MG526 Customer Experience Report: Starbucks Case Study

This report provides an analysis of customer experience at Starbucks, examining its value proposition, customer demographics, and the impact of digital disruption. It delves into how Starbucks manifests its brand and delivers customer experiences through quality, service, and employee engagement. The report identifies key customer segments by frequency of use and demographics, highlighting the importance of loyal customers who value the brand's atmosphere and service quality. Furthermore, it applies the Six Pillars of Customer Experience model (integrity, resolution, expectations, empathy, personalization, and time & effort) to Starbucks, assessing areas for improvement. The implications of digital disruption on customer experience are discussed, followed by strategic recommendations to enhance customer satisfaction and benefit both customers and the organization. This includes leveraging digital platforms and personalizing customer interactions to foster loyalty and improve overall experience.

Customer Experience

Table of Contents
Introduction.................................................................................................................................................3
Main Body...................................................................................................................................................3
Value Proposition....................................................................................................................................3
Customers of Starbucks by frequency of use and demographics.............................................................5
Pillars of customers experience model.....................................................................................................6
Implication Digital Disruption to deliver customer experience...............................................................8
Recommendations...................................................................................................................................8
Conclusion.................................................................................................................................................10
References.................................................................................................................................................11

Introduction
Customer experience is about the feeling of customers which they get after using the
product or service. It is about the holistic experience of the customer with the brand or the
business. It includes the way in which the company interacts with its customers. Positive
customers experience is important in order to maintain positive image of brand in market. The
main aim of the present study is to understand the significance of customer experience (Ieva and
Ziliani, 2018). For this purpose, Starbucks is taken into consideration. It is a multinational chain
of coffeehouses based on United States of America. It is known as the largest coffeehouse chain
at the global level. It was founded in the year of 1971 and currently has presence in different
countries across the world. The present study will include value proposition of the selected
organization and how the way the company exhibits itself among customers. Further, customers
of the entity by frequency and demographics and pillar of the customer experience model will
include in the study. Implication of digital disruption on customer experience along with the
suitable recommendations will cover in the following assignment.
Main Body
Overview of Company
Starbucks is a multination company that offers coffee through the outlets across the
globe. It is the largest and the most prestigious chain of coffeehouse in the world. The core
product of Starbucks is coffee. It was started in 1971 as a retailer of bean and ground coffee.
Currently, the organization is connected with millions of customers in 76 markets globally. The
major presence of the company is in US. However, they maintain nearly 28309 stores in different
countries globally (Starbucks, 2021).
Value Proposition
Value proposition is something which a company promises to deliver its customers. It
gives the reason to the buyers to choose the product or services of a particular organization over
others. Additionally, value proposition can be presented as a marketing statement of the business
entity. It is a way to get the trust of target segment so that they prefer the products of the
organization. In addition, value proposition helps in gaining the attention of buyers and allows

the entity to set a unique identity in the market. It also enhances the loyalty of customers so that
they stay with the brand for longer run. In context of Starbucks, their value proposition and brand
strategy is centered on the “Live Coffee” mantra. They ensure to make the experience of
drinking coffee memorable. They create value in the process of drinking coffee (Starbucks value
proposition, 2017). Certain components of the value proposition of Starbucks are mentioned
below:
 Quality: Starbucks ensure to offer the finest quality of coffee to the customers. They
offer value in terms of quality of coffee and ensure that the coffee grown under high
standard of quality. For this purpose, they follow ethical approach and also maintain an
inviting atmosphere in the outlets (Lo, 2020).
 Services: It is the most important component of value proposition of Starbucks wherein
they train employees about treating the customers. They train employees to keep a smile
of face, positive gesture, greetings in order to connect with customers efficiently.
 Employees: Starbucks is successful due to the value they put in the employees. They
follow the ethical standards and train the workforce to enhance their productivity and
efficiency.
Explain how Starbucks manifest itself and how it deliver customer experience
Starbucks has been positioned itself as a brand that offers quality product to the
customers. It positioned the brand as a perfect and less expensive coffee shop that offers
delicious and rich coffee to target people. Positioning of the respective brand is customer based
wherein they make sure to offer friendly, warm, comfortable atmosphere to the visitors in order
to ensure their frequent visit to the outlet. Also, the company is renowned for its remarkable
customer service and always being customer oriented. They focus of providing experience to the
customers by making connections with them. In addition, the brand ensures to provide such an
atmosphere where people can sit and enjoy themselves (Siqueira and et. al., 2019). They deliver
the experience to the customers through friendly atmosphere. Additionally, they also train
employees so that they can treat the visitors effectively. They provide training to the workforce
of keeping smile and interact with customers with positivity in order to make long-term
connectivity. Apart from positioning the product efficiently, Starbucks also makes sure to deliver
the position to the target segment. For this purpose, they use updated and advance techniques of

