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)

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

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customer service (Bedelan, 2nd 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 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)

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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 super-efficient 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 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)

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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.

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.

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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 eco-friendly. 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

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,

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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.

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.

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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.

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

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

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Independent Variable

Factors affecting CRM to retain customer loyalty

Environment People Product/Service Process

Dependent Variable

Level of effectiveness of Customer Relationship Management of Starbucks Baguio to retain customer loyalty

Intervening Variables

Demographic Characteristics

Behavioral Characteristics

c. Process

d. Product/Service

3. Do responses differ if respondents are grouped according to:

a. Behavioral Characteristics (Frequency of Purchase)

Scope and Limitations

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

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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

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

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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 organizations, understand

the vital need to maintain strategic focus on CRM and to resource and manage

appropriately.

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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.

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

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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 Sample

142 105

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 researchers weigh questionnaire how their profiles and pre-determined

factors affect customer loyalty.

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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

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:

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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

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 Mean Range Descriptive Equivalent

4 3.26-4.00 Very Effective

3 2.51-3.25 Moderately Effective

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2 1.76-2.50 Less Effective

1 1.00-1.75 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

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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 Percentage

Female 75 71%

Male 30 29%

Total 105 100%

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

Frequency Percentage

20-25 years old 27 26%

26-30 years old 21 20%

31-35 years old 7 7%

36-40 years old 13 12%

40-45 years old 33 31%

Others 4 4%

Total 105 100%

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

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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.

Table 5. Frequency of Purchase

The table shows how frequent the respondents purchase in any Starbucks branch in Baguio.

Sources of

VariationSum of Sqares

Degree of

FreedomMean Square Computed f

Column means 312.875 3 104.292 10.98

Error 38 4 9.5

Total 350.875 7

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.

Frequency Percentage

Php 5,000-7,000 22 21%

Php 7,001-10,000 11 11%

Php 10,001-12,000 13 12%

Php 12,001-15,000 17 16%

Php 15,001 and above 42 40%

Total 105 100%

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.

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Table 7. Customer Relationship Management Factor

(Environment)

Factors Weighted

Mean

Interpretation

Environment

a. There is an enough space for customer 3.63 Very Effective

b. Well ventilated café 3.06 Moderately Effective

c. Can easily smell the aroma of the coffee

upon entering the Starbucks café

3.16 Moderately Effective

d. There is a proper lighting in the café 3.49 Very Effective

e. Has relaxing atmosphere 3.22 Moderately Effective

f. Equipped with the best facilities 3. 40 Very Effective

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 Mean Interpretation

People

a. Treats customer well 3.48 Very Effective

b. Staff are friendly and accommodating 3.36 Very Effective

c. Knowledgeable work force 3.46 Very Effective

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d. Properly dressed staffs 3.38 Very Effective

e. Capable of handling customer complaints 3.52 Very Effective

f. Has enough employees to serve customers 3.08 Moderately Effective

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 Mean Interpretation

Process

a. Does not take a long time to serve the orders

of the customers

2.44 Less Effective

b. Has customer service representative to

acknowledge queries of customers

2.33 Less Effective

c. The coffee is fresh and made right after the

order

2.35 Less Effective

d. Quick transaction, any mode of payment will

do

2.31 Less Effective

e. There is always an S.O.P. followed on their

operation

2.36 Less Effective

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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 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 Mean Interpretation

Product 2.31 Less Effective

a. Customize product offerings to satisfy the

wants of customers

b. Availability of the product to be purchased 2.40 Less Effective

c. Has an attractive packaging. Product has a lot

of benefits

2.42 Less effective

d. Offering a wide range of quality products 2.34 Less Effective

e. Products at reasonable price 2.39 Less Effective

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 and not all can

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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 Mean Interpretation

Environment

a. There is an enough

space for customers

3.63 Very Effective

b. Well ventilated café 3.06 Moderately Effective

c. Can easily smell the

aroma of the coffee

upon entering the

Starbucks’ café

3.16 Moderately Effective

d. There is a proper

lightning in the café

3.49 Very Effective

e. Has relaxing

atmosphere

3.22 Moderately Effective

f. Equipped with the

best facilities

3.40 Very Effective

People

a. Treats customer

well

3.48 Very Effective

b. Staff are friendly and

accommodating

3.36 Very Effective

c. Knowledgeable

work force

3.46 Very Effective

d. Properly dressed

staff

3.38 Very Effective

e. Capable of handling

customer

3.52 Very effective

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complaints

f. Has enough

employee to serve

customers

3.08 Moderately effective

Process

a. Does not take a long

time to serve the

orders of the

customers

2.44 Less Effective

b. Has customer

service

representative to

acknowledge

queries of

customers

2.33 Less Effective

c. The coffee is fresh

and made right after

the order

2.35 Less Effective

d. Quick transaction,

any mode of

payment will do

2.31 Less Effective

e. There is always an

S.O.P.

2.36 Less Effective

Product Less Effective

a. Customize product

offerings to satisfy

the wants of

customers

2.31 Less Effective

b. Availability of the

product to be

purchased

2.40 Less Effective

c. Has an attractive 2.42 Less Effective

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packaging. Product

has a lot of benefits

d. Offering a wide

range of quality

products

2.34 Less Effective

e. Products at

reasonable price

2.39 Less Effective

23