Chapter I Introduction Firms relationship with their customers, like other social relationship tend to evoke overtime. Scholars have suggested that marketing exchange relationship between dividers and customers often have the potential to evolve from strangers to acquaintances to friends and to partners. In the Philippines, one of the frequently visited tourist places is Baguio, which is considered the Summer Capital of the Philippines. People from different places come here for its beauty, and climate, making the coffee industry suited to this place. In the early industrial stage, producers attempted to increase production. They were focused on mass production and efficient technology. Companies were product driven because the demand of the product was high. So, there was no need for customers research marketing was product oriented as there was more focus on product rather than customer needs. But in the 1980’s, enormous attention was directed at the area of customer service. Customer service programs have been embraced widely within the service sectors, notably in financial service. (Payne, 1993, p. 215) According to Philip Kotler (1996): To succeed in today’s fiercely competitive market place; companies will have to move from a product and selling philosophy to a customer-marketing philosophy. Companies’ effort should be more focused on customer service rather than in presentation of goods and services. The role of marketing is changing as the company becomes more, a more customer oriented. There are many benefits of marketing, rather than sales orientation. Customer oriented marketing is adaptive to change in customer characteristics and needs. Under marketing philosophy, selling is used for communication and with understanding customers, serves customer dissatisfaction tend to change in policy, neither a stronger nor difficult sales pitch. Marketing looks for a real difference in customer taste and develops strategies, since it is a long range oriented and marketing goals reflect over-all company goals. Finally, marketing views, customer needs in broader than narrow manner. (Berman, 1996, p. 14) 1
Customer relations depend upon customer satisfaction. This reflects on a person’s feelings of pleasure disappoint resulting from company product’s perceived as performance of quality in relation to his or her expectation. (Kotler, 1997, p. 40) Providing good customers relation is important because customers are third stakeholder in a typical enterprise environment. Without customer, enterprise could not exist. All enterprise relies on customer service (Bedelan, 2 nd Edition, p. 86) most especially in the coffee industry where customers want an exceptional customer service which will build good relationship particularly in terms of customer loyalty. As there is more competition among coffee industry in Baguio City, the researcher found a strong need for this study to determine the factor which can contribute to customer loyalty and how effective these factors are. So, the greater the competition is, the greater is the need of a company to come up with ways and means on how they can retain their customer and still have their loyalty for the company. Background of the Study The goal of Starbucks 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. While language and culture may vary, the experience is universal, creating a positive encounter for consumers who will return again. Starbucks` current customer retention strategies started when Starbucks created its unique service experience which is based on a customer-driven marketing strategy, the founder fully understood the strategic importance of segmenting his target market, differentiating his product and thus achieving a successful positioning for Starbucks not only in its traditional markets, but globally. These strategies are meant 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. (Moon & Queich, 2003, pg. 2) these elements made the Starbucks 2
experience key in retaining its customers. Starbucks’ overall retention strategy has cleverly covered the 5Ps and these are the following: Starbucks’ trademark was the unique features of the coffee-based beverages. These are 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. (Clark, 2007, pg.201) Starbucks’ major coffee priority is the consistency of the product taste and quality assurance. Starbucks’ even as 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 superefficient coffee maker machines. (Beverly, 2007, pg.6, 104) Starbucks’ major coffee priority is the consistency of the product taste and quality assurance. Starbucks even as priding itself as the best quality coffee in the world tries to control much of the supply chain for the quality control and product assurance. Starbucks’ reliability and product consistency is driven by the super efficient coffee maker machines. (Beverly (2007, pg. 6, 104) Starbucks’ brand name and popularity came through customizing the beverages to the costumer’s desire through offering flexible drink options such as extra cream, caramel syrup etc. (Clark, 2007, pg. 2014). 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. 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-sight strategy to reach its target costumers and eliminating its competitors. Starbucks’ store-sight strategy is to have high visibility, high traffic and convenient location (stores are located on shopping malls, and populated business district), so a daily costumer will be delighted to stop everyday at the store for his Latte. The stores’ high visibility, convenience and accessibility in terms of its location and amenities provided (comfy furniture, grand amount of 3
