VIETNAM NATIONAL UNIVERSITY

INTERNATIONAL SCHOOL

FINAL REPORT
ANALYSIS OF STARBUCKS CUSTOMER RELATIONSHIP
MANAGEMENT (CRM) STRATEGY

Students : Nguyen Duc Son – 22070205

Lecturer : MSc. Vu Dieu Thuy
Subject Code : INS3209 - INS320901

Ha Noi, 7 December 2024

ACKNOWLEDGMENT

I would like to send my most sincere thanks to MSc. Vu Dieu Thuy - lecturer of this subject.
Thank you for always enthusiastically guiding, creating conditions as well as helping me in the
learning process. Thanks to that, I was able to complete the report.

MSc. Vu Dieu Thuy teaches me step by step, from the way of thinking, giving feedback on the
outline and guiding me through the implementation process. She is not only a source of
academic inspiration but also a driving force that helps me overcome challenges in completing
this report.

Without his support, I would not have been able to finish the report. Once again, we sincerely
thank MSc. Vu Dieu Thuy and I hope to be your students in many more courses. Wishing you
good health and continued success in your work and dedication!

Your student

Nguyen Duc Son

PREFACE

In the past, I was lucky enough to have the opportunity to work as a part-time barista at
Starbucks. For me, Starbucks is not just a simple part-time job but also gives me a lot of
valuable knowledge, experience and experiences. That is the main reason I chose this topic.
Through my experiences, I believe this report can bring a more multi-dimensional perspective
to readers from the perspective of a former employee.
In the process of completing the report, errors cannot be avoided. I look forward to hearing
your comments so that the report can be more complete!

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TABLE OF CONTENTS

I. INTRODUCTION ................................................................................................................ 3

1.1. Overview of the business and its products .......................................................................... 4

1.2. Analysis............................................................................................................................... 6

II. CUSTOMER BASE ANALYSIS....................................................................................... 7

2.1. Market segmentation ........................................................................................................... 7

2.2. Target customer characteristics........................................................................................... 9

III. CRM STRATEGY .......................................................................................................... 10

3.1. Current CRM system, current situation ............................................................................ 10

3.2. Customer interaction programs ......................................................................................... 12

IV. ASSESS CUSTOMER PERCEPTIONS ....................................................................... 12

4.1. Marketing Mix Analysis-7Ps ............................................................................................ 12

4.2. Evaluate customer satisfaction level ................................................................................. 16

4.3. Analyze strengths and weaknesses ................................................................................... 16

V. CONCLUSION AND RECOMMENDATIONS ............................................................ 17

5.1. Summary ........................................................................................................................... 17

5.2. Suggested improvements .................................................................................................. 17

REFERENCE

Table of Figures

Figure 1: A Starbucks store in Viet Nam ....................................................................... 4

Figure 2: Market shape of coffee shop brands 2023 (Nhi, 2024) .................................. 5
Figure 3: The market share shift of coffee shop brands (Nhi, 2024) ............................. 5
Figure 4: Business model canvas ................................................................................... 6
Figure 5: Brands leading social media discussion market share in 2020 ...................... 7
Figure 6: Customer journey map ................................................................................. 10
Figure 7: Consona's CRM system................................................................................ 11
Figure 8: Starbucks Rewards. ...................................................................................... 12
Figure 9: Offline Store ................................................................................................. 13
Figure 10: Starbucks App ............................................................................................ 14

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Figure 11: Retail .......................................................................................................... 14
Figure 12: ACCI Score (teams, 2024) ......................................................................... 16

Tables
Table 1: SWOT .............................................................................................................. 7
Table 2: Segment base ................................................................................................... 8
Table 3: Evaluate attractiveness .................................................................................... 9
Table 4: Starbucks customer analysis ............................................................................ 9
Table 5: Strengths and Weakness ................................................................................ 16

I. INTRODUCTION

1.1. Overview of the business and its products

Starbucks is a famous coffee brand in the world, providing Arabica coffee products, Teavana,
snacks and snacks. Coffee-related accessories such as cups, glasses, thermos and many other
high-end gift products…

Figure 1: A Starbucks store in Viet Nam

The company is headquartered in Seattle, Washington, United States. By the end of 2023,
Starbucks has more than 38,000 stores (Statista, 2024) globally in 75 countries around the
world with the mission: “To nurture and inspire the human spirit – one person, one cup, one
neighborhood at a time.”

