The advancement of internet services has popularised the use of social media sites. A large number of people use social media sites to communicate and share their content. With time, it is becoming a critical part of people’s lives. There are more than 2.46 billion active social media users in 2017. The popular social media sites include Facebook, Twitter, Instagram, and YouTube. Companies are using social media sites to improve their interaction with consumers and enhance the audience for their marketing. It has become significantly important for corporations to adopt a social media strategy for their growth. Now corporations are spending millions of dollars for adopting better social media strategies and securing their data online.
The primary objective of this report is to analyse the online strategy of Starbucks, which assists them by enhancing their customer base. The necessity and benefits of online presence shall be evaluated from Starbucks perspective. Other aspects of social media will be discussed in the report as well, such as customers, regulations, safety, and technologies. Further, the report will scrutinise the theories of online experts and provide recommendations to implement these theories in Starbucks strategy.
Starbucks was first established in Seattle, Washington as an American corporation, in 1971. The corporation operates more than 23 thousand stores globally, in coffee stores industry. The key features of Starbucks are the quality of their product, rich taste, and excellent social environment. The company serves an average of 500 consumers every day, in each of their stores. In 2016, the corporation generated a profit of US$21.3 billion. To maintain their stores and for manufacturing their beverages, the company employs more than 236,000 employees.
Starbuck’s online strategy was adopted in 2008 by CEO Howard Schultz, to change the reputation of the company. The organisations suffered a huge loss in 2008 which forced them to implement new business policies. Starbucks uses their reputation and their consumer’s value to implement a successful online strategy. This strategy increases the social interaction of company and consumers (Schultz 2012).
The first step of the strategy included opening a Facebook page to allow customers to interact with the company. After that, Starbucks has increased their presence in almost all social media sites. The online policy of Starbucks proves to be beneficial for the company, even in a depression.
Starbucks Existence over Social Media
Starbucks is significantly popular over various social sites as compared to their competitors. They use their online presence to increase their customer’s base and advertise their products. Following are the statistics of different social websites:
- Facebook: 37.07 million likes
- YouTube: 141 thousand subscribers
- Twitter: 11.9 million followers
- Pinterest: 319 thousand followers
- Instagram: 15.2 million followers
- Google plus: 4.8 million followers
As per Sindhwani and Ahuja (2014), the company implements various policies to maintain their high presence over social websites. This strategy augments the demand for company’s products in-between consumers. Starbucks did not just use their online presence for their benefits, the instead company is known for using their popularity for improving the situation of society. As per Mattson (2012), the most popular initiative from the company includes their association with RED to raise money for AIDS awareness causes. RED assists in raising HIV awareness in African kids and provides them medical facilities to fight AIDS. Starbucks associated with location sharing social sites Foursquare, to give $1 for each Starbucks location post on the website. This helps them rising more than $250,000 for charity purposes.
The research of Engagement db (2008) divides various companies, who use social media strategy, into different categories. Starbucks was entered in Mavens category, in which the corporations have the highest level of consumer interactions over social websites. These corporations communicate with their social media audience to prove them information and solutions for their quarries. The social media interactions are an essential part of their corporate model. Starbuck’s online strategy provided them a competitive advantage in coffee shops industry (Eisinggerich et. at. 2015).
Consumer over Social Media
According to Haskova (2015), the motive of most online strategies is to increase the number of followers on social media websites, but it is not an easy job. Strategic planning from corporation’s management is required to enhance their online presence. According to O’Farrell (2013), Starbucks audience comprises of hip adult peoples who demand unique taste and high-quality beverages (Figure 1). They usually pay extra for the better social environment in a restaurant or coffee house. Starbucks introduces various new beverages according to different occasions to attract a large number of consumers.
Tong (n.d.) provided that the enterprise advertises their beverages as an essential part of people’s lifestyles, like Red Bull. Instead of attracting coffee drinker, the company focuses on their target demographics’ requirements. Starbucks use their online posts to give details about new offers and products launch to their followers. Their online followers can also post quarries or feedback regarding any product, which usually solved by the organisation.
With a significantly large number of loyal followers, Starbucks prefer to advertise their products on online mediums to reach a broader audience. Starbucks strategically plan their posts and maintain a minimal approach on online sites. Starbucks online marketing policy emphasis on reliability of information shared online. They did not post every small update or constant share new information; instead, they share the information which is necessary for consumers. They do not post update much time in a day; instead, they plan their posts to increase its effectiveness (Jain & Shah 2017).
The company also improves its consumer satisfaction rates with the help of social media interactions. Starbucks reply to the feedbacks and questions of customers to provide them better information. This augments a consumer’s trust and loyalty in the brand. To increase the impact of online presence, Starbucks introduce different campaigns. These online campaigns allow consumers to interact and share with the company. Many companions are related to charity and others are related to advertising of certain products, for example, My Starbucks Idea, PSL, Non-profit and RED campaign. Successful campaigns are one of the primary reasons for Starbucks successful online presence (Hossain & Islam 2015).
As per the research of Chua & Banerjee (2013), the online presence also benefits the company in product development procedure. Starbucks takes ideas from consumers or conducts a survey to determine the requirements of consumers. This information assists company in preparing beverages according to consumer requirements. Starbucks is significantly popular between celebrities, therefore, celebrities followers also prefer Starbucks over other coffee houses. The company also create various advertisement featuring internet personalities to attract their online followings.
