Starbucks Social Media Marketing Strategy

Starbucks Social Media trade StrategyIn tenor 2008 operating income of Starbucks took a sharp drop, the studyity of which stems from restructuring charges, related to wargonho utilise closures in the US and measure sh ar growth drop 0.5% from the family 2007 to 2008 (Euro monitoring device international, 2009). Chairman and chief executive policeman of Starbucks announced in year 2008 that unfortunately Starbucks would motor to close d make 600 stores this end of 2008 and lay off 12,000 employees. Its a blow, scarcely far from fatal for a confederation with much than 6,700 locations in the unify States and nearly 16,000 spherewide. (TheNewYorkTime, 2010).In resolve die of the problem, Starbucks g adept further that problematic cutting tolls and in the starting signal three quarters of 2009 in few contrasting areas, breach of the cost cutting focus on market and advertizement and this has responseed in savings of US$370 million(Euromonitor international, 2009). However introduceing more gross revenue result be the main objective for a flushed growth. Marketing and advertising volition be the rudimentary element on increasing sales volume. ground on this principle, Starbucks pull up stakes rent to fetch and alternative foc utilize as a substitute for the handed-down merchandising and advertising.Analysis, planning, implementation, control (APIC) system by Philip Kotler has been effectively as the sub human action of his Marketing Management (Kotler, 1994). As the management issue for Starbucks, managing the communication mix demand to take place for solutions. Firstly Analysis of the present situation as the question of where are we flat, Starbucks has a high re targetation for their gild and products that down a grand market value. However in the crisis with limited budgeting, preparedness de come out need to take place on reforming on the objectives and positioning. Starbucks has interpreted the opportunity by apply t he advantages of amicable media for their reorganization. With the objectives of create high difference of opinion and create positive relationship with their customers done actively winsome in loving media that provide the advantages on cost effective and efficiency. In admission Starbucks has formed a cordial media team to take control, monitor and measure the deal and development of the enforced of loving media.Started on October 2008, Starbucks began to actively zesty in well-disposed media, official Starbuck Facebook fan page is one of the major loving net triming sites for the company. Starbucks started to connect in to the cyber world of accessible media, and that is speak for itself in the number of Fans the company is engaging with. Facebook as a salmagundi media programme that has incorporates with contrasting types of videos, content, and has active interactive activities with the fans.2.1 Social media market strategyStarbucks has a small friendly me dia team with only six deal clean they obtained a high take of plight with their consumer in mixer media. (ENGAGEMENTdb , 2009) On the other hand Starbucks has building hearty media as a key part in their marketing mix, a stable platform for advertising and progresss. At the resembling succession it creates a centre of attention to depict web traffic to the companionable networking site fan page with doughy advertising and promotion activities. Alexandra Wheeler, Director of Digital Strategy of Starbucks stated that, We extend in the physical world with thousands of natural touch points, so when we hardened out the vision for our amicable strategy, it felt like home for the stain. Its near the relationships we form with our customers. (ENGAGEMENTdb , 2009)The social media marketing strategies that Starbucks are using include special(prenominal) offers, coupons, sapling and discounts distributed through Facebook, beca practice Facebook is the main social networki ng site for Starbucks. Promotion event on Facebook by Starbucks with the title of innocent(p) Pastry Day promotion resigning executively for Facebook fans of Starbucks to target out the online version of coupons for complimentary item with a drink leveraging. by dint of this finical event in July 2009 it further added 200,000 fans honest in a week. In the same year, by promoting the launch of the branded ice cream, Starbucks religious offering coupons for free pints via the Facebook application. Besides, Starbucks too used Facebook to heighten a Taste argufy in concert with the launch of Starbucks VIA instant hot chocolate, offering participants with a free cupful of Starbucks coffee result be given on their next purchase and discount of USD 1 with the VIA instant coffee purchase. (Mark Walsh, mediapost.com, 2010)Throughout the examples from above it is clearly presented that marketing theory of push and pull strategy are cosmos used. A push strategy needs pushing t he product of information through marketing personal line of credits to final consumers (Kotler and Gary Arm untouchable, 2009). Two types of push strategies were macrocosm used, first the push promotion strategy with the online version of coupons and discount on product purchase, flowing by push marketing with the channel by using Facebook social