CASE 4

Starbucks India: The Human Coffee Experience

A wonderful moment is created when the consumer is willing to grab a cup of coffee. This moment becomes more wonderful and enlarged when it is connected to Starbucks. Thus, the company ensures that this connection is strengthened and grows in strength at every touch point. In line with this, Starbucks enhances these connections with the consumers by offering worldclass coffee and by increasing consumers’ communities. To do so, Starbucks first buys the roasted coffee. Subsequently, the excellence in quality of the selected coffee beans is enhanced by systematic data collection and information systems. Though, superb coffee is the only core business, Starbucks does as it is a part of the story.

ABOUT STARBUCKS

Starbucks Coffee houses are the favourite of coffee lovers. Consumers come to Starbucks as they are aware that the service will be superb. Further, they will also be assured of an enticing ambience, an excellent cup of highly roasted and amply brewed coffee. To enhance this experience, Starbucks also offers tea, exceptional pastries and other delightful treats to stimulate the taste buds of the consumers. Additionally, the music that is played at the Starbucks further enhances the coffee experience. This experience is magnificent. This appeals to all coffee lovers. Thus, consumers visit Starbucks for chatting, talking, discussing, meeting at personal and professional levels. Starbucks is a gathering place, which is part of the daily activity of the consumers, which can make them happy and blissful. Consumers become stress free in this pleasing environment. Thus, Starbucks is more than brewing a cup of coffee. This is due to the fact that the company focuses on enhancing the coffee house experience with all the possibilities.

The main mission of Starbucks India is to aspire and develop the human spirit with every individual, every cup, and every neighborhood simultaneously. Starbucks India is 50:50 joint venture of Tata Global beverages and Starbucks. They have 75 outlets in the seven cities in India. Their headquarters and first store are in Mumbai. Here, the coffee offered is always of top quality. Further, the exquisite coffee beans are roasted and brewed with the enhancement in the life of people who grow and develop with the company. Starbucks calls themselves as partners as these tasks are not restricted to their jobs. It comes from their passion. Thus, they embrace diversity as every individual is provided the space and freedom to be themselves. All the individuals are treated with respect and dignity at Starbucks while celebrating different cultures. The company offers services in the culturally relevant way. Consumers are always connected and involved with Starbucks as they laugh, crack jokes and celebrate their life with this memorable moment. These moments start with an excellent cup of coffee and goes until strong human connections are developed. Thus, consumers have a sense of belongingness at the stores, forget their worries as they meet their friends and embellish the life with some slow and fast moments with humanity (“Starbucks Coffee Company”, 2017).

BUSINESS PHILOSOPHY

Every store belongs to a part of the community and the connection among the company, consumers’, and communities is tied strongly with Starbucks by strategic partnership. There is a high sense of responsibility and has high potential. To ensure the same, Starbucks has set up high standards for this task.

In line with the same, Starbucks also deals with environmental issues, creates creative and flexible solutions, environmentally friendly products, establishes environmentally friendly corporate values, and monitors all the projects with the mission. All of this are accomplished by doing business ethically. These ethics are reflected in their services and all communication channels. Further, the partners become employees who engage with different consumers and serve various communities. Additionally, the suppliers of Starbucks have programs that can enhance their business relationship. Thus, each partner at Starbucks integrates talent, expertise and knowledge and enhances the humanity and connections with the customers with these elements (“Starbucks”, 2017).

These philosophies, approaches and practices are very close to Indian consumers as they aim for enhanced human connection. Thus, Starbucks is totally in sync with their mindset and thinking. Thus, coffee lovers in India adore Starbucks and can see and feel the connect. Starbucks also connects with the consumers with the different kinds of coffee they offer in India such as whole bean, roasted (blonde, medium, dark), flavoured, unflavoured and so on. They also have Indian tastes blend such as chocolate, herbal, Kenya which is juicy and complex, Italian roast, Sumatra which is earthy and herbal Colombia, which is balanced and nutty and so on. These flavours signify that there is a blend of Indian and international taste. This is because consumers prefer this kind of flavours as they like the glocal (combination of global and local) concept (“Business Ethics and Compliance | Starbucks Coffee Company”, 2017).

