Faculty of Organisation and Management

BSc (Honours) Hospitality Business

Management

Title: A Study of the Customer Satisfaction of Starbucks Coffee in Hong Kong

Name: WONG WAI SZE

Student No: 91203264

Month Year: April 2009

Sheffield Hallam University

Faculty of Organisation and Management

Title: A Study of the Customer Satisfaction of Starbucks Coffee in Hong Kong

FULL NAME: WONG WAI SZE

STUDENT No : 91203264

Supervisor: Prof. Ray Pine

In partial fulfilment of the requirements for the degree of Bachelor of Science in Hospitality

Business Management.

Month Year: April 2009

Acknowledgements

First of all, I would like to thank my deepest gratitude to my Prof. Ray Pine who has been

kindly in giving me the guidelines and providing the great suggestions during the whole

process of my dissertation. He has been so generous to share his time in providing the

valuable advices and comments to develop of my study.

Moreover, I have so grateful to my classmates and friends who give lots of help and

encouragement in the preparation for this study. Actually, I have so happy that they are

willing to share their comments in my dissertation.

Furthermore, I would like to thank to my mother and three sisters who have support and

encouragement for me to finish my dissertation. I will never forget their love and support

in my life.

Abstract

Research is regarding the interrelationships among different variables in the service

environment. Service firms can gain competitive advantage if they can satisfy with their

customers. Besides, service quality improvement can also be led to increase customer

satisfaction. Hence, service quality and customer satisfaction can make the service firms

to be successful in the future. In the hospitality industry, Starbucks Coffee is one of the

successful companies as it is selling the concepts to their customers.

The purpose of this report is to investigate the importance of customer satisfaction from

the quality service through launching the Starbuck’s concepts. The primary research

selects the self-administered questionnaires as the survey method. Also, a convenience

sampling was used to obtain the sample with one hundred and three respondents in the

survey. The questionnaire was based on the SERVQUAL format and distributed in two

different Starbucks was located in shopping mall and MTR station.

The results found that respondents’ expectation was high than perceptions in Starbucks.

It indicated that Starbucks did not meet the standard of excellent coffee shop. Hence,

Starbucks should improve the service related to all parts of five service-quality dimensions

of SERVQUAL. Nevertheless, there were six priority statements of service need to be

improved first for Starbucks Coffee and the most necessary improvement of customer’

satisfaction was environment. Then, the recommendations will be provided for the future

improvement to raise customer satisfaction.

Table of Contents Page

Acknowledgements 4

Abstract 4

Table of Contents 4 - v

List of Figures 4

List of Tables 4

Chapter 1 Introduction 1-4

1.1 Reason for choice the topic 1

1.2 Background of Starbucks Coffee 2

1.3 Aim and Objectives 3

1.4 Outline of the study 4

Chapter 2 Literature Review 5-20

2.1 Consumer behavior

2.1.1 What is consumer behavior

2.1.2 The reflection of consumer behavior

5

5

2.2 Service quality

2.2.1 What is service

- Characteristics of service

2.2.2 What is quality

2.2.3 The dimension of service quality

2.2.4 The importance of service quality

2.2.5 Measurement of service quality

- SERVQUAL scale

6

7

9

10

11

12

2.3 Customer expectation and customer perception

2.3.1 The discrepancy between the expectation and perception

13

2.4 Customer satisfaction

2.4.1 What is customer satisfaction

2.4.2 The importance of customer satisfaction

15

15

2.4.3 Measurement of customer satisfaction

- Customer Satisfaction Index Model

17

2.5 Achievement of customer satisfaction

2.5.1 The concept of Starbucks coffee

2.5.1.1 The Third Place

2.5.1.2 The Customer-oriented approach

18

19

Chapter 3 Methodology 21-28

3.1 Primary research

3.1.1 Primary data

3.1.2 Quantitative research

3.1.3 Designing the questionnaire

3.1.4 Sampling

3.1.5 Data collection

3.1.6 Data analysis

3.1.7 Limitations of primary research

21

21

23

24

25

26

26

3.2 Secondary research 3.2.1 Secondary data 3.2.2 Limitations of secondary research

27

27

Chapter 4 Findings and Analysis 29-54

4.1 Demographic profile of the respondents 30

4.2 Summarizing the five service-quality dimensions 4.2.1 Tangibles dimension 4.2.2 Reliability dimension 4.2.3 Responsiveness dimension 4.2.4 Assurance dimension 4.2.5 Empathy dimension 4.2.6 Overall expectations of service quality 4.2.7 Overall perceptions of service quality 4.2.8 Overall rank of the statements in the five service-quality dimensions

4.2.8.1 Staffs instill confidence to customers 4.2.8.2 The physical facilities are visually appealing in coffee shop

4.2.8.3 The coffee shop performs the service right in the first time

33

35

37

39

41

43

44

4.2.8.4 The coffee shop shows genuine interest in solving the problems

4.2.8.5 Materials associated with the service are visually appealing

4.2.8.6 Staffs understand the special needs of customer

4.2.8.7 Discussion the most necessary improvement

47

47

48

48

48

49

49

49

4.3 Summarizing the customers’ satisfaction

4.3.1 Discussion the most necessary improvement

50

52

Chapter 5 Conclusions and Recommendations 55-61

5.1 Conclusions 55

5.2 Recommendations 57

5.2.1 Suggestions on the priority statements for Starbucks

5.2.1.1 Assurance: increasing the staff’s confidence

5.2.1.2 Tangibles: improving the physical facilities and materials

5.2.1.3 Reliability: reinforcement in performing service right in first time

and solving problems skill

5.2.1.4 Empathy: understanding the specific needs

57

58

58

59

5.2.2 Suggestions on improving the environment for Starbucks 60

5.3 Further research 61

Reference List 62-64

Appendix

A-Bilingual Questionnaire

B-Contact information and Demographics

65-69

70-73

C-Overall information of the statements in the five service-quality dimensions

D-Overall information of customers’ satisfaction

74-77

78-82

List of Figures

Page

Figure 2.3.1 Perceived Quality 13

Figure 2.3.2 Service key factors influence customers’ expectation 14

Figure 2.4.1 Customer Satisfaction Formula 16

Figure 2.4.3 Basic CSI Model 17

Figure 2.5.1 Communication Channels 19

Figure 3.1.1 Types of questionnaire 22

Figure 4.2.1 Statement in tangibles dimension 34

Figure 4.2.2 Statement in reliability dimension 36

Figure 4.2.3 Statement in responsiveness dimension 38

Figure 4.2.4 Statement in assurance dimension 40

Figure 4.2.5 Statement in empathy dimension 42

Figure 4.2.6 Overall the average mean of respondents’ expectations and

perceptions

45

List of Tables

Page

Table 2.1.1 Consumer Behavior reflects 6

Table 2.2.1 A conceptual model of service quality 7

Table 2.2.2 Original formulation components of Service Quality 10

Table 2.2.3 The five SERVQUAL dimensions categories 10

Table 3.1.1 Statements pertaining to the dimension 24

Table 4.1.1 Respondents’ demographic profile 32

Table 4.2.1 Comparison of the statements in the tangibles dimension 34

Table 4.2.2 Comparison of the statements in the reliability dimension 36

Table 4.2.3 Comparison of the statements in the responsiveness dimension 38

Table 4.2.4 Comparison of the statements in the assurance dimension 40

Table 4.2.5 Comparison of the statements in the empathy dimension 42

Table 4.2.6 Overall five service-quality dimensions 46

Table 4.3.1 Comparison of customers’ satisfaction 50

Table 4.3.2 Overall percentages of customers’ satisfaction 51

Table 4.3.3 Overall frequency of customers’ satisfaction 52

Table 4.3.4 The relationship between occupation and environment 53

Chapter 1 Introduction

1.1 Reason for choice the topic

In the hospitality industry, customer satisfaction depends on a service provider’s ability to

deliver service form their perceptions. Their importance may affect the consumer

behavioral intentions. The introduction of the Starbucks has brought the interest in

studying the service quality, expectation, perception, and satisfaction in an environment.

Nowadays, Starbucks Coffee Company is one of the successful organisations in

hospitality industry. They not only sell the coffee, but also to sell the concepts of the shop

to their customers.

Starbucks understand that people need a place to put the pressure of work aside.

Besides home, people require the third place for them to relax. Starbucks aims at

creating such peaceful and conformable environment for their consumer to reading, rest

and relax. As a matter of fast, Starbucks is very successful in promoting this concept to

the public.

