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Retail monopolistic competition
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The retail environment is filled with competition creating a need for each individual establishment to offer its customers more than just a product. The producers of the product have to provide an experience in addition to the product, an experience that creates loyal customers and encourages repeat visits. Stores, such as Starbucks, have capitalized on this idea and have expanded from 1 store in 1971 to over 11,784 locations as of July 2, 2006 (Starbucks Coffee, 2006). The coffee sold at Starbucks is perceived as a premium coffee and the price charged for this product is much greater than the price charged at other locations. The question is what warrants this price difference, and why are consumers willing to pay more for Starbucks coffee …show more content…
There are a variety of factors to be considered in reference to this topic, including understanding the basic definitions of the customer experience, defining the difference in low-service and high-service stores, and determining the effects of these experience aspects on consumer choice. Ultimately, it is critical to determine whether this aspect of retail operations, the customer experience, has an overall effect on profitability or is just an operational decision that provides a competitive advantage over those who sell greater amounts of lower priced products, with little to no effect on …show more content…
This includes all aspects prior to the purchase and all treatment they receive during their visit. This is a crucial operational activity and can convert customers to repeat customers or drive good customers away. This process can be further divided among four areas: personnel, product offering, consumer convenience, and shopping elements, all of which contribute equally to effective customer service The personnel aspect referrs to the person that operates the store and interact with customers. These employees are a direct reflection of the organization and are often the first contact a customer has with an organization. These are only a sampling of necessary traits but are necessary within the personnel employed in customer service roles. Product offering is an aspect that reflects associated issues with the product and its effect on the customer, and is a direct reflection of how this product is handled. The product is the most important aspect of the business and can have a tremendous affect on customers and their decision to become repeat buyers. Inaccurate descriptions and incorrect labeling can have a very negative effect on sales, in fact, this has been the demise of many
Having prior knowledge of a customers needs, habits, and questions before or during every interaction and transaction can boost customer satisfaction. (Zueschner, Raymond. (1997). Communicating Today. Boston: Allyn and Bacon.
One of the most important areas to consider is customer service. The atmosphere of a store
First, when shopping, a big factor that will impact a customer 's experience is the customer service. Whether it’s from a simple “hello”, or an employee going out
Starbucks Coffee, Tea, and Spice opened its first store in April 1971 in the Pike Place Market in Seattle, by owners who had a passion for dark-roasted coffee that was popular in Europe, but hard to find in the U.S. (Harrison et al., 2005; Venkatraman & Nelson, 2008). The company’s mission was to provide Seattle with the best access to dark-roasted coffee, and sought to educated customers about the product. As a matter of customer education and acceptance of the product, Starbucks grew and expanded into the successful domestic market it is today. Much of this success can be attributed to a focus on the total customer experience and s...
Starbucks is currently the industry leader in specialty coffee. They purchased more high quality coffee beans than anyone else in the world and keep in good standings with the producers to ensure they get the best beans. Getting the best beans is only the first part, Starbucks also has a “closed loop system” that protects the beans from oxygen immediately after roasting to the time of packaging. They did this through their invention of a one-way valve which let the natural gasses escape but keeping oxygen out. This gave them the unique ability to ensure freshness and extended the shelf life to 26 weeks. Starbucks isn’t only about the coffee, it’s also about a place where people can escape to enjoy music, reflect, read, or just chat. It is a total coffee experience. The retail outlet has been responsible for much of Starbucks growth and has contributed substantially to their brand equity.
With clear core values towards providing quality coffee, the best service, and atmosphere, Starbucks has enjoyed great success since it was founded 30 years ago. The company has being doing very well for last 11 years with 5% or more store sales increase, even with the rest economy still reeling from the post-9/11 recession. However recent research, conducted to Starbucks, have showed some concerns regarding company’s problem meeting customers’ expectations.
Providing great customer service and having the ability to retain customers require consistency in delivering the anticipated services. Customer service encompasses having the ability to provide a service or product to customers by means in which it was promised. However, there are times when unforeseen circumstances may occur, resulting in customer service breakdowns. Understanding the effectiveness of customer service relations provides the assurance needed to handle complicated service related issues. A well qualified customer service representative has the acquired skill to effectively defuse a potentially damaging service related matter. Service recovery influences customer retention and improves customer satisfaction.
By remaining true to core competency and a laser like focus effort towards quality; Starbucks has managed to analyze, adapt and create brand loyalty to their particular market and remained the top competitor throughout the coffee industry. Americans in general enjoy a good, hot cup of coffee to start their day. In any given business, seeing a torrid cup of coffee in a cup from Starbucks is not uncommon. Starbucks is one of the most popular coffee franchises in the world with locations in 62 countries. Starbucks has been around since the year 1971where they started off as a coffee bean roaster and retailer. This research paper will briefly explores, examine, and assess Starbucks quality marketing and management strategy. Additionally, this research
It’s the strategic interface between marketing and logistics, it adds value to any given product, yet it’s intangible – what is it? The answer is simple: customer service. “Customer service has been an issue since the early 1970’s” (Cavinato 60). Though it’s long been considered an issue, it’s important to remember that there isn’t one set formula to developing customer service, it’s more of a mindset (Cavinato 61).
a) Good customer service is a critical component of a quality product. Collier (2011) states that service needs to be consistent, continuous, thoughtful and available. These are crucial in meeting and exceeding customer expectations. Collier also continues on to state that staff providing customer service must have appropriate skills, knowledge and personal attributes to execute a high standard of service. These skills have been identified by Collier as listening skills, punctuality, courtesy, integrity and grooming. The skills and qualities identified are reflected by the five key components of customer service tangibles, reliability, responsiveness, assurance and empathy. The five components have been provided by the SERVQUAL service measuring
To effectively sell a product or service, organizations have to really know how customers behave, regarding to what they buy. The study
One of the main problems that Starbucks is facing at the present time is the ability to maintain national competitive advantage (Monash South Africa, 2014). Due to their local demand conditions, Starbucks tries to satisfy all customers by trying “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” (Starbucks Corporation, 2014). Local demand conditons consist of a company trying satisfy needs of their closest customers and expanding their competitive advantage by upgrading their strategic management policies (Monash South Africa, 2014).
When I saw this discussion, I couldn’t help but think of Starbucks and the impact they’ve made throughout their 45 years of establishment. I worked with them for about 7 years and saw how unique they were from your everyday coffee and latte spots. A retail company with thousands of coffee shops in the US as well as in other countries, this particular retailer has been able to catch the eyes of all ages as well as locations throughout the world. For example, today college students utilize Starbucks locations to study rather than go to a nearby library. Starbucks is also known for its best coffee and espresso drinks (Latte or Frappuccino) and with one of its delicious espresso 's any student or just a person stopping in to enjoy its lounge area where there is free Wi-Fi is awesome! Starbucks lifecycle has made a 360 turn around and been revamped twice to accommodated the growing market. Customizing their brand to fit more in with everything and not just one thing. By doing this they’ve created multiple product lifecycles within their own lifecycle as a corporate company.
Environment and the people giving service at that have an effect on customer to make a decision on buying the product.
Customer Service is the provision of service to customers before, during and after a purchase. The perception of success of such connections is subject to workers "who can modify themselves to the identity of the visitor". Customer service concerns the need an association relegates to customer service in respect to segments, for example, item development and valuing. In this sense, an association that esteems good customer service may spend more cash in preparing representatives than the normal association or may proactively interview customers for feedback.