Question

Instructions Read the following case study and answer the questions. Starbucks: Changing Value Proposition Overview Christine Day, Starbucks’ is a senior vice president of administration in North America. Day, however, was not feeling very happy, in part because Starbucks’ most recent market research had revealed some unexpected findings. “We’ve always taken great pride in our retail service,” said Day, “but according to the data, we’re not always meeting our customers’ expectations” Day and her associates had come up with a plan to invest an additional $40 million annually in the company’s 4,500 stores in improving the quality of service. The real question for Christine Day’s team is how to figure out what constitutes ‘excellent’ service for our customers? In preparation for her meeting with company’s CEO Schultz, Day had asked one of her associates to help her think through the implications of the plan. The Starbucks Value Proposition Starbucks’ brand strategy was best captured by its “live coffee” mantra, a phrase that reflected the importance the company attached to keeping the national coffee culture alive. From a retail perspective, this meant creating an “experience” around the consumption of coffee, an experience that people could weave into the fabric of their everyday lives. There were three components to this experiential branding strategy. The first component was the coffee itself. Starbucks prided itself on offering what it believed to be the highest-quality coffee in the world, sourced from the Africa, Central and South America, and Asia-Pacific regions. To enforce its exacting coffee standards, Starbucks controlled as much of the supply chain as possible—it worked directly with growers in various countries of origin to purchase green coffee beans, it oversaw the custom-roasting process for the company’s various blends and single-origin coffees, and it controlled distribution to retail stores around the world. The second brand component was service, or what the company sometimes referred to as “customer intimacy.” “Our goal is to create an uplifting experience every time you walk through our door,” explained Jim Alling, Starbucks’ senior vice president of North American retail. “Our most loyal customers visit us as often as 18 times a month, so it could be something as simple as recognizing you and knowing your drink or customizing your drink just the way you like it.” The third brand component was atmosphere. “People come for the coffee,” explained Day, “but the ambience is what makes them want to stay.” For that reason, most Starbucks had seating areas to encourage lounging and layouts that were designed to provide an upscale yet inviting environment for those who wanted to linger. “What we have built has universal appeal,” remarked Schultz. “It’s based on the human spirit, it’s based on a sense of community, the need for people to come together.” Yet judging by recent performance, customers are losing appreciation of this value proposition. Day and her associates are in the process of rethinking Starbucks value proposition in order to closely align it with customer expectations. They hired you to help them.

1. Propose a procedure for sample selection. What type of sampling technique is appropriate? What should be the sample size? Explain your choice.

2. What data analysis tools would you choose and why?

3. What are you expected results?

Answer 1

Sol: