Customer Relationship Management of 4 Variants of Coffee sold by Starbucks in India. Suggestions for CRM And Existing CRM activities done by Starbucks

1. CRM for Whole coffee bean
Products-Starbucks India
Tejas Jadhav
MMS
9730326100
Sydenham Institute of Management
Studies, Research and
Entrepreneurship Education

2. Starbucks- TATA alliance
• The brand is in a 50:50 joint venture
with Tata and the alliance is named
Tata Starbucks
• Coffee beans are sourced and roasted
locally from Tata fields in Coorg,
Karnataka
• It is spread over Delhi, Maharashtra,
Karnataka, Tamil Nadu and Telangana
• Starbucks had previously tried to
enter the Indian market in 2007 with
the Future Group for its India foray
because of the latter's known
credentials as India's biggest retailer
by far owing to FDI regulations.*
TATA STARBUCKS
Type Joint Venture
Traded As Starbucks “A TATA Alliance”
Industry/
Genre
Coffee Shops/ Coffee House
Headquarters Mumbai, Maharashtra
Number of
Locations
78 stores (October 2015)
Key People Avani Saglani Davada, CEO
Products Coffee, tea, pastries,
frappuccino beverages,
smoothies
Owners Starbucks Corporation(50%)
Tata Global Beverages (50%)
Employees 1000+ (September 2014)
**Jordan Melendrez, Go off the menu with these 8 secret Starbucks drink ideas, today.com, October 2014

3. Starbucks Positioning
Frame of Reference Comparative Brand Points of Parity Points of Difference
International Status Lavazza and Costa-
early entry in the
market
High quality, premium
brand status
Brand Equity of
Starbucks, larger
outlets, customer
service, product
ranges
Local Players in India CCD- Market Leader-
understanding the
market is easy, value
for money, wide
channel
Awareness, Quality to
some extent
Better ambience,
speciality coffee
Quick Service
Restaurants
McD, KFC- customised
products, fast delivery
systems
Stylish stores giving a
valuable experience
Brand Image and
Quality Standards
Other Restaurants Free home deliveries,
easily accessible and
convenient
Availability of both tea
and coffee (specific to
India)
Larger space in the
outlets, ambience and
experience
“It is the premium coffee drinking experience for the premium customer”

4. Target Audience
• Parameters:
1. willingness to pay
2. Ability to excite others
3. Likeability for social image
4. Appreciate good quality coffee
• Coffee Experts- 35-49 years of age, these people are quality conscious.
They enjoys lattes and have long built choices in coffee
• Trendy Lot- These people are 25-35 years of age and enjoy the ambience
of a place more than anything else. Teen parties, Kitty parties may all fall
within this criteria
• Status Opportunists- 25-40 years of age, these people fall under the
secondary target market. They are looking out for good crowd to be with
and wish to establish their place in the high end societySource- Starbucks Market Entry and Expansion Strategy into India, A case study by IIMB

5. Whole Bean
Coffee
1.Italian Roast
2. Sumatra
3. India Estate Blend
4. Kenya
SKU’s of Product
- Sold at Starbucks Outlet
only

6. OTHER MERCHANDISE
Coffee Mug sold the
most
India Mug bought by Foreigners

7. After Sale: Coffee Preparation
1.Grinding done at Starbucks
2. Brewing by French Press
Or 2. By Pour Over

8. Product Information
• Cost of all 4 SKU’s = Rs.750 for 250 gms
• Almost 3 Rs/gm
• Avg French press brewing in one go= 54 gms
• 54*3= 162 Rs
• Cost of same Dark Coffee at Starbucks
Rs.115
“BUYING SKU IS A COSTLY AFFAIR”

9. Customer Demographics
• Age :30-40 years and 50 plus avid Coffee
lovers
• Gender : Generally Male
• High Income Group
• Coffee buying Partners
Most purchases of SKU are repeat purchase
Starbucks Fort( 3-4 SKU’s per day)
Generally 6-7 SKU’s on Thursdays
Starbucks Chowpatty ( 1 SKU’s in 2 days)

10. Whole Bean Coffee
Product Target
Audience
Features and
Benefits
Opinion
Makers
Decision
Makers
Catchment
Area
KENYA
SUMATRA
ITALIAN ROAST
INDIAN BLEND
Higher
Income Group
Coffee Lovers
Passionate
Coffee
Drinkers
Feature
Freshly
Grinded and
Freshly
Brewed Coffee
Benefits
Get Charged
and start your
day with
happiness.
Fresh Aroma
changes your
mood
Barista (If you
ask him for a
dark Roast),
Coffee
Connoisseur,
Friends
Person
Buying the
coffee
Starbucks
Store
Fb
community
e.g Love for
Coffee
Repeat
customers
at Starbucks

