How To Maximize Starbucks' Influence Through Digital Marketing?

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Digital Marketing?
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How to Maximize Starbucks’ Influence through Digital Marketing?
Starbucks in the United States
Introduction
Starbucks’ first store was opened by three partners: English teacher Jerry Baldwin, history
teacher Zev Siegl, and writer Gordon Bowker in Seattle's Pike Place Markets in 1971 and
now it has 17,009 stores in 55 countries. Its business covers brewed coffee, espresso-based
hot drinks, instant coffee, other hot and cold drinks, coffee beans, salads, hot and cold
sandwiches, pastries, snacks and items such as mugs and tumblers. The company also has
the Starbucks Entertainment division and Hear Music Brand which markets books, music
and films. Starbucks’ revenue in 2010 was 10.71 billion with 1.42 billion of operating
income. The beverage occupies the highest weight of its sales—75%, followed by
food—19% of its sales.

U.S. coffee market
Drinking coffee is a deeply entrenched habit for American people. Over 50% of the
American people drink coffee on a daily basis. 40% of the 18 to 24 year-old young people
drink coffee daily in 2011 compared to 31% in 2010. According to a National Coffee
Association’s study (Exhibit 1), even though coffee consumed at home downed by 3 points
from 2008 to 2010, the average percentage was still as high as 83.5%. Besides, more and
more consumers are getting used to bring their traveler’s mug for commute (up by 10%).
Instant coffee is far from satisfaction in the U.S.: only 2% of the people in a survey said
they drank instant coffee regularly. Meanwhile, single-serve coffee in grocery and mass
market outlets increased 91% in 2009. Daily specialty coffee edged down from 17% in
2008 to 14% in 2009. As a coffee chain, Starbucks is undoubtedly facing with big
challenge in front of the current American coffee market trends.
Starbucks marketing strategy
Coffee is a quite common and normal product in people’s daily life, so it seems to be so
difficult to differentiate it from competitors. Besides, the traditional coffee market is
shrinking in the U.S. Starbucks’ marketing strategy has to lay emphasis on differentiating
itself from its rivals in all aspects. On the other hand, the company is devoted to getting
consumers to experience the brand building and brand development since this sense of
“belonging” and “involvement” will drive consumers to feel themselves responsible for the
brand building and to contribute to it.
 Brand image
“Third place”: Starbucks has always been positioning itself as the “Third Place” between
home and work, which provides consumers not only a perfect cup of coffee but also an
experience of enjoying coffee and life. This brand image creates an emotional link between
the brand and consumers which drives consumers to being dependent on such a feeling
rather than only a cup of coffee.

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Social responsibility: even though a company’s social responsibility does not affect directly
its business, with consumers’ growing awareness of companies’ ethical activities, they tend
to choose those who are more engaged in ethical practices. Starbucks focuses its social
responsibility on environmental protection, ethical sourcing, community and diversity of
people. The company has been engaged in recycling cups and meanwhile it encourages
consumers to bring their own mugs. In order to help farmers who have difficulty in selling
their products, Starbucks chooses to buy high-quality coffee from them through ethically
traded sources. The brand image of social responsibility can no doubt have positive effect
on its business and bring Starbucks added value as well as ensure its sustainable and stable
long term business development.
 Target consumers
Starbucks’ initial target was high-income, professional people from 25 to 40, which
contributed almost 49% to its total business. This segment tends to be urbanite with
relatively high income, professional careers and a focus on social welfare. This target