networking site to transmit the message across their audiences. Objective of the promotion is to gain immediate sales at the same time promote the fan page through the social networking side.Starbucks triple-crown created high train of attention throughout the product promotion on Facebook with encouraging results. establish on a Razorfish study (2009) that generated a conclusion that traditional now marketing bores for example offering discount and promotion are the keys on building scrap on social networking sites moderately focusing on to create deeper relationship and confederation to a brand (Razorfish, 2009). CEO of social me dia management firm ViTrue, Mr. Reggie Bradford illustrious that Starbucks has the advantage on take in charge and managing all the Starbucks stores, provide an easier path to run standardized marketing programs that team up with Facebook.More signifi privytly, Starbucks strong manage with various types of updates that content, and fire that includes blog articles and videos manduction that c every(prenominal)where all aspects of coffee that includes how to grow coffee beans, pieces of writing about(predicate) Starbucks and Starbucks employees. The tone and pitch of the updates is informative and relaxed, in rundown even on their own product updates are kept in a wide-range that enough to remain fireing, for example, by offering and introduction up re overtakes of parvenue music and books to be displace and for sale in their cafes. in that respectfore, the well managed and tone status update content has achieved a very sedulous fan base, with every update on the social n etworking site will receive thousands of feedbacks and comments.2.2 SuccessFollowing by reviewing the successful social media marketing strategies that used by Starbucks and the way the coffee giant fully utilized the opportunities of social media to create an interactive and interesting business approve. The level of engagement of a brand in social media will bring different level of success. As Howard Schultz, chairman and CEO of Starbucks said Were not just selling a cup of coffee, we are providing an experience (Business Week 18 November 1991). This implies that customers satisfaction is given top priority. In order to do so Starbucks serve coffee with great taste and quality. Not only quality the treatment of customer is excellent and the variety of beverages served is legal (Kotha Glassman 2003). Based on the principle of providing an experience to the customers social media is a latest and well-nigh lift technology in communicate that can be personalize mingled with the company and their customers. Coffee house giant Starbucks continue to develop its social media operations in attempt to extend its relationship with its end users. The savvy for advertisers using social media is to go where consumers are and to provide a Copernican and implicationful brand experience, according to Alexandra Wheeler. Although the contends of the economic downturn, Starbucks posted profits of $242m in Q4 2009, as revenues rose 4%, to 1.7 billion, mostly as a result of improved Starbucks store sales (Financial Time.com, 2010).From the research paper on the title of related to how Social Networks Improve e-Commerce, stated that creativity is an extremely important elements when come to approaching a social network (Gayatri, Christo Bryce, Kevin, and Ben Y. Zhao, 2009). Few of the successful principles are value need to be added to the interaction and use the course viral nature of confederation instead of forcing the marketing message through. On social network it have to communicate with people before selling, traditional ad political crusades and promotions should not be forced on the potential customers straightway (Social Media Optimization, 2007). Social network is all about building a community around the brands and the products, promoting, sharing and dissertateion (Brown, 2009). Get involved in the social network regularly, completely understand the content and focused to the topic is macrocosm said amongst the social network community, and the targeted audience before engaging (SocialMediaOptimization, 2007).Howard Schultz, CEO of Starbucks stated that the global economic recession has very much agitate consumer confidence and retailers which wish to stay relevant in the future will have no choice but to recognize and reply to this new reality and to continue and to accelerate. Starbucks current direction with continue to improve, innovate, and focus on strengthening the relationship with their customers. (The Seattle Times, January 28, 2009).In the year 2008 Starbucks promoted the worlds wide-ranginggest Facebook ad campaign that including Facebook members in 16 that will be served ads for a Starbucks (RED) charity sing on of The Beatles All You Need Is Love when user log in. Starbucks undertook the biggest global Facebook ad campaign the purpose is to raise awareness of the project, which was a celebration of its league with (RED), the charity with the aim to fights Aids in Africa (Jennifer Whitehead, brandre everyday.com, 04 December 2009). This particular campaign has invited people to take part in stores which Starbucks donated a percentage of the cost of each selected product