STARBUCKS AND INFORMATION SYSTEM

In line with the same, Starbucks uploads all the policy documents on the website and other online sources that are accessible in the public domain. This is because the company works ethically and likes to be transparent with all the partners (consumer, employees, suppliers and so on). Additionally, they also provide the information of Starbucks India Mobile app as consumers are extensively using these platforms. Consumers can access the information about the Starbucks through all the sources including stores (“Starbucks”, 2014).

DATA COLLECTION

To be updated with these policies and remain connected with the partners, Starbucks collects data from multiple sources.

1. Customer or Consumer level data Collection
   1. Personal Information: The company gathers data from all the customers and consumers along with their personal information. This information include name, surname, email, mobile number, birthdays, demographics and any other data that the individual would like to share with the company.
   2. Financial Information: Data include details about the bank, account details, credit card detail and payment options
   3. Purchase Information: Data may include details on products bought from the company, timing, location and frequency.
   4. Digital Information: Data are extracted though the Starbucks India mobile app about the device id, location, stores that are close to the consumer and places that the consumer has visited.
   5. Other Information: Additional data that the consumers can provide about other areas that are of their interest.

   Outcome: Starbucks Card and My Starbucks Reward Account (provides massive data to the company and helps in retention of the consumers, community analytics and development of the community which are the key aims of Starbucks).

2. Digital Level Data Collections: Starbucks collects the data from the websites, online sites visited by the customers and consumer and through mobile app. Digital data provide information about the internet service provider, operating system, browser type, IP address, access time, web pages that have been browsed and so on. This information is used by the company to provide the appropriate cookies and web beacons that are on relevant time and would be acceptable and informative to the consumers.
   1. Cookies: These are small data files that are saved in the hard drive of the various websites. These cookies are used by the company to enhance the overall web experiences by providing relevant and contextual data and information to the consumers. These cookies help the company to understand areas, features and visits by the consumers on various websites.
   2. Web Beacons: These are electronic images and visuals used on the websites are visited by the consumers. These images are used for delivering cookies, making counts of the visit and the usage pattern of the consumers. These images are further supplemented by the flash cookies, which are known as local shared objects as they can easily get adjusted in the digital screens in accordance with the consumers’ usage. Thus, data are gathered by the company about the consumer with the good web experience.
3. Company level Data: The company also collects data about the consumers anonymously as the focus is not on a particular person or individual. The aim is to primarily understand the consumers’ perspectives and insights about the company. Data are collected by the third party about the consumers of the company. Based on this, Starbucks understands what their consumers feel, think, and experience about the brand. They also like to understand the expectation and suggestions that the consumers would like to offer to the company

   This is very important for the company as they consider consumers to be their partners. Subsequently, they also aim for developing strong human connection, which embellishes the coffee house experience at Starbucks (Bamb, 2016).

INFORMATION USAGE BY STARBUCKS

Starbucks uses the information in the various ways:

1. Managing the Consumer Purchase: Starbucks uses the information to process and manage the purchases and products and services used by the consumers. This includes accounts and program participation of consumers who can aid them in getting personalized experience from Starbucks.
   1. Quick Response: This information provides the company with consumer inquiries and Starbucks responds quickly with the relevant data and information. This is essentially managed by the customer care services of the company. Additionally, comments and suggestions posted on the blog and other online websites are also considered by the company. Thus, they can quickly take appropriate actions.
   2. Customized Promotion: Starbucks uses the information and provides customized and personalized promotions to the consumers with personal and non-personal information. This information includes type of purchases, amount sent and the benefits that can be derived by the consumers through this personalized promotion.
   3. Strong Communications with Company: Starbucks strengthen their communication with this data as order, purchases, services and program data facilitates the company to link the consumers with the relevant contest and sweepstakes that could further help the consumers.
   4. Better Communication with Other Partners: Consumers’ data help the company to connect its consumers with other co-branded programs and partners. This further facilitates consumer and the company strengthens their relationship (Boulton, 2016).