For Starbucks, the core value is in the products the company brings to customers: "Coffee is
the most important thing. The difference between Starbucks coffee and any other coffee brand
in the world is high quality, fresh roasting, pure coffee.”, aiming to be a company with business
ethics, love and sharing.

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The 6 main success factors of the Starbucks coffee brand include: product quality, marketing
strategy, employee training, continuous improvement, clean service environment, respect for
local culture. One of them, Starbucks always maintains the "third place" culture, which means
that in addition to home and work, Starbucks is a third home where relationships meet and
warmth is the number 1 priority. In this way, the company requires each employee to share and
sympathize with customers. That is the key that directly determines the success of Starbucks
today.

In terms of market share, only in Vietnam, the company has 108 stores, accounting for 3.4%
of Vietnam's $1.2 billion coffee market. (Nhi, 2024)

Figure 2: Market shape of coffee shop brands 2023 (Nhi, 2024)

Figure 3: The market share shift of coffee shop brands (Nhi, 2024)

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 During my internal training sessions at Starbucks, Ms. Patricia Marques, CEO of Starbucks
Vietnam, has a clear direction: The company's strategy is to plant the flag, position the brand
and deliver more give Vietnamese people a choice, the experience coffee Exquisite, high-class
Arabica, arrive from many countries around the world. Actually, though cannot yet dominate
market share in the Vietnamese market, but Starbucks still basically implements the proposed
strategy well and grows from 304 billion VND in 2016 to 2022 to reach 1,000 billion VND in
revenue.

1.2. Analysis
To better understand the business, let's explore the preliminary analysis to understand the
business model, strengths and weaknesses, and an overview of Starbucks.

Business model canvas

Figure 4: Business model canvas

SWOT Analysis
According to PhD. Etienne Musonera, School of Business Mercer University-Atlanta in the
report "STRATEGIC MARKETING CASE ANALYSIS: STARBUCKS" (Etienne Musonera,
2021) and my personal opinion based on practical experiences, I can give the following
analysis:

Strength Weak
- Strong brand recognition - Major dependence on a single product
- Innovative business model line(coffee)
- Commitment to sustainability, ethically - Intense competition in the coffee industry
- Strong customer loyalty - Limited international expansion in some markets
- Global presence - Potential negative impact of commodity price
- Strong digital presence and financial fluctuations
performance - Dependence on a large number of company-
- Largest coffeehouse chain in the world operated stores (Covid19 affect negative

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 revenue)

Opportunity Threats
- - Product diversification, new production - Competition from other coffee chains and
- - Partnerships and collaborations with other independent coffee shops
companies or brands - Changes in consumer preferences or trends
- - Adopt price differentiation - Economic downturns or market instability
- - Coffee Subscription growth - Supply chain disruptions or sourcing challenges
- - Expanding the Starbucks rewards loyalty program - Labor disputes or employee turnover
- - Acquiring complementary businesses or brand

Table 1: SWOT
II. CUSTOMER BASE ANALYSIS

2.1. Market segmentation

Within the scope of this report, because Starbucks is a large global company, to be more
specific and accurate, the analysis of industry and competition will only be limited to the
Vietnamese market to create a closer perspective. intuitive and vivid.
For the world's third largest coffee exporting country - Vietnam, where strong,
concentrated coffee - Robusta - is favored with a distinct coffee culture, in addition, the F&B
industry is diverse with many different types of drinks. (fruit-juice, ...) there are many choices
for customers with good quality, freshness and reasonable prices. So what are the competitive
advantages and differences of Starbucks when entering the Vietnamese market?
BA report released recently by market research company Euromonitor said The Vietnamese
coffee and tea chain market alone has a scale of about 1 billion USD/year (assessed in April
2019). (YouNet Media, 2020)

