Starbucks Customer Satisfaction Analysis: Marketing Research Assessment

This report analyses Starbucks customer satisfaction levels in general and post the introduction of Iconic kiwi flavored drink. The study reveals significant levels of customer satisfaction, however there are delays with services once order is placed and high prices which is responsible for lower share of market for Starbucks New Zealand.

STARBUCKS CUSTOMER SATISFACTION
ANALYSIS
MARKETING RESEARCH
ASSESSMENT 1: PROBLEM DEFINITION & QUALITATIVE RESEARCH PROPOSAL
STUDENT NAME
STUDENT ID
SUBJECT NAME: UNDERSTANDING MARKETS
SUBJECT ID: MKTG861
DATE DUE
PROFESSOR NAME
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ABSTRACT
Organizations globally are trying to devise their products as well as services to match
customer expectations and satisfaction levels. Product innovation is a technique that is adopted
by companies in order to please its customers. The scope of the following report analyses
Starbucks customer satisfaction levels in general and post the introduction of Iconic kiwi
flavored drink. A research design and method has been proposed to allow suitable collection of
data from secondary sources. Then subsequent analysis of such data has been conducted to arrive
at findings related to the study. The findings of the study reveals significant levels of customer
satisfaction, however there are delays with services once order is placed and high prices which is
responsible for lower share of market for Starbucks New Zealand.
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Table of Contents
ABSTRACT....................................................................................................................................2
1.0 INTRODUCTION................................................................................................................4
2.0 PROBLEM DEFINITION.........................................................................................................5
2.1 Research Objectives.............................................................................................................10
2.2 Research Questions..............................................................................................................10
2.0 RESEARCH DESIGN........................................................................................................11
3.0 SECONDARY FINDINGS................................................................................................12
4.0 RESEARCH METHOD.....................................................................................................16
6.0 CONCLUSION........................................................................................................................17
7.0 REFERENCE LISTS...............................................................................................................19
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1.0 INTRODUCTION
Organizations globally are striving to adopt innovation and other means to achieve customer
satisfaction (Grewal, Chandrashekaran, & Citrin, 2010). Customer satisfaction drives sales and
profitability which in turn is provides companies with growth. Market research methods are
adopted such that customer satisfaction can be attended. Market research methods encompass
diversified means and methods for collecting country wise data and then industry factor data.
Internal capability analysis of the Company also needs to be conducted to understand, the
company’s capability to grow and expand their businesses. The scope of the current analysis
deals with Starbucks coffee shop in New Zealand.
Figure 1: Starbuck's Global Presence
Starbucks Corporation is an American coffee company founded in Seattle, Washington with
currently worldwide operations. Jerry Balswin, Zev Siegl and Gordon Bowker are the founding
members of the coffee store and currently Myron E. Ullman is the Chairman, Mellody hobson is
Vice Chairman and Kevin Johnson is President and CEO for the Company. The Company’s
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worldwide revenue earning is US$22.387 billion as of 2017 with over 238,000 employees. The
New Zealand branch of the Company’s business is profitable however is faced by intense
competitive pressures which forces it to devise innovative products. In New Zealand, product
development department has introduced kiwi flavored drink (Eisingerich, Auh & Merlo, 2014).
Hence the scope of this study encompasses research methods and procedures to understand if the
product will be able to provide customer satisfaction through data collection methods.
2.0 PROBLEM DEFINITION
New Zealand is a rapidly developing economy characterized by open markets. Globalized
firms are easily able to set up their operations in New Zealand given the easy requirements of
setting up business in the country (Marinova, Ye & Singh, 2008). The government within the
country is also providing impetus to local entrepreneurs to establish business with ease of access
to funds and loan facilities. This has led to emergence of a number of indigenous coffee stores in
the country.
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Figure 2: New Zealand's Environment Analysis
Source: Author
Due to large number of coffee shop presence and limited population, companies within
the country face tremendous competition (Jacobson & Mizik, 2009). Due to industry rivalry
amongst coffee stores within the Country, Starbucks, which is global player in coffee and
beverage business in order to emerge as a leader in the country continuously innovates products
and services.