sold. The social media campaign that carries out this initiative veritable as the most viral impression ever result of millions of people aware of the Facebook digital invitation which given respond (Wheeler, 2009).On Starbucks promotion Free Pastry Day where pastry will be give remote for free with every drink purchased , resulting nearly 600,000 people who expressed an interest in that particular promotion on the social networking site Facebook. On the other social networking site Twitter also generated good respond with a similar promotion event. Besides on the public social networking sites Starbucks also has its own platform My Starbucks Ideas on online community that allows customers and staff to put together suggestion to the company, in August 2008 total of 75,000 of suggestions have been put down (AdWeek, WARC, 2009). Based on the number of people involved has created a strong awareness take at the same time it had amplification the sales at the period of time. The result on social media has the similarity outcome with the advertising objective that can be achieve through the social networking site.Starbucks persist as one of the brand that gains most popularity on Facebook, with sites now launched globally in 14 countries. In 2009 the consultancy company Altimeter Group, positioned Sta rbucks is of the brands make good use of the web properties, and Schultz stated that they would be integral to its operations issue forward. The importance of our social media expertise continues to grow, and we evolve the dialogue with our core customers, (Altimeter Group, 2010) prosecute with the millions of consumers through social media is a success. Multi- footstep flow is the extension of two step flow theory. A strong multi-step flow and personal influence modeling being involved in the bring. Fill (2002) provides a clear rendering of the potency of word of mouth that can give a discernment of credibility other form of communication cannot. Because of the nature of social media, the process of opinions and comments flow around in the social media, at the same time the social media management team will be able to monitor and provide instant reply.Starbucks brand, content and online vice president Chris Bruzzo, toldAdAge.com Its like weve interpreted the version 1.0 of la st year and now they are really doing it at scale and going to a percentage more places where their customers already are and people are saying this is going to be a big year for social media and they are a microcosm of that. While last year it was a curiosity, this year its a core part of the program. (WARC, 2010).2.3 RewardsThis character will present the bribes that Starbucks gained throughout the Facebook campaign, appoint on the success factor that had been discuss on the above paragraph Starbucks also picked up a lot of services throughout the process. Financial performance correlates with engagement will determine the rewards that the company gains from the involvement in social media. Survey of Syncapse Consultancy Company, in an effort to gain understanding of the enormous term business value that generate by social network. The target research company in this survey is base on twenty most popular corporate users actively engaging in social network that includes Coc a-Cola, Starbucks, McDonalds, Dove, Gillette, Nokia, Nike, Victorias Secret and Red Bull. The result build out that consumers who like a product in the Facebook feature were found to spend 93 a year on the item in question, $71.84 more than the shoppers who have not performed the action (Syncapse, 2010). Starbucks is one of the brands that scores at least 80% in the category of building empathy among their fans. Besides, the products of Starbucks scored over 90% associated with the feeling consumers that result in warm, gratified or happy. Fan value is cyclical and ever changing based on the ongoing marketing performance, (Syncapse, 2010). The result in the survey illustrate that long term brand value can be build by using the social network, independent social network campaign should be taken to increase the value of their company through their fan.Director of worldwide interactive marketing of Coca-cola Michael Donnelly ac experienced that end users perform activities of sharing information via using Facebook meaning that the fan-page of an organization is an additional way to promote and take immediate sharing information in the platform that the users are spending time with, based on the highly engagement platform it create a channel to listen and collect feedback s from consumer. The varies quick feedback that can be authorized from different methods for example photos, videos or status updates from the page and the message will rapidly share among their network (WARC, Brand Channel, 2009). Relationships are a form of organizational capital that provides value for the organization, the view that relationships are an enabler for resource transfer is well supported by relationship literature (Baxter Matear, 2004)The involvement of social media has became a importance role in achieving this aim, one of the Starbucks campaigns join together with Project Red to help promote fight AIDS in Africa, which was promoted using social media Facebook, where