segment has an annual growth rate of 3%. They can afford a relatively higher pricing coffee
and would grab a coffee on the way to work, which is perfectly coherent with Starbucks
brand image—“Third place between home and work”. However, the brand began to be
popular amongst the youth. So the company decided to expand their target consumers to
college students from 18 to 24, accounting for 40% of its total sales. Besides, the company
also considers kids as small target segment.
 Products
Starbucks is dedicated to the variety and the innovation of products to satisfy different
consumer segments’ needs and even create needs for them. Their main products are:
- Brewed coffee and espresso: a traditional and basic business for Starbucks to keep
those who have grown up with Starbucks and those who want pure, simple and
good quality of coffee.
- Specialty coffee: relatively higher pricing drinks, but Starbucks succeeds in drawing
consumers eyes with constant innovative drinks which differentiate themselves
from its competitors. Specialty coffee accounts for 75% of Starbucks’ sales. Their
target is younger consumers who like new experiences and innovative products.
Frappuccino is quite a success in targeting young consumers with creative and fun
drinks by mixing and balancing different ingredients.
- Instant coffee: Starbucks realized the large market potentiality of instant coffee
especially in the United Kingdom and Japan, with 81% and 63% of the total coffee
sold. Even though positioning itself as expert in high-end coffee, Starbucks still
decided to enter the instant coffee market through the launch of VIA coffee.
- Whole bean coffees and ground coffee: Starbucks offers a large choice of coffee
beans in terms of origin, intensity and form.
- Teas: with the growing conscious of health and the benefits of teas, Starbucks
created their own tea brand —Tazo, which allows them to sell brewed teas in their
stores as well as bottled tea through other channels. Tea sales currently occupy

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around 3% of Starbucks’ overall business and it is one of the fastest growing

businesses.
- Other drinks: smoothies, kids’ drinks: these drinks are designed for kids and those
who look for fun.
- Coffee equipments and other merchandises: Starbucks commercializes some
high-end coffee equipment as well as some small merchandise such as mugs.
Similar to whole bean coffees, this part of business is increasing in recent years.
 Distribution
Starbucks’ primary distribution channel remains retail stores. Besides, their coffees are also
available on their website, in supermarkets and select food service outlets, which give
consumers a chance to have the “Starbuck’s experience” at home. The selection of
distribution channel depends on products’ nature and consumers’ needs.

 Pricing
Starbucks has a relatively higher pricing strategy which differentiates itself from other
coffee purveyors in terms of pricing positioning. The devoted customers are willing to pay
for the extra prices to Starbucks. However with the struggling economic situation, some
lower-end customers are stolen by chain stores like Mcdonald’s. Starbucks start to revamp
its pricing structure by lowering some coffees such as brewed coffees and lattes in order to
sustain the price sensitive customers. Meanwhile it increased its higher-end drinks such as
Frappuccinos by 8%.
 Communication
Instead of embedding some kind of brand image in consumers’ mind or boasting

exaggerated qualities of the products through traditional advertising channels like TV,
outdoor advertisements, Starbucks adopted a more interactive channel—digital marketing.
The objective of Starbucks’ communication strategy is to build a close relationship between
the brand and the consumers, to get them involved in experiencing and sharing everything
of the brand: from product development to brand image building.
U.S. digital market
According to a report of U.S. department of commerce in 2010, as much as 89.23% of

Americans use internet in and out of home. Social media users have doubled from 2008 to
2010: 47% of adults are SNS users in 2010. The top social media websites are Facebook,
Twitter and Youtube. Digital surgeons’s study shows the difference between Facebook and
Twitter (Exhibit 2):
 Facebook
- 500 million total users

- 41% users login every day but only 12% of them update their status daily

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- 30% login via mobile device

- 40% users follow a brand
- 51% of brand followers would purchase that specific brand
- 70% users are located outside the U.S.
 Twitter
- 106 million total users

- only 27% users login every day but 52% of them update their status daily
- 37% login via mobile device
- 25% users follow a brand
- 67% of brand followers would purchase that specific brand