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New
Zealand's
Macro
Factors
Political Factors:
Low Bureacratic
Interferance
Economic Factors:
Stable markets,
currency, WPI
Social Factors:
Stable Population
Presence of Young
demographcis
Techological Factors:
Updated technology
4G and Ecommerce
Legal Factors:
Good Judicial System
Conduccive Labor
Laws
Environmental
Factors:
High consciousness
regarding environemnt
Sustainability Driven

Figure 3: Coffee Shops in New Zealand
Source: Google Maps
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Figure 4: Industry Competition
Source: Author
Recently the Company has introduced kiwi flavored drink. Introduction to its menu is
done often in order to gain customer surprise and satisfaction. However in this current menu
introduction a survey of customers has to be conducted to so as to understand whether customer
is satisfied or not (Kim & Seoung, 2011). The problem definition here includes identifying
customer satisfaction rates with the new menu, in order to determine such research objectives
and research questions needs to be defined in detail as given below.
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Industry
Rivalry:
High
Bargaining Power of
Buyer's :
High
Threat from
Substitute Products:
Medium (Tea/ Drinks
& Beverages)
Threat from New
Entrant:
High
Bargaining Power of
Suppliers:
Medium (Suppliers
of coffee)

Figure 5: Starbucks Position in the Market Quality/Price
Source: Author
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C4
Coffee
Raglan
Roast
Tahunanui
Starbucks
The Hanger
People's
Coffee
Roastery

2.1 Research Objectives
In order to attain aims of the research which is as given below, there are various
objectives that needs to be attended to;
Research Aim: Understand Customer Satisfaction from the newly introduced kiwi flavored
drink
Below are some of the research objectives;
 Research Objective 1: To analyse satisfaction of Starbucks customer related to their in-
store experience
 Research Objective 2: To analyse satisfaction from introduced local flavor Iconic Kiwi
Starbucks drink Research Objective 3: To understand overall customer perception related to Starbucks
quality and price
2.2 Research Questions
In order to attain to the research aims and objectives, the following research questions needs
to be adhered to.
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 Research Question 1: What is customer satisfaction of Starbucks in their in-store
experience?
 Research Question 2: Are the customers satisfied from newly introduced local flavor
Iconic Kiwi Starbucks drink?
 Research Question 3: What is the overall customer perception related to Starbucks
quality and price?
2.0 RESEARCH DESIGN
The proposed study will be conducted using positivism research philosophy with
exploratory research design (Brannen, 2017). This study through exploratory research design,
will aim at exploring research questions to arrive at final and conclusive solution to arrive at
existing problems. The scope of the current research design is not directed at providing
conclusive evidences however, it will allow analysing the existing problem in a better manner. In
this study Starbucks has comparatively lower position within coffee stores in New Zealand, in
spite of its global dominance in coffee business (Tu, Wang & Chang, 2012). Through analysis of
customer’s perception related to its newly introduced product, its overall in-store perception and
understanding its price and quality perception will allow the Company to extend its products in a
better manner.
Qualitative data had been mostly collected for the study from sources secondary in nature.
Primary sources had not been resorted to by the scholar due to lack of time and resources to
establish the study (Neuman, 2013). Through secondary data collection from journals and several
internet sources, the study has been developed and sourced. The Company will be also able to
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extend its brand perception in an enhanced fashion. This study through exploratory research will
provide basis for more conclusive research, which in turn will allow tacking new problems
regarding this study. This design will allow developing range of solutions for research problem
to be identified (Rothman, Greenland & Lash, 2008). This design was selected due to its
capability to adapt and be flexible and providing groundwork for future studies to take shape.
3.0 SECONDARY FINDINGS
Data collected from sources secondary in nature to arrive at the certain findings related to
the study. The findings for the study had been developed using qualitative analysis from the data
collected relating them to research questions (Chua & Banerjee, 2013). Through exploratory
design answers to the research questions helped reveal the following secondary findings related
to the study.
 Research Findings 1: Customer satisfaction of Starbucks in their in-store experience
Collection of several data collected from journals and internet sources revealed that in-store
experience of customers was connected to SERVQUAL (Hafeez & Muhammad, 2012).
SERVQUAL includes identifying tangibles, reliability, responsiveness, assurance and empathy.
o Tangibles: Starbucks coffee shops have glass walls which allows see-through. All
stores of Starbucks have parking facilities so that customers can easily park their cars.