marketing. Here, they maintain strong connectivity with the target audience via social media
platform. Apart from this, the organization strives to create a sense of belonging, home
environment at each location. They always put efforts to improve the quality of services. They
ensure that all its customers feel belonging, warmth, connected to Starbucks stores, they often
visit (Avetisyan, 2020). Employees of the entity play a crucial role in delivering the value to the
customers. In addition, they also use different approaches to keep the customer satisfied and
connected.
Customers of Starbucks by frequency of use and demographics
Customers are crucial part of the business as they are the major source of revenue for the
organization (Pine 2020). Starbucks is a customer centric organization which focuses on
providing experience to the customers while drinking the coffee. The majority of customers of
the business entity are loyal towards the brand. Once availing the services, they frequently visit
to the outlets. In Starbucks, customers do not only get coffee rather they get experience,
connection, sense of belonging. These all factors are important to make a strong connection with
the target segment.
Customers by frequency of use: The customer retention rate of the Starbucks is 75 %.
Majority of its customers are loyal towards the brand. The reason customers are loyal for the
brand is the quality of their services. Here, the people who frequently visit to the store are those
who feel a connection with the brand and satisfied with their services. These people enjoy the
warm welcome, atmosphere and most importantly experience provided by the brand. In addition,
the frequent customers are those who give priority to the experience and quality over the money.
Customers by demographic: Demographic also play a crucial role in affecting the
number of visitors in the store. It comprises numerous components such as age, income, gender
and more. Starbucks customers are nearly 50% male and 35 % are female in 2018 (Soicher,
2018). The brand targets urban and affluent people and white-collar professionals. The majority
of its customers are educated with the average age group of 42 (Bowman, 2018). In addition,
Starbucks is popular among the men and women of middle to upper class. They target the people
who can afford high price coffee cup on daily basis.

Pillars of customers experience model
Customer experience is based on some pre-defined attributes. These attributes are helpful
in offering exception experience to the customers. These pillars are explained below:
Integrity: Customers are likely to connect with those companies which fulfill their
promises consistently. Here, organization along with their staff can create moments of trust that
will further help in increasing the integrity. Trust is the foundation of strong relationship
(Rajaobelina and et. al., 2018). In context of Starbucks, they ensure to build trust among
customer groups by delivering the promise constantly. Here, they deliver quality products and
train their employees in order to connect with the customer effectively. Additionally, the entity
ensures to fulfill the promises made with the buyers in order to ensure long-term relationship.
Resolution: Sometimes, customers get a negative experience by the organization. Here, it
is imperative to turn the bad experience in good one. No matter how hard an entity try to keep all
customers satisfied but it is not possible to keep all the customers satisfied. However, the
situation can be handles through recover the buyers from bad experience. Here, it is vital to
apologize and take instant steps to handle the situation (Hamouda, 2021). In context of
Starbucks, they also have been faced numerous controversies regarding the experience of the
customers. Some customers have complaints with the taste of coffee, time between placing and
receiving the order and more. In this situation, Starbucks needs to apologize from those
customers and offer them best possible solution in order to turn their bad experience in great one.
Expectations: This pillar of the customer experience model is related to the standards set
by the company. The best brand sets high standards hence the customer’s expectations are also
high from such brand. Here, it is the responsibility of the brand to satisfy the level of
expectations of the customers. In current time, brands are well-aware that they need to attain the
set expectation level of buyers and even need to exceed to flourish in competitive market space
(Chen and Yang, 2021). In case of Starbucks, they have been set particular standards for the
quality and they strive to attain the set standards and even exceed from those standards
constantly.
Empathy: This pillar is related to understand the circumstances of the customers in order
to build positive relationships. To connect with the customers effectively, it is vital to connect

