Pinkberry 1

MGMT 325
Pr. Jane Mooney
Emina Zahirovic
Andrea Donovan
Mercedez Lemieux
Pengfei Huang
Isabel Stearns


Pinkberry, established in 2005, is an international frozen yogurt franchised company centered on high quality products and exemplary customer service. In this project, our group took a closer look at the service operation and process efficiency at the Newbury Street, Boston, MA location, due to its centralized location and high foot traffic.

PINKBERRY MISSION

Pinkberry’s mission is to provide the customers with the highest quality yogurt. The mission further entails on the company’s continuous value propositions, to perfect the desired reach to the consumer segments, by depicting that it shall engage on offering the best that their consumer may expect in different geographical locations of the company’s business (SAP AG, 2010).

The company sets a protocol of delegating and implementing obligations deemed necessary in reaching the consumer effectively and reducing the threat of competition in the beverage market. Through the continuous advertising of the company’s trademark of swirly sweetness, the company is able to achieve the set mission objectives. The company has more than hundred stores, with a net employee tally of 1800. Although the company was established in the year 2005, it had grown year over year through the continuous acceptability and consumer loyalty. The customer turnover margins seem to appreciate accordingly (SAP AG, 2010).

With large sales and profitability, Pinkberry strives to become a multinational company through product quality, operational efficiency, accountability (of the human resource, accounting operations) and state of the art informational technology. Operations efficiencyis critical for the company as they reduce costs. Customer satisfaction leads to increased revenue and hence more profit. The company understands the need of store operation skills and managerial skills, and the value they bring to the Pinkberry brand in the market (SAP AG, 2010).
STRATEGY AND OBJECTIVES

Pinkberry strives to use premium ingredients in their frozen yogurt recipes. They believe all ingredients should be served fresh and therefore, the fruit is hand-cut every day. At Pinkberry, “goodness is guaranteed” (Pinkberry, 2012). Another goal of the company is to create an “exceptionally strong emotional connection with its customers” (Pinkberry, 2012). Pinkberry values their customers and products and wants to provide their customers with only the best.

Pinkberry is a franchise company that expands into new areas by creating strong relationships with partners and surrounding area developers. Pinkberry researches the franchises involvement in the community before partnering with them. They also check on the market trends in that area. The strategy is known as “One store at a time, one market at a time, one quality partner at a time” (Pinkberry, 2012). Pinkberry wants to remain a strong franchise company in both domestic and international markets including: North America, South America, Europe, the Middle East and Asia. No matter where in the world one experiences Pinkberry, their objective is to give their customers the best ingredients, customer’s relations, and experience that match its one of a kind product.

COMPETITIVE PRIORITIES

Pinkberry’s main competitive priority is that of differentiation based on quality. The frozen yogurt scene has seen an immense growth in the saturation of the market, with new frozen yogurt chains and concepts popping up every day. Since Pinkberry’s product cannot be differentiated significantly from its competitors, Pinkberry must differentiate itself by way of product-based quality and transcendent quality. Pinkberry prides itself on serving, not only the freshest ingredients, but making sure that those ingredients are premium as well. Pinkberry also strives towards a grand ideal of “inspiring customers to feel light and fresh, just like the yogurt,” competing in terms of transcendent quality (Pinkberry, 2012). Pinkberry is selling more than just healthy frozen yogurt with good toppings; they are selling a way of being that can only be achieved through consumption of their product. Think of Pinkberry as an alternative way to cleanse your aura.

ORDER QUALIFIERS AND TARGET MARKETS

Pinkberry’s employees greet every customer with a smile. They are polite and passionate about their work and are always friendly. Customers include locals, tourists, shoppers, health conscious people, and college students. Their target is the younger adult and health-conscious. Interacting with customers shows Pinkberry’s interest in their loyal buyers and care for the target market(s).

The most popular order is the frozen yogurt. The yogurt comes in a variety of flavors, which includes the signature original along with seasonal flavors like mango, pomegranate, chocolate hazelnut and coconut. Customers customize their orders by adding a variety of toppings that range from fresh strawberries, brownie bites, chocolate sauce and gummy bears to mocchi, pomegranate juice, nutmeg, and nutella.

