The Service Experience Produced by Starbucks - Term Paper Example

The Service Package of Starbucks Introduction This essay examines the service experience produced by Starbucks in the context of the five components of the service package: supporting facilities, facilitating goods, information, and implicit and explicit services. Starbucks is selected as the example for this because what the organisation provides fits the definition of service provided by Fitzsimmons and Fitzsimmons (2011); according to that definition, service is a time-dependent and intangible experience for the customer, in which the customer contributes to the experience’s production. Starbucks produces a basic, non-unique product – ready-to-drink coffee beverages in various forms – so its differentiation from its competition is entirely dependent on the service experience (Paryani, 2011). Starbucks is an excellent example of the service experience because the experience, which is carefully-designed and produced with great consistency in each of the thousands of Starbucks’ stores around the world, can be defined in terms of both the marketing-oriented and production-oriented dimensions of service (Cook, Chon-Huat & Chen, 1999, 327-329; Kwortnik & Thompson, 2009). By examining these orientations in the framework of the service package, it can be seen how Starbucks successfully integrates the orientations to provide a superior customer service experience. The Service Package 1. Supporting Facilities Supporting facilities are the physical resources needed to provide the service (Fitzsimmons & Fitzsimmons, 2011), and in the case of Starbucks, consist of the familiar Starbucks store. Starbucks’ service philosophy is that the coffee shop should feel like a ‘third place’ to the customer – home, workplace, Starbucks – which is familiar and comfortable. Although there are variations amongst Starbucks’ stores, these are kept to a minimum by company planners. The practical reason for this is that the layout of Starbucks’ stores is primarily designed around the operations process; the service counter is always in the same relative position to the seating area, and the seating area is always arranged in the same relative order, with smaller tables and ‘stand-up’ counter space closer to the counter, comfortable upholstered seating and larger tables in a middle zone, and outdoor-type seating farthest from the counter (Dutta & Subhadra, 2006). This consistent relative arrangement has two impacts on the service experience. First, it is familiar to Starbucks’ customers. Whether in Sydney or Sao Paulo, the layout and appearance of the store is essentially the same, and the customer will associate the environment with the ‘Starbucks experience’ (Rippen, 2007); this is reinforced by his having to pass through the width of the store – past all the other customers comfortably enjoying their coffee – in order to reach the service counter. Second, the standardisation greatly improves Starbucks’ ability to focus on the key process, the efficient production of customers’ coffee drinks, by removing some variables in traffic flow in the stores (Jackson, 2008). The arrangement and constructed environment of the Starbucks store combines aspects of both a marketing and an operations orientation towards service. The ‘atmosphere’ provides differentiation (Cook, et al., 1999, 327); the product that Starbucks offers is not particularly unique, so it is the manner of its provision in the particular environment in which it is provided that differentiates it from competitors. The layout and environment of the Starbucks store also contributes to operations dimensions of service in terms of customer contact and customer involvement (Cook, et al., 1999, 328), which are discussed in more detail below. 2. Facilitating Goods The obvious facilitating good provided by Starbucks is coffee, which is provided in virtually limitless variations depending on customers’ preferences. Although the variety of ways in which a customer’s beverage can be presented is very large, the product is made from just three basic ingredients: coffee, a milk product, and a flavouring product. In order to efficiently produce a ‘customised’ product for each customer, a specific process is used. The customer’s order is ‘translated’ by the cashier in a particular sequence (size of drink, type of drink, type or variant of flavouring) to the barista actually making the drink, who repeats the order to eliminate errors (Gill, 2007). Thus while the customer perceives he is getting a completely personalised product, it is actually the outcome of a simple set of components and a simple operational process. The system works well because it is kept simple; the reduction of complexity reduces the number of failure points in the service delivery process (Kwortnik & Thompson, 2009). There are really only two points at which the process could fail, either in the transmission of the order from the counter to the barista, or in the making of an incorrect drink regardless of a correct order. In either case, correction requires only one step in the process to be repeated. When done correctly, the product is something that provides service in two different ways: By doing something for the customer – providing a sense of control over the final product – and providing something to the customer, a tangible, quality product (Cook, et al., 1999, 327). 3. Information In the service package, information is provided by the customer to facilitate the production of the service (Fitzsimmons & Fitzsimmons, 2011); the most significant change in the shift from production-oriented economies to service-oriented economies has come in the way information is managed (Karmakar, 2004, 2), so it is not at all surprising that Starbucks focuses quite closely on the customer-server information exchange described above as a key part of its service strategy. It is the input of customer information that makes it possible to differentiate Starbucks’ product, and therefore provide a personalised service experience to the customer. Thus the operations orientation of the service involves a high degree of customer contact and customer involvement; this integrates the marketing and operations orientations because the design of the product relies on the information input and participation of the customer (Cook, et al., 1999, 329-330). Although making completely-customised orders might under other circumstances lead to a great deal of variability, which works against providing consistently effective service processes (Kwortnik & Thompson, 2009), the heterogeneity is a bit of an illusion, as explained above; the number of components needed to make a customised coffee drink is quite limited, which helps to reduce variability in the actual production process (Gill, 2007; Paryani, 2011). 