The store layout is neat and kept tidy with wooden furnishing. The walls are painted
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with coffee colors to give customers an appeal and smell of coffee brews is present in
store. The coffee brewers are placed on the service tables of the coffee shops and
personnel serves with smiling face and courteous behaviours. Generally locals from
the place are employed which allows ease of interactions with customers visiting the
coffee store. A well-defined menu is placed on each table with pricing on the right
from which customers can make their choices. A brief description of each menu is
given below each name. Coffee is served in large mugs with logo of the Starbucks to
appeal customers.
o Reliability: Starbucks regularly caters to the best quality coffee taste to which it
promises. The coffee, drinks and other food menu is of high quality and fresh, which
provides customer satisfaction.
o Responsiveness: Employees at the coffee store are responsive as it allows customer
with prompt service. However, there is one problem faced by customers at New
Zealand stores, which was found upon analysis. There is delay in serving orders one
placed especially in new menus devised. The stores at New Zealand have introduced
newly flavored drinks at its stores however there is just one chef who prepares the
concentrate and is able to mix it appropriately with the coffee. This has created a lot
of customer dissatisfaction.
o Assurance: Knowledge and courtesy of employees at Starbucks is tremendous as they
are able to instill trust and confidence amongst customers. The employees
communicate in a trustworthy manner and are able to service customers well. They
provide a sense of comfort to customers visiting their stores.
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o Empathy: Though it was difficult to analyse empathy of the firm towards its
customers, yet detailed analysis regarding its customer feedback revealed a lot.
Starbucks is a store which designs menus based on its country location; it also tries to
adjust its standard menus to local tastes. This proves that Starbucks is capable of
empathizing with its customers so as to provide them maximum possible benefits.
Service quality analysis at Starbucks stores in New Zealand reveal that due to lack of trained
staffs there is often delay in servicing customers. This could be one of the factors which have led
to growing dissent and in lack of customer satisfaction rates. Moreover, in cases of regular orders
as well, the wait period is considerably less compared to other stores across New Zealand. Such
delays often lead to impatient amongst young people, who plans Starbucks for their weekends
when they have time at hand. This affects the business of Starbucks substantially by losing out
on its revenues.
 Research Findings 2: Customers satisfied from newly introduced local flavor
Iconic Kiwi Starbucks drinks
Starbucks has a stable influx of customers and regular visitors. Brand loyalty of customer’s
towards Starbucks is significantly higher compared to other coffee and beverages company.
With Starbucks frequently able to surprise its customers with new product launches, it is able
to generate steady customers regularly (Verhoef et al., 2009). In New Zealand also Starbucks
has been able to attract sizable proportion of customers to its stores with new product
introduction. Through stable advertisement and social media followers it has been successful
in generating curiousness amongst its customer demographics which it wants to cater to for
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this drink. Mostly young people aged 10 years to 25 years, school, college and officer goers
would prefer to try on this drink. As this drink is priced at substantially affordable levels it
has been able to attract large customer influx. Moreover, there is considerable amount of
repeated purchases that is taking place for the drink, which establishes that customer
likeliness towards the product.
 Research Findings 3: Overall customer perception related to Starbucks quality and
price
Starbucks all around the world has been able to position itself as being pioneer of coffee and
beverages manufacture. The Company enjoys leadership position within the world when
compared to other companies; no other coffee maker has been able to compete globally with
Starbucks (Yuan & Wu, 2008). The Company has emerged globally as a leading chain of coffee
and Beverage Company with local competitors only. This has led to the Company often charging
exorbitant prices for some of its products. The Company seemingly charges such prices for its
brand value which is high and can be evaluated with other food and beverages companies from
around the world. The Company has tall claims regarding the quality of coffee beans that it uses
and the method of coffee brewing that it adopts. The Company is regarding as a pioneer in the
coffee brewing business. In New Zealand there exist a most competitors, who copy steps that are
adopted by Starbucks to become second best in the industry. However, due to smaller scales of
operations they are able to charge lower prices compared to Starbucks. This has led to
competitive disadvantage for Starbucks.
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However in spite of global leadership and position, customers in New Zealand view
products of the Company to be priced highly. Though there is significant dependence on quality
of the product yet customers are of the view that the products offered at Starbucks is over-priced
often. The price when matched against quality leads to a lower position of the company within
the market. This has led to the Company losing its market share in New Zealand. Thus, the
Company needs to expand its offerings to enhance its brand position and also competitive
position in the market. The company needs to devise steps such that it is able to overcome its
current pricing related challenge and emerge as market leader with its core competencies that are
present.
