COLLEGE OF CREATIVE ARTS

POST GRADUATE STUDIES

PROGRAMME CODE
CAAD 704 (MASTER OF DESIGN TECHNOLOGY)

EVC 711
FINANCE AND MARKETING FOR DESIGNERS

ASSIGNMENT 2 – KANO MODEL ANALYSIS (20%)

Starbucks Co.

PREPARED BY

NO NAME STUDENT ID

1. SYAFIQAH SALIM 2023502387

2. KHADIJAH BINTI MOHAMED SIDIQUE 2023967893

PREPARED FOR
ASSOC. PROF. Ts. DR. ROSITA BT MOHD. TAJUDDIN

Submission Date: 8/6/2023 (Friday)

1) The business background in terms of nature of its business, target market, and
marketing mix.

The Starbucks Corporation is a leading roaster, marketer, and retailer of speciality coffee
worldwide. It was founded by Jerry Baldwin, Zev Siegle, and Gordon Bowker launched in
1971, selling high-quality ground coffee in their first outlet in Seattle's Pike Place Market,
Washington (Geereddy, 2013). Starbucks, the biggest chain of coffee shops in the world, is
seen as a key component of the second coffee culture in America. There were Starbucks coffee
shops springing up wherever you walked (Moron, 2022). Today, Starbucks has about 182,000
employees with nearly 35,000 stores worldwide (Starbucks Co., 2022).

Starbucks offers a wide range of fresh foods, drinks, and high-quality, premium-priced coffees
that are roasted and handmade. Additionally, they provide trademark licencing services and
offer a range of coffee and tea goods through additional channels, including authorised
retailers, grocers, and national foodservice clients (Starbucks Co., 2023). The Starbucks
Company's goal is to position Starbucks as the most well-known and trustworthy coffee brand
in the world. Starbucks will selectively pursue other opportunities to leverage and grow the
Starbucks brand through the introduction of new products and the development of new
suppliers around the world in addition to continuing to expand its retail operations, sales orders,
and sales operations (Azriuddin, 2020).

Starbucks entered Malaysia on 17 December 1998 by launching its first store located in Kuala
Lumpur's KL Plaza. Currently, in Malaysia there are more than 320 stores including over 58
Drive-Thru stores and 10 Reserve™ stores. After more than twenty years in business,
Starbucks has developed into not just Malaysians' favourite coffee shop but also a valuable
contributor to local communities all throughout the nation (Starbucks Malaysia website, 2023).
The Starbucks brand offers each customer a distinctive "Starbucks Experience" that is
generated from outstanding customer service, professional, well-maintained store that
represent the culture of the communities in which they operate, and consequently generates a
high level of client loyalty (Geereddy, 2013).

Starbucks' target customers are sometimes classified as affluent or high income since they are
willing to spend it on premium coffee beverages (Barbara, 2019). Most customers are female
(61%), aged between 21 and 30 years old (37%) (Gitnux, 2023). Starbucks holds the brand
name of being our third place after work and home by offering an aesthetic environment and
pleasuring experience. Many Starbucks are in distant places that are called suburbs of urban
centres but usually 60 miles or more from the city (Barbara, 2019). For instance, Starbucks is
frequently found near office properties, universities, and Rest and Relax (R&R) locations in
Malaysia. However, customers who are always on the go view Starbucks as more than just a
pit break; they view it as a mini office where they can set up their laptops and do work while
drinking their preferred beverages since the firm started providing Wi-Fi to the public (Barbara,
2019).

Starbucks used an effective marketing mix to become the most recognised and respected
company worldwide as well as among the market they are targeting (Bhaskar, 2009).
The services marketing mix (5Ps) of Starbucks are:

1. Product: Starbucks offers a variety of products in-store as well as online in Malaysia.

Starbucks' products include coffee, tea, pastries, Frappuccino drinks, smoothies, and
merchandise. This serves to accommodate a wide range of clients, such as providing
alternatives for non-coffee drinkers. On top of that, the coffee brewing process is always
consistent resulting in standardised coffee flavour.

2. Price: The cost of a Starbucks product reflects its premium quality. Starbucks' meal and
drink prices range from RM6 to RM24, while its merchandise may cost up to RM200.
Despite being quite pricey, Starbucks beverages provide a valued brand's luxury at an
affordable price. Even if some consumers may not afford Starbucks goods often, they
nevertheless enjoy treating themselves to their preferred Starbucks menu occasionally.

