Study of Starbuck Coffee and Gloria Jean Coffee
1. 0 INTRODUCTION 1. 1 Background of the assignment Coffee is one of the world’s most popular beverages. Some claim it is the most widely consumed liquid in the world aside from water. Coffee is more than a beverage, however. It is a memory, anticipation, a lifetime of consoling moments of modest pleasure woven into our lives. Coffee’s success as a beverage undoubtedly owes both to the caffeine it harbors and to its sensory pleasure.
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Coffee lovers come to associate the energizing lift of the caffeine with the richness and aroma of the beverage that delivers it. Coffee is produced from the seeds of a small red (sometimes yellow) fruit that grows on plants halfway in size between shrub and tree. The process that turns these seeds into beverage is a long and complex process, perhaps the most complex process associated with any major beverage.
It is also a very labor intensive process involving a vast intercontinental collaboration that starts with the coffee grower, moves from there to the picker, then to the mill workers who meticulously remove the fruit and dry the beans, then to those who clean and grade the beans, to those who roast them, to those consumers and baristas who finally grind the beans and prepare the beverage. Every act along the way can be performed either with passion and precision or with careless shoddiness.
It is the cumulative quality of all of these creative contributions that together make the difference between a lackluster cup and a fine and distinctive one Starbucks, a corporation that has grown since its retail inception in 1982 to reach global stardom with over 6,000 shops worldwide, it is truly one of the most successful business ventures to-date. Starbucks purchases and roasts high-quality whole bean coffees and sells them along with fresh, rich-brewed, Italian style espresso beverages, a variety of pastries and confections, and coffee-related accessories and equipment – primarily through its company-operated retail stores.
In addition to sales through our company-operated retail stores, Starbucks sells whole bean coffees through a specialty sales group and supermarkets. Additionally, Starbucks produces and sells bottled Frappuccino® coffee drink and a line of premium ice creams through its joint venture partnerships and offers a line of innovative premium teas produced by its wholly owned subsidiary, Tazo Tea Company. The Company’s objective is to establish Starbucks as the most recognized and respected brand in the world.
To achieve this goal, the Company plans to continue to rapidly expand its retail operations, grow its specialty sales and other operations, and selectively pursue opportunities to leverage the Starbucks brand through the introduction of new products and the development of new distribution channels. The competitor is Gloria Jean’s Coffee was franchising in 1998, and opened 185 stores within 6 years where all are locally owned and operated by more than 100 franchisees. By 2003, Gloria Jean’s Coffee has established stores in every state of Australia.
The company has opened 906 stores and signed 34 Master Franchise agreements across 33 countries worldwide, its strength is built upon a strong recognized brand synonymous with coffee quality and industry leading franchise systems. Gloria Jean’s Coffees has played a major role in the development and growth of the retail coffee market in Australia. Our team of Franchise Partners is passionate about the brand and its products, and has the dedication and determination to succeed. To meet the rapid global expansion, the corporation unwillingly had compromised on some of its key success factors.
This paper will examine these factors from the customer’s point, and how essential are they for Starbucks and Gloria Jean’s Coffee to retain its current customers. 1. 2 Objectives of the assignment The objective of this assignment is to achieve: 1) Analyze company A background STARBUCK COFFEE 2) Analyze company B background GLORIA JEAN’S COFFEE 3) Compare and analyze between two company services retention. 4) Compare and analyze between two company services recovery strategies. 1. 3 The important of the assignment ) The output of this report will give us the clear view of both company perspectives in the customer retention strategic program. 2) Revile both company service marketing plan In addition to sales through our company-operated retail stores, Starbucks sells whole bean coffees through a specialty sales group and supermarkets. Additionally, Starbucks produces and sells bottled Frappuccino coffee drink and a line of premium ice creams through its joint venture partnerships and offers a line of innovative premium teas produced by its wholly owned subsidiary, Tazo Tea Company.
The Company’s objective is to establish Starbucks as the most recognized and respected brand in the world. [pic] 2. 0 STARBUCK COFFEE – COMPANY A 2. 1 Introduction Starbucks purchases and roasts high-quality whole bean coffees and sells them along with fresh, rich-brewed, Italian style espresso beverages, a variety of pastries and confections, and coffee-related accessories and equipment – primarily through its company-operated retail stores. Starbucks is primarily known for selling coffee, but also sells other hot and cold beverages, pastries, sandwiches and other snacks.