Figure 5: Brands leading social media discussion market share in 2020

.
According to compiled (Nhi, 2024) while the coffee market is increasingly saturated
and mass Coffee start-ups are expanding while big brands are still stagnant. It's a full market
competitiveness and fragility for chain stores. Not to mention the "concept" is very easy to fall

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 for Copying does even better. Therefore: “If you are not consistent and always renew yourself,
as is inevitable will be eliminated. Some chains then only focus on fulfilling investors' targets
forget the original value of the brand. While there are more and more new, unique brands,
Interesting emerges.” (Anh, 2022) For Starbucks, although it is a global giant, the Vietnamese
market is extremely competitive. So to survive, Starbucks must make a clear choice strategy
(Nguyen, 2020- July) Only then can we survive for ourselves.

Based on the analysis in the above sections, we can choose the most outstanding point of
Starbucks Vietnam, which is behavioral psychology, as a segment base.

Segment base = Psychology Lifestyle Income Age

People looking for experiences, Active, luxurious High earner and middle 25-45 years old
luxury products, lifestyle, earner
connections, brands. (Starbucks)

People looking for convenience, Fast, good quality High earner and middle 18-30 years old
good quality guaranteed (Circle K) earner & low earner

Traditional coffee lover - Robusta Slow, Simple, loves Middle, Low earner 35-60 years old
(Aha, local shop, …) tradition

People looking for space: self-care, liberal, likes High earner and middle > 18 years old
open/meet (work), take photos, freedom & low earner
communicate, get close to nature,
...
(Kafa, The coffee house, …)
Table 2: Segment base
Evaluate attractiveness

Segment Segment size Segment structural Organization

and growth activeness objective and
resources

1.People looking for experiences, ✓✓ ✓✓ ✓✓

luxury products, lifestyle, connections,
brands.

2.People looking for convenience, ✓✓ ✓✗ ✓✗

guaranteed good quality (low-middle
cost)

3. People who love traditional coffee - ✓✓ ✗✗ ✗✗

Robusta

4. People looking for space: open/meet ✓✓ ✓✗ ✓✗

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 (work), take photos, communicate, get
close to nature, ...
Table 3: Evaluate attractiveness

(Note: 2 crosses = really bad, 2 ticks = really good, 1 tick 1 cross = neutral)
Starbucks clearly chose and focused on segment number 1.

2.2. Target customer characteristics

From personal experiences, through internal staff training sessions, conversations with Store
Manager (SM), District Manager (DM) and valuable reports and research articles, we can give
more detail about Starbucks' customer characteristics.

Starbucks customer analysis table

Density Attraction Characteristic Growth

potential

Adults from 25 Main target Space design, consistent Relatively high income, about 3% per
to 40 years old accounting for modern design in professional career and year.
(HASKOVA, 49% advertising as well as focus on social
2015) decoration. Good product connections and lifestyle.
quality. High
connectivity.

Young people: ~ 40% Abroad, Starbucks Positioned as a place where college about 4.6 percent
18 to 24 years (Etienne students can study, chat with friends, and meet people. per year
old Musonera, 2021) In Vietnam, young people with economic conditions
come mainly to check in, study, etc. Besides, Starbucks
takes advantage of social networks to actively build a
youthful, dynamic, classy and influential image.
directly to this target group.

Children and Accounts for 2% - Drinks containing milk Although the number is not much, this can
adolescents: most of the or sugary coffees, increase customers
from 13 to 17 Children's items non-caffeine, whipped future potential, i.e. Starbucks has made
years old are purchased by cream topped coffee, ice children and teenagers
parents - blended. brand recognition and making the brand more
children travel - Eye-catching vases, friendly to customers
with their cups, etc. This phenomenon may return in the future
parents. (when old enough to use these types
Starbucks signature drink)

Table 4: Starbucks customer analysis

Starbucks targets a defined market segment that targets luxury coffee products, high
quality, high prices and eye-catching packaging. Accordingly, Starbucks' target customer
profile will be Vietnamese people with the following characteristics: 25-40 years old; belong