Use of Technology
The popularity of modern technology, such as smartphones and internet based facilities, encourage organisations to implement such technologies into their business procedures. Starbucks implement these technologies to improve the experience of their consumers. Following are few examples of Starbucks adaptation of online technology into business:
- Availability of Free Wi-Fi: Starbucks is known for their free Wi-Fi facility in every store. Many people perform their work using Starbucks internet. Singh (2016) provided that the Wi-Fi users are welcomed with a home page which encourages consumers to follow Starbucks on social sites. In the RED campaign, Starbucks donated $1 for every user who uses Starbucks Wi-Fi for checking in their location on foursquare.
- Online Ordering and Payment Service: To improve their consumer’s experience, Starbucks introduced a new feature in their mobile application which allows consumers to order their beverage through the application. The consumers can place their order, pay online and collect their beverage from the nearest stores. The company proved this service in stores of North America, Canada, and England. The consumers prefer these options because they do not have to wait in line for ordering their beverage and this also increased the productivity of workers by freeing their time (Hamann et. al. 2014).
- Modern Programmes: Modern social media tools assists companies to gain detailed information about their audience on social media. They can determine the gender, preferred drink and interest of their consumer by using online applications such as Facebook Insights and Google Alerts. The company ascertains these details by analysing their follower’s data. The organisation uses such data to advertise their products to the specific audience, and encourage them to share their interest with other peoples (Aiello & Dickinson 2014).
- Partnerships and Offers: Starbucks collaborate with other companies to provide their consumer new offers and discounts. Notably, Starbucks collaborate with iTunes and Spotify to play music in various stores and also provide gift cards and their services to their consumers. Starbucks attracts online consumers by organising giveaways and offers on their social media platforms.
Ethics, Privacy, and Safety
The modernisation of social media sites has increased its benefits but along with benefits, there are several threats for using online platforms. The risk of cyber-attack has grown considerably in past decade. The social media account of various companies has been hacked and a large amount of sensitive data has been leaked on the web. This increases the concern regarding the safety of private data online by different companies. Many popular companies such as HBO and Yahoo, got their accounts hacked by unknown hackers. The government has increased the regulations regarding online privacy and put a restriction on companies who use their follower’s data (Davidson & Stevens 2012).
As per ethical issues, Starbucks adopt ethical policies to avoid any unethical conduct in the organisation. Recently, Starbucks was involved in tax evasion charges in the united kingdom, along with other large organisations such as Google and Facebook. According to Dowling (2014), Starbucks uses their European stories to avoid paying taxes. These charges reduced the online reputation of the enterprise (Figure 2). The company pledged to pay 10 million as taxes for next two years, to regain their consumer's trust.
Starbucks implement Corporate Social Responsibility principles to avoid any unethical issues. The CSR policy of the company is based on preserving the interest of various stakeholders such as employees, suppliers, environment, and consumers (Bruhn-Hansen 2012). Following are key points of Starbucks CSR policy:
- Use of biodegradable product to serve their beverages, in order to reduce the pollution in the environment. The brewing process of the company ensures a minimum amount of wastage of products. From 2015, Starbucks has declared that 99 percent of their coffee beans are produced from ethical sources only. Starbucks use online campaigns to increase the environmental awareness in public such as Non-profit campaign.
- Starbucks maintains a high standard of quality throughout their stores since this is their key characteristic. The company also ensure the safety of their employees and maintain a positive reaction with them. The main ethical principle of Starbucks is to use only high-quality ingredients in the products.
- The company does not use their position to gain an unfair advantage over its competitors. They do not defame their competition on social sites or enter any illegal contracts. The company properly implement different country’s government regulations in their stores.
In the limelight of the above executed analysis, it has been inferred that social media usage is a necessary part of business strategy. Social media benefits companies by connecting them with their target audience, collecting useful data for product development and analysing the demand of the public. Starbucks has effectively applied social media strategy into their business model, which has significantly benefited the organisation. The company uses their online presence to interact with consumers and improving their facilities quality. Starbucks does not just focus on increasing benefits; instead, they also benefit the public by various charities. This helped them maintain a positive reputation on online websites (Figure 2). They also implement technology for improving their services and widely advertise their products. The implementation of online services assists Starbucks in gaining positive reputation and enhancing their profits.
There are some policies that Starbucks can apply to improve their online strategy even more. Following are some of the examples:
- Starbucks post different information on different social sites which confuse their followers. The company should plan their posts and update them at the same time over all the different social websites.
- The company should also adopt a proper schedule for posting their information on social websites. Many times organisation stops the quantity of consumer’s interaction and just avoids their online followers, which should be avoided by enterprises.
- The firms are criticised for the number of hashtags used by them over social sites. Due to this crucial hashtags such as Non-Profit, did not get proper attention.
- Many of Starbucks stores do not maintain a high standard in cleanness. Frustrated consumers share this on social media sites of the company which reduced their value since they are known for high-quality standards. The company should avoid such embarrassing situations by maintaining proper cleanness throughout their stores (Gregory 2015).
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