A “Skinny” line of drinks rolled out in 2008, offering lower-calorie and sugar-free versions of the company’s offered drinks which use skim milk and are sweetened by a choice of artificial sweetener or one of the company’s sugar-free syrup flavors 2. 2 Company background Starbucks, named after the first mate in Herman Melville’s Moby Dick, was founded in 1971 at Seattle’s Pike Place Market by three atypical businessmen, Gordon Bowker, Jerry Baldwin, and Zev Siegel. Starbucks mission is to “inspire and nurture the human spirit one person, one cup, and one neighborhood at a time. ” Starbucks, founded in the 1970s, opened heir first location in 1971 in Seattle’s Pike place. In 1982, Seattle’s Best began to sell to restaurants and coffee bars. In 1987, the company’s name became Starbucks. The same year, stores in Chicago and Canada where opened. In 1988 Starbucks began mail-order sales of their products. Today Starbucks sells hot and cold beverages, complementary food items, coffee-related accessories and equipment, teas and other non-food products through retail stores in 37 countries. The company operates primarily in the US, is headquartered in Seattle, Washington and employs about 204,000 people.
Starbucks has experienced expansion globally, and has created licenses throughout Asia, the Middle East, Africa, and the Americas, and maintains a 40% market share internationally. The goal of the company is to create brand awareness through the “Starbucks Experience. ” This experience translates well, helping folks start their day with an aromatic cup of coffee, pleasant customer service, and each person’s finding a niche while enjoying their favorite drink and listening to music or reading a book. The first Starbucks location outside North America opened in Tokyo, Japan, in 1996.
Starbucks entered the U. K. market in 1998 ,UK-based Seattle Coffee Company, re-branding all the stores as Starbucks. In September 2002, Starbucks opened its first store in Latin America, at Mexico City. In 1999, Starbucks experimented with eateries in the San Francisco Bay area through a restaurant chain called Circadia . These restaurants were soon “outed” as Starbucks establishments and converted to Starbucks cafes. In April 2003, Starbucks completed the purchase of Seattle’s Best Coffee and Torrefazione Italia from AFC Enterprises .
The deal only gained 150 stores for Starbucks, but according to the Seattle Post-Intelligencer the wholesale business was more significant. In September 2006, rival Diedrich Coffee announced that it would sell most of its company-owned retail stores to Starbucks. This sale includes the company-owned locations of the Oregon-based Coffee People chain. Starbucks converted the Diedrich Coffee and Coffee People locations to Starbucks, although the Portland airport Coffee People locations were excluded from the sale In August 2003, Starbucks opened its first store in South America in Lima, Peru.
In 2007, the company opened its first store in Russia, ten years after first registering a trademark there. In March 2008 they purchased the manufacturer of the Clover Brewing System. They began testing the “fresh-pressed” coffee system at several Starbucks locations in Seattle, California, New York and Boston. Starbucks has always been a place where you can find the world’s best coffees. But in 1971, you would have had to travel all the way to our only store in Seattle’s historic Pike Place Market. [pic] |[pic] |[p|1970s | | | |ic|The first Starbucks opens. The name comes from Herman Melville’s Moby Dick, a classic | | | |] |American novel about the 19th century whaling industry. The seafaring name seems | | | | |appropriate for a store that imports the world’s finest coffees to the cold, thirsty | | | | |people of Seattle. | | |[pic] |[pic] |[p|1980s | | | |ic|Howard Schultz joins Starbucks in 1982. While on a business trip in Italy, he visits | | | |] |Milan’s famous espresso bars. Impressed with their popularity and culture, he sees | | | | |their potential in Seattle.
He’s right – after trying lattes and mochas, Seattle | | | | |quickly becomes coffee-crazy. | |[pic] |[pic] |[p|1990s | | | |ic|Starbucks expands beyond Seattle, first to the rest of the United States, then the | | | |] |entire world.
After becoming one of the first companies to offer stock options to its | | | | |part-time employees, Starbucks becomes a publicly traded company. | |[pic] |[pic] |[p|2000s | | | |ic|The Starbucks phenomenon continues. As of this writing, Starbucks has more than 6,000 | | | |] |locations in over 30 countries.
In addition to our excellent coffees and espresso | | | | |drinks, people now enjoy for Tazo® tea | Logo description In 2006, Valerie O’Neil, a Starbucks spokeswoman, said that the logo is an image of a “twin-tailed mermaid, or siren as she’s known in Greek mythology”. The logo has been significantly streamlined over the years. In the first version, which was based on a 16th-century “Norse” woodcut, the Starbucks siren was topless and had a fully visible double fish tail.
The image also had a rough visual texture and has been likened to a melusine. ] In the second version, which was used from 1987–92, her breasts were covered by her flowing hair, but her navel was still visible. The fish tail was cropped slightly, and the primary color was changed from brown to green, a nod to Bowker’s Alma Mater, the University of San Francisco. In the third version, used between 1992 and 2011, her navel and breasts are not visible at all, and only vestiges remain of the fish tails. The original “woodcut” logo has been moved to the Starbucks’ Headquarters in Seattle.