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to the high-income class: office workers, businessmen, etc. mainly live and work in big cities,
are luxurious, sophisticated and wealthy; with modern, Western lifestyle trends; have aesthetic
taste and promote safety issues such as health, environment, society, etc. Starbucks provides
unique and personalized services and high customer service standards to satisfy target
customers. their target audience, who prefer coffee products for coffee connoisseurs and create
prestige for the brand.
In terms of positioning, Starbucks positions itself as a highly reputable brand, providing
premium products with global standard flavors, helping to differentiate the company from other
competitors in Vietnam such as Highlands Coffee, The Coffee House, Trung Nguyen coffee,
...

III. CRM STRATEGY

3.1. Current CRM system, current situation

At Starbucks, it is clear that CRM is the key to creating success today. Starbucks not
only sells products but also sells experiences and close relationships with customers. That is
the biggest difference compared to competing brands in the market, ensuring sustainable
development for the organization.
According to report, to build an effective CRM strategy (Munifa, 2022) , there are three
important steps that must be taken, namely:
1) Identify the characteristics of each customer.
2) Create a model of the value of each customer segment.
3) Creating a proactive strategy and implementation plan or business method, which can answer
customer needs, starting with the most potential customer segments.

These things are applied consistently and throughout at Starbucks, clearly demonstrated
through the following aspects:

Customer journey

Figure 6: Customer journey map

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The customer journey is very important and there are many touch points with customers,
highlights can be mentioned in order such as: cozy space, staff remembering names and drinks
of frequent customers, receiving personalized drinks make it and have your name on the cup
,...

Customer-oriented culture

CRM activities in Starbucks

- Automate the sales process: CRM helps manage the sales process in different stages
and manage employee activities.
- Analyze customer data to serve Marketing: CRM helps identify and target Managing
and measuring the effectiveness of CRMs helps them improve Marketing campaigns.
- Customer service management: Software helps companies improve customer service,
while increasing efficiency and reducing costs.

Technology and data used

Starbucks has applied the Consona Enterprise CRM solution within the group Foodservice and
Salesforce. This application helps Starbucks consolidate its databases Different customer data
into a single system to focus on gaining corners comprehensive view.

Figure 7: Consona's CRM system

Consona's CRM helps Starbucks with its sales automation process by provides the following
features:
- Manage and organize customer information: Management and organization
Customer information includes: personal information, purchase history, preferences
and information contact information.
Example: Based on information, Starbucks create appropriate marketing and outreach
strategies to increase engagement, bow Offer incentives, accumulate points and create a better
experience for customers.
- Increase Customer interaction: Guest interaction customers via phone, email, online
chat and social networks. Help Starbucks save money time and strengthen relationships
with customers.
- Sales process management: Support sales process management from ordering,
tracking orders... These processes are automated to reduce Minimize manual work and
increase efficiency.
- Marketing campaign automation: automate the Marketing campaigns, including:
email marketing, online advertising and promotions other media. These campaigns can
be scheduled and sent automatically target customers, helping to save time and costs.
- Analysis and reporting: data analysis and Create reports to evaluate the effectiveness
of sales activities.

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Example: By analyzing data and reviewing key performance indicators, Starbucks can improve
and optimize the menstrual process business to increase revenue.

3.2. Customer interaction programs

In store:

The most prominent is the customer loyalty program - Starbucks Rewards, according to CNN's
report, as of October 2022, Starbucks Rewards had more than 28.7 million members and
brought Starbucks annual growth of up to 16%. Another Manifest study revealed that of all
smartphone users who use restaurant loyalty apps, nearly half (48%) are members of a
restaurant loyalty program. Starbucks Rewards.

Figure 8: Starbucks Rewards.

This application has useful features such as: Managing orders, earning points for loyal
customers, providing personalized rewards programs, analyzing purchase history to
recommend suitable drinks. Free drinks when it's your birthday, ...