4.0 RESEARCH METHOD
Research method determination is a crucial step towards conducting any type of research
(Thomas, Silverman & Nelson, 2015). In this study also an appropriate and adequate research
method has to be devised so that the study is able to arrive at its aim and fulfill its stated research
objectives. In the current study a qualitative method has been used for data collection as well as
its analysis techniques. The proposed qualitative methods for data collection have been
conducted from sources secondary in nature. Moreover, an inductive technique for data analysis
has been applied. Each data has been collected either from journal sources or from internet
sources (Rubin & Babbie, 2016). These data had been then jotted down and subsequently
analysed on basis of the research questions that had been posed for the study. Mostly, method of
observation had been followed from subsequent journals and internet sources, wherein year on
year data was collected. Changes in customer satisfaction rates had been analysed by
understanding and observing data from one year to the other. The changes helped to reveal
findings of the study and arrive at suitable conclusion. However such findings are not conclusive
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in nature and detailed findings using quantitative techniques can reveal much dearth of
information (Sekaran & Bougie, 2016).
Research methods for this study will include searching for various articles and journals from
Google Scholar as well as business website of New Zealand. Internet websites will be searched
thoroughly for customer satisfaction rates form New Zealand for Starbucks coffee store as well
as other coffee stores. Searches will also include rising demand or beverages in New Zealand and
consumer demand patter. These all sources will be assembled to understand customer’s
perception of satisfaction and quality of beverages in New Zealand. Once these all sources have
been identified and assembled then through qualitative design findings will be arrived at to
reveal detailed insights regarding the research questions.
6.0 CONCLUSION
Analysis of the above secondary findings of the study reveals various issues faced by Starbucks.
The study here analysis the key to customer satisfaction at Starbuck coffee store. With
introduction of newly kiwi flavored drink the store expects to generate new customer influx and
customer curiousness. The research approach identifies the various elements of customer
satisfaction by attempting at the research questions. Through exploratory research design, the
concept of customer satisfaction and customer reaction towards the newly floured drink can
easily be generated. Secondary collected data analysis reveals several facts regarding customer
perception of price, quality and in-store experience of customers, which in turn is used to analyse
levels of customer satisfaction. The client organization here, Starbucks will need to identify ways
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and means to bridge its service gap and pricing strategy such that it is able to increase its market
share and also customer satisfaction rates.
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7.0 REFERENCE LISTS
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Chua, A. Y., & Banerjee, S. (2013). Customer knowledge management via social media: the case
of Starbucks. Journal of Knowledge Management, 17(2), 237-249.
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participation and word of mouth in the relationship between service firms’ customer
satisfaction and sales performance. Journal of Service Research, 17(1), 40-53.
Grewal, R., Chandrashekaran, M., & Citrin, A. V. (2010). Customer satisfaction heterogeneity
and shareholder value. Journal of Marketing Research, 47(4), 612-626.
Hafeez, S., & Muhammad, B. (2012). The Impact of Service Quality, Customer Satisfaction and
Loyalty Programs on Customer's Loyalty: Evidence from Banking Sector of
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possible financial market mispricing of customer satisfaction. Marketing Science, 28(5),
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Kim, G. J., & Seoung, T. J. (2011). A Comparative Study on the Determinants of Customer
Satisfaction, Revisit Intention and Word-of-mouth between STARBUCKS and
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Marinova, D., Ye, J., & Singh, J. (2008). Do frontline mechanisms matter? Impact of quality and
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of Marketing, 72(2), 28-45.
Neuman, W. L. (2013). Social research methods: Qualitative and quantitative approaches.
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Rothman, K. J., Greenland, S., & Lash, T. L. (2008). Modern epidemiology.
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Rubin, A., & Babbie, E. R. (2016). Empowerment series: Research methods for social work.
Cengage Learning.
Sekaran, U., & Bougie, R. (2016). Research methods for business: A skill building approach.
John Wiley & Sons.
Thomas, J. R., Silverman, S., & Nelson, J. (2015). Research methods in physical activity, 7E.
Human kinetics.
Tu, Y. T., Wang, C. M., & Chang, H. C. (2012). Corporate brand image and customer
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Verhoef, P. C., Lemon, K. N., Parasuraman, A., Roggeveen, A., Tsiros, M., & Schlesinger, L. A.
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Yuan, Y. H. E., & Wu, C. K. (2008). Relationships among experiential marketing, experiential
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