3. Promotion: The Starbucks Card is a stored-value card that provides customers with
increased convenience when making purchases at any Starbucks location. Most
customers have the card because their co-workers promote it when they purchase
 Starbucks products. As a result, the cardholders can earn Stars towards a complimentary
beverage. While some customers purchase products because they can redeem coupons
and brochure promotions.

4. Place: Customers visit Starbucks because it is easy, convenient, and the company has
many branches around the local area. As an example, Starbucks provides an
aesthetically pleasing setting, several parking spaces, and drive-through service for
individuals who are on the run. Additionally, the opening and closing time for Starbucks
store also to suite to their consumer lifestyles.

5. People: The crew at Starbucks is friendly and helpful, constantly focused on providing
efficient services, and has a service-minded attitude. Starbucks supports their
employees by providing a pleasant environment as well as additional advantages such
as a competitive compensation and optional benefits (Azriuddin, 2020). Employees are
coached and mentored to help them become better in their jobs and go further in their
careers. Furthermore, Starbucks' organizational culture places a strong emphasis on the
worth of employees.

2) The Basic (Dissatisfiers)/Performance (Satisfiers) and Excitement needs offered by

the business. If they do not have the excitement needed, you need to give your
suggestion what and how they can improve.

A. The Basic (Dissatisfiers)

They are always expected by customers and cause strong dissatisfaction if absent.
However, customer satisfaction cannot be increased by their presence (Appinio, 2022).

Starbucks are always expected by customers and cause strong dissatisfaction if absent.
However, customer satisfaction cannot be increased by their presence.
Basic features: Coffee
: Side snacks items
: Good coffee shop ambience
Starbucks offers a range of exceptional products that customers enjoy in their stores, at
home, and on the go (CSIMarket, 2023). All Starbucks stores offer a choice of regular
and decaffeinated coffee beverages, a broad selection of Italian - style espresso
 beverages, cold blended beverages, iced shaken refreshment beverages and a selection
of teas and distinctively packaged roasted whole bean coffees (CSIMarket, 2023).
Starbucks stores also offer a selection of fresh pastries and other food items, sodas,
juices, coffee - making equipment and accessories (CSIMarket, 2023).

Each Starbucks store varies its product mix depending upon the size of the store and its
location (CSIMarket, 2023). Larger stores carry a broad selection of the whole bean
coffee and espresso - making equipment and accessories such as coffee grinders,
coffeemakers, coffee filters, storage containers, travel tumblers and mugs (CSIMarket,
2023). Small Starbucks stores and kiosks typically sell a full line of coffee beverages,
a limited selection of whole bean coffees and a few accessories such as travel tumblers
and logo mugs (CSIMarket, 2023).

Starbucks: The Atmosphere, not the Food. Starbucks has been customers go-to place to
work remotely since Starbucks opened. The coffee is not the reason why customers go
and nor is the food (Ng, 2020). Most Starbucks provide the environment for customers
to concentrate and work, which is something other cafes cannot provide (Ng, 2020).
The interior of other cafes may look like most fast-food joints like McDonald’s and
Taco Bell. With its glaring fluorescent lights that remind of gas stations. They are more
likely a place where customers just eat, pee, and go like at a truck stop.

Starbucks, however, often has a library-like ambiance, the wooden walls and tables, the
warm glow of the lighting in the late afternoon, and earthy colours that contrast the
bright lights of cafes like Dunkin’ Donuts (Ng, 2020). While the shriek of the
cappuccino maker and the bustle of people are nowhere near the morgue-like silence of
a library, there is something about that sound level that helps people think and write
better (Ng, 2020).

B. Performance (Satisfiers)

They have a linear relationship with customer satisfaction. The less pronounced they
are, the less satisfied consumers are. They must match customer expectations and be of
the same quality as those of competitor products (Appinio, 2022).

The Starbucks brand is both a product and a service (Jordan, 2022). When customers
walk into a Starbucks store, they intend to buy their coffee or any beverage. This means
 it is a product. In terms of services, Starbucks services are not tangible like any other
service. Customers will get coffee services from the baristas. Starbucks offers customer
services by promoting a welcoming and safe ambiance in its stores (Jordan, 2022).
Starbucks customer services start the moment one walks through their door. They will
notice welcoming smiles from the friendly baristas. Details matter and at a time where
communication is often more generic than personal Starbucks provides a personalised
level of service every time (Jordan, 2022). The effect is compounded when the baristas
get to know customers and greet customers without even having to ask them for their
name.