Actually, Starbucks Coffee Company becomes one of the most famous brands around the

world (Business Week, 2007). However, competition is intense and complex in the

market now. New competitors appear every day who threaten the leading position of

Starbucks. Starbucks has no alternative but to keep itself innovative and creative all the

time in order to maintain its competitiveness. There will be a long-lasting struggle

between Starbucks Coffee and its competitors. The topic of how Starbucks resist will be

an interesting topic to be explored further and deeper.

1.2 Background of Starbucks Coffee

The original Starbucks Coffee Company was founded in Seattle, Washington in early

1971. Starbucks, named after the first mate in Herman Melville’s Moby Dick. Starbucks

built its first store by Gordon Bowker, Zev Siegel, and Jerry Baldwin in Seattle’s Pike

Place Market. During this period, Starbucks was just selling the roasted whole-bean and

equipment (Schultz and Jones Yang, 1997).

In the 1982, Starbucks was developed within the specialty coffee market in North America.

In the same year, Howard Schultz was hired as director of retail operations and marketing.

However, after experiencing the espresso bars in a trip to Milan, Italy. Schultz broke away

from Starbucks and opened his own style espresso bar coffee shop called Il Giornale in

1985 which sold Starbucks coffee (Schultz and Jones Yang, 1997).

After decade in 1992, Schultz bought out the founders’ Starbucks and began Starbucks

Corporation in public. Starbucks also began providing coffee to fine restaurants and

espresso bars (Schultz and Jones Yang, 1997).

Today, Starbucks is the world’s leading retailer, roaster and brand of specialty coffee and

it has over 15,700 stores in more than 43 countries around the world (Starbucks Coffee

Company, 2009a). In Hong Kong, Coffee Concept (Hong Kong) Limited, the operator of

Starbucks in Hong Kong, is a joint venture between Starbucks Coffee Company

International and Hong Kong premier catering conglomerate Maxim’s Catering Limited.

The first Starbucks store was opened at Central’s Exchange Square in May 2000. During

this period, Maxim's Catering Limited operated part of the Starbucks in Hong Kong and

Macau (Maxim’s Catering Limited, 2009). Now, Hong Kong’s Starbucks has more than

100 stores located in commercial, shopping & entertainment and residential areas

(Starbucks Coffee Company, 2009b).

1.3 Aim and Objectives

The purpose of this report is to study the importance of customer satisfaction from the

quality service through launching the Starbuck’s concepts. Thus, the literature review will

focus on service quality. The concepts related to customer satisfaction, service quality,

SERVQUAL, customer perception and expectation will be discussed in detail. Thus, the

results are desired Starbucks Coffee to increase customers' satisfaction in the future.

The major objectives of this study are as following:

1. To analyze the importance of service quality;

2. To compare the different between customer’s expectation and customers’ perception;

3. To find out the gap different between customer's expectation and customers’

perception;

4. To enhance the customer satisfaction from Starbucks Coffee.

In this report, it wants to analyze that whether service quality could help Starbucks to meet

its customer's expectation and perception, and to help Starbucks Coffee to achieve the

service standard of excellent coffee shop.

1.4 Outline of the study

This study consists into five chapters. Chapter 1, Introduction, states the reason for choice

the topic and the background of Starbucks Coffee are introduced briefly. It has also

discussed the aim and objectives and the outline of the study.

Chapter 2, Literature Review, contains a review of literature in the areas of the reflection

of consumer behavior, the importance of service quality, the discrepancy between

customers’ expectation and perception, customer satisfaction and the achievement of

customer satisfaction in Starbucks Coffee.

Chapter 3, Methodology, gives the details of primary and secondary research used in this

study, including research data, quantitative research, designing the questionnaire,

sampling, data collection and limitation of research in survey.

Chapter 4, Findings and Analysis, presents the results of survey. It begins with providing

the demographic profile of the respondents’. Then, it summarizes the five service-quality

dimensions and customers’ satisfaction which relate to previous research.

Chapter 5, Conclusions and Recommendations, the last part is the conclusion which

would be drawn from the findings of the research and the recommendations would be

suggested to Starbucks Coffee for increasing their quality service to launch the

satisfaction for their customers.

Chapter 2 Literature Review

Introduction

The purpose of this study is to promote a better understanding of the factors that

influences the customer satisfaction to the service industry. This chapter is divided into

five parts; it examined the relationship among the consumer behavior, service quality,

customers’ expectation & perception, satisfaction and achievement of customer

satisfaction in Starbucks Coffee.

2.1 Consumer Behavior

2.1.1 What is consumer behavior

According to Hoyer and MacInnis (2007) state that consumer behavior refers to the study

of how a person purchases the product and how to obtain a product at any one point in

time.

2.1.2 The reflection of consumer behavior

The human decision-making involves acquisition, consumption, and disposition of goods,

services, activities and ideas (Hoyer and MacInnis, 2007). Hence, those consumption can

affect the consumer’ behavior when they are purchasing the products over time. Table

2.1.1 shows that the reflection of consumer behavior.

Table 2.1.1 Consumer Behavior reflects:

The totally of

decisions

About the

consumption

Of an offering By decision- Marketing units

Over time

Whether

What

Why

How

When

Where

How much/

How often/

How long

Acquisition

Usage

Disposition

Products

Services

Activities

Ideas

Information

gatherer

Influencer

Decider

Purchaser

User

Hours

Days

Weeks

Months

Years

↑ ↓

Marketing strategies and Tactics

Source: Hoyer Wayne D., MacInnis Deborah J. (2007:5)

2.2 Service Quality

2.2.1 What is service

Zeithaml et al. (2006) state that services are actions, processes, and performances.

Service as product refers to a wide range of intangible product providing that customer

value and pay in the marketplace. Besides, the process of satisfying the customer

through service delivered with efficiency, understanding and compassion (Odgers, 2008).

The next part explains the characteristics of service.

Characteristics of service

Lovelock (1996) mentions that the marketing tools used for goods marketing cannot easily

be translated to service marketing. As different characteristics with exist between goods

and services presented in Table 2.2.1 and discussed as follow.

Table 2.2.1 A conceptual model of service quality:

Goods Services Resulting implications

Tangible Intangible Services cannot be inventoried, easily patented,

readily displayed or communicated. Also, pricing is

difficult.

Standardized Heterogeneous Service delivery and customer satisfaction depend

on employee and customer actions.

Service quality depends on many uncontrollable

factors.

There is no sure knowledge that the service

delivered matches what was planned and

promoted.

Production

separate from

consumption

Simultaneous

production and

consumption

Customers participate in and affect the transaction.

Customers affect each other.

Employees affect the service outcomes.

Decentralization may be essential.

Mass production is difficult.

Nonperishable Perishable It is difficult to synchronize supply and demand with

services.

Services cannot be returned or resold.

Source: A. Parasuraman, V.A. Zeithaml, and L.L. Berry (1985:41-50) cited in Zeithaml V.A.,

Bitner M.J., and Gremler D.D. (2006:22)

2.2.1.1 Intangibility

The basic characteristic used to define service is intangibility. Services are performances

or actions that are intangible. Services cannot be physically seen, felt, smelled, tasted or

touched in the same concrete manner that you can sense tangible goods (Becker, 1996;

Zeithaml et al., 2006).

2.2.1.2 Heterogeneity

A second characteristic is heterogeneity in the performances of services by humans.

Heterogeneity refers to the state of being different. It is used to describe the fact that no

two service performances are exactly alike and no two customers are precisely alike.

Because most service performance is performed by different people, it is hard to achieve

the standardization of services (Zeithaml et al., 2006).

2.2.1.3 Simultaneous Production and Consumption

A third characteristic of service states most services are sold first and then produced and

consumed at the same time. Service provider is playing the role as part of the product

during service delivery and as essential element in the service experience for customer.

Customer satisfaction depends on what service quality happened in actual time with

service provider. It also means that it is not possible to gain the economies of scale

through centralization. Also, customer is involved in the service performance (Zeithaml et

al., 2006).

2.2.1.4 Perishability

The last characteristic is perishability in the service performance. Service cannot be stored,

saved, returned or resold. Services are fixed in time and place, very inflexible and cannot

be used in future. Services need to match the supply and demand because of inability to

inventory issue. Strong recovery strategies are prepared when things do go wrong

(Zeithaml et al., 2006).

2.2.2 What is quality

In the current study there are many definitions of quality in research relating to goods and

services. Johns (1996) states that the concept of quality as ‘‘excellence’’ which is giving

attention to the production or delivery contexts. Besides, Kotler et al. (2004) urge that

quality can bear on its ability to meet customers’ needs in the totally of features (what the

customer desires) and characteristics of a product.

Hence, Service quality is the combination of the definition of “Service” and “Quality”.