with them emotionally. For this, the organization needs to understand the circumstances of the
customers in order to connect with them properly. It helps the business entity to know how the
customer feels which enable them to offer appropriate solutions (Raina, Chahal and Dutta, 2019).
In reference of Starbucks, they positive connection of the entity with the buyers allow them to
understand the issues that are being faced by the target audience. Better understanding will help
them in providing best possible solutions to the customers.
Personalization: It is the most crucial pillar of customer experience that is based on
offering personalizes experience to the customers. It allows the buyer to connect with the brand
effectively. There is focus on creating emotional connection with the buyers by providing them
individual attention (Gao and et. al., 2021). In Starbucks, ever customer is important for them
hence they focus on providing experience to the customers while drinking coffee in store. Here,
the company has an application named as MyStarbucksIdea. Com where customers can share
their thoughts that make them feel more connected and involved with the brand. In addition, they
ensure to provide personalized attention to each and every people visit to the store.
Time & Effort: nowadays, people look for instant gratification due to the lack of time.
For increasing loyalty, it is imperative to remove the obstacles that might delay decision-making
process of customers. This pillar can be used as a competitive advantage by the organization
since it can help in cutting the cost of production as well (Joshi, 2018). In reference of Starbucks,
they ensure that customers do not need to wait for long time after placing the order. For this
purpose, they hire potential candidates who are able to fulfill the demand of the customers in
timely manner. Providing timely services play a crucial role in improving the customer
experience significantly.
With above discussion, it is monitored that customer experience consist some pillars
which play a crucial role in exceeding the satisfaction level of the buyers significantly. Here,
integrity, resolution, expectations empathy, personalization and time & efforts are the some
crucial pillars through which expectation level of the customers can be enhanced. These pillars
are helpful in connecting with the target people effectively that will lead the business entity
towards long term success and growth.

Implication Digital Disruption to deliver customer experience
Digital disruption describes the changes that occur during the use of new technology,
approaches in the business. It affects the business model and changes the value of the industry
and its existing products or services. These new changes might disrupt the business practice and
generate the need to reevaluate the existing good or services. In other words, digital disruption
cause changes which can be positive or negative. In terms of customer experience, digital
disruption helps in exceeding the satisfaction level of customers in an efficient manner. In
context of Starbucks, they use innovative and creative approaches to exceed the customer
experience. They moreover rely on creative ways of marketing and promotion. Social media has
become a crucial way for the entity to promote its services. They maintain separate accounts on
different social media platforms such Face book, Instragram, Twitter and more. Here, the
customers can share the post and tag the company as well. In addition, digital technology makes
the organization enable to maintain transparency. Here, customers can share their reviews and
feedbacks over the social media account. In addition, Starbucks run a social media campaign
names as “#Whatsyourname”. The main aim of the campaign is to enhance inclusitivity in the
society. In support of the campaign, people share their picture with the coffee cup of Starbucks
on social media. Hence, the digital disruption is helping the entity in improving the experience of
customers in significant manner.
Recommendations
 It is suggested that Starbucks is required to address the queries of the customers
effectively. For this purpose, they can hire efficient people who are capable in
maintaining positive relation with customers. It will strengthen the bond of brand with
target people that will lead the entity towards success.
 In current time, it is vital for an organization to deal with the customers with empathy. It
allows the organization to understand the issues that are being faced by the buyers. In this
situation, Starbucks is required to train their employees so that they can connect with the
buyers emotionally. It will help in building the trust and also provide competitive edge to
the entity.
 To incorporate the digital practices in the business successfully. It is suggested that
Starbucks is required to arrange proper training programs for employees. It will enhance
their ability to coordinate with advance and innovative approaches used by the entity. In