11. EXISTING CRM ACTIVITIES
• Coffee Tasting Session(Every Thursday at 4 p.m)
• Promotional Activity
• Preparation Process is taught(Helps selling Appartus)
• Also Barista’s get a
Response of
Customer for Dark Coffee
• Record saved only if the
person buys or is a prospect
• Treated with Respect
• Baristas have coffee with us
explaining slurping and
sipping process also

12. Free Tall Drink with Purchase of
1 SKU

14. UNIQUE PACKING
Coffee is grinded in front
of customers
Special Antilock feature allows airtight c pack
Coffee is
Grinded as per
Brewing Process
Coffee to be used
Within 7 days

15. Voice Surveys by Loyalty Card
• Third Party Agency Research on Customers is
done
• Only Customers who have transacted with
a Starbucks Loyalty Card
• Six Monthly Voice Surveys are taken

16. OTHER CRM ACTIVITIES
FB Page for Customer Engagement and Complaints
Guests buying Whole bean
Coffee Artistically Captured

17. Customer’s Response to Whole
bean coffee
• Name – Mr. Lalwani
• Age – Mid 50’s
• Occupation – Central Bank of India(Director)
• Visited Several Starbucks outlets across
the World
Connoisseur of coffee

18. Responses by Mr.Lalwani
• From my and experience of my friends
around 60 percent coffee is thrown
• They don’t have Jamaican Blue Mountain which
Starbucks doesn’t sell in India
• It looses “Aroma” and then turns rancid after
5 days( Starbucks says 7 days though)
• I drink Coffee by Pour Over only as the filter
paper absorbs all the oil in the coffee and
I never have a expresso or by French Press
because of high oil levels

19. CONCLUSION- BIN 3 type
• BIN 3- More Involved Product
Since these are Repeat Purchase and the
product is such that needs huge involment
in the Coffee Preparation Process
• Coffee Lovers have a developed palates and
are experimenting different coffee hence
refrences in this case is Vital

20. Response from Store Managers
• Focus is more on Educating and the process
of making coffee at home
• Overall Awareness is very low
• Mainly people drink Frappuchinno in Fort and
Chowpatty store apart from Regular hot coffees
• We are pushing Black coffee beverages sale
• Not even 1% of the Sales is Whole Bean
Coffee retail SKU
• Sampling Plans are different Storewise
• We are coming up with an App for Data
tracking
• Focus is not Whole bean SKU sales on till 2017

21. CRM Strategies we Recommend
• Problem – No data of the buyer
• For e.g. Colaba Store – Driver/Pune gets INR 15000
cash and collects 20 packs of Sumatra
• So no data of customer and his response of coffee
Solution -
• We propose compulsory Starbucks Card for
every purchase of Whole bean coffee SKU
• Cash should be transferred to Card
• In this way we will have a track of all customer
data

22. “Be a Barista”-Showcase how great
Coffee lover are you
• We propose Starbucks should start a Program
where their Loyal Customers using Whole Bean
conduct a Coffee Tasting Session in the nearby
location
• This will be an influential marketing exercise
as will have more impact of customer
• Suggestion because these people love to
showcase and share their knowledge of
coffee

23. Small SKU boxes
• Problem- Grinding the entire 250 gms coffee at one
go as people use it for initial 2 out of 5 serves and then
throw away as Aroma is lost
Solution-
We propose small 50 gms SKU
5 Units of 50 gms in one Pack
Starbucks provides custom Grind or Customer
Can buy an electric grinder at Rs.1400

24. COFFEE REMINDERS
• Creative SMS Reminders from Day1 – Day 7
For e.g. “ Did you have your Dark Roasted
Kenyan Coffee Today?”
• Day 7 will ask for a Feedback where the
customer gets an upgrade for the next drink
i.e.(From Short to Tall, Tall to Grande)

25. Strategy-Process for Coffee
Preparation
• Video Link of How to make a Pour Over or
Use the French Press
• Starbucks should mention the temperature
of Water and Specify all the Process of
Preparation in Depth/Coffee Water contact
• Special Photo upload section on Starbucks
page of people with their Appartus
• Engage customers in Competition which
tests his knowledge and skill of coffee
Preparation

26. HOPE YOU BUY ONE OF US
THANK YOU