At the beginning of September 2006 and then again in early 2008, Starbucks temporarily reintroduced its original brown logo on paper hot-drink cups. Starbucks has stated that this was done to show the company’s heritage from the Pacific Northwest and to celebrate 35 years of business. The vintage logo sparked some controversy due in part to the siren’s bare breasts,] but the temporary switch garnered little attention from the media. Starbucks had drawn similar criticism when they reintroduced the vintage logo in 2006. The logo was altered when Starbucks entered the Saudi Arabian market in 2000 to remove the siren, leaving only her crown, as eported in a Pulitzer Prize-winning column by Colbert I. King in The Washington Post in 2002. The company announced three months later that it would be using the international logo in Saudi Arabia. In January 2011, Starbucks announced that they would make small changes to the company’s logo, removing the Starbucks wordmark around the siren, enlarging the siren image, and making it green. [pic] Starbuck mission Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time. Here are the principles of how we live that every day: Our Coffee It has always been, and will always be, about quality.
We’re passionate about ethically sourcing the finest coffee beans, roasting them with great care, and improving the lives of people who grow them. We care deeply about all of this; our work is never done. Our Partners We’re called partners, because it’s not just a job, it’s our passion. Together, we embrace diversity to create a place where each of us can be ourselves. We always treat each other with respect and dignity. And we hold each other to that standard. Our Customers When we are fully engaged, we connect with, laugh with, and uplift the lives of our customers – even if just for a few moments.
Sure, it starts with the promise of a perfectly made beverage, but our work goes far beyond that. It’s really about human connection. Our Stores When our customers feel this sense of belonging, our stores become a haven, a break from the worries outside, a place where you can meet with friends. It’s about enjoyment at the speed of life – sometimes slow and savored, sometimes faster. Always full of humanity. Our Neighborhood Every store is part of a community, and we take our responsibility to be good neighbors seriously. We want to be invited in wherever we do business.
We can be a force for positive action – bringing together our partners, customers, and the community to contribute every day. Now we see that our responsibility – and our potential for good – is even larger. The world is looking to Starbucks to set the new standard, yet again. We will lead. Branding strategies Three components to this experiencing branding strategy: ? First, coffee itself – offering the highest-quality coffee in the world, coffee standards by controlling the supply chain as possible and the distribution to retail stores ? Second, service – customer intimacy ? Third, atmosphere. To make customers want to stay.
Based on human spirit, a sense of community, the need for people to come together. Channels – Broad distribution strategy ? Want to reach customers where they work, travel, shop, and dine ? Good Location: Company-operated stores located in high-traffic, high-visibility settings ? Product mixed tended to vary depending on a store’s size and location non-company-operated retail channels, food-service accounts, domestic retail store licenses Good starbuck partner ? All Starbucks employees were called “partners” -Most hourly-wage employees ? Generous policy of giving health insurance and stock options High partner satisfaction rate (80% to 90%), well above the industry norm. ? Lowest employee turnover rates in the industry (just 70%, compared with fast-food industry averages as high as 300%) ? Lower managers turnover rates & encouraged promotion from within its own ranks Delivering on Service and good measuring service performance ? Training: hard skills and soft skills ? Treated as a valuable customer (75%), friendly staff (73%) and highest quality coffee (67%). ? A variety of metrics, including monthly status reports and self-reported checklists. ? “Customer Snapshot” measurement tool
Less competition ? A variety of small-scale specialty coffee chains (regionally concentrated). independent specialty coffee shops & Donut and bagel chains Strategic for supply ? Part time employees- Starbucks had lowest employee income rate of any restaurant or fast-food company but Starbucks offering health insurance and modest stock options to part-timers. ? Increased consumer participation- Starbucks does a nice job of encouraging this through its integrated marketing communications efforts. For example : has questionnaires in its stores urging customers to send in feedback about their experiences Facilities for future expansion The company’s efforts to greatly increase its sphere of strategic interest by its joint ventures with Pepsi and Dreyer’s, its move to sell coffee in supermarkets, and the possibility of marketing fruit-juice drinks and candy under the Starbucks label represented In order to sustain the company’s growth and make Starbucks a strong global brand, that the company had to challenge the status quo, be innovative, take risks, and alter its vision of who it was, what it did, and where it was headed. 2. 3 Customer Retention Strategies When Mr.
Schultz founded Starbucks and created its unique service experience which is based on a customer-driven marketing strategy, fully understood the strategic importance of segmenting his target market, differentiating his products and thus achieving a successful positioning for Starbucks not only in its traditional markets, but globally. These strategies are to protect their current customers from deserting to competitors and to capture new markets. Starbucks’ unique blend of relaxing ambience and innovative coffee drinks positioned it as a leader in its category, and made it an all time favorite for millions of devotees around the world.
The third place theme highlighted that Starbucks surpassed a place for just a cup of coffee, but instead it gave its customers the comfort of a home, excellent customer service, quality products and the feeling of being special. These elements made the Starbucks experience key in retaining its customers. Starbucks’ overall retention strategy has cleverly covered the 5Ps, among others, as we will see below. Product Quality Starbucks trademark was the unique features of the coffee-based beverages. These innovative drinks have attracted new customers to experience luxury coffee drinks at affordable prices, in a very cozy environment.
Starbucks created a coffee culture, educating its customers on the coffee types, origins, and the roasting process, thus building brand credibility and gaining clients’ trust in the brand and quality of products provided. Consistency Starbucks’ major coffee priority is the consistency of the product taste and quality assurance. Starbucks whilst priding itself as the best quality coffee in the world tries to control much of the supply chain for quality control and product assurance. Starbucks’ reliability and product consistency is driven by the super-efficient coffee maker machines.
Besides making the same drink shot, it is noise-dampening, making sure the customer’s ‘experience’ is not disturbed by the blenders’ noises. Customized and Seasonal Products Starbucks’ brand name and popularity came through customizing the beverages to the consumer’s desire through offering flexible drink options such as extra cream, caramel syrup etc. Starbucks also introduces various and new seasonal products to differentiate themselves from its competitors and to capture new clients. The new drinks add to the overall experience of loyal clienteles and this specialization increases its competitive edge over other players in the market.
Convenience Through Location Starbucks applied the first rule in opening a store i. e. a successful and strategic location, and for thousands of its stores worldwide, credit should be given to their sharp foresight in store-site strategy to reach its target customers and eliminating its competitors. Starbucks’ store-site strategy is to have high visibility, high traffic and convenient location like shopping malls, bar districts and populated business towers, so a daily commuter will be delighted to stop everyday at the store for his Latte.
The stores’ high visibility, convenience and accessibility in terms of its locations and amenities provided (comfy furniture, grand amount of seating, clean restrooms, etc) attracts attention and increases brand recognition and reputation, thus diminishing customer defections and increasing the stores’ traffic and sales. Strong Brand Equity The unique earthly-colored walls of the each store, innovative product display and cozy atmosphere, seasonal themes, promotions etc makes Starbucks a strong brand that allows for brand recognition and consumer retention.
In addition, Starbucks promotes the idea of supporting the local communities by being a good neighbor, and aims to involve its partners in the decision making process. The image of Starbucks sustaining local coffee farmers and helping in grooming their crops builds the customer’s trust in the coffee bean superiority and Starbucks as a socially responsible corporate brand looking after the long-term benefits of the local community with the aim of growing together and not to exploit. (www. tarbucks. com). The store’s clean and hygienic image has added very much to the strong image of Starbucks; a survey states that 83% of the sampled clientele rated a clean store as highly important, a reputation which is equally important for Starbucks’ overall image. Customer Bonds and Loyalty Programs Starbucks recognized that one of the ways to obtain customer satisfaction is by manipulating their perception of equity and fairness in gaining maximum return for their money and loyalty.
So, Starbucks introduced the Starbucks Loyalty Card which gives great benefits to its customers; ranging from syrup and milk options on their drinks free of charge, complimentary coffee refills and free beverage with whole bean purchases. The Starbucks Card or the Duetto Visa Card (a reloadable prepaid card/Visa credit card) binds the customer whereby they feel that they are gaining more value for their money, being treated fairly by Starbucks and feeling appreciated by a better quality service in being a loyal and a regular client, thus preferring to stay devoted to the brand and gaining further benefits with their future purchases.
Starbucks also created its own world culture by innovating new proprietary language for its products, to the extent of publishing a booklet for such vocabulary for its clients. This syntax enabled customers to choose the drink that suits them the most, thus creating a customization bond with Starbucks’ beverages and products. The mastering of this language is essential for the customer to get exactly what he wants, and since this lingo cannot be found out of Starbucks, it will refrain the regulars from flocking to other coffee shops.
In addition to the customization of the drinks, Starbucks’ interior store design was carefully studied and aimed at reaching the human inner-soul, sending subliminal messages making the customer comfortable and at ease in enjoying his ultimate coffee experience. An Affordable Experience Starbucks market entry and key success was in providing high-end quality coffee drinks at affordable prices. This clever blend of unique quality drinks with a great ambiance and an excellent service made their pricing reasonable and fair for millions.
The customer satisfaction on the overall package in exchange for the price paid is reflective in their patronage. Sustaining their prices is essential for customer contentment and retention. The Relationship with Customers Employees of Starbucks are a critical factor since they interact directly with the client. Starbucks’ strategy of creating a personalized service that is vital for the customer’s satisfaction is pivotal in ensuring his loyalty; personalized services include personal greeting, flexible changes to the drink/order and memorizing the favorite order of each customer, all with a genuine smile and friendly spirit.
The human touch and customer intimacy is an essential element in the overall Starbucks experience by making each client feel special and well looked after. This point clearly marks Starbucks’ acknowledgement of creating relationships and having personal bonds with their clientele to deter them from changing stores. 2. 4 Services Recovery Strategies Starbucks interacts with customer in two ways. The first way is at the Point of Sale (POS). The interaction with the customer begins with the greeting, followed by taking the dink/food order, money exchange and leaving.
Pleasant conversation is encouraged the regular customer. This build the idea of the third Starbuck phase for its ambiance meaning that a person has their house, work and Starbuck to make them comfortable. The second interaction is taken place over the phone or by email concerning question comments, or any complaint that they might have. During the first set of interactions, the customer has a high level involvement. The customer has all the choice in how they would like their drink made. There are no self-service or technology used in these interactions.
The second interaction has medium involvement with the customer and has no face time. If a situation does arise, Starbuck has several different ways to rectify the situation. The first way is with their guarantee. This guarantee is that the customer drink should be made right in time and particular item needed by the customer. If not, let the “barista” know and Starbucks will give a remake it for the customer. This is also called within company “a right now recovery”. This allows the “barista” to remake the drink to any specification that was missed in the previous attempt for free.
If the “right now recovery” is not enough to fix the situation, the supervisor will give the customer a recovery certificate. This is a coupon that allows the customer to receive any drink of their choice for free. Finally Starbucks also has the store managers as well as the district managers lave their business card in the store. This allows the customer to have direct communication with the management if any situation become out of hand. Online feedback at www. starbucks. com from one customer reads that “The licensed stores never had a conception of the “heart” of the business to start with.
They are exemplary of everything that is wrong with current store operations. ” [pic] 3. 0 GLORIA JEANS COFFEE – COMPANY B 3. 1 Introduction As one of the world’s leading providers of specialty-flavored whole bean coffees, Gloria Jean’s has been providing the ultimate coffee experience for over 29 years. In 1979, Ed and Gloria Jean Kvetko purchased a small gift shop in a quaint little town just north of Chicago. Deciding to share their secret for great tasting coffee, the store soon developed a loyal following as people came from all around to experience Gloria Jean’s gourmet coffees.
Due to increasing demand and popularity, Gloria Jean’s began franchising stores in the mid-1980’s to entrepreneurs in the Chicago market who shared their passion for specialty coffees. Today Gloria Jean’s has grown to be one of the largest mall-based retailer of specialty coffees in North America. Committed to quality and selection, Gloria Jean’s is the premier destination for people who know and crave gourmet coffee. Each of our flavored coffees receives utmost care from harvest to cup. We meticulously roast and flavor to exacting standards, making Gloria Jean’s coffee the finest you can buy.
Gloria Jean’s Coffees is known for its signature range of hot and cold coffee drinks including traditional espresso and ice blends; coffee beans, specialty teas, pastries and coffee accessories. (Wikipedia – The Free Encyclopedia 2008) 3. 2 Company background In 1979, Gloria Jean Kvetko founded Gloria Jean’s Coffees with her first outlet opened in Chicago, USA, selling coffee and gifts. 1n 1996, Jireh International Pty Ltd, founded by NabiSaleh and Peter Irvine, purchased the rights to franchise Gloria Jean’s Coffees in Australia.
With stores in over 30 countries world, Gloria Jean’s Coffees is one of Australia’s leading coffee specialists and one of the fastest growing franchise organizations in the world. The company has opened 906 stores and signed 34 Master Franchise agreements across 33 countries worldwide, its strength is built upon a strong recognized brand synonymous with coffee quality and industry leading franchise systems. Gloria Jean’s Coffees has played a major role in the development and growth of the retail coffee market in Australia.
Our team of Franchise Partners are passionate about the brand and its products, and have the dedication and determination to succeed. Gloria Jean’s Coffees is one of the top 30 fastest growing franchises in Australia and is also listed as one of Australia’s top 1,000 companies and top 500 Private Companies (Source: BRW 2007/2008). The company has been recognized for their systems, most recently winning the ‘Food Franchisor of the Year 2007’ in the PricewaterhouseCoopers Excellence in Franchising Awards and ‘2006 International Franchisor of the Year’ awarded by the Franchising and License Association, Singapore.
Passionately committed to creating the ultimate coffee experience for every guest from bean to cup, the Gloria Jean’s Coffees difference comes from a true dedication to handmade coffee – from hand picking beans to handcrafting each individual cup. Gloria Jean’s Coffees is driven by a desire to be the most loved and respected coffee company in the world. They are committed to leaving a positive net benefit to both the communities from where they source their coffee and those communities they serve. With the sale of each cup, Gloria Jean’s Coffees helps to support local and international communities through their partner programs.
Over the last year Gloria Jean’s Coffees has made a huge investment in new resources, systems and tools that will take their franchise model to the next level globally. The team has put in place leading-edge platforms, systems and tools that have strengthened their business and created a robust model that can be implemented successfully and consistently across their overseas markets. Gloria Jean’s Coffees provides ongoing management and support from the moment new Franchise Partners join the Gloria Jean’s family. The Gloria Jean’s Coffees business model is a franchising system similar to many fast-food chains.
