies who are
providing such kind of products that satisfied their needs (Kalbach, 2018). They search for
the information from their previous experience in regards with different products. After
gathering information, they select the company which best suits their needs. At this stage,
they take into consideration different factors such as quality, price, cost and many other
factors which are crucial for them. The next stage involves the purchasing of the final
products on the basis of the knowledge and information being accumulated. The last one is
the satisfaction and dissatisfaction after the purchase of the products. At this, clients match
their expectations with the reality. Thus, it can be said that the customer decision making
process basically revolves around the price, quality of the products and customer services.
Consequently, Starbucks has to alter to change their quality management system and
processes based on the consumer decision making process of the target market.
SWOT analysis
From conducting the SWOT analysis of the company, it has been determined that
there are many strengths and weaknesses which are internal to the company that significantly
impacts the quality system of the company and control for consumer in the times of crisis of
coronavirus. One of the weaknesses which have identified is lack of training programs in
context of quality in Starbucks (Aiello, 2017). Company does not make any suitable
arrangements for training and development sessions in terms of quality and its related process
among the staff members which significantly impacts their quality system. Furthermore, even
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the top management of the company are less involved which hampers the quality system of
the company as top management is required to oversee varied activities as well as tasks
within the firm for making that the products and services being offered by the firms are of
good quality of not and when they are not involved quality is hampered. Other than this, it
has also been determined that the standards being established by Starbucks are quite difficult
to interpret which affects the quality management system and processes of the company.
Further, the intense level of competition, changing marketing conditions and global pandemic
all across the world is also posing great threat to the operations of the company (Peelen and
Beltman, 2013).
TASK – 2
Systems supporting the quality processes at Starbucks and the manners in which they are
effective in meeting the needs of the customers and maintains good relationship
Starbucks is one of the leading coffee retailers presently. Due to continuous profit
growth of the firm, competitors begin to emerge as they look great prospects and profits for
this type of industry. However, irrespective of the different threats of the markets, the
company has still the most one of the effective quality strategies amid the other coffee shop
firms. This can be more evident from the earnings of the firm that is rising up unswervingly,
the unmatched taste of the coffee, the quality systems that brings different recognitions to
Starbucks. Further, the company can make use of different systems for offering adequate
services to the customers and for supporting the quality processes of the organization (Buttle
and Maklan, 2015). The firm makes use of random check-ins firm district managers wherein
they check the baristas, communicate with the clients for acquiring the feedback and monitor
the drinks for making sure their quality. It also makes use of EcoSure for performing checks
of the needed qualifications in every six months for all the stores to make sure that the quality
standards are maintained effectively. Additionally, organization also takes into account
empowering the workers as a quality system through mobilizing them to become brand
gospeler as well as offering them with adequate worker advantages. These systems being
implemented by the company have successful and effective enough in achieving in different
prestigious awards as well as recognitions (Starbucks stories & News, 2020).
Other than this, there are other systems as well which have been implemented by the
company such as different safety protocols for the purpose of developing a healthy public
environment for making sure the safety of the customers. Moreover, the covid19 crisis has
forced Starbucks to change their traditional manner of operating. They have realized that the
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quality system along with the processes requires to be altered and, in this regard, they have
closed down their outlets and are more towards shifting their business towards online
platforms. They have started following the protocols such as social distancing, wearing of
face mark, hand sanitization and so forth (Srivastava, 2013). The company also makes use of
IDIC model which is being created by Peppers & Rogers. This model has helped and
supported Starbucks to evaluate the expectations of the clients along with their values to the
business. The acronym IDIC model stands for identity, differentiate, interact and customize.
Figure 1: The IDIC approach to relationship building
(The IDIC approach to relationship building. 2021).
This system supports the company in determining the requirements of the customers
for building relationship with them. Further, the firm differentiate the expectation of the
clients into value and needs and based on that can tailor their customer relationship efforts. At
the third stage, the company interacts with the customers for comprehending their client’s
expectations. This is being done by collecting feedbacks and opinions of the customers. And
in the last stage, based on the documented interaction, company then customize one to one
service.
