The role of Physical Evidence in making Starbucks a Global iconic brand

Starbucks coffee company, a premier coffee roaster and retailer of specialty coffee, was founded by Jerry Baldwin,
Zeff Siegl and Gordon Bawker in Seattle, Washington in 1971. Howard Schultz, the present CEO, who joined the
company in 1982, was instrumental in introducing the concept of coffee by cup. Schultz also introduced new
products like espresso coffee and blended coffee beverages and expanded the operations of Starbucks to many
countries.The worldwide revenue of the company stood at USD 16.45 billion (2014) 1. Starbucks optimized on
physical atmosphere and other tangible cues to enable customers to perceive their service quality and the values that
the brand stood for.
Buildings and Interiors: Starbucks stores were carefully designed by designers to reflect the following: Heritage
and history of Starbucks and their first Seattle store; ‘Shared Planet’ theme (echoed environmental protection goals);
and other themes inspired by local art and culture.

 All Starbucks stores (over 23,000 as of 2015 2) drew inspiration from the original Starbucks store in Pike
Place Market in downtown Seattle. The floors, the fixtures and the counters of the Seattle store retained
their original look, due to their historical significance. The first and original store established in 1971,
connected with coffee history and the business history of Seattle.
 TATA Starbucks Ltd. opened their spectacular flagship store in Mumbai at the historic Elphinstone
building Horniman Circle in Mumbai in October 2012 3. The interior and designs of the store reflected the
Starbucks coffee heritage of Seattle Store and also the local culture. The teakwood furniture, floor designs
and the design of the interiors were created by Indian (local) artists and craftsmen. When customers saw
thehand carved wooden screens, old-leather bound books, painted trunks etc., they were reminded of
Mumbai’s mercantile past. Howard Schultz, CEO, Starbucks, at the time of the inauguration (19/10/2012)
of the store said, “It is perhaps the most elegant, beautiful, dynamic store we’ve opened in our history”.

Concern for environment: Since coffee came from the earth, Starbucks took extra care in treating it well by
following sustainable building practices and through other ways like: Minimal use of water and electricity, use of
reused and recycled materials to the maximum extent possible and use interior design in their stores to trigger
thoughtful questions on environment. By late 2010 4, Starbucks began to use US Green building Council’s LEED
(Leadership in Energy and Environmental Design) certification as a benchmark for their own store buildings. On
29th November 20155, Starbuck announced that they opened their 700 th LEED certified store. Starbucks also planned
to double this number by the end of 2016.

Atmosphere and mood: The artifacts, wall colors, the music, the freshly ground aroma of coffee, etc. in Starbuck
stores created a very relaxing atmosphere. The stores were designed to make visible the roasting, grinding and
brewing of fresh coffee. Customers could thus feel the quality of coffee defined by its freshness. Starbucks planned
to open a sprawling Roastery-branded new store in New York in 2018 6 and this was designed to reflect the heritage
and history of the Seattle store. The café, located near Chelsea Park in New York, would be the biggest ever
Starbucks café constructed in over 20,000 sq feet. In an interview (06/04/2016) to Bloomberg, Howard Schultz,
CEO of Star Bucks said that Starbucks wanted to bring the Roastery model to all mega cities globally. Starbucks
believed that the Roastery model format would bring fresh vigor to the company. It would also educate customers
about the origin of coffee beans and about coffee roasting.

1
http://www.statista.com/statistics/266466/net-revenue-of-the-starbucks-corporation-worldwide/
2
http://www.statista.com/statistics/266465/number-of-starbucks-stores-worldwide/
3
“Starbucks opens first Indian store in Mumbai’s historic Elphinstone Building”, 19/10/2012, The Telegraph,
4
http://www.starbucks.in/coffeehouse/store-design
5
Ally Hickson, “Starbucks tops all other companies in the world with this green certification”, 30/11/2015, Refinery 29
6
Leslie Patton, “Starbucks plans to open biggest store in History in New York”, 6/04/2016, Bloomberg
On 21st April 2016, Starbucks opened their first store in Johannesburg in South Africa joining the other food and
restaurant stores that had already opened shop to take advantage of the continent’s expanding consumer class.
Prince Ndlovu, a young music artist manager who had been waiting for more than two hours to be a part of the
grand opening in an interview to Wall Street Journal said, “For a beautiful thing you need to wait”. Like Ndlovu,
hundreds of coffee lovers queued up in front of the posh upmarket Starbucks store in Rosebank, Johannesberg,
whose design was inspired by: the neighborhood surroundings and the original Starbuck’s Seattle Pike Place
Market Store7. Needless to say, the interiors of the store conveyed the standard of Starbuck service and also scripted
the physical and emotive journey of consumers while availing service in Starbucks.
Starbucks had been in the forefront in creating the third place: Starbucks pioneered in creating the third place
after home (the first place) and work place (second space). Starbucks stores were meeting points that facilitated
creative and broad social interaction. Chris Chopp, the author of ‘Fullstop India’ who travelled over 50,000 kms in
India by road, rail and sky during a time period of 10 years, had recorded his experience of visiting several
Starbucks outlets in India in two separate trips spanning 2 years. Commenting (February 2015) on the Indian
Starbucks stores, he said, “Starbucks was a go to place for friends and businesses to meet” 8.The warm cooling
environment (free of loud music) with high ceiling, large open spaces with good lighting, comfortable couches and
soft music created just the right environment for social interaction. The staff in uniform, their courteous reception
and exemplary service added value and credence to the Starbucks brand and their service quality.Customers could
avail the Wi-Fi connectivity and thus sipping a cup of coffee they could also: work undisturbed on their palmtop or
laptop, download music and share music with friends in MP3 format (Starbucks collaboration with Apple’s iTunes).
Starbucks logo: Yet another tangible cue that reinforced Starbucks brand was the logo which was continually
refreshed (2011:No name, but bigger mermaid in green to reinforce their original green success 9) which customers
would find on the take away cups, napkins and all machines used for roasting, grinding and making coffee.

The Starbucks experience for a customer was not just about having a cup of coffee. Customers stayed in Starbucks
stores longer for the ambience and came back again to be connected.

Starbucks
The buildings, the interiors, cozy furniture, décor, uniform of staff, logo on takeaway cups and Wi-Fi connectivity,
whichsignifiedthe physical evidence,were a part of the service in Starbucks served as tangible cues for customers to
perceive: The core benefits, underlying values, service norms and the service standard and quality of Starbucks.

Discussion Questions
1.How could marketers manage tangible cues to overcome the challenge posed by intangibility in services?

2. Elaborate on how Starbucks managed tangible cues to enable customers perceive their service?

7
Daniel Uria, “Starbucks opened its first location in South Africa”, 30/04/2016, UPI,
http://www.upi.com/Business_News/2016/04/30/Starbucks-opens-first-location-in-South-Africa/9201462044938/
8
Chris Chopp, “10 Reasons why Starbucks is Not an overrated Coffee Shop in India”, 22/02/2015
9
Elizabeth Fuller, “Starbucks logo change: No name. More mermaid. Will it sell more coffee?”, 06/01/2011, CS Monitor