-
60% users are located outside the U.S.
- Twitter has several analytics enable account owners to better analyze online users’
behavior. For example, Twittercounter allows owners to compare number of
followers and tweets of up to 3 accounts. Tweetstats shows owners the timelines of
followers and retweets (Exhibit 3).
 Youtube
Nielsen’s recent report reveals that American users viewed 15 billion videos in May 2011.
Traditional TV viewing rose only 0.2% over last year while online video viewing increased
35%. If we take a close look at Youtube, astonishingly, 35 hours of video are uploaded to
Youtube every minute. In addition, Youtube has an analytic tool enabling users to have an
overview of the detailed statistics such as number of views of my videos, demographics of
my audience, etc (Exhibit 4).
 Smartphone
Thanks to the 3G technology progress, Smartphone has become another catalyst to the
access to internet. According to the graphic of Morgan Stanley (Exhibit 5), 3G penetration
has increased by 13 points from 2007 to 2010. The number of USA smartphone app &
browser users edged up from 18% to 38% from 2009 to 2010. Mobile browser users’ top
activities are search, social media and news.
Starbucks digital Marketing operations in the US
As it is known to us, Starbucks uses rarely traditional advertising. We can hardly find a
Starbucks ad in a billboard, newspaper, magazine or poster where other companies usually
launch their ads. The company adopts an unconventional marketing strategy—digital
marketing strategy which includes viral videos, mini websites, smart phone applications
and social media. Each of the above channels has been attributed to the different needs of
the company’s marketing ambitions since they have different functions and targets. The
reason why Starbucks has chosen digital marketing strategy instead of conventional

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marketing strategy such as TV commercials is that the co-branding by the company and the
customers is more valuable for a coffee company like Starbucks. Compared to traditional
marketing strategy which imposes some messages to customers, digital marketing guides
customers to be engaged in the brand building and to bring more to the brand as a member
of the brand.
 Starbucks digital business management
As Starbucks’ Chief Information Officer and Executive Vice President of Digital ventures,
Stephen Gillett is in charge of 2 aspects of business:
- management of global technology functions and business process which includes

retail technology, business intelligence, new platforms, software engineering,
information security, finance, global infrastructure, supply chain, etc. for global
market in 56 countries

-

management of digital & interactive activities including e-commerce, m-commerce,
Starbucks Entertainment, Starbucks Digital Network, business platforms, Starbucks
Wi-Fi, strategic digital partnerships, mobility, loyalty, starbucks.com, social/digital
media platform, gaming and online/new business activities.
 Social media
Undoubtedly, social media is a tool of utmost importance for Starbucks for the following
reasons: increasing popularity of social media, relatively complete user profile, trackability
of user behavior. By means of social media, Starbucks integrate consumers into the brand,
make them feel like inside the brand so that they are willing to contribute to the brand
building and growing. The most widespread social media platforms are:
- Facebook
As the first ranked social network websites in the U.S., Facebook has a huge number of
users who spend relatively long time on it daily and has expanded well at an
international level. With more than 26 million fans on Facebook, Starbucks is ranked
as the 4th most liked brand on Facebook. Starbucks shares their contents to friends
(videos, blog spots, photos), send them to twitter, comment on them etc, Starbucks
updates regularly their page, reward fans with special offers. Starbucks invites its fans
to events through Facebook. Besides, Starbucks has a location application helping
people to locate the closest store to you. This application needs users’ permission so
that Starbucks can access to their private accounts’ information, including
demographics, network, friends list, etc. It also has links to other Facebook pages such
as Starbucks Frappuccino, Tazo tea, Seattle’s best coffee, Create jobs for the USA, Fair
trade certified, which is convenient for people to visit other related accounts.

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- Twitter
Starbucks operates several different accounts on Twitter:
Starbucks Coffee: Regular interaction between Starbucks and twitter users, for
example:
“If you've never had Starbucks Clover coffee, you've no idea what you're missing.
Splurge, you're worth it!” – twitter user
“Glad you like it. What did you have today?” – Starbucks
My Starbucks Idea: Announcement of new ideas’ launch, new products or events,

collection of new ideas and invite users to share them on MyStarbucksIdea.