Asubonteng et al. (1996) state that service quality which is defined by Parasuraman et al.

(1985), consumers are too hard to judge the service quality than goods quality. Service

quality is not easy to judge as service is intangible and the level of service may be varied

to different people.

On the other hand, Parasuraman et al. (1988:16, cited in Asubonteng et al., 1996) argue

that perceived service quality is ‘‘global judgment, or attitude, relating to the superiority of

the service’’. Asubonteng et al. (1996) also supplement that perceived service quality is

the customers’ expectations for the service performance before customer encounter the

services and their perceptions of the service received. Hence, to get service quality well

done, it is very impotent for hospitality organizations to understand customer’s expectation

and perception.

2.2.3 The dimension of service quality

As mentioned before, service quality need to concern the consumers’ expectation and

perception. Parasuraman et al. (1985) identify that the original formulation to measure the

ten components of service quality in Table 2.2.2 below.

Table 2.2.2 Original formulation components of Service Quality:

1. reliability; 2. responsiveness; 3. competence; 4. access; 5. courtesy;

6. communication; 7. credibility; 8. security; 9. understanding/

knowing the customer; 10. tangibles

After few years, Parasuraman et al. (1988, cited in Asubonteng et al., 1996) find that 22

questions which to fall down into five dimensions. The original ten components turn into

five dimensions: reliability, assurance, tangibles, empathy and responsiveness (Zeithaml

et al., 1990), as defined in Table 2.2.3. Reliability, tangibles and responsiveness retained

context, but another seven components decrease into two dimensions; assurance and

empathy.

Table 2.2.3 The five SERVQUAL dimensions categories:

Dimensions Definition

Reliability The ability to perform the promised service dependably and

accurately

Assurance The knowledge and courtesy of employees and their ability to

convey trust and confidence

Tangibles The appearance of physical facilities, equipment, personnel and

communication materials

Empathy The provision of caring, individualized attention to customers

Responsiveness The willingness to help customers and to provide prompt service

Source: Buttle Francis (1994). ‘‘SERVQUAL: review, critique, research agenda’’, European

Journal of Marketing, Vol.30 No.1, pp.8-32

2.2.4 The importance of service quality

Quality becomes more and more important in the service industry. As Service quality has

become the key to gain the competitive advantage, increased patronage, and long-term

profitability for an organizations (Clow and Vorhies, 1993; Randall and Senior, 1996).

Moreover, quality has a direct impact on customer satisfaction (Kotler and Armstrong,

1997) and reflects the customer’s perception of service such as reliability, responsiveness,

assurance, empathy and tangibility (Zeithaml et al., 1990).

As many definitions of service quality agree that providing quality is to deliver what the

customer requires (Randall and Senior, 1996; Crosby, 1979 cited in Ayala et al., 1996;

Gitomer, 1998; Lau, 2005).

Lau (2005) explains that providing the variety of service to the customers such as after

sales service can develop the long-term relationship between service provider and

customer. However, an organization only just concerns the quality of product but ignoring

the service. Customer may switch to another organization. On the other hand, product is

easy to imitate, but service quality is not. Thus, service quality is very important.

Thus, organizations have to enhance the quality and let the customers feel more value on

experience in the service process (Tse, 1996).

2.2.5 Measurement of service quality – SERVQUAL scale

SERVQUAL is first published in 1985 by A. Parasurman, Valarie A. Zeithaml and Leonard

L. Berry. It can be used to measure and manage service quality through understanding

the expectations and perceptions of customers. Peck et al., (1999:316) point out that

“SERVQUAL emphasizing the linkages between internal and external quality

management”. Without doubt, an organization provides the distinctive of service to their

consumer. An organization can design the questionnaire of analyzing the service quality.

This questionnaire can be called SERVQUAL (service quality).

A questionnaire is designed in 22-question (item) scale that is measuring five dimensions

of service quality (reliability, responsiveness, empathy, assurance and tangible) both on

expectations and performances. Parasuraman et al. (1985; 1988 cited in Asubonteng et

al., 1996) mention that SERVQUAL scale is an instrument for measuring and managing

the service quality by comparing expectations to performance. SERVQUAL means to

measure service quality as perceived by the customers (Asubonteng et al., 1996). Hence,

SERVQUAL would be evaluated by customers.

An organization creates the questionnaire to rate the customer degree of agreement or

disagreement with each statement with 7 indicating “strongly agree” and 1 “strongly

disagree”, with 6, 5, 4, 3 and 2 for a rating between “strongly agree” to “strongly disagree”.

Asubonteng et al. (1996) state quality is measured as “performance-expectations for each

pair of questions”. For example, if the performance score was equal to the expectations

score, an organization would meet the customers’ expectations and have a high service

quality. Consequently, SERVQUAL scale can measure the customers’ expectation and

customers’ perception on service quality.

2.3 Customer Expectation and Customer Perception

2.3.1 The discrepancy between the expectation and perception

Understanding customers’ perceptions and expectations of quality is increasingly

important to service industry. Zeithaml (2006) states that customers’ perception is

considered which connect with expectations. Customers’ perception of the service is

relative to the quality and satisfaction. There are three themes relating to the evaluation

and perception of service quality (Parasuraman et al., 1985 cited in Ayala et al., 1996).

First of all, service quality is too hand for customer to evaluate than the product quality.

Secondly, the result of perceived service quality is to compare of customer expectations

with actual service performance. Lastly, quality evaluations are not only focus on the

outcome of a service, it also need to evaluate of the process of service delivery. Figure

2.3.1 evaluates the level of expectations in perceived quality.

Figure 2.3.1 Perceived Quality

Unacceptable

Quality

Pre-purchase

Expectations ↘

Expectations Not

Met →

Perceived Process

Quality → = Expectations Met →

Satisfactory

Quality

Perceived Output

Quality ↗

Expectations

Exceeded →

Ideal Quality

Source: Zeithaml V.A., Parasuraman A., Berry .LL. (1985:2 cited in Hayward and Pine,

2009)

On the other hand, customers’ expectation is the judgment between standard or reference

points and performance of the service delivery in customer’s beliefs (Zeithaml, 2006).

Zeithaml et al. (1990) illustrate that there are several key factors that may influence

customers’ expectations: word of mouth, personal needs, past experience and external

communications, as shown in Figure 2.3.2.

Figure 2.3.2 Several key factors influence customers’ expectation

Dimensions of

service quality

Word of

mouth

Personal

needs

Past

experience

External

communication Tangibles

Reliability

Responsiveness ↓

Competence Expected

Service

→ →

Courtesy → → Perceived Service

Quality → →

Credibility

Security → → Perceived

Service

Access

Communication

Understanding

the customer

Source: Zeithaml V. A., Parasuraman A., Berry L.L. (1990:23)

Without doubt, the organizations would know that the expectation and perception are very

important issues for their customers. As mentioned before, perceptions of service quality

is based on five dimensions: reliability, assurance, empathy, responsiveness, and

tangibles. If the organization fulfill their customer’s expectations, it have be exceeded the

customer satisfaction.

As a matter of fact, it is clear recognizes that the judgments of high and low service quality

depend on how customers perceive the actual service performance in what customers

expected. Therefore, perceived service quality by customers, it can be defined as the

discrepancy between the customers’ expectations and customers’ perceptions.

2.4 Customer Satisfaction

2.4.1 What is customer satisfaction

Zeithaml et al. (2006:110) define “Satisfaction is the consumer’s fulfillment response. It is

a judgment that a product or service feature, or the product or service itself, provides a

pleasurable level of consumption-related fulfillment”.

Additionally, Gitomer (1998) mentions that satisfied customer felt the experience, product

or service was okay which met their needs and wants. The overall feeling is positive. On

the other hand, Hoyer and MacInnis (2007) state that customer satisfaction refers to

consumer evaluate the outcomes of their decisions. If the customer thought their needs

or goals had been achieved, they feel satisfaction. Satisfaction can be associated with

delight, happiness, and feelings of acceptance.

2.4.2 The importance of customer satisfaction

Hoffman and Bateson (1997) illustrate that the trend of services marketing is toward to

increase the growing customer satisfaction in organizations and customer satisfaction

becomes one of the most studied areas in the services marketing.

As a matter of fact, there are two importance reasons in customer satisfaction to business

which is presented as follow. First of all, organizations realize that increasing the levels of

customer satisfaction can be linked to profitability (Heskett et al., 1994; Barsky, 1995),

increases chances for repeat purchase, positive word-of-mouth promotion, increases

customer expenditure on current purchases and brand loyalty (Barsky, 1995; Webster,

1991 cited in Ayala et al., 1996; Kotler, 2000; Zeithaml et al., 2006; Hoyer and MacInnis,

2007).