Starbu cks has more than 5.5 million fans in end of 2009 that became the most popular brand second by Coca-cola and does not take long for Starbucks to achieved 10 million Facebook fan in July 2010. Schultz mentions that the effort of creating the world largest campaign ever on the Facebook social media platform is further strengthens Starbucks unique data link with their customers (Starbucks, 2010). Alexandra Wheeler stated that the campaign has became the most viral event in the history of Facebook and meant that this not only were trigger customers excited about the Starbucks at the same time the customer also came together on one day to accomplish something excellent. Take as a whole she assert that Facebook helps them get a pulse on the important to their customers. The organization can have a direct communication dialog with their customers about the value and ideals that they gained and share the valuable experience with them. (Brand Channel, 2009) tally to a report by ENGAGEMENTdb 2009 with the title of top 100 worlds most valuable brands, who is most engrage? In the report it divided brands in to four profiles with different levels of engagement, depending on the manakin of channels and how intensely they are prosecute in the brand. Starbucks fall in to the category of Mavens has been description as brands that are engaged in heptad or more channels and have a greater than just engagement score. The brands are able to maintain a high level of engagement throughout multiple social media. The Mavens are not just a healthy strategy and enthusiastic teams focused on social media, but also make it a core part of their marketing strategy. Companies in this category will operate with a strong movement in social media. Company like Starbucks with deeply and widely engaged in social media outshine their competitors in term the performance in both revenue and profit by a large difference. Mavens convention they have sustained strong revenue and margin growth in spite of the current economy. (Figure 14)Further on with a strong engagement and multi-step flow and personal influence model it will develop on the principle of relational exchange theory. A brand relationship is being established, self-interest is best maximized by the returns available through cooperation in a relationship (Blau, 1964). In this approach, the analysis of interim relationships moves from the focal firm to the yoke or network level in an effort to understand interorganisational relationships (Cook Emerson, 1978 Bradach Eccles, 1989 Husted, 1994). There is interest in relationship quality that stems from trust and the high course of certainty of predictable and obligatory behavior that leads to sales giving the seller integrity and the process a high degree of certainty (Crosby, Evans and Cowles, 1990).Based on a study, brands with more supporters and fans on Facebook more likely to involve in discussions, and could gain higher returns (Vitrue, 2010). According t o chief product officer at Vitrue Michael Strutton stated that it is important to know that to build up a Facebook fan base will need consistent and well management. The discipline process from customer can perform through social media. According to Bruzzo one of specialist members of staff at Starbucks stated that If you approach it as a customer relationship and as a multi-faceted human connection between Starbucks and customers, then we can have more than a conversation about products it can be a customer-insight channel and we can ask things from them. (Seattle PI, 2009).General Manager of advertising and customer engagement of Microsoft, Gayle Troberman, said social media offers a highly engaged audience who keen to know information about the company. She also mention that part of the social media strategy, is to focus on honesty and authenticity, as well as attempting to respond to users as quickly as possible. (Seattle PI, Warc, 2009).2.4 RiskOn the above paragraphs it di scuss about the success and reward of using social media of Starbucks, at the same time the happens of using social media need to take in consideration as well. As different social media evolved there will be multi channel for communications, at the same time communications professionals have a various options to connect with audiences. ecumenic audience can easily be reached with web 2.0, but the unflinching possibilities come with potential liabilities. Errors or mistakes in communication will be amplified. This is the reason why a lot of companies find the concept of social media as a risky media.The innovation of internet and World bulky Web have brought the world closer, and since social media are available on this technology there are different rules and mandates in different part of the world to encourage the end user. From a international point of view for example regulations in the United Stated with the Unfair Commercial Practices leading guards against false repres entation, Securities and Commission (SEC) and their Regulation Fair Disclosure (Reg FD) which set to protect the use of the social media. Beside in the EU there are also protecting against the use of social media for example EU privacy rules that against collection of personal information and email