Internet Marketing at Starbucks - Case Study Example

INTERNET MARKETING By The of the School The and where it is located Contents Contents 2 Task 1 3 Task 1.1 3 Task 1.2 3 Task 1.3 4 Task 1.4 4 Task 2 5 Task 2.1 5 Task 2.2 5 A 8 B 8 Task 3 9 3.1 9 3.2 9 3.3 10 3.4 11 Task 4 12 4.1 12 References 15 Task 1 Task 1.1 Starbucks has grown its business in the global market and has looked to take social media to reach the customers. The company has used its company website and various social media websites like facebook and twitter to reach and communicate to the customers. This has helped them in attracting huge number of customers on a continuous basis and has increased the brand awareness to a great extent. This has helped the company to capture a huge market and grow globally across to different parts of the globe expanding its business in a huge way. It helps in creating a good and long term relationship with the customers which helps the company in getting many innovative and creative ideas from the customers to better its service (Bailey, 2011, pp. 56-64). Starbucks website and social media pages are interactive and clients can ask questions and get answers to their enquiries in company products, locations and prices. They can also have their complaints addressed. Task 1.2 Among the all the categories of marketing mix, the one which varies in case of internet marketing is the promotional activities as the product, place and price remains the same. Thus in this case Starbucks looks to promote its product using various social media websites by conducting events and attracting more number of customers. It also attracts the young generation by communicating the exact message across the customers regarding the value that the company creates for its customers. The price related to internet marketing is reduced compared to the marketing activities that have been done using other platforms. Task 1.3 Starbucks is already using blogs and social media websites as tools for internet marketing. The company has always looked to use latest marketing techniques to reach the customers in better way. In future it can look to use other tools in internet marketing like SpyFu to know about the competitors’ strategies. Hub Spot internet application allows the company to track leads and maintain direct communication with clients. This sort of communication also allows for segmentation of the market into different sections so as to ease marketing (Chaffey, 2009, pp. 34-42). As of now, Starbucks most effective means of reaching their clients has been facebook, twitter and the company website. This could be because these sites have the highest number of users in the country and in the world. Task 1.4 Starbucks uses the latest and available technology in its operational processes so as to provide good and high quality service to the customer. The customers have special attention paid to them so that they do not have to wait for a long duration for the orders that they make. The customers have also been provided with a wide variety of products to choose from. Varied research techniques have been used so as to find out what the clients need. Innovative techniques have been used at the time of service so that the orders provided to the Starbucks members of staff are delivered to customers without confusion. The employees on the counter have been properly trained to serve the customers in a unique way. Starbucks clients are provided with pamphlets from which they can choose the items that they need and place their orders. After the order has been placed, the coffee is served to the customers by the employees at the counter. The amount of digitalisation used in this process is reduced so as to increase customer contact with the members of staff at the company. In future the company can look into new ways of implementing the latest digital technology by use of management information system to take the orders and also to deliver the orders to the customers accurately. Task 2 Task 2.1 The company has seen a sales growth of 7% in 2012, with net revenue of $13.3 billion. It also has a huge chain of stores with around 1200 stores in total including the stores owned by the company in addition to the licensed stores. Customers expect to get good quality coffee with a good ambience which they get from Starbucks physical locations. The Starbucks Company ensure that they market their products and services efficiently by providing fresh content on a regular basis. This ensures that when the clients use available search engines, they can be able to see the company’s positive content such as company website and popular social media pages. The clients can also see good reviews that have been made about the company (Charlesworth, 2011, pp. 22-24). Search engine optimization services are provided by the company’s marketing department. Task 2.2 The sample size selected here is 50, which includes customers of age group from 20-50 and also employees working in the outlets of Starbucks. Primary research and quantitative method is been used in this research method by collecting data using questionnaire which is generally the survey method. Question 1: Do you find a good use of technology in the outlets of Starbucks? Yes No No Idea Question 2: Do you feel use of latest and new technology will help in improving the operations and service of Starbucks? Yes No No Idea Question 3: Do you prefer to go to Starbucks outlets for a cup of coffee? Yes No No Idea Validation of Question 1 In response to survey from question 1 25 respondents said yes while 15 said no and 10 said that they have no idea with respect to the use of technology in the Starbucks outlets. Validation of Question 2 In this 80% of people said that yes, with usage of latest technology the service in the of