Franchise owners have to pay franchise fees and royalties on their sales as well as operating costs. The organization’s board consists of chairman Nabi Selah, and directors John Dwight, Peter Irvine and Andrew Tyndale. Product Coffee houses serve and sell a range of espresso coffee drinks, cold drinks, blended and estate whole bean coffees and specialty teas along with pastries and coffee accessories. Gloria Jean’s Coffees recently purchased through auction an allocation of the whole coffee bean that came fifth in Brazil’s Cup of Excellence awards, Niche/Small Target Market
Gloria Jean’s Coffee is currently targeting small market segment, young adults segment, which comprises people age 18 to 25 years old, compared to Starbucks, 15 to 64 years old. Besides that, Gloria Jean’s mainly focuses on female customers, where half of the sales came from that particular gender. Customers Are More Demanding Nowadays, customers are more knowledgeable towards coffee. Besides, there is no switching cost to other competitors. They know what different types of coffee taste like and what kind of beans came from where. Thus they only drink those that they prefer and they like.
Customers are price sensitive, where a slight change in price might lead to change in preferred brand due to the low switching cost. This means that if customers do not get what they want from a brand, they will have no obligations to switch to the other brand, or they might as well buy coffee beans from supermarkets and brew themselves, which is one of the reason why sales is declining. Highly Competitive Industry There are a lot of brands that selling the same product, which is coffee. Most of it is already well established. Thus it is a highly competitive industry where all are fighting for a share in the industry.
The reason for many companies being in the same industry is because of a profitable market and low entry barrier. Growth in specialist coffee shops such as Hudson’s Coffee and Starbucks Coffee took up a huge portion of the share in the market. Selection of Franchisee/Partners Gloria Jeans is very particular in selecting franchisees or partners. The company stands by their values, which is “Our partnerships are based on integrity and trust”. They only choose those that they prefer and they feel good with. Logo description Gloria Jean’s coffee logo colors are two shades of brown, orange, yellow, and silver.
The logo itself is a coffee cup with steam coming out of it. The motto is “escape the daily grind” are full of meaningful in a coffee lover life. [pic] 3. 3 Customer Retention strategies Operations Gloria Jean’s Coffees strive to develop their operations in retail business environment by using several channels. One of their distribution strategies is having a very well known third party companies that basically shares their beliefs, values, and commitment to quality. Gloria Jean’s Coffees also expanded their coffee business by making their coffee and coffee-related products available via mail order and the World Wide Web.
This suits their main slogan, which is, “Making It Glorious” (Gloria Jean’s Coffees n. d. ). Donate / Joint venture with society Our success is thanks to the communities that support us, and in return we aim to give back whenever possible. We strive to have a positive impact, both on the communities from where we source our coffee and the communities we serve. Gloria Jean’s Coffees’ core value of “Belief in People, Building and Changing Lives” Gloria Jean’s Coffees in Singapore has collaborated with World Vision International by sponsoring seven children through the Child Sponsorship Programmed.
The Child Sponsorship Programmed supports the world’s less fortunate children from various countries by addressing the root causes of poverty and diseases, helping these children, their families and communities break the cycle of poverty, and empowering them to help themselves in the future. A Bean for a Dream for our sponsored children. When you buy a Happy Cookie at our outlet, part of the proceeds will go towards the outlet’s sponsored child. The bean represents the dreams that you will help fulfill, and the card shows your support for the Child Sponsorship Programmed.
Customer Service Due to the company’s ‘family spirit’, they tend to take customer service as an important role and expect their partners would share these values in the area. Since Gloria Jean’s Coffee houses around the world are known for providing a very friendly environment and offers a personalized service. Therefore, Ian Martin, group chief executive of Gloria Jean’s Coffee franchise said that, “At Gloria Jean’s we don’t talk about customer service because we don’t have customers, we have guests. This is more than emantics – we don’t see ourselves as retailers, but as a coffee house, serving guests, and you treat guests differently from customers” (Franchise Business 2007). This is one of Gloria Jean’s Coffees strength as it is proven that they do take their consumers seriously. Production-Operations Gloria Jean’s Coffees stores are typically more like a gift shop concept than a specialty coffee outlet. Stores vary in size and located in a variety of settings, including overlooking parks and gardens, the beach, and main thoroughfares. Most of the location chosen for their outlets usually is a metropolitan area which most of people usually go.
They believe in the concept of higher volume, higher chances of having customers. The product mix varies between each store based on the size and location of the store. It was a take-away concept, which is totally un-Australian. Marketing Gloria Jean’s Coffees positions their products on quality and experience, rather than just offering coffees. A comparison of specialty drinks with its competitors reveals very minor differences. Gloria Jean’s Coffees’ image is one of the key elements to their success. The company has realized that people don’t only come for the coffee; they come for the atmosphere.
People socialize, read, study, dine, or just enjoy the music while drinking their coffee. By knowing this, Diedrich Coffee try to make their stores unique in some way or another that will create a vibrant store atmosphere. Research and Development Gloria Jean’s Coffees consider research and development (R) as one of the main factor to be successful in the market thus they constantly urge their employees to be innovative and creative. This is evident through the continuous developments of new and exciting products, being the various drink flavors and coffee related products.
