Analysis of Starbucks

This article provides an analysis of Starbucks for the Services Marketing assignment. It covers the history of Starbucks, its service and product offerings, and how it has become successful in the industry. The article also discusses the principles of service marketing, including the service marketing mix, customer role, reputation, and the need to update services to meet customer expectations.

Running head: ANALYSIS OF STARBUCKS
SOUTHERN CROSS UNIVERSITY
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Signed
:
YASODHARA SOORIYAARCHCHI
Student Name: YASODHARA SOORIYAARACHCHI
Student ID No.: 23013395
Unit Name: SERVICES MARKETING
Unit Code: MKT10724
Tutor’s name: JILL GILLIGAN
Assignment No.: 01
Assignment Title: CASE STUDY - STARBUCKS
Due date: 27 JUL 2018
Date submitted: 27 JUL 2018

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ANALYSIS OF STARBUCKS
(please
type your name)
Date: 27/07/2018

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ANALYSIS OF STARBUCKS
Answer to Question 1
Starbucks was established by three entrepreneurs namely, Gordon Bowker, Jerry
Baldwin and Zev Siegl. The period in which Starbucks had started its operations a huge price
war had started in the American coffee market. The company had started its operations as a
retail store which offered different kinds of coffee beans and brewing equipments. After the
appointment of Howard Schultz in the organization Starbucks had started with a new idea of
offering brewed coffee to the customers. The company also aimed at providing the best levels
of services to customers and an ambience which can create a different effect on them
(Starbucks Coffee Company. 2018).
Starbucks can be considered to be a service (intangible) that is provided to the
customers for the purpose of creating an ambience which is unique in nature and Starbucks
can also be considered to be a product (product). Starbucks can be considered to be a service
as the organization aims at providing a positive ambience to the customers. The organization
is mainly famous for the services that are provided to the customers rather than the specific
products. The service based concept was introduced by Howard Schultz in the year 1987. The
new President of the organization further aimed at reshaping the image of the organization
which was helpful for its future growth. The logo of Starbucks was updated and the service
was mainly shaped in such a manner which would be a blend of the Italian elegance and the
American informality levels. The strategy that was implemented by Schultz in the
organization had paid off highly. The revenues of the organization in the US coffee market
had also increased in the process (Bienstock, Mentzer and Kahn 2015). The company started
expanding all over the world in a rapid manner. The success and expansion of Starbucks in an
effective manner has proved that the services that have been provided by the company to the
customers have been able to provide a position to the organization. The service oriented
approach of the company has proved to be the most important factor behind its immense

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ANALYSIS OF STARBUCKS
success in the industry. The company had started its operations by offering brewing machines
and coffee beans to the customers. The business process was later transformed into a type
which was based on providing the services to customers (Dabholkar 2015). The company
further aimed at creating an ambience for the customers which will help in creating a loyal
group. The processes that were used by the company in brewing high quality coffee was also
changed and new technologies were introduced. The organization was further able to improve
its position from a normal retailer to an upscale service provider. The Starbucks ambience is
based on many important factors which include, the fabulous quality of coffee, familiar
clusters of people, friendly environment and employees. These factors are able to ensure that
the services which are provided to the customers of Starbucks are able to maintain the
position of the organization. The company has always been customer centred and has devised
new strategies for the purpose of increasing the customer satisfaction levels (Gummesson
2017). The different functions that have been performed by Starbucks has thereby been able
to depict that the company has been able to create a profitable position in the market with the
help of service based operations.
Answer to Question 2
Services marketing is mainly based on the marketing value and relationship. This
concept can be used for the purpose of marketing a product or service. The increase that has
been seen in the prominence of the services in global economy has thereby led to the study of
service marketing. The marketing process of services is different from that of the goods with
respect to different characteristics like, heterogeneity, intangibility, inseparability and
perishability. The services thereby tend to add more economic value to the countries as
compared to raw materials, manufacture and raw materials (Nasution et al. 2014). The service
marketing concept is mainly based on different principles which are as follows,

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ANALYSIS OF STARBUCKS
 The service marketing mix – The physical evidence, people and processes are
added to the four Ps of marketing which are considered in case of marketing a
product. The people factor plays the most important role in case of providing
appropriate services to the customers. The processes which are used by the
marketers in order to provide appropriate services is also important for the
service marketing concept. For example, the services that are provided by
Starbucks are based on the ways by which the employees interact with the
customers and are trained to make the best brew of coffee (Patterson 2016).
 The customers play a significant role in the service marketing based process.
Value of the products which is perceived by the customers and the value that
is provided by the company is an important factor which affects service
marketing. The poor service levels can lead to the loss of customers for the
company which can further cause long term damage to the firm. The effective
training of staff is thereby an important factor in case of the service marketing.
For example, Starbucks has been able to create a loyal base of customers with
the help of its innovative products and services. The satisfaction levels of the
customers is thereby the most important for the creation of successful service
marketing process (Russell-Bennett and Baron 2016).
 The most important part of the service marketing based activities is related to
the reputation of the company that has been created in the market. The trust
levels of the customers on the organization plays an important role in the
success of the service marketing efforts. For example, Starbucks has been able
to develop its unique reputation in the market and has acquired the position of
an upscale brand in the food industry.

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ANALYSIS OF STARBUCKS
 Services which are provided to the customers need to be updated in nature so
that they are able to connect with the organization in an effective manner. The
trends and customer expectations in external environment needs to be taken
care by the organization in an effective manner. For example, Starbucks has
been implementing different technologies which have helped the company to
improve its operations and provide effective service to the customers (Wirtz
and Lovelock 2016).

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ANALYSIS OF STARBUCKS
References
Bienstock, C.C., Mentzer, J.T. and Kahn, K.B., 2015. How are service firms measuring and
managing service quality/customer satisfaction?. In Proceedings of the 1996 Academy of
Marketing Science (AMS) Annual Conference(pp. 161-161). Springer, Cham.
Dabholkar, P.A., 2015. How to improve perceived service quality by increasing customer
participation. In Proceedings of the 1990 academy of marketing science (AMS) annual
conference (pp. 483-487). Springer, Cham.
Gummesson, E., 2017. From relationship marketing to total relationship marketing and
beyond. Journal of Services Marketing, 31(1), pp.16-19.
Nasution, R.A., Sembada, A.Y., Miliani, L., Resti, N.D. and Prawono, D.A., 2014. The
customer experience framework as baseline for strategy and implementation in services
marketing. Procedia-Social and Behavioral Sciences, 148, pp.254-261.
Patterson, P., 2016. Retrospective: tracking the impact of communications effectiveness on
client satisfaction, trust and loyalty in professional services. Journal of Services
Marketing, 30(5), pp.485-489.
Russell-Bennett, R. and Baron, S., 2016. Back to the future! The importance of history in
services marketing. Journal of Services Marketing, 30(1), pp.1-2.
Starbucks Coffee Company. 2018. Starbucks – The Best Coffee and Espresso Drinks. [online]
Available at: https://www.starbucks.com/ [Accessed 26 Jul. 2018].
Wirtz, J. and Lovelock, C., 2016. Services Marketing: People, Technology. World Scientific
Publishing Company.