Secondly, satisfaction is based on the customer’s perceptions of the service which they

received. If the customers feel the service is failures, it may lead into the customers’

dissatisfaction. For instance, it brings to negative feelings and responses from customers,

telling other customers about their negative experiences, left unfixed, complaint actions

and negative word-of-mouth (Zeithaml et al., 2006).

In fact, service failure is inevitable even for the best of organizations with world-class

service systems. However, service provider can avoid the mistake in developing the

relationship. The formula of customer satisfaction is show in Figure 2.4.1.

Figure 2.4.1 Customer Satisfaction Formula

Doing the job at

Right the first

time

+

Effective

complaint

handling

=

Increased

customer

satisfaction and

customer loyalty

Source: Zeithaml, V.A., Bitner, M.J., Gremler, D.D., (2006:110)

2.4.3 Measurement of customer satisfaction – Customer Satisfaction Index Model

Customer Satisfaction Index (CSI) can reflect the customers’ expectation and allow the

organizations to identify better opinions to satisfy their customers. Therefore, the

organizations are actively monitoring their customer satisfaction through the use of market

surveys. The surveys involve Customer Satisfaction Index (CSI) Model which measures

the satisfaction in a variety of industry. This model is an instrument to baseline levels of

service delivery normalcy (HKACE, 2008). Also, HKACE mentions that Customer

Satisfaction Index can improve the service standard. Figure 2.4.3 illustrates the

relationship between the three components. Hence, Customer Satisfaction Index can

reflect the customers’ expectation and allow organization to identify better opinions to

satisfy their customers.

Figure 2.4.3 Basic CSI Model

Drivers Key Customer Behaviors

Product Quality

Service Quality

Perceived Value

Complaint Referral Re-purchase Cross-

purchase

Source: HKACE (2008). Customer Satisfaction Index and Its Implications 2002

2.5 Achievement of Customer Satisfaction

2.5.1 The concept of Starbucks Coffee

2.5.1.1 The Third Place

Schultz and Jones (1997:5) define that “a Third Place is a comfortable, sociable gathering

spot away from home and work, like an extension of the front porch”.

Schultz always mentions that he loves the most three places. The first one is home,

second is work place and third place is Starbucks Coffee shop. A Third Place means let

people feel relax, comfortable and safety in place outside at home and work place

(Schultz and Jones, 1997). Moreover, Luo (2005) states that people need an exceptional

atmosphere in coffee shop where it can talk with friends, relaxing and have different

feeling of work place and family.

On the other hand, people can get the romance of the coffee experience and the feeling of

warmth in Starbucks environment. Schultz figures that Starbucks Coffee not only

develops enthusiastically satisfied customers on coffee but also realizes that Starbucks

Coffee has offering benefits as attractive as the coffee itself: a taste of romance, an

affordable luxury, an oasis and casual social interaction (Schultz and Jones, 1997).

Besides, Internet becomes increasingly used in 1990s. Starbucks would like to satisfy the

customers’ need on a regular basis for the human interaction in providing the wireless

internet service and selling the CD in shops (Luo, 2005).

Hence, Starbucks Coffee can provide a social interaction and fulfill the need of their

customers in safe gathering spot, the “Third Place” outside of work and home.

2.5.1.2 The Customer-oriented approach

Randall and Senior (1996:174) explain that “Development the customer-oriented

perceptions in an organization means that there must be effective communications

between customers, management and employees”. Figure 2.5.1 shows the

communication channels between those people.

Figure 2.5.1 Communication Channels

Source: Randall and Senior (1996). The developing role of quality in the

hospitality industry. Training for service quality in the hospitality industry

(pp.164-179).

The concept of customer-oriented approach is to develop the relationship between

Starbucks Coffee and customers. Schultz mentions that Starbucks Coffee is shaped the

feeling of accreditation and value in the corporation through the delivering to their

customers. Besides, Schultz knows seriously their customers’ perceptions of high service

quality are important that to make Starbucks offers the excellence service to fulfill their

customer’s needs (Luo, 2005). As an illustration, Starbucks employees would provide

special customized service when customers order the special request in the cup of coffee.

It shows that employees would pay attention to fulfill their customer’s need in every

purchase. Moreover, Starbucks employees are willing to explain their customers clearly in

every product characteristic of coffee. It shows that this can be unique selling point in

Starbucks Coffee. Especially, Starbucks also concern the communication between

employees and customers because of the achievement of providing the customers’ needs

and quality service (Luo, 2005).

Hence, it can be achieved that the aims of Starbucks Coffee in providing high service

quality and developing enthusiasm to satisfied customers all of the time (Starbucks Coffee

Company, 2009b).

Conclusion

The objective of this chapter was to offer a conceptual overview of each key constructs

which examined in the study - consumer behavior, service quality, customers’ expectation

& perception, satisfaction and achievement of customer satisfaction in Starbucks Coffee.

In conclusion, the literature review revealed that service quality and satisfaction is very

important to customer’s perceptions in service delivery.

The next chapter provides a discussion of the research methodology for the study. The

methodology gives the details of the research for sampling, collecting the data, developing

the questionnaire, and analyzing the data in more detail.

Chapter 3 Methodology

Introduction

In this chapter, the research methodology used to test and measure the service quality

and customer satisfaction of Starbucks Coffee. The primary research and secondary

research were introduced and evaluated in details of measurement. This includes the

data research, quantitative research, designing the questionnaire, sampling, data

collection, data analysis and limitations of the research.

3.1Primary research

3.1.1 Primary data

Primary research concerns the collecting data that is used to solve the particular problem

or for a specific purpose (Kotler and Armstrong, 1997). This study used the primary data

with quantitative research which the purpose was to collect a new data – using

SERVQUAL instrument to conduct a questionnaire.

3.1.2 Quantitative research

According to Saunders et al. (2003), survey is one of popular research strategies

approach included a questionnaire, structured observation and interviews. Honestly, the

data often obtain from a questionnaire as it is standardized and easy comparison. It

seems that survey strategy allow to collect responses from a large amount of data to

quantitative analysis and easy to control the research process.

Questionnaire can be used in two researches, descriptive or explanatory research.

Descriptive research can attempt to use the attitude and opinion questionnaires that to

recognize the different kinds of issue (Saunders et al., 2003). Moreover, questionnaire

can be differed of its administered as shows in Figure 3.1.1. Saunders et al. (2003:282)

define “Self-administered questionnaires are usually completed by the respondents”.

Hence, a response to self-administered questionnaire is taken the time saving between

respondent and distributor during the survey.

Figure 3.1.1 Types of questionnaire

Questionnair

e

Self-administered Interviewer administered

On-line

questionnair

e

Postal

questionnair

e

Delivery and

collection

questionnaire

Telephone

questionnaire

Structured

interview

Source: Saunders, M., Lewis, P., and Thornhill, A. (2003:282)

Besides, SERVQUAL was tested for reliability and validity to measure the service quality

(Parasuraman et al., 1988 cited in Asubonteng et al., 1996) and adapted in a variety of

settings such as in large retails chains, fast food restaurants etc (Zeithaml et al., 1990).

Therefore, the format of SERVQUAL was adopted by using self-administered

questionnaire in this study.

3.1.3 Designing the questionnaire

3.1.3.1 Structure

The questionnaire was divided into three parts (Appendix A). The first part was designed

to obtain the information of customers’ expectation and perceptions that regarding the

quality of service provided by Starbucks Coffee. The questionnaire was designed into

three columns. The 22 statements (question) were listed in the center column that

measuring five basic dimensions of service quality as showed Table 3.1.1. Both of

expectations (Part A) were measured using 22 statements and performance (Part B) was

rated using 22 parallel statements, 44 statements in total were used.

Besides, the left column (Part A) was measured the expectations of respondents what

service they expect to receive in an excellent coffee shop and the right column (Part B)

was measured the respondents’ perceptions of Starbucks service. In second part, there

were five extra questions that asking respondents about the overall level of satisfaction

with Starbucks Coffee.

In the original SERVQUAL instrument used the seven scales of rating the agreement or

disagreement with each statement (7 indicate “strongly agree” and 1 “strongly disagree”).

However, this questionnaire was used five scales of rating to measure the customers’

expectations and perceptions as it can be effectively to finish the questionnaire as soon as

possible by respondents. Respondents were requested to rate the score, ranging from 5

“very strongly agree” to 1 “very strongly disagree”. Also, there were 3 “neither agree nor

disagree” between 5 and 1. The last part was collected the respondents’ socio-

demographic as well: gender, age, educational level, income level, occupation, Starbucks

member card and the frequent visit to Starbucks per month of the respondents.