seating, clean restroom, etc) attracts attention and increases brand recognition and reputation, thus diminishing customer defections and increasing the stores’ traffic and sales. Clark (2007, pg. 113-116). The unique earthly-colored walls of the each stores, innovate product display and cozy atmosphere, seasonal themes, promotions etc makes Starbucks a strong brand that allows for brand recognition and customer 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 costumers’ 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.starbucks.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 equally important for Starbucks’ overall image. (Beverly, 2007, p. 14) 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 began as a single coffeehouse in Seattle, Washington. Today Starbucks is a worldwide success. It is the world’s largest chain of coffeehouses and can be found in more than 40 countries worldwide. There are few people in the world today unaware of the Starbucks phenomenon. The original Starbucks coffee shop was opened in Pike Place Market in 1971. The founders were three partners: English teacher Jerry Baldwin, history teacher Zev Siegel and writer Gordon Bowker. Their aim was to sell high quality coffee beans and coffee related equipments. 4
The original shop then moved to 1912 Pike Place and you can still visit this Starbucks coffee house to this day. The name Starbucks come from Starbuck, Captain Ahab’s first mate in the novel Moby Dick. Keeping with nautical theme, the Starbucks logo depicts a twin tailed siren although the current logo has been much developed since the original. By 1992, Starbucks had 165 outlets across the United States and Canada and was floated on the stock exchange. (NASDAQ: SBUX) The first Starbucks outside of North America was in Tokyo, Japan and was opened in 1996. Since that time Starbucks has expanded greatly and is now found over 40 countries throughout the world. It is surely one of the most recognized brands in history. In 2008 Starbucks announced some major changes to shareholders. Firstly they were to upgrade their espresso machine system. Secondly, pre-ground beans were to be phased out across America. In the words of the company themselves, this was to, “bring aroma, romance and theatre” to American stores. Other changes include the rolling out of Wi-Fi throughout stores in United Kingdom, stopping the use of milk from cows injected with RBGH, introducing a loyalty card and expanding areas of their consumer business by introducing products to be used at home. However, despite all this innovation, expansion has switched to recession in the current economic climate and since 2008; Starbucks has announced the closure of some 900 underperforming stores. Almost 1000 non-retail as well as over 6000 retail jobs have also been lost in a bid to restore fiscal security to the troubled company. Starbucks has been making a lot of effort to at least appear more ecofriendly. It is possible to pick up the used coffee grinds for free for use in your garden. In addition, they have worked hard to increase recyclability, increase the proportion of their coffee that is fairly sourced and to decrease energy and water consumption. Apart of the success of Starbucks, like other businesses not all the time they had their big sales, there are instances where their sales are decline. Declining sales and executive-level scrutiny on brand health following reports that the company is straying too far from their true identity. Interestingly, the most attention is being placed on CRM (customer relationship management) approaches to reward their 5
most loyal customers and better understand their needs and desires. One of these initiatives is a standard customer loyalty-rewards program at retail, and another is a new style of website for customers and employees to share thoughts with the people who run the company. It appears Starbucks is practicing these concentrated CRM tactics to reclaim their position of being the customer’s “Third Place” with home and work being number one and two. Third places are social environments generally revolving around beverages. Starbucks is fulfilling on this mission as having become a nationally accepted “Third Place” where consumers spend lots of money, time and collaboration. With their now declining sales, Starbucks recognizes that they must take consumers interaction and entertainment to a more subtle but effective level without being too obvious. Theoretical and Conceptual Framework Customer
Relationship
Management
involves
managing
detailed
information about individual costumer and carefully managing costumer “touch points” in order to maximize Costumer loyalty. Creating a superior Costumer value and satisfaction is in the key to building lasting relationship with costumers. Satisfied customers are more likely to be loyal customers and give the company larger share of business. (Armstrong & Kotler , 2010, p. 37) A Costumers touch point is any occasion on which a customer encounters the brand and product from actual experience to personal or mass communication to casual observation. (Kotler, 2008, p. 173) Customer relationship management requires a Customer centric business philosophy and culture to support effective marketing, sales, and service processes. (Johnston & Marshall, 2010, p. 98) Moreover, CRM is managing interactions between the companies, its customer, with the object of maximizing the lifetime value of the customers for the company, satisfying the customers by being customer focused. (Kotabe, 2011, p.134) Maximizing customer value means cultivating long term relationship. Working to retain customer makes good economic sense. Every company will always be benefiting from a long term relationship with their customers rather than a short term relationship with costumers. It is very important for companies to be aiming to have a harmonious and long term relationship with customers rather than depending on mass media message which is just but one-way, there should be new, and more interactive approaches to help build two-way customer relationship. 6