The results achieved show: More than 20% of transactions are made through the application.
And the most important thing is that customers feel appreciated and treated like VIPs when
they are members.

Outside the store:

It is clear that Starbucks is always present even when customers do not come to the store,
through personal bottles, social interaction channels, and regularly organized events. And
especially private events/products, … only for loyal customers.

IV. ASSESS CUSTOMER PERCEPTIONS

4.1. Marketing Mix Analysis-7Ps

Product:

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Starbucks doesn't just sell coffee, it also offers a unique service experience that focuses on
personalization and high quality.
- Good and diverse products: 100% Arabica coffee worldwide, tea products, snacks,
retail goods (vase, cup, souvenir, ...), lines coffee products premium (Starbucks
Reserve), consumer packaged goods (CPG)
- Personalization: Handwritten customer name, using "Barista Promise" - customers can
customize drinks according to their wishes.
- Service experience: The space is clean and pleasant. Customer focus and convenience
(average 45 seconds/order).
Price:
Starbucks uses a premium pricing strategy. In the marketing mix, this pricing strategy takes
advantage of behavioral trends of customers, who will buy more expensive products on the
basis of perceived correlation between high "price" and high "value".
The focus on price has two main points: customer experience and quality to maintain a
premium brand image, always improving product quality and customer experience.
- Flexible price adjustment: Prices are adjusted based on location and market
conditions, reflecting operating costs, local rainfall and increased competitiveness.
- Psychological Pricing Tactics: Starbucks often uses psychological pricing strategies,
such as pricing items slightly below a whole number (e.g., $4.95 instead of $5.00). This
makes prices seem lower than they are, a tactic designed to encourage more spending
subtly.
- Tiered Pricing for Size Options: Starbucks utilizes tiered pricing for different sizes of
drinks, providing customers with options that cater to different needs and price
sensitivities. This allows customers to choose based on their budget while encouraging
upselling.

Place:
Through 3 main channels: offline stores, Retailer and online platform.
- Extensive store network strategically located: With more than 38,000 stores
globally, in Vietnam they are mainly located in shopping centers, office buildings or in
urban areas, crowded city centers with a large number of people.

Figure 9: Offline Store

- Digital and Mobile Presence: Emphasizing convenience, Starbucks offers a robust
mobile app that allows customers to order and pay in advance, pick up their orders at
the nearest store, and earn rewards.

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 Figure 10: Starbucks App
- Community-Oriented Store Experience: Starbucks focuses on creating a welcoming
and comfortable “third-place” experience in its stores, encouraging customers to linger,
work, or socialize. This approach increases foot traffic and fosters community and
brand loyalty.

Figure 11: Retail

Promotion:
Mixed advertising in the following forms: word of mouth (WOM), advertising, public relations
and promotions. Starbucks marketing is somewhat more modest than other F&B companies,
instead they focus on premises, product launches and attractive incentives.

- Discount: 10,000 VND when bringing personal cup/bottle when purchasing at the
store, combined with partners who offer discount codes (swipe discount card, order via
app, etc.)
- Point accumulation programs, memberships, combos, etc.
- Seasonal and Limited-Time Offerings: By introducing seasonal and limited-time
products at a premium price, Starbucks creates a sense of urgency and exclusivity. This
strategy drives sales during the offer period and helps attract new customers and retain
regulars’ interest.

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People:

The human factor is the most important factor. This aspect is crucial in service-based industries
where customer satisfaction heavily depends on the quality of the service provided. Here are
key points regarding the “People” aspect of Starbucks:

- Employee training and development: From part-time barista to store manager, there
are online courses and detailed training curriculum. The training program lasts about 1
month and then there will be tests and there will be regular tests during the working
process. For me, someone who knew nothing, became someone with coffee knowledge,
customer service, and operational skills. This, ensures a consistent and high-quality
customer experience.
- Employee satisfaction and retention: Appreciate employees, call them partners, not
employees. I can say that Starbucks' benefits are extremely good compared to the F&B
industry (subsidized meals, gasoline, health insurance, etc.). Many career development
opportunities, in addition, there are many extracurricular activities (barista Asia cup,
volunteer,…)
- Customer service focus: Aim for a personalized experience, building relationships
with every customer. This includes remembering customers' names and what drinks
they order most often, helping to create an open space for people to meet and connect.
- Feedback and continuous improvement: Employees can send emails directly to leaders,
customers receive regular activity surveys, etc.