The systems being implemented by the company for supporting the quality processes
are effective in meeting out the needs of the customers. In addition to this, it has also been
evidenced from the evaluation that they even help in maintaining good relationship with the
customers. IDIC model is one of the important customer relationship management models
being executed by the firm for supporting their quality processes offers a base for organizing
as well as synchronizing the services of the clients (Sholihah and et.al, 2016). this also
supports in offering effective technical support to Starbucks as well. Further, the other
systems being discussed above are very significant for a business in longer period of time, as
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it assists the company with getting valuable feedback from the clients in regards with the
products and services, issues and queries. They also help in building close one to one
association with the customers.
Critical comprehension of quality process (relating to customer service) in the workplace
The strategy and approach of Starbucks in focusing on its clients is to situate itself as
a "third" place in the ways of life of its clients. In other words, the prototypical Starbucks
client will invest their energy at home, working and at Starbucks. To energize this thought,
the areas of the outlets and stores of the company are outfitted with relaxed seating, offer
outlets for electronic hardware, and a sweeping no-smoking approach guarantees that all
clients are agreeable and contended in the climate. Making clients more agreeable while
investing energy in the stores makes them remain in the store for longer period of time and in
doing as such, enjoy a greater amount of what Starbucks brings to provide (Chuang, 2019).
Other than this, since, the firm is being engaged in the service type business, they
comprehend the significance of quality in terms of customer service.
The quality process is important for the growth as well as evolution of their business.
Starbucks makes use of different approaches for making sure that effective services are being
rendered to the client. For example, the company has a clear goals and vision for the
employees and have also created internal quality standards which have to be met by each and
every member of the company. Additionally, for rendering effective services to the clients,
the company also makes arrangement for different training and development session for their
workers in regards with knowledge of the products and for providing superior experience to
the client. They also make sure that their workers are satisfied because employee contentment
is the key for offering superior experience to customers (Eko, 2014). Moreover, the company
makes use of different safety protocols such as cleaning of hands, sanitization, social
distancing, decontamination and many more. They even provide comment card to the
customers which are available at the condiment stations. This helps the firm to remain in
touch with the clients and to get the knowledge about the demands of their guests. Further,
Starbucks also makes use of SERVQUAL model for capturing as well as measuring the
service quality being experienced by the clients. seeking help from this system in place, the
company develops the quality system that satisfies the customers effectively. There are five
important aspects of this model that reliability where the clients of Starbucks anticipate that
whatever they will need, it will be fulfilled. In relation with assurance, the customers of the
company have confidence on the services providers. Tangibles of the firms involves the
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physical facilities, ambience, appearance of the employees and equipment. In regards with
empathy, the workers of Starbucks offer care and individualized attention to the clients and
finally, responsiveness that is each and every worker of the firm is willing to offer prompt
services to the customers (Johnston and Clark, 2021).
Relevant marketing (service) theories for evaluating the customers’ experience of an
organisation
Starbucks is using various marketing models for making its products image more
strong or competitive in the market because without marketing theories or models it is
impossible to reach the target on demand (Urdea, Constantin and Purcaru, 2021). Theories
used by Starbucks are:
7Ps marketing mix
The Starbucks is using 7Ps marketing model which are product, place, price,
promotions, people, process and physical evidence. Due to increasingly change in the needs
of customers due to more availability of substitutes the company has to regularly checks its
day to day activities of each department for planning more advanced strategies for maximum
results.
 Product: The first and foremost strategy of every company is to decide its quantity of
products and its quality too (Guerola-Navarro and et. Al., 2021). Starbucks uses its
marketing strategies by deciding in advance about its product quality and how to
improve the present services and the product so that it looks competitive in the present
world.
 Prices: The Starbucks is deciding its prices according to the customer needs and
preferences and it need to decide its strategies related to the price discriminations.
This company is trying to reduce its overall cost by using various marketing strategies
for pricing the products to earn more revenue.
 Promotion: The most important step is to advertise the products and services to the
public to make them know about its price and taste. The Starbucks is a big brand and
needs less marketing but due to increasing competitions it has to promote its good to
the market for increasing the sales (Tien and et. Al., 2021).