Starbucks outlets would improve a lot while 12% said no and 8% said that they had no idea. Validation of Question 3 In respond to this question 76% of the sample population agreed that they do prefer Starbucks for a cup of coffee while 20% prefer other brands and 4% said no idea. For this method the data has been analysed using the pie charts to clearly understand the market situation and the use of technology in the service. It gives a clear understanding of the entire research and the desired results were obtained which would ensure proper planning from given data. Task 2.3 A The company is able to communicate its message across to the customers in the easiest and most cost effective way by using internet. The various tools of internet marketing like social media will help the company to attract a higher number of customers and understand the position of the competitors in a better way (Miletsky, 2009, pp. 123-126). The internet also helps to create a good relationship with the customers who help the company to get information regarding the improvements that need to be made. B There are many security issues as all the data and information regarding the company is open in the internet which can be accessed by the competitors to understand the strategies of the company. The company can use safe file sharing techniques to increase the number of clients that are reached especially for special offers such as on festive days or bookings for a large number of individuals. The file sharing tool would make use of current clients to get access to a higher number of clients Task 3 3.1 In order to amplify the popularity and brand value of the organization of Starbucks and its products, the concept of digital marketing is implemented. In digital marketing, social media played a vital role that amplified its customer base and reputation in the market among many rival brands in the market (Jue & et. al., 2009, pp. 110-123). Other than this, through face-book, the organization of Starbucks might easily analyse the attitudes and preferences of the customers and that criteria may be used at the time of preparing the products. As a result of the level of preference and demand for the analyzed research, Starbucks products demand increased to a considerable extent as compared to its rival players. Apart from this, the organization of Starbucks might also attain varied types of feedback from the customers that would help in improving flavours and tastes of the products that are made and sold by the company (Joosten, 2012, pp. 512-523). Thus, due to the above mentioned reasons, social media acts as a catalyst for the Starbucks organization in its future development especially in benchmarking its position among competitors in the industry. 3.2 Email marketing is also recognised as one of the most important technique for promoting and advertising the products and services. This is because; through email marketing, the organization might directly contact its target customers and present the features of its new product or services. By doing so, the level of interpersonal relationship gets enhanced to a significant extent that may amplify the demand and profitability of the organization in the market among many other rival players (Macdonald, 2013, pp. 356-367). Moreover, in this digital age, relationship marketing offers high concentration of how resources are managed by the entrepreneurs as it helps to enhance the brand value and market share of the organization and its product lines. Other than this, with the help of email marketing, the organization of Starbucks might easily increase its customer base that may improve its position and sustainability in the market among other competitors in the industry (Jacobson, 2009, pp. 312-323). 3.3 The business environment of Starbucks is analysed with the help of PESTEL Political: stability of the political environment as well as laws of United States has proven to be extremely effective for the Starbucks organization. Stable environmental policies have helped to improve the brand image and reputation of the product lines thereby increasing its customer base and dominance in the market among other competitors (Beall, 2010, pp. 412-423). Economic: inflation acted as one of the most important issues for Starbucks that affected its growth and profitability to a significant extent as compared to others. This is mainly due to decline of the per capita income of the citizens of U.S that hampered its prosperity and brand value in the market. A higher number of people had low purchasing power which they did not want to spend on hospitality related outlets. Social: in order to retain the customers for a long time, the Starbucks organization always desires to improve the quality of the products. The organization might present a refreshing and relishing taste to the customers in order to amplify its market share and sustainability (Beall, 2010, pp. 412-423). Technological: however, in order to enhance brand loyalty and company’s competitive edge for the current target market, varied types of cards such as Starbucks Cards and Starbucks pay by phone have been implemented. This has proven to be extremely effective for the organization of Starbucks thereby amplifying its brand value and reputation in the market. Environmental: in order to reduce the rate of pollution, the organization of Starbucks offered higher concentration over recycled products as well as greener cups. This strategy proved extremely effective for the organization thereby amplifying its loyalty and dominance in the market. Clients appreciate the products of companies that are known to engage in business process that promote environmental sustainability (Beall, 2010, pp. 412-423). Legal: Starbucks organization always obeys the Country’s laws such as labour laws, company registration and operation and changing wage. This contributes to the satisfaction and retention rate of the employees thus lowering turnover among staff members. However, inspite of goodwill, the organization of Starbucks might try to offer high concentration over the relationships of the customers. This might prove effective to amplify the customer base and prosperity of the organization in the market among other rival players. Therefore, it might try to present online bogs so as to attain the feedbacks of the customers, regularly. Along with this, the organization might implement an online video call service and online news so as to communicate directly with the customers. This might prove effectively in enhancing the loyalty and relationship with its customers. 