By introducing more and more new products and by developing new distribution channels, it coincides with Gloria Jean’s Coffees goal of becoming the most loved and respected coffee company in the world. 3. 4 Services Recovery Strategies Caring for Upset Customers Now and again there are bound to be problems. A customer may be dissatisfied with his meal or may find the quality to be below his standards. There are special training for server and they have to attend it, in able to get confirmation of services. At Gloria Jean’s Coffee they are 100% sure servers know the best ways to handle customer complaints.
Retaining upset customers can be a challenge. By putting in the effort and respect to recover distressed customers, usually Gloria Jean’s may be able to convince their customer to return to in the future. Customer Comment Cards Customer comment cards are recently use and most type of way in evaluating the customer experience. Customer comment cards are typically set out on the table or delivered by the server at the end of the meal. Customers can rate qualities of the Gloria Jean’s Coffee cafe, such as food presentation, menu pricing and server friendliness. 4. 0 COMPARATIVE ANALYSIS
The definition of comparative analysis are the item-by-item comparison of two or more comparable alternatives, processes, products, qualifications, sets of data, systems, or the like. In accounting, for example, changes in a financial statement’s items over several accounting periods may be presented together to detect the emerging trends in the company’s operations and results. 4. 1 Comparisons Starbuck Coffee and Gloria Jeans Coffee in term of Customer Retention Strategies In order to maintain the customers for both companies in this industry, there have to make sure that their customers always satisfied with their product.
The definition of customer retention strategy are helps the organization to keep their sales up, to create social and structural bonds and build engagement to delight the customers. The top strategies to retain customers are: market to the existing clients, connect with the customers, ask for feedback and input, share resources, reward customers for staying, be consistent in the approach and interactions, and follow through on the commitments, and keep learning. It is well documented that optimizing customer loyalty has a direct and positive impact on a company’s financial performance and strategy.
Increasing customer loyalty through improved customer experiences can be driven by the insight gained from a comprehensive customer feedback program. Below are comparisons table for both company. 4. 2 Comparisons Starbuck Coffee and Gloria Jeans Coffee in term of Services Recovery Strategies Service recovery has drawn the attention of researchers and academicians recently. The concept of service recovery is seen as both business practice and focus of marketing study which has developed over time.
Perhaps the strongest single factor that causes service failure is the nature of service products themselves, which increase the possibilities of errors, or service failures, and therefore the need for recovery. Most scholars point out that the difference between tangible products and intangible services has increased customer awareness of the possibility of service failures either from the operational perspective or from the customer’s viewpoint and it’s difficult for marketers to understand and to meet customer expectations. Besides, service variability has been identified as ongoing problem both for marketing and quality managers.
Below is the table of both companies for services recovery strategies. 5. 0 CONCLUSION 5. 1 Conclusion for Starbucks and Gloria Jean’s As one of the famous coffee brand shop, the coffee shop does well in the field of marketing. According to the analysis of the shop’s situations concerning the marketing mix and positioning, a clear picture of the shop’s competitive advantages can be achieved. Generally speaking, there are some important factors that help the shop to achieve business success, which include convenient location, guaranteed high quality of both coffee and service and the Starbucks and Gloria Jean’s brand itself.
On the other hand, this research also gives some recommendations to help to solve problems found during the course of research. For example, the shop should pay more attention to create a more comfortable environment in the guest area, and be more positive to introduce the “Member Card” which can help to build more stable and loyal customer relationship. 5. 2 Recommendation for Starbucks Coffee Based on the analysis, there are some issues should be taken into considerations to make further improvements for the Starbucks coffee shop.
First one is based on the customers’ expectation survey. Some customers suggest that Starbucks should offer more comfortable armchairs and coaches, canopy and replace the outdoor floor with the wooden floor as same as the indoor decoration. In service industry, customers often look for tangible clues, namely physical evidence which can influence customer’s evaluation of service quality. In this case, there is knowledge gap between the service providers and the customers perceived service quality.
More comfortable environment can help create friendlier atmosphere, which enhance the supplementary services by adding values to customers. It is more attractive to customers, especially when they want to have a relaxed time in this Starbucks shop except for a cup of coffee. Besides that, many customers were surprised when they heard that Starbucks also offer a reward card called “Starbucks Card Visa”, which, however, is not introduced to customers by staff, compared to the Gloria Jean’s positive attitude to introduce their discount card to customers.
Loyalty reward programs can offer existing customers incentives to remain loyal and perhaps even increase their purchases. In this case, the coffee shop appears negative to reward their customers, which is easily resulting in customer defection because customers will feel like being defected when they get to know the truth. The shop should realize that existing customers are more profitable while winning new customers are costly. Thirdly, should pay more attention to educate its customers about Starbucks’ coffee culture. Starbucks does well in brand building.