addition, it will enhance the efficiency of workforce which further make the company
enable to ensure high customer satisfaction level.

Conclusion
It is concluded through above-mentioned information that customer experience basically
focuses on relationship of the organization and the buyers. It helps in setting a unique identity of
the brand in the mind of customers. The above study is based on Starbucks that is a well-known
chain of coffeehouse. It is concluded that the company offers quality service, experience to the
customers. There is discussion regarding six pillars and digital disruption in the organization.

References
Books and journals
Chen, N. and Yang, Y., 2021. The impact of customer experience on consumer purchase
intention in cross-border E-commerce——Taking network structural embeddedness as
mediator variable. Journal of Retailing and Consumer Services, 59, p.102344.
Gao and et. al., 2021. How customer experience incongruence affects omnichannel customer
retention: The moderating role of channel characteristics. Journal of Retailing and
Consumer Services, 60, p.102487.
Hamouda, M., 2021. Purchase intention through mobile applications: a customer experience
lens. International Journal of Retail & Distribution Management.
Ieva, M. and Ziliani, C., 2018. Mapping touchpoint exposure in retailing: Implications for
developing an omnichannel customer experience. International Journal of Retail &
Distribution Management.
Joshi, A., 2018. Digital technologies for enhancing customer experience. Sansmaran Research
Journal, pp.1-8.
Lo, A., 2020. Effects of customer experience in engaging in hotels’ CSR activities on brand
relationship quality and behavioural intention. Journal of Travel & Tourism
Marketing, 37(2), pp.185-199.
Pine II, B.J., 2020. Designing employee experiences to create customer experience
value. Strategy & leadership.
Raina, S., Chahal, H. and Dutta, K., 2019. Customer experience and its marketing outcomes in
financial services: A multivariate approach. In Understanding the Role of Business
Analytics (pp. 119-143). Springer, Singapore.
Rajaobelina and et. al., 2018. Towards a better understanding of mobile banking: the impact of
customer experience on trust and commitment. Journal of financial services
marketing, 23(3), pp.141-152.

Siqueira and et. al., 2019. Spreading the word: How customer experience in a traditional retail
setting influences consumer traditional and electronic word-of-mouth
intention. Electronic Commerce Research and Applications, 37, p.100870.
Online
Starbucks Value Proposition. 2017. [Online]. Available through:<
http://reneebowsernauprojects.blogspot.com/2017/02/list-digital-toolsplatforms-company-
uses.html
Brand development strategies, 2021. [Online]. Available through:<
https://penmypaper.com/knowledge-base/starbucks-brand-image />
Avetisyan H, 2020. Positioning strategies of Starbucks and Dunkin. [Online]. Available
through:< https://thesocialgrabber.com/positioning-strategies-of-starbucks-and-dunkin/ >
Bowman Jeremy, 2018. Who Is Starbucks' Favorite Customer?. [Online]. Available through:<
https://www.fool.com/investing/2016/06/16/who-is-starbucks-favorite-customer.asp/>
Soicher P, 2018. What Type of Starbucks Customer Are You?. [Online]. Available through:<
https://towardsdatascience.com/what-type-of-starbucks-customer-are-you-72f70e45f65
Starbucks, 2021. Starbucks Company Profile. [Online]. Available through:<
https://www.starbucks.in/media/AboutUs-Company_Profile-30.01.18_tcm87-34806.pdf />