3.4 With the help of file-sharing sites, the organization of Starbucks might present varied types of videos, news and updated information to its target customers. By doing so, the level of brand image and loyalty of the products and organization might get enhanced among others. Task 4 4.1 Environmental analysis: due to the presence of numerous rival players such as cafe coffee day, Nestle, Dunkin etc, the level of competitiveness is extremely high. Due to which, the bargaining power of the customers is also high in this segment. As a result, the organization of Starbucks has had to offer varied types of inventive flavours of coffee so as to attract and retain the customers for a longer period of time. Along with this, in order to cope with the threat of new entrants and substitute products, the Starbucks Company has had to offer high attention over the changing taste and preference of the customers so as to enhance its portfolio and loyalty in the market among others. Competitor’s analysis: due to the presence of numerous competitors such as Nestle, Dunkin and Cafe Coffee Day, the organization of Starbucks had to present varied types of innovative flavours such as caribou coffee, frappucino, blonde roast coffee, cappuccino and espresso etc. By doing so, the brand image and dominance of the products of Starbucks increased that improved its profit margin and position. SWOT analysis: Strengths: High brand image: due to high brand image, the demand of the product lines of Starbucks is extremely high as compared to others. High feedback ratio: the feedback ratio of the customers in online market is extremely high. Due to which, the organization had to be extremely conscious about the feedbacks and make the necessary changes so as to retain its image and dominance. Weaknesses: Wrong information: due to the presence of online sites, the customers may easily present or upload any sort of misleading or wrong information about the organization. As a result of which, the reputation and image of the organization might suffer from some negative publicity. Opportunity: High customer reach and accessibility: due to online sites, the organization might reach a huge range of customer in a very small amount of time. Due to which, the reputation and brand value of the organization might get positively publicized to a significant extent as compared to other players in the industry. Threats: Various promotional campaigns: due to the presence of online sites or marketing facility, varied types of promotional campaigns might be presented by the competitor organization, highlighting its features. This might hamper the position and loyalty of the product lines sold and marketed by Starbucks. In such light, the Starbucks Company would need to offer high concentration over promotional campaigns in order to amplify its status in the market (Drummond & Ensor, 2006, pp. 123-134). Channel Analysis: in order to improve the total sale and profitability, the organization improved its distribution system. It implemented both direct and indirect channel system to sell its products. The organization presented its products directly to its customers through retail outlets and indirectly from online sites. By doing so, the reliability and demand of the products of the Starbucks Company were enhanced to a significant extent (Beall, 2010, pp. 223-234). Market Segmentation by channel and users: the Starbucks organization mainly targeted the youths of age groups 15 to 45 years. Along with this, as per behavioural segmentation, the customers favouring high quality and taste are targeted Starbucks Company in comparison to other industry players (Bradley, 2012 pp. 334-356). Other than this, as per psychographic segmentation, customers from high income groups and middle income groups are also targeted by the Starbucks Company. References Bailey, M. (011. Internet Marketing: An Hour a Day. America: John Wiley & Sons. Beall, A, E. 2010 Strategic Market Research: A Guide to Conducting Research to solve problems. Boston: Harvard Business School Press. Bradley, N. 2012. Marketing Research: Tools & Techniques. New York: McGraw-Hill. Chaffey, D.2009. Internet Marketing: Strategy, Implementation and Practice. London: Prentice Hall/Financial Times. Charlesworth, A. 2011. Internet Marketing: a practical approach. London: Routledge. Drummond, G. & Ensor, J. 2006. Introduction to Marketing Concepts. New York: Cengage Learning. Jue, A. L. & et. al., 2009. Social Media at Work: How Networking Tools Propel Organizational Performance. John Wiley & Sons. Jacobson, J. L. 2009. 42 Rules of Social Media for Small Business. Oxford University Press. Joosten, T. 2012. Social Media for Educators: Strategies and Best Practices. New York: Springer. Macdonald, R. 2013. The new age of marketing: How social media has changed the marketing landscape. New York: Springer. Miletsky, J. 2009. Principles of Internet Marketing: New Tools and Methods for Web Developers. Ohio: Cengage Learning. Read More