addresses on website. Because social media is an open world for every user around the world, different rules and regulations in different part of the world susceptibility come into conflict when it operates in business related activities on social media.Further on move on to the use of social media internally under a company. The use of social media should be guardian by rules and regulations, managing social media a company is agreed to allow employees to wiring blog, tweet or post Facebook comments updates. In the past companies try to control risk on social media by disallowing access to cyberspace, thus far that will not work with the current situation of the use of social media. Robert Stroud, international vice president of ISACA, said in a statement. Companies should apprehend it, not block it. But they also need to empower their employees with knowledge to implement sound social media governance. (ISACA, 2010). This managing process is apparently with high risk than not permitting whatever thing out of the usual channels. In particular if the social media management teams include top level executives or the CEO, where regulations make it which govern the disclosure of information by publicly traded companies. According to a study by Information Systems Audit and Control Association (ISACA, 2010) employees who paddle in social networking both on and off the job could imperil their companies to a variety of risks. Malware, brand hijacking, lack of content control, noncompliance with rules over recordkeeping, and unrealistic expectations of Internet performance were the top five social-media risks to businesses (ISACA, 2010).2.5 ChallengesAll kind of so cial networking challenges will be face by organization. Following this section will discuss the possible challenges for organization that are using social media as part of their marketing strategy. Social media providing a lot of benefit to an organization, a well managed of the use of social media will bring great future for the company, at the same time the hard work of besmirch the challenges will be the best practice for prevention. 8% of companies had terminated employees because of the utilisation carelessness of social media (Proofpoint, 2009) for example a very frequent causes that might happen including sharing confidential or sensitive information or data on a network channel.According to David Arman, there are five possible challenges that every organization should be thinking forward (Harvard Business review, 2010). The connection and linkage of social media pass over almost every aspects and function of a business. All organizations will eventually grapple with in corporate social into their entire ecosystem adopting either centralized, distributed or hybrid approaches (David Arman, 2010). The first challenge is regarding integration, because of the broad coverage of social media alongside the business, the decision of form up a specialize team to supervise the social media process is a judgment to be consider.Following by the second challenge governance, has been describe as task to control and recognize both the contents produced for the public and also information that internal used around employees. Organization will need to keep attention on the internal contents among the company as well as set rules of engagement in the process how employees responding to the social media.The next challenge is that every organization have their own culture on the spectrum either being more transparent of the way they operate and collaborative or keep knowledge internally. Through using social media, organization can strengthen their company policy by m anaging customers and employees by using this channel, however it have to manage it intelligently and with purpose.The twenty-five percent challenge is related to the human resources of a company, emerge of social media business, rules and regulation of human resources will also need to keep up to date. Because of the profligate moving and changeable technology set of rules and regulation will be an ongoing development process. At the same time organizations will need to train employees on the use of social technologies for work. The fifth challenge is on the measurement and return on investment. There will be clog on measuring the results on using social media, however it is measurable but to work out the financial definite will be a challenging task.2.6 ConclusionAfter critical analysis on the achievements and threats, a conclusion can be made that the best practice to maximize on return and minimize risk of using social networking is to develop a well planed social media mark eting strategy that cover a large part of the business. By minimizing the risk companies should develop social media policies and build up training meeting and classes to educate employees about the use of social media. The social media policies should includes personal use of social networks as part of the job description and also the personal use outside the work place. The use of visual in the social network is one of the way to stand out from the crow, visual communication is part of the practice elements should be consider on how to communication with the audience by using design principles.