Customer empowerment has become a way of life for many companies that have had to adjust to a shift in the power with their customer relationship. (Kotler & Keller, 2001, p.173) Marketers attempt to solidify a loyal relationship with their customers. They want customers to be satisfied with their purchase and buy from the same company again. Loyal customer will buy certain brands at certain stores and they include no other firms in their evoked set. (Grewal & Levy, 2010, p.161) Whether or not the costumer will make a repeat purchase and endorse the product to another will depend on how satisfied he is with the product. This is the utmost importance to marketers and because the immediate concern is to determine the consumer’s behavior. The consumer’s satisfaction is a result of comparing expectations about the product against performance as perceived by the consumer. (Medina, 2008, p. 25) simply stated, if a customer’s expectations of a company’s performance are met or exceeded, the customer will be satisfied. Conversely, if perceived performance is less than what the customer expected, then the customer is dissatisfied. (Bowersox, 2010, p.58) if the customer is not fully satisfied, he is more likely to consider other brands first before making a repeat purchase of the product he first bought; also, he will not be too enthusiastic in endorsing the product (Medina, 2008, p. 26) Customers nowadays are ever-changing. As companies who try to fulfill their needs and wants we must outrun these changes. Customers are lifeblood of any organization
that’s
why
some
companies
invest
on
customer
relationship
management on how they address the customer’s requirement particularly their needs and wants. Through CRM, we also secure the life of our organization. In our case, we choose Starbucks because we believe that our study is congruent to the particular area we choose from. We will engage ourselves to conduct surveys and studies on how this organization implements in their industry the CRM. CRM also talks about giving value to our customer, how your customers are satisfied out of your product and service, how to meet the requirement with regards to their needs and wants, how you will create trust and build customer loyalty to patronize your store (product or service). Although this CRM look as an expense for some organization, but for some they see this as an investment. The return of these is high compared to your expense.
7
Moreover, Starbucks, who is known globally, has employed CRM and it is evidential that they were able to retain their customers. A lot of consumers patronize this coffee shop thus they were able to have a large share of market and they were able to still attract more and more customers anywhere in the world. Conceptual Paradigm Independent Variable Factors affecting CRM to retain customer loyalty Environment People Product/Service
Dependent Variable
Intervening Variables
Level of effectiveness of Customer Relationship Management of Starbucks Baguio to retain customer loyalty
Demographi c Characteristi cs Behavioral Characteristi cs
Statement of the Problem This study aims to know the level of effectiveness of Customer Relationship Management of Starbucks Baguio to retain customer loyalty. Specific Statements of the Problem 1. What is the profile of respondents based on demographic characteristics in terms of: a. Age b. Gender c. Income 2. To what extent do the following CRM factors affect customer loyalty in terms of: a. Environment b. People c. Process d. Product/Service 3. Do responses differ if respondents are grouped according to: a. Behavioral Characteristics (Frequency of Purchase) Scope and Limitations
8
This study was conducted to know the level of effectiveness of the Customer Relationship Management of Starbucks in Baguio City but all its branches in other locations will be considered since Customer Relationship Management in Starbucks. This study limits the respondents which covers only the Customer Service Representatives of Sitel not only to the regular customer of Starbucks but also to their customers who are not regulars of their establishment. This study will consider every aspect of the customers’ personal information that would affect their purchase in Starbucks like their demographics (i.e. frequency of purchase). Definition of Terms
Customer Expectation This is what customers anticipate on your product or service. These are continuously increasing, customers seeks out products and producers that are best able to satisfy their requirements. For instance, a product does not need to be rated highest by customers on all dimensions, only on those they think are important. Customer Loyalty It is the faithfulness of customers to the establishment emotionally loyal consumers are more valuable in terms of length of relationship with a brand and the level of profitability these consumers deliver to the business. Customer Relationship Management Being delighted with the product purchased. Product Quality This usually includes features, performance, conformance, assurance and responsiveness. Profit and Growth It is stimulated primarily by customer loyalty. Reliability It refers to the dependability of the service providers and their ability to keep promises to customers. Response Time Communicate our sense of urgency and concern to our customers and their experience with our product or service. Service Level Timeless and thoroughness is important to determine whether the customers will return or not. Service Quality It includes delivery time, and knowledge of delivery personnel. Value 9
It is the importance of the stakeholders of the company.