Table 3.1.1 Statements pertaining to the dimension

Tangible Statements 1-4

Reliability Statements 5-9

Responsiveness Statements 10-13

Assurance Statements 14-17

Empathy Statements 18-22

3.1.3.2 Wording and language

The questionnaire was written with sample and easy words to explain each statement. It

is because it could make respondents more understanding in the survey. Also, the

questionnaire was designed in both language (Chinese and English) to increase the

response rate as it could make the respondents more convenient to read the

questionnaire and more understanding the content in the survey.

3.1.4 Sampling

A convenience sampling was used in this research. It was because the convenience

sampling was easiest to obtain the sample which was intended to response the total

population (Saunders et al., 2003). Also, convenience sampling could be reduced the

time and financial constraints. On the other hand, the sampling was focus on Chinese

Hong Kong residents who speak Cantonese and stay in Hong Kong Special

Administrative Region. Since the residents’ point of view were very important for Hong

Kong Starbucks that to improve the service quality and create more customer satisfaction.

Also, the target sample size was undertaken 120 respondents to complete the whole

survey. However, the number of competed questionnaire was 103 questionnaires.

Sudman (1976) suggests that for studies on attitude, the minimum age is usually eighteen.

Since this study basically deals with measurements on expectations and perceptions, it is

logical to follow Sudman’s suggestion. The target respondent who was aged over

eighteen, were assumed those with experience in Starbucks Coffee.

3.1.5 Data collection

The data were collected far into the two different places outside of Starbucks Coffee in

Hong Kong. The two different Starbucks was located in shopping mall (Tai Po Mega Mall)

and MTR station (Tai Po Market). The survey was carried out for ten days from 10th

February 2009 to 20th February 2009 in person. In addition, the survey was conducted

about an hour per day at afternoon. This was considered to be the most effective way of

collecting responses to the survey. Survey research was carried out with a self-

administered by using the questionnaire. The purpose of questionnaire was explained to

each respondent when starting the survey. Then, the questionnaire was delivered by

hand to each respondent and gathered later after completion.

3.1.6 Data analysis

After collected the data, the statistical software was applied to analysis the data as well.

Next, the data were analyzed by using the Statistical Package for the Social Sciences

(SPSS) Windows version 16 which can perform the quantitative research for review the

details. Descriptive statistics analysis was also used in this study to measure the

frequencies which generally obtained from nominal scales. Excel also put in use for

showing the table and figure in the paper.

3.1.7Limitations of primary research

There were some constraints when the questionnaire survey was conducted. Firstly, the

manager of Starbucks Coffee was not approved outside of Starbucks. As the manager

said that it would be disturbed their consumers when leaving the Starbucks. Hence, the

manager forbade the caller to conduct the survey outside the Starbucks.

As a matter of fact, it was difficult to measure the level of reliability of every respondent in

filling the questionnaire. If the respondents did not want to complete the questionnaire,

they could just fill the box with never visit the Starbucks that the questionnaire was

completed. Therefore, it might affect the validity of the survey.

3.2Secondary research

3.2.1 Secondary Data

McDaniel and Gates (1993:43) define that “secondary data information that has been

gathered that might be relevant to the problem”. A variety of secondary data was

collected and stored to support in this study: for example, text books, academic journals,

newspaper articles, official websites, annual report and some related reference which can

be obtained quickly to explore the primary research in depth.

3.2.2 Limitations of secondary research

Unfortunately, there are limitations of secondary data in this study. The reference book

used “Pour your heart into it”, by Howard Schultz, was published in 1997. It was written a

longer than a decade. Also, it focused mainly on the history and business development of

Starbucks Coffee but rarely on customer service and the Third Place marketing.

On the other hand, some secondary data might not accurate such as world wide of web

references that were not conducted by a scholar. Hence, the disadvantage of using

secondary data without the organization might affect the collection (Saunders et al., 2003).

Conclusion

This chapter presented the methodology employed to empirically test the service quality

and satisfaction of Hong Kong Starbucks Coffee, including data research, quantitative

research, designing the questionnaire, sampling, data collection, data analysis and

limitations of the research. The quantitative research was chosen because any statistical

analysis can provide useful information to display and summarize the data values. Also,

survey was selected as the research method because it was the most flexible method to

collect data. In addition, SERVQUAL questionnaire using the Statistical Package for the

Social Sciences (SPSS) Windows version 16 software was used to test the causal

relationship among the customers’ expectations in an excellent coffee shop and

perceptions in Hong Kong Starbucks Coffee. Lastly, the results of the statistical analysis

are presented in the next chapter.

Chapter 4 Findings and Analysis

Introduction

The statistical analysis of the data collected from questionnaire (Appendix A) is presented

in this chapter 4. The findings enable Starbucks Coffee to have a better understanding

towards the service expectations and perceptions of their customers. The questionnaire,

was distributed and tested outside the Starbucks Coffee, comprised with 49 questions

in total which are describing service quality and satisfaction in five service-quality

dimensions and personal information.

The first part, it begins with providing the demographic profile of the respondents. Then,

five service-quality dimensions are investigated in the second part. The results show that

the respondents’ perceptions of the service provided by Starbucks Coffee and their

expectations’ of the service expected from an excellent coffee shop. Then, an overall

expectation and perceptions of service quality is analyzed while an overall ranking of

statements for five dimensions is also discussed. The findings identify a priority list of the

service that Starbucks should improve. In the final part, customers’ satisfaction is

summarized. The key findings are summarized below under these parts.

In this survey, the size of sample was 120 respondents. However, the questionnaire was

completed successfully with a total of 103 respondents. The overall response rate was

85.8% as shown in Appendix B (Table1).

4.1 Demographic profile of the respondents

The questionnaire found that 56 respondents were female (54.4%) and 47 respondents

were male (44.6%). In terms of their age level, the top three ago groups of the

respondents were 25-30 years (32%), 18-24 years (25.2%) and 31-35 years (24.3%).

The results of the educational level showed that there were nearly 70% of the

respondents who had attended the college or university right now. High school level and

graduated high school were distributed 4.9% and 25.2% respectively.

For the average monthly income range, more than half of respondents (55.4%) were in

the income range under $10,000. 27% of the respondents had monthly income from

$10,001 to $20,000. Moreover, only 17.5% of the respondents earned over $20,001 or

above.

Findings indicated that the majority of the respondents were clerk and sales at 41.7%,

followed by student at 31.1%. Administrative and executive were distributed at 14.6%.

Lastly, only 11.7% and 1 % of respondents were labor and teacher.

About 71.8% of the 103 respondents did not have Starbucks member card. Alternatively,

among 29 respondents did have Starbucks member card representing 28.2%.

Finally, the majority of the respondents (48.5%) visited Starbucks five times below per

month, while 27.2% of the respondents visited six to ten times a month. There were 25

out of 103 respondents (24%) who visited Starbucks between eleven times and twenty

times per month. Nevertheless, none of respondent visited the Starbucks over twenty-one

times per month.

A complete demographic profile of the respondents is showed in Table 4.1.1 and

Appendix B (Table 2-8).

Table 4.1.1 Respondents’ demographic profile

Variables Frequency % (Base=103)

Gender Female

Male

56

47

54.4%

45.6%

Age 18-24 years old

25-30 years old

31-35 years old

36-44 years old

45-54 years old

Over 55 years old

26

33

25

13

6

0

25.2%

32%

24.3%

12.6%

5.8%

0%

Educational level Primary or below

High school

Graduated high school

College/University

Graduated college/University

Postgraduate

0

5

26

41

30

1

0%

4.9%

25.2%

39.8%

29.1%

1%

Average Monthly

Income Range

Under$8,000

$8,001-$10,000

$10,001-$20,000

$20,001-$30,000

$30,001-$50,000

Over$50,001

36

21

28

18

0

0

35%

20.4%

27.2%

17.5%

0%

0%

Occupation Student

Labor

Clerk / sales

Administrative / Executive

Teacher

Others

32

12

43

15

1

0

31.1%

11.7%

41.7%

14.6%

1%

0%

Starbucks Member Card Yes

No

29

74

28.2%

71.8%

How frequent you visit

Starbucks per month?

Under 5

6-10

11-15

16-20

21-25

Over 26

50

28

11

14

0

0

48.5%

27.2%

10.7%

13.6%

0%

0%

4.2 Summarizing the five service-quality dimensions

In this section, all of the bar charts show the mean score as well as the statement

including the respondents’ expectations and perceptions on the service quality. Besides,

each Table explains the statement, an exact mean score, ranking and the gap between

respondents’ expectations of the service from an excellent coffee shop and perceptions of

the service provided by Starbucks Coffee for comparison.