Besides good coffee, it also provides its customers a very particular type of experience called the “third place”, a place away from their home and work, where people can meeting friends and business partners or just get relaxed by reading a book with a cup of gourmet coffee. This is the Starbucks’ positioning, the selling point. However, according to the survey results, no one knows it. The shop should realize that differentiation is most of the time why people buy. A clear concept of what the difference is will directly pull customers to come in. There should be a complete consideration about the cost issue before taking action. 5. Recommendation for Gloria Jean’s Coffee Product Uniqueness Gloria Jeans should opt for better coffee beans or a variety of coffee beans from around the world. Beans could be obtained from areas such as South America and Indonesia. These are the places that venture into to obtain variety of beans that suits the consumers. By doing so, consumers will definitely have a variety of brew that they could choose from, besides, the special beans could even provide a better taste of coffee for different types of consumers. Using low fat milk, creamer and artificial sweetener could benefit those whom are worried about obesity and have obesity problem.
This specially caters to them as it is less fattening and less sweet, thus it could comply with World Health Organizations agenda of providing healthier food and beverages. Product Differentiation Gloria Jeans should provide food to customers instead of only cakes and pies. This is because walk in customers would find it convenient to dine in instead of just buying coffee from the outlet. Menu such as breakfast sets and set lunch should be provided besides serving light food such as sandwiches and cakes. Raising standards Most walk in customers look for a cozy and warm place to hangout when they enter the outlet.
Gloria Jeans could provide a better environment for them by using comfortable sofas and furniture, warm ambience with music and also providing handicap facilities. This will improve consumers’ perception towards the outlet. Modern equipment such as The Clover, which is a specialized brewing machine that allows a barista to quickly deliver one freshly brewed cup of coffee at a time, would be useful. It takes quite some time for a freshly brewed cup of coffee to be served to customers with traditional equipments, thus it might lose some customers whom could not wait.
Many people patronize coffee outlet is because it is a neutral place for people to talk about business and do their homework and assignment. This means that internet connection is very useful for them, including students whom usually do their assignments and homework at the outlet. Providing Wi-Fi service to them might benefit Gloria Jeans, as more people will patronize the outlets for usage of Wi-Fi, which will indirectly linked to purchasing of coffee in the outlet. Increase baristas standards Providing further training such as entrepreneurship skills and management skills to baristas might improve their services.
Baristas will feel more knowledgeable in handling situations that might occur. Giving baristas extra incentives such as entertainment allowance and company trips might boost up their morale, which might indirectly increase their productivity level and decrease the turnover rate. Widen the target market Gloria Jeans target market in considerably small, where there only target people aged 18 to 25 years old compared to other competitors. They could widen their target market to cater students as well as corporate business people.
This can be done by widening the operation to hotels and resorts, healthcare, college and university campus environments and business and industry cafeterias. Besides that, they could provide kids menu, which could be favorable to those families that brings their children together to Gloria Jeans’ outlet. Increase Customer Awareness Gloria Jeans hardly did any advertising and promotions. They should advertise in local newspaper on their special promotions and their new products to gain customers awareness. Celebrity endorsement could also be useful in the sense that Gloria Jeans is their choice of coffee.
This will gain attention of the fans of the celebrity and also people in public. Local celebrities such as Nicole Kidman is prove to be useful as a marketing strategy in the sense of celebrity endorsement. Social and environmental effort can be seen as a good way to increase customers’ awareness towards the brand name. Doing charity work such as funding the coffee bean farmers, building schools and clinics could be seen as a useful tool to gain worldwide attention towards what Gloria Jeans is doing for the world. They could also be part of Governments plan of reducing the consumption of electricity and water by doing so in the outlets itself.
Customer incentives Gloria Jeans should reward their loyal customers with membership card or loyalty card to encourage them to stay loyal to the brand and also continue patronizing. These rewards will be beneficial to them and make them feel happy and treasured. They could provide them with discounts coupons and free refills for them who have the membership card, and encourages those that have not sign up, to sign up for these benefits. Franchisee Criteria Gloria Jeans has a strict policy in choosing franchisees for their business. This causes a lot of potential franchisees withdrawn from franchising for Gloria Jeans.
The company should be more lenient towards the requirement in selecting franchisee or partners. But then also they have to do adequate power research on the background of the franchisee before choosing them. This is because they reflect the brand image of the company when they are operating under Gloria Jeans’s name. Choosing the Right Partner From the problem regarding funding Mercy Ministry against anti-gay society, Gloria Jeans should discontinue the funding of it in order not to interfere with serious issues that could jeopardize the business.
Instead, they should fund beneficial organizations such as Red Crescent Society and World Wildlife Fund. This will also help promote Gloria Jeans name worldwide, as a form of consumer awareness 6. 0 REFERENCE ? http://en. wikipedia. org/wiki/Gloria_Jean’s_Coffees ? http://www. gloriajeans. com. sg/our-drinks/ ? http://www. starbucks. com. my/ ? theentrepreneurshipjournal. wordpress. com/… /customer-retention-strategies ? www. slideshare. net/Spartanski/starbucks-case-analysis ? http://www. ukessays. com/essays/marketing/gloria-jean-coffee. php