Significance of the Study Customers are the lifeblood of any organization: small and large businesses today are not only engaging themselves in earning a high profit. They invest customer relationship management; they build a positive image on the customer loyalty. Different products and service delivery enhancement, trainings, innovations are done by companies to make their customers be satisfied out of their offerings. We as customer in this institution, we actually see the relevance of our study on how to manage their customer, how to satisfy them and lastly how a lasting relationships can make a business more become profitable. Achieving effective CRM require many organizations
to
adopt
new
perspective. The modern CRM approaches will, your relationship with customers should be on going, cooperative and built for a long term. Organizations that
have
many transitory relationships without consequently have to spend a lot of money on finding new customer. The cost of keeping existing customer is a tiny fraction of the cost of acquiring new customer. Successful and effective CRM people tend to display the following:
Positive attitude People orientation Organization skill Customer focus Understanding of the link between CRM and profitability There are significant business society benefits which accrue from an effective CRM approach. These include:
Reduce cost, because right things are being done( i.e effective and efficient
operation) Ensuring that the focus of the organization is external. Growth in the number of customers Maximization of opportunities ( i.e. increase service referral) Increase access to a service of market Increase access to a service of market Highlighting poor operational processes Long-term profitability and sustainability, forward thinking understand
organizations,
the vital need to maintain strategic focus on CRM and to
resource and manage
appropriately.
10
Chapter 2 DESIGN AND METHODOLOGY This chapter discusses the Method of Research, Research instrument, Population Universe and subject of the study and statistical Treatment of Data. Research Design The methodology used for this study is descriptive method of research; Gay (1976) defines descriptive research as a process which includes the collection of the date to answer questions concerning the study’s subject. Descriptive method is used to gather information about the present existing condition. The concern of the study is more on describing rather than on judging or interpreting. The main objective of a descriptive research is verifying formulated hypotheses that refer to the present situation in order to explain it. Also, descriptive research is a type of research that is mainly concerned with describing the nature or condition and the degree in detail of the present situation. This type of research design aims to obtain an accurate profile of the people. With this research type, it is essential that the researcher already has a clear view or picture of the subject being researched before the data collection procedure is carried out. The researcher used this kind of researcher to obtain first hand data from the respondents so as to formulate rational and sound conclusions and recommendations for the study. The researchers described
the
factors
affecting
loyalty
towards
the
environment, people, processes and products of Starbucks Baguio. The descriptions methods include description, recording, analysis and interpretation on the present condition of the establishment. Their responses and our theoretical/conceptual framework will be our basis in order to come up with the meaning and interpretation of the effects of demographic and behavioral characteristics and also the variables which include environment, people, processes and products of Starbucks Baguio. Population and Locale of the Study Baguio City is known as the Summer Capital of the Philippines and it is a tourist destination in the North because of its climate and great ambiance. They see Baguio City as a fertile ground for investments and businesses.