For example of Figure 4.2.1, the first bar of “Exc. coffee shop (Mod. equip.)” means that

“an excellent coffee shop has modern-looking equipment.” And then the second bar,

“Starbucks (Mod. equip.)” means that “Starbucks has modern-looking equipment.” These

two bars are paired for comparing the respondents’ expectations and perceptions of the

modern-looking equipment.

4.2.1 Tangibles dimension

As shown in Figure 4.2.1 and Table 4.2.1, the respondents’ highest expectation with

tangibles aspect is “phys. appeal” (The physical facilities are visually appealing) (mean=

4.28), followed by “mat. appeal” (Materials associated with the service are visually

appealing) (mean= 4.20), the lowest mean of 4.13 are “staff neat” (staff are appear neat)

and “mod. equip.” (An excellent coffee shop has modern-looking equipment) (mean= 4.01).

It shows that respondents agree that they expect the physical facilities of an excellent

coffee shop are visually appealing. However, the largest gap between customer

perceptions and expectations occurred for this statement (Gap of two means= -0.54). The

mean of respondents’ perception is 3.74 which show that respondents do not agree the

physical facilities are appealed in Starbucks.

On the other hand, Starbucks has received the highest perceptions as shown in Figure

4.2.1 is “staff neat” (Staff appears neat in appearance.) (mean= 3.93) which shows that

the respondents agree staff of Starbucks appear neat and tidy. Moreover, the lower score

with a mean of 3.74 is “phys. appeal” and 3.58 is “mod. equip.”. Therefore, Starbucks is

most necessary to improve the modern-looking equipments as well as physical facilities.

Figure 4.2.1 Statement in tangibles dimension

Table 4.2.1 Comparison of the statements in the tangibles dimension

Statement Exc. coffee

shop(mean)

Rank Starbucks

(mean)

Rank Gap

score

1 Mod. equip. 4.01 4 3.58 4 -0.43

2 Phys. appeal 4.28 1 3.74 3 -0.54

3 Staff neat 4.13 3 3.93 1 -0.2

4 Mat. appeal 4.20 2 3.82 2 -0.37

4.2.2 Reliability dimension

As shown in Figure 4.2.2 and Table 4.2.2, the respondents ranked the highest expectation

on reliability aspect is that an excellent coffee shop should perform the service right in the

first time (mean= 4.26), followed by “solving” (When customers have a problem, an

excellent coffee shop shows genuine interest in solving it) (mean= 4.22) and the lowest

mean of 3.87 is “promises” (When an excellent coffee shop promises to do something by

a certain time, it does so).

The largest gap between customer perception and expectation is “error-free serv.” (Gap of

two means= -0.47). It shows that the mean score of respondents’ expectation is high than

perceptions. Hence, it can be seen that Starbucks has lack of ability to insist on error-free

service to customers.

The highest perceptions bar in Figure 4.2.2 is “promises” (Starbucks promises to do

something by a certain time, as it promises to do so) (mean= 3.89) appears the strongest

area in “promises” for Starbucks’ customers.

Figure 4.2.2 Statement in reliability dimension

Table 4.2.2 Comparison of the statements in the reliability dimension

Statement Exc. coffee

shop(mean)

Rank Starbucks

(mean)

Rank Gap

score

5 Promises 3.87 5 3.89 1 0.19

6 Solving 4.22 2 3.83 4 -0.39

7 Right first time 4.26 1 3.87 2 -0.39

8 Time promises 3.97 4 3.86 3 -0.11

9 Error-free serv. 4.20 3 3.73 5 -0.47

4.2.3 Responsiveness dimension

As shown in Figure 4.2.3 and Table 4.2.3, it can be seen that the ranking does match of

each statements. The respondents’ highest expectation with responsiveness aspect is

“willing to help” (Staff at an excellent coffee shop are willing to help customers) (mean=

4.41), followed by “prompt” (Staff gives prompt service to customers) (mean= 4.17) and

the lowest mean of 3.97 is “never too busy” (Staff are never too busy to respond to

customers).

And then, the largest gap between customer perception and expectation is “when

perform” (Gap of two mean= -0.29). It can be concluded that the most necessary service

of Starbucks should improve in telling patrons exactly when service are performed.

The respondents agree that staffs in Starbucks are always willing to help them (mean=

4.17). However, the lower score with a mean of 3.72 is “never too busy”, this aspect is

viewed as staff has to improve never too busy to respond to customer.

Figure 4.2.3 Statement in responsiveness dimension

Table 4.2.3 Comparison of the statements in the responsiveness

dimension

Statement Exc. coffee

shop(mean)

Rank Starbucks

(mean)

Rank Gap score

10 When perform 4.07 3 3.78 3 -0.29

11 Prompt 4.17 2 3.99 2 -0.18

12 Willing to help 4.41 1 4.17 1 -0.24

13 Never too busy 3.97 4 3.72 4 -0.25

4.2.4 Assurance dimension

As shown in Figure 4.2.4 and Table 4.2.4, the respondents’ highest expectation with

assurance aspect is “knowledge” (Staff have the knowledge to answer customers’

requests) (mean= 4.36).

The largest gap between customer perception and expectation occurred in the same

statement is “confidence” (Gap of two mean= -0.58). The results show that Starbucks

should improve the confidence in their staff, so that they can instill to customers.

Moreover, Starbucks has received the highest perceptions in “courteous” (Staff at an

excellent coffee shop are consistently courteous with customers) (mean=4.24). It shows

that the respondents agree the staff can provide a polite to them. And the lowest score

with a mean of 3.62 is “confidence”.

In Table 4.2.4, there are different ranking sequences of respondents’ expectations and

perceptions. However, all the mean score of expectations and perceptions are very

similar to each statement in assurance dimensions.

Figure 4.2.4 Statement in assurance dimension

Table 4.2.4 Comparison of the statements in the assurance dimension

Statement Exc. coffee

shop(mean)

Rank Starbucks

(mean)

Rank Gap

score

14 Confidence 4.20 2 3.62 4 -0.58

15 Feel safe 3.88 3 3.98 3 0.1

16 Courteous 4.17 4 4.24 1 0.07

17 Knowledge 4.36 1 4.12 2 -0.24

4.2.5 Empathy dimension

As shown in Figure 4.2.5 and Table 4.2.5, the respondents’ highest expectation with

empathy aspect is “convenient hr” (An excellent coffee shop has convenient business

hours) (mean= 4.32). This shows that the respondents are likely to agree an excellent

coffee shop will have convenient opening hours to of all its customers. And the lowest

mean of 3.94 is “interests” (An excellent coffee shop has customers’ best interests at

heart)

The largest gap between customer perception and expectation are “convenient hr” and

“special needs” (Gap of two mean= -0.27). However, those two statements are just a little

bit deviation between expectations and perceptions. It can be suggested that Starbucks

can a better service to customers if it provide a convenient opening hour and more

understand customers’ special needs.

The best service provided by Starbucks relating to the empathy dimension which offer

customers individualized attention (mean= 4.06). However, the lowest score with a mean

of 3.96 “staff atten.” It implies that the respondents want to obtain more personalized

attention from the staff.

Figure 4.2.5 Statement in empathy dimension

Table 4.2.5 Comparison of the statements in the empathy dimension

Statement Exc. coffee

shop(mean)

Rank Starbucks

(mean)

Rank Gap

score

18 Attention 4.18 3 4.06 1 -0.12

19 Convenient hr 4.32 1 4.05 2 -0.27

20 Staff atten. 4.07 4 3.96 5 -0.11

21 Interests 3.94 5 4.01 4 0.12

22 Special needs 4.30 2 4.03 3 -0.27

4.2.6 Overall expectations of service quality

Table 4.2.6 clearly shows the overall findings of service quality dimensions between

excellent coffee shop and Starbucks Coffee. The result shows that the average mean of

empathy dimension (mean= 4.163) is the most critical dimension on respondents’

expectation, followed by responsiveness (mean= 4.155), tangibles and assurance (mean=

4.153) and reliability (mean= 4.107). Furthermore, the overall average mean scores of

expectations are 4.146.

Results from those studies have consistently shown empathy to be the most important

dimension, and reliability the least important. However, according to Zeithaml et al.

(2006), reliability is the most important to determine the service quality in the five

dimensions. Hence, it has some different between the actual finding and literature in the

study.