PROCESS ANALYSIS

After observing Pinkberry at different times during the week, we concluded Pinkberry’s peak times and off-peak times. According to our data in Exhibit 1, Pinkberry is busiest Thursday to Sunday from 2:00PM to 3:00PM and 9:00PM to 10:00PM drawing in an average of 58 customers daily. These times show the highest volume of customers purchasing frozen yogurt at Pinkberry along with an average 3.75 minutes to complete an order. Due to the high volume, the task times increase, taking longer to order and pay for each unit. During peak times, waiting, also known as the lead time, is an average of 1.17 minutes, followed by 0.07 minutes of sampling (depending on consumers), 1.36 minutes completing the requested order, and 1.15 minutes to pay. Thursday through Sunday has high demand due to the likelihood that consumers shopping on Newbury Street and tourists are exploring the area, giving them the convenience of a healthy and tasty snack. On the other hand, Monday through Wednesday from 1:00PM to 2:00PM and 6:00PM to 7:00PM, Pinkberry is at its slowest. The demand is low due to work and classes. With an average of 31 customers stopping in for frozen yogurt, it takes only an average of 1.83 minutes each unit. Waiting time decreases to 0.23 minutes along with 0.84 minutes to complete an order and 0.63 minutes to pay. Sampling increased to 0.13 minutes; however we concluded due to the number of customers, consumers did not feel pressured to order quickly, rather, they took their time to place an order.

Pinkberry uses an assembly line process. In other words, the employees work in a sequential manner to complete a placed order in a timely manner. Looking at Exhibit 2, the three step process includes sampling, ordering, and paying. When a consumer walks in, he/she may order immediately, or try a sample of a new flavor. Once the step is completed, they place the order of what size, what frozen yogurt flavor, and what toppings they would like. Once the order is complete, the customer pays and enjoys their order. During peak times, paying is the bottleneck step due to the lead time of waiting to pay in line. This is created due to two employees completing steps one and two while the third employee handles the cash register. The bottleneck step becomes step two during off-peak times because two employees complete each step, balancing out the work load.

Observing the service process matrix in Exhibit 3, Pinkberry falls under retailers. The service process is rather simple. The process begins with the material producers. They supply the frozen yogurt in a variety of flavors. Then there are the suppliers, which are local farms that provide the fruit toppings. These products go directly to Pinkberry, the retailers where the two products are combined to complete an order.

OPERATIONALIZING THE MISSION AND STRATEGY

There are a number of ways in which the service operations of Pinkberry operationalize the mission and strategy of the company. Within the ‘Pinkberry Promise,’ six key points help to illuminate their mission.

1. “We believe in sourcing premium ingredients from around the globe to create our one-of-a-kind craveable taste” (Pinkberry, 2012)

On its website, Pinkberry describes its pomegranate frozen yogurt as having been made with 100% pure California grown pomegranate juice. The mangos that go into making their mango frozen yogurt are not just any mangoes- they are Alphonso mangoes, which are known as the sweetest mangoes in the world and are imported from India. Even their chocolate frozen yogurt is special- it is harvested from the Theobroma Cacao plant which grows deep in the tropical regions of the Americas. In translation, ‘theobromacacao’ means ‘food of the Gods’. The company offers premium globally sourced ingredients not only by way of offering the best of a type of ingredient, but also by offering ingredients not typically found in your traditional frozen yogurt shop: mocchi, lychee, blood oranges, etc.

2. “We believe in fanatical freshness and only serve daily hand cut fruit” (Pinkberry, 2012)

Pinkberry’s staffing strategy is such that, at any given time there are three people on the floor serving guests and one person in the back prepping the fruits and vegetables needed. Unlike many food vendors, these fruits and veggies are not simply cut up in bulk at the beginning of the day, creating a supply that will last the duration of the day. Rather they are cut up in small batches, filling up two one pint containers, and when those begin to run low, more are chopped up. With this strategy, Pinkberry is going above and beyond its promise of daily hand cut fruit; in some instances this fruit is being cut hourly or semi-hourly.

3. “We believe real frozen yogurt should taste like yogurt, made only with hormone-free milk and live & active cultures” (Pinkberry, 2012)

Rather than merely claiming the benefits of their yogurt, Pinkberry has actually taken the time and necessary paperwork to carry the seal of approval from the National Yogurt Association. This seal specifically attests to the live & active cultures that can be found in Pinkberry’s frozen yogurt. According to its website, Pinkberry yogurt contains billions of live & active cultures per serving, which has been shown to support for a healthy immune system as well as joint health and flexibility.

4. “We believe in the power of human connection and service” (Pinkberry, 2012)

Instead of operating like an assembly line where a customer is handed off to a different employee at each step of the process, a single Pinkberry employee handles a customer throughout, from tasting, to ordering, to paying. This is of course when customer flow allows for it, which is most of the time. Depending on the length of the interaction, employees are able to establish a relationship with their customers. Having continuity in the employee-customer interaction increases how valued the customer feels. This strategy is akin to the type of strategy seen at high-end designers such as Louis Vuitton, where an individual customer representative handles a customer throughout their shopping experience.