11
Starbucks is one of the well-known establishments in the coffee industry which is suited to be established in the locality. The proponents choose to identify the customer according to demographic characteristic such as income, age and occupation. Behavioral characteristic will also be considered such as the usage rate. The researchers also choose the Customer Service Representatives of Sitel who will be the target respondent of the researchers. The researchers choose this organization to know the perspective of the Sitel CSRs toward effectiveness of the pre-determined factors of CRM. The researchers use Slovin’s formula to come-up with the no. of respondents. n = N/(1 + N·e²) Where: n=sample size N=population size e = margin of error Table 1. Sample size Population 142
Sample 105
The sample size that will be used to come up with the analysis is 104.79 and it was rounded off to 105 since we are referring to population. This implies that 105 questionnaires will be floated for the Customer Service Representatives of Sitel. Data Gathering Procedure For this study to be possible, the researchers decided to use the questionnaire method to gather data from the subjects. The researchers use questionnaires to gather the data and they used it to measure the effectively of Customer Relationship Management as integrated in the management system of Starbucks. The researchers will be floating questionnaire to the Customer Service Representatives of Sitel who is the target respondents of the researchers. From the questionnaire, the researchers incorporated various types of survey questions. The researchers used the questionnaire method for it is the easiest way of collecting data. Our respondents are Customer Service Representatives of Sitel and they have 8 labor hours of shift, therefore the questionnaire would help the 12
researchers weigh questionnaire how their profiles and pre-determined factors affect customer loyalty. The questionnaire composed only one page and classified into two parts. In part one of the questionnaires is the profile information that includes demographic variables namely the respondent’s age, gender, and income; another is behavioral variable which is frequency of purchase. In part two, the pre-determined factors questionnaire is design to find out how it affects customer relation management. They were asked to rate based on their perception if it is very effective, moderately effective, less effective and not effective. Very effective- there is a high degree of producing a quality product and service and performs strong impressions or response. Moderately effective- not excessive or extreme, of medium or average quantity or extent, and of limited or average quality products and services. Less Effective- not as great in amount or quantity, it has a lower in importance to customers in providing them quality products and services. Not Effective- there is no degree in having an intended or expected effect. The questionnaire will measure how customers react to the services rendered and product offered by Starbucks. After gathering all the data from respondents, it will be tallied, tabulated and interpreted to be able to determine the level of effectiveness of the Customer Relationship Management of our target establishment which is the primary goal of the research. Through the questionnaires, the researchers will know if the consumers are favorable, if they are satisfied or not, their frequency of visit, and also their profiles. For the questionnaire to be possible, the researchers addressed an introductory letter (see appendix) to the officer-in-charge of the Human Resource department of Sitel, Atty. Ma. Yvalonne L. Quimoyog, assuring them that the questionnaires to be distributed are for academic purposes only and strict confidentiality will be applied. Upon the permission of the HR, OIC the researchers administered the questionnaire at the said company. Treatment of Data
13
The gathered data from the respondents were tallied, tabulated, and interpreted. Keller & Warrack (1991) cited that a number of factors determine which statistical technique will be used, but two of these are especially important, first is the type of data being measured, and second is the purpose of the statistical inference. The data gathered was treated and participated by the means of statistical tools. Data will be treated with the use of the following: Part 1. Percentage It is a numerical value that shows two proportions of a sample frequency from the population: The formula: Percentage (%) = (f x n) x 100 Where in: f = Frequency p = Percentage N= no. of respondents Part 2. Weighted Mean The study also utilized the weighted mean average to describe the tabulated data. Weighted mean is the measure of central tendency used for numerical variables. The weighted mean of each item in the questionnaire is computed by multiplying each mid value by the corresponding frequency, then summing the product and dividing by the number of each item. (Frederick 1999) The weighted mean will be computed to designate their descriptive interpretations which are “very effective”, “moderately effective”, “less effective” and “not effective” for the factors affecting CRM. Formula for weighted mean: x = Sf N Where: x = Weighted mean f = frequency of responses N= Total number of responses
14
A four point scale was used to determine the insight of the respondent’s on the specific items asked for in the questionnaire: Table 2. Likert Scale Arbitrary Value 4 3
Mean Range 3.26-4.00 2.51-3.25
2 1
1.76-2.50 1.00-1.75
Descriptive Equivalent Very Effective Moderately Effective Less Effective Not Effective
Part 3. Analysis of Variance (ANOVA) The point of scale was used analysis of variance (ANOVA) was utilized for data with interval scale. ANOVA was utilized to determine the significant differences of variables at 0.05 level of significance. Tabulated F was compared with F critical value to find whether significant differences existed or not. (Keller and Warrack 1991, p. 198) The formula for ANOVA is as follows: GT = sum of the totals N = the total numbers CF = (GT)2 /N TSS = (x2 1 + x2 2 + x2 3 … x2 N) – CF/N RSS = (R2 1 + R2 2 + R2 3 … R2 N) – CF/N CSS = (C2 1 + C2 2 + C2 3 … C2 N) – CF/N ERROR SS = TSS – RSS – CSS Calculating the value of F by formula F = MSSB/MSSW Compare the computed F value with the tabular F value
15
Chapter 3 Presentation, Analysis, and Interpretation This chapter shows the presentation, interpretation and analysis of data gathered in the study based on the problem and concepts and theories that were on this research. Table 3. Gender Profile of the Respondents The table shows that 71% are females. This female respondent implies a greater proportion in the population of the Customer Service Representatives of Sitel. Frequency 75 30 105
Female Male Total
Percentage 71% 29% 100%
Female respondents have higher initiation to visit Starbucks. These women are affected by their interpersonal skills because Starbucks can be a place for any occasion most especially social gatherings. Table 4. The Age Profile of the Respondents 20-25 years 26-30 years 31-35 years 36-40 years 40-45 years Others Total
Frequency 27 21 7 13 33 4 105
old old old old old
Percentage 26% 20% 7% 12% 31% 4% 100%
Majority of the Customer Service Representatives at Sitel belongs to the age bracket,
40-45
years
old.