Starbucks Card: Answers to all types of questions about Starbucks Card
@Starbucks tweets: Starbucks forwards the contents that @Starbucks (address to

Starbucks)
Starbucks Calendar : This account tells every day in Starbucks history
Frappuccino: This account answers questions about Starbucks Frappuccino
Each account has its own functions and own targets to communicate specific
information to different customers. On twitter Starbucks has more direct and instant
communication with its customers: they answer people’s questions, publish any events
or activities in a short time, retweet what people are talking about the brand and create
open communication platform to interact with their customers. “Starbucks Coffee”
account alone has more than 1.9 million fans and 9168 tweets on Twitter (by the end of
Dec. 2011). “Starbucks Coffee” tweets more than 10 times per day and answers timely
the questions of their customers.
- My Starbucks Idea
In addition to Starbucks official website, it created a mini website – My Starbucks Idea,

aiming to collecting consumers’ ideas. All the ideas are classified into 3 categories:
product ideas, experiences ideas and involvement ideas. Here are some idea examples:
“I'm sure I am not alone in saying I am completely addicted to Starbucks and my key
chain card is a necessity of life. PLEASE BRING THEM BACK!”
“I'd like to see how many votes my ideas are getting when I log in”
“A periodic contest in which participants submit photographs of any sort. The only
guideline being: the photo must contain a labeled Starbucks product”

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“My idea would be a 15% discount instead of a 10% discount if the customer uses a
Starbucks brand cup. This would increase sales for Starbucks products as well as
beverage sales.”
“If Starbucks could provide a computer and offer a "Community Volunteer Page",
nonprofits and service organizations could post their need for volunteers and students
could log on and find what the needs are in their community and organize how they
could help.”
“I know it is a Christmas season special, but the Caramel Brulée Latte is so good that
I thought I would suggest keeping it through the winter, or better yet, all year long.”
Some employees are in charge of the management of the ideas. The ideas are indicated
as one of the four phases: under review, reviewed, in the works and launched. A
leaderboard lists the top ten point scorers in terms of ideas submitted, comments
submitted and votes submitted, which encourages consumers to engage in conceiving

ideas for Starbucks. By March of 2011, 100 000 ideas were submitted, over 1 million
votes, and 98 ideas launched.
My Starbucks idea is not only a form of crowd sourcing, but also a tie between
Starbucks and their consumers since they feel contributing to the brand building and
development by submitting their ideas.
- Youtube
Viral video is a tool that Starbucks uses to build its brand image and generate interests
by conveying the message they wish to express. Starbucks videos on Youtube have
around 6.5 million views and their channel has over 10,000 subscribers. Starbucks has
4 main types of viral videos: commercials, informational videos such as telling coffee
knowledge or explaining how to use an application, public welfare videos and
consumers’ consumption experiences sharing videos. Thanks to these different types of
videos carrying various messages, Starbucks can announce the launch of new products,
create consumers’ passion about coffee and the brand, and build a social responsible
brand image. The videos of commercials or events are quite well designed, cool and
fun which are always highly consistent and coherent to the brand image.
 Smartphone applications
Smartphone application is one of the most creative features of Starbucks’ digital marketing
arsenal. The company has two main applications:
- My Starbucks: enables you to locate the Starbucks store with the amenities you
want, build your own drink and find out all the Starbucks coffees. Starbucks is one
of the most searched brands having location-based services.
- Starbucks Card: with which you can check your Starbucks Card balance, reload it,
pay for your drink and track number of stars you have got.

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Starbucks’ two smartphone applications are designed to facilitate consumers’ consumption

experience and even make it fun and enjoyable.
Starbucks in China
Chinese coffee market
As we all know, China is a traditional country for tea drinks. However, with the
development of economy, the transmission and the penetration of foreign culture as well as
the pursuit of a certain life style, more and more people, especially young people start to
accept and enjoy coffee. According to the statistics of CCAB (China Coffee Association
Beijing), nowadays, the coffee consumption in China keeps increasing by 15% per year
while the growth rate around the whole world is only 2%. In the light of the average

standard of global coffee market, the consumption of Mainland China should be around