The results find that the respondents’ expect to receive the high provision of caring,

individualized attention in the empathy dimension that an excellent coffee shop provide to

customer. Maybe the respondents’ desire to get the better understands on their individual

needs. On the other hand, responsiveness is the second importance dimension for the

respondents’ as they concern the worth on the staff whether eagerness to help customers

and to offer prompt service. Besides, it is surprised to find out that tangibles and

assurance are generally important in the expectable service quality on the respondents’

mind. Lastly, the result shows that reliability is the least important as they are not predict

an excellent coffee shop can deliver its promises service dependably.

4.2.7 Overall perceptions of service quality

Table 4.2.6 also shows that the average mean of perceptions in the five service-quality

dimensions. The most important dimensions are the empathy (mean= 4.021), followed by

assurance (mean= 3.990), responsiveness (mean= 3.913), reliability (mean= 3.837) and

tangibles (mean= 3.769). Besides, the overall average mean scores of perceptions are

3.906.

Simultaneously, results have consistently shown empathy to be the most important

dimension in respondents’ perceptions. Namely, it has the same results of highest

average mean on the respondents’ expectation as shown in Table 4.2.6. The results

show that the respondents’ were perceived the caring, individualized attention of service

through Starbucks. It is related to the above literature review, Starbucks employees

would provide the special customized service to fulfill their customers’ needs (Luo, 2005).

The result indicates that respondents’ are most satisfied with Starbucks treat the

customers as individuals. Hence, empathy dimension are ranked in the first.

Moreover, assurance is the second importance dimension for respondents’ as Starbucks

employees are willing to explain their customers clearly in every product characteristic of

coffee (Luo, 2005). Moreover, according to Starbucks Coffee Company (2009a), it states

that each store employee participates in an extensive training program that facilitates

strong coffee knowledge, product skill and a commitment to customer service.

Fortunately, the result shows that employees have knowledge, courtesy and the ability to

answer customers’ questions as well. Therefore, the assurance score were similar as the

empathy score (gap of two average mean=0.031).

Besides, it finds out that responsiveness and reliability are generally important in the

perceptive service quality on the respondents’ mind. Lastly, tangibles are the least

important dimension that means the respondents’ were less satisfied with the appearance

of physical facilities, equipment, personnel, and communicate materials. It is because the

concept of Starbucks is to provide a place of comfortable, relax and safety in place

outside at home and work place (Schultz and Jones, 1997). The result shows that the

concept is not consistency with the actual findings in Hong Kong Starbucks. Hence,

Starbucks need to improve the service quality related to all the statements in tangibles

dimension if they intend to deliver an excellent service to customers.

Finally, Figure 4.2.6 tracks customers’ expectations and perceptions along the overall

average mean of five service-quality dimensions. An overall statement in the five service-

quality dimensions is shown in Appendix B.

Figure 4.2.6 Overall the average mean of respondents’ expectations and perceptions

Table 4.2.6 Overall five service-quality dimensions

Statements An excellent

coffee shop

mean

(exp.)

Starbuck

s

Mean

(percept.

)

Gap

scor

e

Averag

e mean

(exp.)

Average

mean

(percept.

)

Tangibles

1. The equipment is modern-looking. 4.01 3.58 -0.43 4.153

(3rd)

3.769

(5th) 2. The physical facilities are visually appealing. 4.28 3.74 -0.54

3. Staff appears neat. 4.13 3.93 -0.2

4. Materials associated with the service are visually

appealing.

4.20 3.83 -0.37

Reliability

5. When they promise to do something by a certain

time, they do so.

3.87 3.89 0.19 4.107

(4th)

3.837

(4th)

6. When patrons have a problem, they show genuine

interest in solving it.

4.22 3.83 -0.39

7. They perform service right in the first time. 4.26 3.87 -0.39

8. They provide its service at the time it promises to

do so.

3.97 3.86 -0.11

9. They insist on error-free service. 4.20 3.73 -0.47

Responsiveness

10. Staff tells patrons exactly when services are

performed.

4.07 3.78 -0.29 4.155

(2nd)

3.913

(3rd)

11. Staff gives prompt service to patrons. 4.17 3.99 -0.18

12. Staff is always willing to help patrons. 4.41 4.17 -0.24

13. Staff is never too busy to respond. 3.97 3.72 -0.25

Assurance

14. The behavior of staff instills confidence in

patrons.

4.20 3.62 -0.58 4.153

(3rd)

3.990

(2nd)

15. Patrons feel safe in their transactions. 3.88 3.98 0.1

16. Staff is consistently courteous with patrons. 4.17 4.24 0.07

17. Staff has the knowledge to answer patrons’ 4.36 4.12 -0.24

requests.

Empathy

18. Staff gives patrons individualized attention. 4.18 4.06 -0.12 4.163

(1st)

4.021

(1st) 19. The opening hours are convenient to all of its

patrons.

4.32 4.05 -0.27

20. Staffs who give its patrons personal attention. 4.07 3.96 -0.11

21. They have the patrons’ best interests at heart. 3.94 4.01 0.12

22. Staff understands the specific needs of their

patrons.

4.30 4.03 -0.27

Total average mean score 4.146 3.906

4.2.8 Overall rank of the statements in the five service-quality dimensions

The overall top nine rank of the expectations and gap scores as shown in Appendix C

(Table 1 and Figure 1) which include the overall information of the statements in the five

service-quality dimensions. It indicates that the information is useful to improve service

quality in the most necessary part.

As presented in the overall rank (Appendix C, Table 1), six statements are discussed in

depth. It is because there are the larger significant gaps within those six statements. The

six priority statements including: “staffs instill confidence to customers” (confidence); “the

physical facilities are visually appealing in coffee shop” (phys. appeal); “the coffee shop

performs the service right in the first time” (right first time); “the coffee shop shows

genuine interest in solving the problems” (solving); “materials associated with the service

are visually appealing” (mat. appeal) and “staffs understand the special needs of

customer” (special needs). The results are discussed follow.

4.2.8.1 Staffs instill confidence to customers (confidence)

The largest gap between customers’ expectations and perceptions is “confidence”. The

ranking of the expectation of this statements is 8th (mean= 4.20). The respondents agree

that staffs instill confidence to customers in an excellent coffee shop. However, the

ranking of the perception is 21st (mean= 3.62) which shows that this is one of the worst

service aspects provided by Starbucks. Hence, Starbucks need to improve the staffs’

confidence first.

4.2.8.2 The physical facilities are visually appealing in coffee shop (phys. appeal)

The second largest gap is “phys. appeal”. Physical facilities are ranked in the fifth highest

expectation (mean= 4.28). It means that the respondents believe the physical facilities

are visually appealing in an excellent coffee shop. However, the ranking of perception is

stated in 18th (mean= 3.74). This shows that the respondents do not perceived any

physical facilities in Starbucks. Hence, Starbucks need to pay attention to this statement

of the service strategy.

4.2.8.3 The coffee shop performs the service right in the first time (right first time)

The third largest gap is “right first time”. The ranking of expectation in this statement is 6th

(mean= 4.26). The respondents moderately agree that Starbucks performs the service

right in the first time, because perception ranking of this statement is only 13rd (mean=

3.87). This shows that Starbucks cannot provide the service right to their customers

during the delivery process. Therefore, service right should be performed in the first time

by Starbucks.

4.2.8.4 The coffee shop shows genuine interest in solving the problems (solving)

“Solving” is the fourth largest gap and the 7th highest expectation (mean= 4.22). The

respondents approve that an excellent coffee shop shows genuine interest in solving the

problems. Nevertheless, because the perception of this statement appears 16th in the

ranking, the respondents generally accept Starbuck can show the genuine interest in

solving the problems. Consequently, Starbuck need to take seriously when solving the

problems.

4.2.8.5 Materials associated with the service are visually appealing (mat. appeal)

The fifth largest gap is “mat. appeal” and the expectation ranking is in 9th in this statement

(mean= 4.20). The respondents slightly agree that the materials associated with the

service are visually appealing in Starbucks, as the perception ranking is in 15th

(mean=3.83). Thus, Starbucks can be increase the materials associated with their service.

4.2.8.6 Staffs understand the special needs of customer (special needs)

The perception ranking of “special needs” is 6th (mean= 4.03). The respondents indicate

that staffs understand the special needs of each customer in Starbucks. However, the

expectation of this statement appears 4th in the ranking. It means that the respondents

have a higher expectation than the perception. Therefore, Starbucks need to implement

the strategy to decrease the gap.