DATA SHARING

Starbucks also shares the consumers’ data with credit card processes, mailing houses, HR, CRM departments, site managers (primarily for the online data) and data managers who are the partners of Starbucks. These departments help the company to market the product, add consumers to the appropriate mailing list and develop loyalty program systems. However, they use information by following the proper legal processes and comply all the laws and legal approaches. Based on the same line, Starbucks never shares any information based on the personal data without the prior permission of their consumers. Thus, they take the written permission from the consumers if they are publishing any of their information in the public domain.

DATA SAFETY AND SECURITY

Starbucks provides all the opportunities to consumers to update, modify and edit the data as the rights are with the consumers. Data are very safe as the company would never make the changes in their personal data. More specifically, the promotional messages will not be sent to the consumer if they would like to opt out of the process. Consumers can also remove and reject the cookies if they want. If the consumers withdraw the consent about any information, company would not take further processing. Based on the same, they can develop approaches based on the consumers. More importantly, the company can also take care of all the information pertaining to loss, misuse of the personal information. However, there is full guarantee by the company for 100% security of data as the data transmission is very quick and fast through the various online sources and websites which cannot be monitored or tracked by the company easily (“Privacy Statement |Starbucks Coffee Company”, 2017).

Information Processing and Storing: The company processes and stores the information of only adults as minor details cannot be saved by the companies, according to the Indian law. However, if the parents and guardians share the minor’s information, they become the care takers along with the company. Starbucks uses safeguards for the data such as firewalls, physical access, data encryption and other administrative and control systems. Further, highly sensitive information such as details about the credit cards is transmitted either through the company website or company’s mobile apps that uses secure sockets layers (SSL) protocol. In addition, there are security technologies that safeguard the personal information about the consumers. In line with the same, if there are changes in the processing and storing of information or privacy policies, the company mentions it on the website and other digital platforms so that the consumer is aware about the change. Finally, the company also stores the consent form for the consumers where they provide the authority to the company to retrieve, store, process and share the personal information (“MIS-Starbucks”, 2015).

Further, data are used for analytics. Thus, the big data so collected facilitates the company to manage their loyalty programs. Due to this, Starbucks is also able to track and monitor their customers very closely. This helps them to develop the human connection and strengthen their relationship with the consumers and to develop the rich coffee experience. This is done as Starbucks makes the segments of the consumers’ based on the data and set up the rule which is in sync with their purchase behaviour. This is usually carried on their smart phones of the consumers. This monitoring of the consumer habits helps the companies personalize the offers as well. For example, with the data, which were collected and processed in India, Starbucks grabbed an opportunity to serve tea brand “Teavana” in the country. The company also developed the best class in social media, which was again derived from the data the company collects from the various sources (Adkins, 2015).

WAY AHEAD

The chairman of the company also thinks that Starbucks is the research-driven organization and excellent in collecting and gathering consumer data. He strongly holds that the reputation of the company has to be earned.

Starbucks has successful in making significance presence in India by adhering to the retail model of the country. Starbucks has taken care of the local requirement, which is relevant to the local culture in India. This was achieved as Starbucks believes in employee-centric organization. Thus, they invest heavily on their employees, who are their “partners”. With these policies, Starbucks opened 50 outlets in the first year of their operation and successfully increased their stores. One of the reasons for the same is the middle class which is increasing exponentially in India and increasing the business opportunities for Starbucks. Thus, India is the fastest potential market for Starbucks. The company wants to explore further opportunity to sell Starbucks coffee at Vistara, Tata’s airlines in India. They are also focusing on the merchandizing which includes books and music (Anand, 2017).