The next thing is the setting of the store. The company has intentionally created a cosy
and inviting atmosphere to attract customers and there some people getting some work
done in these stores due to its Wi-Fi. The Starbucks marketing strategy incorporates
digital interactions with customers by implementing new ways to attract digitally
registered customers (Simplilearn, 2023). It offers mobile order services at its stores.
The ability to go cashless with Starbucks cards has further accelerated its business. It
offers coffee services for many businesses and the coffee preparation services are top
notch (Simplilearn, 2023). Great customer service is making sure that the customer is
happy from start to finish and making sure their experience is special. It can be
something simple like greeting customers by their name if they are a regular, knowing
what their usual drink is, or finding a way to make them feel unique.

C. Excitement needs

These are not expected by customers but are well - received if present. The absence of
these features does not negatively affect customer satisfaction. They are used to
differentiate from the competition (Appinio, 2022).

Starbucks makes excellent use of gamification, special offers, good user experience
design, mobile-pay, personalized rewards, and more in their app to delight their
customers and increase customer loyalty (Hartsoe, 2018). The Starbucks rewards is a
well-loved customer loyalty program, which many of the largest retail and restaurant
chains have used as a model when creating their own customer loyalty programs. As
with any customer loyalty program, to achieve the highest level of customer
engagement, Starbucks rewards members need to understand exactly how to earn
members-only freebies, discounts, coupons, deals, and promos.

Loyalty programs are a great way to save money at Starbucks. Customers can register
for the Starbucks rewards program in a couple of different ways. This program offers
several different features and benefits as earn free add-ons, drinks, and food items, order
ahead and pay using the smartphone app, free refills on brewed coffee and tea and the
interesting one is a free birthday treat every year with purchase of any handcrafted
beverages during customer birthday month and bonus reward days (Starbucks, 2023).

As a member, customers will collect Stars on almost everything they buy, and those
Stars add up to customer rewards. This can only be earned with pay using a Starbucks
Card or Starbucks MY mobile app, customers will earn 1 STAR for every RM1 spent
(Starbucks, 2023). As customers earn Stars and reach certain levels, they can be
converted into rewards. The Stars will be removed from their account after redemption.
Customers can choose to use a level reward or save up customer stars for a bigger
reward. For example, 25 Stars, customers can get free drink customization, including a
flavoured syrup, extra shot of espresso, or milk substitution such as almond or coconut
milk (Starbucks, 2023). “More SIPS, More STARS, More REWARDS, more to come
soon!” (Starbucks, 2023). By offering Stars with each purchase at Starbucks, customers
get the feeling that they are getting a little something extra with each purchase. By
customizing bonus Star offers, customers get the feeling that Starbucks is enhancing
their individual customer experience without intrusively monitoring their every move
(Starbucks, 2023).

The free coffee and tea refill for customers gives the most active Starbucks customers
a reason to walk past local and national restaurant or cafes chain competitions which
don’t offer free refills (Starbucks, 2023). In addition, Starbucks merchandise is very
popular. Custom promotional items are always valuable, whether they are offered for
free or sold in a gift shop (Starbucks, 2023). Starbucks knows all about that value with
their eye-catching travel mugs, tumblers, and ceramic mugs printed with their mermaid
logo. They change their drinkware up every season, keeping things interesting for their
dedicated fans. Today, the Starbucks mugs are the most famous promotional items of
all time.
3) Do you think that the company can rely on its existing needs? Give your view.

In our humble opinion, Starbucks has built a strong customer loyalty by rely on its existing
needs. Customer loyalty eventually increases because of the excellent service's skill by their
employee to meet the customer satisfaction. Therefore, Starbucks existing needs are the key to
the survival of Starbucks in Malaysia as strong customer loyalty will make Starbucks sustain
its market position and keep growing in the future.

However, Starbucks must keep up with the current industry where everyone is using
technology. Starbucks cafés often feature long queues during peak hours, even when its
employees do their best to work efficiently. Starbucks can speed up the client order process
and encourage contactless service with the use of the self-service ordering kiosk, which is a
technology-based service with a touch-screen gadget. Other than that, they have to upgrade the
Starbucks app to include quick takeaway alternatives that let customers to place online orders
and pick them up from nearest stores. These new features have the potential to raise customer
satisfaction levels while also enhancing service quality at Starbucks.

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