4.2.8.7 Discussion the most necessary improvement

Form the above results, it identify that six priority statements are the most necessary

improvement in Hong Kong Starbucks. They are very significant differences between

customers’ expectations and perceptions in all statements. It is because the significant

scores of six priority statements are less than 0.01 (Appendix C, Table 1), it can be

concluded with 95% confidence that there are statistically significant differences between

customers’ perceptions of Starbucks’ service and their expectations of an excellent coffee

shop.

Firstly, Starbucks has to raise the staffs’ confidence first in order to decrease the uncertain

about staff’s ability. Then, Starbucks can set up more physical facilities and materials that

visually appealing to customers. Also, Starbucks can offer the training that make their

staffs obtain more knowledge to solve the problems, perform service right in the first time

and understand the special needs with customers.

Lastly, the results of five service-quality dimensions shows that the most necessary

improvement should be focus on tangibles and reliability dimensions in Hong Kong

Starbucks when comparing with other dimensions. It is because the perception ranking

of the two dimensions is very low in the respondents’ view.

4.3 Summarizing the customer’ satisfaction

Apart from the five service-quality dimensions, Table 4.3.1 shows the customers’

satisfaction in the Hong Kong Starbucks Coffee. Based on the findings of the research,

the overall results indicated the Starbucks has a completeness of offered service is the

most important on respondents (mean= 4.13), followed by enjoyment (mean= 3.90),

design (mean= 3.89), quality of product (mean= 3.87) and environments (mean= 3.75). In

addition, the overall average mean of customers’ satisfaction is 3.91.

Table 4.3.1 Comparison of customers’ satisfaction

Statements Mean Rank Average mean

23 Environments 3.75 5

3.91

24 Completeness of offered service 4.13 1

25 Quality of products 3.87 4

26 Design 3.89 3

27 Enjoyment 3.9 2

The overall information of customers’ satisfaction is shown in Appendix D. The results

from those studies had found that the completeness of offered service to be the most

satisfaction and environments was the least satisfaction in respondents’ view.

It shows that the respondents’ were perceived a high complete service thought Starbucks

(mean=4.13). Findings indicated that the majority of respondents (over 85%) agreed with

the Starbucks can offer the complete service to customers. Only 14.6% of respondents

generally accepted the offering service as shown in Table 4.3.2. It is related to the above

literature review, Starbucks employees would offer the excellence service to satisfy their

customer’s needs and wants (Luo, 2005). Therefore, Starbucks was able to fulfill their

customers of offering a complete service. Furthermore, completeness of offered service

was ranked in the first.

Table 4.3.2 Overall percentages of customers’ satisfaction (Base=103)

Percentages (%)

Very

Strongly

disagree

Strongly

disagree

Neither

agree nor

disagree

strongly

agree

Very

strongly

agree

23 Environments 0 12.6 21.4 44.7 21.4

24 Completeness of

offered service

0 0 14.6 58.3 27.2

25 Quality of products 0 2.9 18.4 68 10.7

26 Design 0 2.9 29.1 43.7 24.3

27 Enjoyment 0 7.8 21.4 43.7 27.2

Simultaneously, the second mean score of enjoyment (mean=3.9) was similar to design

(mean=3.89) and quality products (mean=3.87). The majority of the respondents (over 70

out of 103 respondents) satisfied with each statement in “enjoyment”, “design” and “quality

products” in Starbucks as shown in Table 4.3.3.

Lastly, environments were the low mean score in the findings that means the respondents’

were less satisfied with the environments in Starbucks (mean= 3.75). In fact, it was not

consistence with the concept of “The Third Place” in Starbuck which providing the relaxed,

comfortable and safety place outside at home and work place (Schultz and Jones, 1997).

Moreover, result pointed out that 13 out of 103 respondents were strongly disagreed with

the environments of Starbucks. Hence, it led that environment was ranked in the last.

Table 4.3.3 Overall frequency of customers’ satisfaction (Base=103)

Very

Strongly

disagree

Strongly

disagree

Neither

agree nor

disagree

strongly

agree

Very

strongly

agree

23 Environments 0 13 22 46 22

24 Completeness of

offered service

0 0 15 60 28

25 Quality of products 0 3 19 70 11

26 Design 0 3 30 45 25

27 Enjoyment 0 8 22 45 28

4.3.1 Discussion the most necessary improvement

Form the above results, it identify that environment is the most necessary improvement in

Hong Kong Starbucks. The results find that there are significant differences which all the

significant scores of environment are less than 0.01 (Appendix D, Table 1). It also

discovers that there is the relationship between occupation and environment in Starbucks

as shown in Table 4.3.4. It can be seen that two groups are the most respondents in this

survey – student and clerk or sales. It indicated that the mean score given by student

group (mean=4.2812) was high than clerk or sales group (mean=3.5814). The result

means that clerk or sales had gotten low perceptions in Starbucks' environment.

Table 4.3.4 The relationship between occupation and environment (ANOVA) No. of respondents Environment - mean

Student 32 4.2812

Labor 12 3.8333

Clerk or sales 43 3.5814

Administrative or Executive 15 3.1333

Teacher 1 2.0000

Others - -

Total 103 3.7476

In general, clerk or sales would be the target customers’ in Starbucks and they would

prefer a high quality in a place of environment. The findings can be related to the average

monthly income range and frequent visit Starbucks per month (Appendix D, Table 2 and

3). There were 37 out of 43 respondents (clerk or sales) earned the income from $8,001

to $20,000. It shows that they have a stable monthly income and willing to spend, they

want to Starbucks can provide a relaxing or comfortable place that allow they can put

outside the stress at work. On the other hand, nearly half of respondents (22 out of 43

clerk or sales) who visited Starbucks six to ten times a month. It is strongly reflected that

clerk or sales of visiting frequent is high in a month, they would rather get a quality

environment appearing in Starbucks.

Conclusion

In conclusion, the results shows that Starbucks did the best in empathy dimension, as

there were the least gap different between the respondents’ expectations and perceptions.

Nevertheless, there were six priority statements of service that need to be improved.

Moreover, the results pointed out that there were two major parts must to improve in

Starbucks Coffee, tangibles and reliability dimension which the overall perceptions ranking

were very low. Hence, the results suggested that Starbucks can improve the six priority

statements for increasing their quality service to launch the satisfaction for their customers.

In addition, the most necessary improvement of customers’ satisfaction is environment.

Finally, the recommendations will be presented in the next chapter.

Chapter 5 Conclusions and Recommendations

5.1 Conclusions

This study was conducted to enhance customers’ satisfaction through service quality from

Starbucks Coffee. The quantitative research was chosen to collect data because it

provided the useful information and values to Starbucks. In addition, research method

was used the survey. Besides, SERVQUAL instrument was used to conduct the

questionnaire. The self-administered questionnaire was completed to measure

respondents’ expectations and perceptions of service delivery in Starbucks Coffee.

Statistical Package for the Social Sciences (SPSS) was used to test the causal

relationship among respondents’ expectation and perceptions. Lastly, the questionnaires

were distributed outside the Starbucks stores which located in shopping mall and MTR

station.

The research was focus on the importance of customers’ satisfaction. It believed that

increasing the levels of customer satisfaction can be linked to profitability, increases

chances for repeat purchase, positive word-of-mouth promotion, increases customer

expenditure on current purchases and customer loyalty. It indicated that improving

service quality might lead to raise the customers’ satisfaction. Hence, measuring service

quality was essential for Starbucks.

The results were found that Starbucks did not meet the respondents’ expectations in

overall five service-quality dimensions. Therefore, Starbucks should be improved the

service to achieve customers’ satisfaction with their high expectations.

The overall results indicated that Starbucks did the best in empathy dimension, as there

were the least gap different between the respondents’ expectations’ and perceptions.

However, the results indicated there were six priority statements of service that need to be

improved first. It was because there was the large gap different between the respondents’

expectations and the overall gap scores. In addition, the results pointed out that there

were two major aspects must to improve in Starbucks, tangibles and reliability dimension

which the overall perceptions in customers’ mind was low. On the other hand, the most

necessary improvement of customer’ satisfaction was environment.

Last but not the least, some limitations were occurred in this study. Firstly, time and

resources were the mainly constraints in this study. The target sample size may

undertake 200 respondents if the time is enough for the whole survey. The survey can be

more comprehensive. Secondly, respondents responded that the questionnaire was too

many questions and needed time to complete it. Because of the questionnaire contained

into three parts, there were totally had 49 questions which were describing service quality

and satisfaction in five service-quality dimensions. Thirdly, some respondents were

confused about how to define “an excellent coffee shop” in the questionnaire. Although

there were limitations in this study, further research could be overcome the limitations as

well.

Finally, recommendation would be suggested in next part which desire to establish a