5. “We believe goodness should come guaranteed- if you’re not satisfied with your masterpiece, we’ll swirl you a new one for free” (Pinkberry, 2012).

Customer satisfaction plays a huge role in Pinkberry’s mission. As a demonstration of this commitment to satisfaction, Pinkberry allows its customers the time and opportunity to sample as many flavors as they would like. This ensures that a customer knows what they are getting and can be satisfied with the choice they have made. Depending on the quantity and types of toppings a customer chooses, offering to ‘swirl them a new one’ for free could be quite costly for the company. The toppings are of premium quality, and Pinkberry is set up in a way that there is technically no limit on the number of toppings a customer may have; so long as it fits in the cup, it can be added.

6. “We believe our store experience should inspire and our customers should feel light and fresh (just like our yogurt)” (Pinkberry, 2012).
The overall look and design of a Pinkberry store is very similar: light blues & greens, natural wood, fun modern pop artistic elements, simplistic design. One would never accuse a Pinkberry store as being overly cluttered or too visually stimulating. CEO Ron Graves says (of the store design) “the environment is bright, energetic, and clean with attention to detail and quality from design to music and lighting. We’ve taken creative steps in store design because one of our core values, in addition to service and product, is inspirational environment” (Kneiszel, 2011).
Even the company’s choice in furniture reflects this ideal. The tables and chairs used for customer seating are extremely lightweight- mimicking the lightness and freshness of the yogurt being consumed. If the décor is light and fresh, the furniture is light and fresh, and the yogurt itself is light and fresh, then the consumer is more likely to personally feel light and fresh.
PROCESS EFFECTIVENESS & EFFICIENCY

There are a number of parts of the process that allow for effective and efficient service. On a typical day there are three employees on the floor, including the manager, and one in the back preparing the fruit and toppings. This allows for customers to be served efficiently with usually little wait time, as well as a constant replenish of toppings ready throughout the day. It is also important to note that the number of employees on the floor changes in response to peak times, such as in the summer season, evenings and weekends. Because there is just one employee handling each customer order, so there is no delay time in relaying order information from one person to the next. This one on one interaction also fosters a relationship between the customer and employee and enhances the overall Pinkberry experience. At the service bar there are two areas that contain sliced fruits, allowing for two employees to service their customers side by side for a more efficient throughput time (Please refer to Exhibit 4). However, there is only one station for the less popular candies and only one container of each sauce, which can hinder the overall process. However, the likelihood of two orders requesting the same toppings at the same time is low. Finally, another efficient factor in the process line set up is that there are two cash registers. This helps the flow of the orders and service not to get bottled up at the register, which is the longest process for most customers. We observed that the process time was most efficient when one employee was running the register and ringing up customers after their orders were made. This also allowed for more space for the other workers to in the service line.

ISSUES AND CONCERNS

Despite being efficient in many aspects we identified other areas of the process that were a concern and could be improved. One issue for the Pinkberry store on Newbury Street is that it is small. During peak hours the line can form outside the door. This makes it difficult for customers to move in and out of the store and the chaos could turn customers away. Another concern is that the indoor seating area is limited. With only four tables, with ten seats, the chances of getting a free table are slim, especially during peak times. The service area behind the counter for the employees also narrows, and does not provide much space to move around. If more than two employees are completing orders they get in each other’s way within the limited space. A final concern is that the bottleneck time at the pay station still needs to be improved. The switch from the traditional “buy 10 yogurts get one free“ stamp card to a mobile app / swipe card results in slower pay times. This is because employees have to explain the reward system and educate customers on how to use the app. Hopefully, with time this process will become smoother and faster. It is important to note that this Pinkberry store does not have the option to hire more employees to serve customers because of the limited service space behind the counter.

TRANSFORMING INPUTS INTO OUTPUTS

The Pinkberry shops operations consist of raw input staging and preparation, ordering, product preparation and transaction completion. Inputs include dairy mix and related ingredients, fresh fruits and toppings, and packaging. Outputs comprise of five main product categories: frozen yogurt, smoothie, fruit parfait, fruit bowl and take-home. Each of these categories includes different flavors, made by adding different ingredients.

Yogurt:

The company’s central item is wholesome and high quality yogurt. These are available in approximately 20 flavors, with some of these being seasonal. Pinkberry corporate supplies the basic yogurt mix and flavorings. In the shops, employees add the mix and other ingredients into the yogurt freezers to process the mix into salable yogurt. The freezers also vend the finished product so that the employees can add the customers’ requested toppings and flavorings.