4. Implicit Services Implicit services are psychological or emotional benefits received by the customer from the service provided, even if these are not easily defined or tangible (Fitzsimmons & Fitzsimmons, 2011). Successfully marketing an intangible product and an implicit service is difficult, because perceptions of risk increase with intangibility (Laroche, McDougall, Bergeon & Yan, 2005). In other words, the more difficult it is for a customer to define or understand the service choice and its potential benefits, the less likely he will be willing to try it. In the case of Starbucks, the basic product is easily defined by most customers but for those who have not yet tried Starbucks, the ‘Starbucks experience’ that differentiates that product from similar competitive products is intangible. Starbucks seems to approach this problem in two different ways. First, by following a strict and deceptively-simple operations process, and a consistent format in the appearance and layout of the stores Starbucks can better insure that the ‘experience’ delivered to every customer will be as advertised. The other way is a bit more indirect. A key part of Starbucks’ overall strategy in marketing the ‘Starbucks experience’ simply involves expanding its reach as much as possible; the more people have the opportunity to try Starbucks, the more likely they presumably are to be won over by the service experience and become repeat customers (Paryani, 2011). This is another good example of the integration of marketing and operations orientations to support the service package. 5. Explicit Services In contrast to implicit services, explicit services are benefits that are easily visible and identifiable (Fitzsimmons & Fitzsimmons, 2011). In Starbucks, the friendly, personalised service – customers are greeted and their orders identified by their first names – is an explicit service. The ability of customers to order coffee drinks to their personal specifications is an explicit service also, as well being important parts of the information and facilitating goods components of the service package. The comfortable seating facilities, which usually include value-added features such as free Wi-Fi access and complementary products available for purchase, are another explicit service (Paryani, 2011). These explicit services are part of the operations orientation of the service package. The integration of operations and marketing orientations with respect to explicit services occurs because these explicit services are primarily what create the implicit services – the positive emotional and psychological impacts created by the ‘Starbucks experience’. Remove the explicit services, and Starbucks is just a place selling coffee, with nothing to definitely set it apart from its many competitors. Conclusion The service package provided by Starbucks has five components. The supporting facilities consist of the physical store, and are designed to support the service experience through having a consistent, comfortable layout that is familiar to the customer and helps customer traffic flow efficiently. The facilitating goods are, of course, coffee drinks; the customer’s service experience is enhanced with these because the customer must participate in their production. This aspect of the service process also represents the information component of the service package; without the customer input, the facilitating goods could not be produced, at least not in the form which makes them uniquely a Starbucks product. Explicit services are the comfort and convenience of the facilities, the personalised attention given to customers by Starbucks’ workers, and value-added features that encourage customers to spend time in the store. These explicit services are important, because they help to create the intangible implicit services described as the ‘Starbucks experience’. The service provided by Starbucks is time-dependent in that every customer order is made as it is requested on a just-in-time basis. It is an intangible experience, because even though a customer can order just a simple cup of coffee at Starbucks, a product that is physically not significantly different from a cup of coffee anywhere else, it is the overall experience that differentiates it and makes it superior to the competition. And finally, the experience requires that the customer participate in creating it, by essentially designing his own product when he makes his order, even though the customisation is largely a matter of perception since the variability of the product is cleverly limited. Starbucks effectively integrates marketing-oriented and production-oriented dimensions of service (Cook, et al., 1999; Kwortnik & Thompson, 2009). The integration begins with the production or operations orientation. The design of the store is primarily done to promote efficient delivery of service and reduce variability between locations; as a result, the service experience is familiar to the customer, and the risk perception of its intangibility is reduced (Laroche, et al., 2005). The process for ordering and producing coffee drinks, with its features of customer choice, a particular ‘language’, and the use of the customers’ first names in identifying orders is primarily designed to make production efficient and error-free; it integrates the marketing orientation by giving the customer a personal stake in the production of his coffee drink, making the service experience more individualised. Finally, explicit services such as extra features like Wi-Fi access and maintaining very high product quality are designed to differentiate Starbucks from its competitors, but support more intangible service objectives by making the service experience unique. The overall objective is to provide customers with a ‘third place’ to feel comfortable, after their homes and workplaces (Dutta & Subhadra, 2006); since what defines a desirable ‘third place’ very likely differs for every customer, Starbucks combines the processes and place of production with method and style of their delivery to create an effective service experience in which the customer can make an emotional investment to create his own ‘third place’. Given the success of Starbucks and the fact that one can find very few places in the world where the brand is not present or at least familiar, it is evidently a formula that is very effective. 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