Process:
As a former Starbucks employee, I can say: "Everything at Starbucks has a process." The
process at Starbucks is extremely optimized for operations, so much so that I feel like I am
programmed like a robot. However, because the process is too strict, there are some things that
are not flexible, restrictive or even inappropriate,… Some outstanding processes can be
mentioned:
- Employee training process
- Operating procedure: Extremely optimized setup
- Supply chain management: ingredients from around the world, highlighted by
partnerships with coffee growers.
- Quality control: Transfer employees between stores to enable cross-supervision. There
is always an internal inspection team to conduct random checks. In addition, Starbucks
also hires a third company to control quality. Therefore, I can say that product quality
and hygiene are even more guaranteed than when you prepare it at home!

Physical Evidence:
- Store design and space: 4 main styles: Heritage, Regional Modern, Concept, Artisan.
In addition, the store style will adapt depending on the local context and culture, all to
create a comfortable, warm, and gentle atmosphere for customers.
- Brand logo and packaging: Very easy to recognize, aiming for sophistication, beauty
and environmental protection - sustainable development. This helps reinforce the
brand's premium image.
- Community Board: At each store, there is a small board to preserve memories of
employees and customers. This helps increase cohesion, helping to uniqueize Starbucks
stores

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 4.2. Evaluate customer satisfaction level
To evaluate the level of customer satisfaction at Starbucks, we can measure it through reporting
indicators, number of stores growth, revenue growth, etc. (Xingyue Liu1)

Figure 12: ACCI Score (teams, 2024)

The American Customer Satisfaction Index (ACSI) measures how satisfied Americans are with
a particular product or service, with 100 being the best and highest possible score.
From 78 stores (June 2022) to 110 stores by the end of 2023. Thanks to that, revenue also
increases rapidly, 87% in 2022 and 28% in 2023, respectively, to more than 1,300 billion VND.
Thus, after 11 years of operation in Vietnam, the brand has captured a relatively large market
share, reaching about 4% market share in revenue. Data from Viet data
So we can clearly see that Starbucks' customer satisfaction shows that the CRM system works
well.

4.3. Analyze strengths and weaknesses

Thus, from the arguments given in the above sections, we can evaluate and give some
outstanding points and limitations of the Starbucks CRM system as follows:
Strengths Weakness

1. Personalize customer experience: 1. System complexity:

- Starbucks Rewards Program - Many features make it difficult for the
- Personalized customization implementer
2. Create a community for customers - Large investment, maintenance and
- Events and programs operating costs
- Create your own culture and lifestyle 2. Data security
- The risk of customer data being hacked and
leaked is relatively large
Table 5: Strengths and Weakness

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V. CONCLUSION AND RECOMMENDATIONS

5.1. Summary
Starbucks already has a good and great CRM system, which is one of the most successful and
widely adopted cases worldwide. Starbucks is more than just a coffee chain; it’s a paradise, a
workspace, a meeting point, and a community hub. They always listen, put themselves in the
customer's position and serve with all their heart. Clarity and consistency from strategy to CRM
implementation.

5.2. Suggested improvements

Short term:
- Improve Process: Starbucks' process regulations are very mechanical, strict and tight,
there are things that are not suitable for the Vietnamese market
For example: Wifi costs in Vietnam are cheap, so you can't wait 30 minutes to log in to wifi
again. This reduces the customer experience.
- Empower employees more: Be flexible and trustful to avoid constraints on employees,
thereby helping to improve customer relationships.

Long term:
- Technology: Applying artificial intelligence and big data to further analyze customer
characteristics and preferences. From there, personalized consumption trends can be
predicted and products can be intelligently suggested based on Big data

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