The
overall
population
of
Customer
Service
Representatives was considered to be in the middle age. As stated in the book of Johnston and Mashall (p. 243), older consumers exhibit great differences from person to person on such things as income, mobility and work status. This implies that people who belongs to this age bracket has the capability of purchasing the product since they have attained a higher work status as well as income. 16
Table 5. Frequency of Purchase The table shows how frequent the respondents purchase in any Starbucks branch in Baguio. Sources of
Sum of
Degree of
Variation Column means Error Total
Sqares 312.875 38 350.875
Freedom 3 4 7
Mean Square
Computed f
104.292 9.5
10.98
The critical value at 5% level of significance, degrees of freedom (3, 4) is 6.59. Since the computed F (10.98) is greater than the critical value (6.59), the null hypothesis will be rejected. This implies that there is a significant difference in the frequency of purchase of the respondents at Starbucks. Table 6. The Personal Income of the Respondents This table shows the monthly income bracket to which the respondents belong to. Php 5,000-7,000 Php 7,001-10,000 Php 10,001-12,000 Php 12,001-15,000 Php 15,001 and above Total
Frequency 22 11 13 17 42 105
Percentage 21% 11% 12% 16% 40% 100%
This table shows that majority of the respondents belong to the income bracket whose salary ranges from Php 15,000 and above. According to the book of Johnston and Marshall (page 249), marketers use income as segmenting approach very frequently. Examples lower income sides include the discount retailers, higher and include the luxury. Interesting though, there is a not necessarily a direct correlation between income and price preferences. The implication is that, respondents who belong to this income bracket are the ones who can afford to purchase the product. Table 7. Customer Relationship Management Factor (Environment) Factors
Weighted Mean 17
Interpretation
Environment a. There is an enough space for
3.63
Very Effective
customer b. Well ventilated café c. Can easily smell the aroma of the
3.06 3.16
Moderately Effective Moderately Effective
Starbucks café d. There is a proper lighting in the
3.49
Very Effective
café e. Has relaxing atmosphere f. Equipped with the best facilities
3.22 3. 40
Moderately Effective Very Effective
coffee
upon
entering
the
The table shows how environment affects the customer loyalty. Starbucks is very effective in providing enough space for their customers, and the staffs respond towards this area as very effective which has 3.63 as its weighted mean. Starbucks must be able to maintain this so that customers will be continuously satisfied. There were 3.06 in average who answered in the proper ventilation of the café, thus, it is moderately effective. The management must be able to give little attention to this. Aroma and smell of the coffee in the café premises is moderately effective and the customer provides 3.16 feedbacks on this. The café have good and proper lighting of the café and it is also very effective based on their perspective. It is moderately effective, which shows 3.22 in average, where the store provides a relaxing atmosphere. Starbucks is equipped with the best facilities they have strategic counter and electronic type of menu and then they have free access on the wireless connection, and 3.40 responded that it is very effective. Table 8. Customer Relationship Management Factor (People) Factors
Weighted
Interpretation
Mean People a. Treats customer well b. Staff are friendly
and
3.48 3.36
Very Effective Very Effective
accommodating c. Knowledgeable work force d. Properly dressed staffs e. Capable of handling customer
3.46 3.38 3.52
Very Effective Very Effective Very Effective
complaints 18
f. Has enough employees to serve
3.08
Moderately Effective
customers This table shows that Starbucks is very effective in providing excellent customer service. Through their personnel, Starbucks key in achieving their good relationship to their customers is the way Starbucks gives their customers good relationship and excellent accommodation that makes the Starbucks very effective in that area, thus, the results are 3.36 as the response for treating their customers well, 3.48 is the response where the company has a knowledgeable workforce to deal with different types of customers. The company has a dress code that would emphasize or give identity to the personnel and 3.38 responded to this as very effective. The researchers mentioned earlier that Starbucks has a knowledgeable workforce; it would also mean that they have the capabilities to handle customer complaints. Also, the company has enough employees to serve their customers and they deliver the order at the right time according to the result they are just moderately effective and it results to 3.08. Table 9. Customer Relationship Management Factor (Process) Factors