 Place: The next step is to decide the market in which it has to sell its products and
services for more profit earnings. The market with high customer demands is a good
choice for marketing the products in that market.
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 Packaging: It has to decide its packaging style to make its products look more
attractive in the eyes of consumers. More the attractive a product looks more will be
customer attracted towards it.
Positioning: This is another step in which the company decide how to make its company
products on the top position by using various marketing strategies (González‐Teruel, Araújo
and Sabelli, 2022).
 People: The next step is to find the right type of people at right place so that all the
marketing activities are done with full accuracy and efficiently. The Starbucks team
are well developed and professional for doing all the market activities correctly.
Consumer decision making process
The Starbucks uses these strategies for knowing the how the buyers takes the decisions like
 Awareness: First the consumer realise their needs and wants and they get aware of the
things they want in the market.
 Interest: Then the consumers start looking in the market the products that needed
which satisfy their wants.
 Consideration: Then they decide all the pros and cons of all the products and compare
each product with their needs.
 Purchase: After all the investigations the consumer purchased the products and
satisfies its need.
 Loyalty: After sales services or post services are necessary to satisfy the customer
needs efficiently.
Starbucks is planning its marketing strategies according to each consumers step and
provides all the means and methods for selling its products with full quality and quantity.
The benefits and challenges of developing good customer relationships
Benefits
 Increases customer satisfaction: Good customer relationship increases the
satisfaction of the customers due to building of more trust between them. Starbucks is
having strong customer relations due to good quality of products and well brand the
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customers are satisfied with its services and products which makes this company a
huge brand.
 Increases sales: The customer will buy more with good relations and does not switch
to other brands easily due to strong relations. Customer satisfaction automatically
leads to increase in sales and profits and this company has large operations worldwide
due its good relations its making huge sales per year (Cambra-Fierro and et. Al.,
2022).
 Better marketing: The customer good relations will help in smooth marketing
because customers will not avoid the advertisement and continuously checks the new
products when it comes due to stability of the customers. Starbucks does not get any
problem in marketing its products due to fixed and old customers.
 Accurate sales forecasting: The customers of Starbucks are fixed and increasing on
rapid growth due to teenagers are fond of coffee so the sales forecasting for this
company becomes easy due to fixed number of customers and sales due to good
relations.
 Efficiency in work: The customers are the key role of the company and this company
is maintain good relations with them makes it easier for the company to do the task
with full accuracy without any complains and wrong feedbacks by the customers
(Panwar and et.al., 2019).
Challenges
 Understanding customer expectations this is the toughest part for understanding the
customer’s needs and wants due to cultural diversities. The customers demand and
choices are ever changing and it’s the difficult part to produce the products for
satisfying those needs.
 Dealing with customers complains is a big task because if the customer does not like
the products he/she wrote poor things on the company websites which is not good for
the image of the company.
 Choosing the right channels this is the main aim of the company to choose the right
channel because if the products are not delivered on time the customers become angry
and the cost of selling increases the company’s profit decreases both creates problems
for the company (Macieira, Oliveira and Yanaze, 2020).
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 Pricing of the products this creates problems in the deciding the price of the products
because customer will buy cheap products with good quality so the company have to
decrease its cost of selling and advertising for attracting more number of customers.
 Rivals they are the threat to the company because if their services and customer
relations are strong create danger for the Starbucks because it has the chance of
customers switching from one products to other due to more good relations and
strategies by the rivals.
CONCLUSION
Therefore, from the above analysis, it can be concluded that customer relationship
plays a very important role for leading the organization to the path of success and growth.
The report has clearly determined varied internal as well as external factors which impacts
the quality system and control for consumers of Starbucks during the time of crisis of
covid19. In explaining these factors, different marketing along with customer relationship
management theories and models have been applied. Further, in the time of crisis, it is crucial
on the part of the company to focus in offering great experience to the customers and
manager their quality system and processes as the clients not only purchase products from the
business but in reality, they experience or interact with other types of outputs of the company.
In case, if the expectation of the customer’s experience underperforms than they might switch
towards the competitors who are offering better experience. Further, it has also been
originated from the study that for better comprehension of the consumer behaviour different
CRM models needs to be applied by the company as this will improve customer relationship.
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