Weighted
Interpretation
Mean Process a. Does not take a long time to serve
2.44
Less Effective
the orders of the customers b. Has customer service representative
2.33
Less Effective
to acknowledge queries of customers c. The coffee is fresh and made right
2.35
Less Effective
after the order d. Quick transaction,
of
2.31
Less Effective
payment will do e. There is always an S.O.P. followed on
2.36
Less Effective
any
mode
their operation This table talks about the process of Starbucks as to their operation. The customers does wait long time to serve their orders that’s why the respondents respond on this as less effective which is 2.44 in average. Starbucks does not have 19
a customer service representative in dealing any queries by the customers so they have a less effective answer to this area and there are 2.33 respondents who gave a less effective answer. There is a slow transaction on their mode of payment as the respondents expected this is one of the benefits but the company failed on that expectation, the company failed in providing the service as to response there is 2.31 which shows that their mode of payment is less effective. As to Standard Operating Procedure in their company, respondents answered that they are less effective in this area, which results to 2.36 responses. Table 10. Customer Relationship Management Factor (Product) Factors
Weighted
Interpretation
Mean Product a. Customize
2.31
Less Effective
2.40
Less Effective
c. Has an attractive packaging. Product
2.42
Less effective
has a lot of benefits d. Offering a wide range of quality
2.34
Less Effective
products e. Products at reasonable price
2.39
Less Effective
product offerings to
satisfy the wants of customers b. Availability of the product to be purchased
The last table talks about the product of Starbucks. The store got 2.31 responses which is less effective on the customer response towards the customized offering of their product particularly their coffee. And also they have the product availability to purchase; it has 2.40 responses and this is less effective. The respondents find that this is not effective also, because one of the added costs of the offering is the packaging that’s why they see this as less effective, they provide the benefits but the respondents are not aware towards the product benefits. To increase the number of their customer they offer a wide range of quality products so that customer cannot switch to the competitor, and they give a total response of 2.34 which is less effective, this wide range of product is not appealing to the preference of the respondents. Since Starbucks’ products are not highly affordable 20
and not all can purchase it, they must to ensure that the high price that is being imposed will give the customer an extraordinary experience that they will sure that the customer is delighted, a total of 2.39 less effective, on the reason that the researcher target respondent said to be economic buyer, they spend with the reasonable price and practical. Summary of Tables Factors
Weighted
Interpretation
Mean Environment a. There is
3.63
Very Effective
for customers b. Well ventilated
3.06
Moderately Effective
café c. Can easily smell
3.16
Moderately Effective
3.49
Very Effective
3.22
Moderately Effective
3.40
Very Effective
a. Treats customer
3.48
Very Effective
well b. Staff are friendly
3.36
Very Effective
accommodating c. Knowledgeable
3.46
Very Effective
work force d. Properly dressed
3.38
Very Effective
enough
an space
the aroma of the coffee
upon
entering
the
Starbucks’ café d. There is a proper lightning in the café e. Has relaxing f.
atmosphere Equipped with the
best
facilities People
and
21
staff e. Capable of
3.52
Very effective
3.08
Moderately effective
2.44
Less Effective
2.33
Less Effective
2.35
Less Effective
2.31
Less Effective
2.36
Less Effective
2.31
Less Effective Less Effective
2.40
Less Effective
handling customer f.
complaints Has enough employee
to
serve customers Process a. Does not take a long
time
to
serve the orders of the customers b. Has customer service representative to acknowledge queries customers c. The coffee
of is
fresh and made right
after
the
order d. Quick transaction, any mode
of
payment will do e. There is always an S.O.P. Product a. Customize product offerings
to
satisfy
the
wants
of
customers b. Availability
of
22
the product to be purchased c. Has an
2.42
Less Effective
2.34
Less Effective
2.39
Less Effective
attractive packaging. Product has a lot of benefits d. Offering a wide range of quality products e. Products
at
reasonable price
23