1000 billion RMB. But until now, the sales per year are just 70 billion RMB. It is also said
that one customer consumes only 4 cups of coffee per year in China, and even in those big
cities like Beijing or Shanghai, the number is 20 in maximum. These contrasts demonstrate
that the Chinese coffee market is in an early stage, but on the other hand, we can see that
there are real prospects.
Starbucks’ development in China
Starbucks is absolutely a pioneer in the Chinese coffee market. The opening of the
Starbucks’ first store in Taipei, Taiwan, marked its entry into the Greater China market in
1998. The next year, the company continued to develop its business in Mainland China
starting from the capital, Beijing. Then, since 2000, Starbucks has its own stores in
Hongkong, Macau and Shanghai. In the past thirteen years, Starbucks has expanded quickly
in Greater China. Besides the acceleration of the store opening in those major metropolitan
cities as above, Starbucks also presents today in cities such as Changzhou, Chengdu,
Dongguan, Foshan, Hangzhou, Kunshan, Shaoxin, Shenyang, Fuzhou, etc. By the end of
October 2011, Starbucks has already more than 800 stores across Greater China in 42 cities,
including 500 on the mainland, which surpasses the number in Canada and in Japan.
Nevertheless, these figures are far from enough according to their ambitious growth plan,
which aims at 1500 stores in Mainland China by 2015. China is going to be the second
largest market for Starbucks throughout the world.
Starbucks’ marketing strategy in China
 Core values
As an international coffee and coffeehouse chain, Starbucks has its own recipe of success.
Some basic values are unchangeable no matter in which market: conception of the “Third
Place”, importance of the "distinctive Starbucks experience", sharing of coffee culture and
expertise. The maintenance and the implementation of the core values and the adaptation in
the local market contribute to the development of Starbucks in China.

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 Brand image
Following its global brand image strategy, the company demonstrates its involvement in
social responsibility in China since 2005 with a grant of 34.17 million RMB (US$5 million)
for the Starbucks China Education Project. In 2008, Starbucks donated 2.7 million RMB
(US$395,000) to help the areas of Sichuan, which were impacted most by a devastating
earthquake. It has also supported the teachers and the students there through its Education
Project. In addition, the company contributed later US$100,000 for immediate disaster
relief and long-term recovery in China.
 Targets
The brand named after Starbuck, a character who loves coffee in Herman Melville’s novel
Moby-Dick, implies that the initial targets of Starbucks were people with good education,
high income and refined tastes. Despite trying to enlarge the range of costumers, the brand
image and relatively high prices still make white collar workers the main consumers of

Starbucks.
This position corresponds actually well with the Chinese coffee market. As for Chinese
people, coffee is an exotic drink that can be often linked to an elegant or a modern life style.
The brand image satisfying the emotional appeals of many petit-bourgeois helps Starbucks
attract more easily those who look for life quality and sometimes, for self-esteem or social
status. A lot of people who come back to China after finishing study abroad are also
common consumers of Starbucks mostly because of their habit cultivated or familiarization
with the brand in foreign countries.
 Products
Regarding the products, Starbucks offers many standardized choices like various coffee
based drinks, other hot and cold drinks, coffee beans, sandwiches, pastries, and other
related items… Meanwhile, in order to better integrate itself into the Chinese market,
Starbucks creates from time to time new products that appeal to local tastes. Moreover, it
profits from the different regional occasions, such as the launch of moon cakes during the
Mid-Autumn Festival and “rice dumplings” for the Dragon Boat Festival (Exhibit 6).
Digital marketing in China
The internet and other digital tools have become an inseparable part of our life. The rapid
development of technology and the use of those digital platforms are changing deeply the
life styles and consumer behaviors of Chinese people.
The study of CNNIC (China Internet Network Information Center) disclosed that by the
end of June 2011, there were 485 million net users in China. Compared to the number of
last year, it was increased by 6.1%, in other words, 2.77 million people. China is now the
country having the largest population of net users. It is also predicted that, in 2015, the
number will grow to 750 million. 65.6% users are ranged from 20 to 49 years old and the
percentage of young people from 20 to 29 years old keeps growing. (Exhibit 7)

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In addition 318 million people, representing 65.5% of total net citizens, use cell phones to
access to the internet. One report published by Google and IPSOS Research showed that in
the urban area, 35% of habitants have smartphones. About half of the smartphone users are
often attracted by mobile advertising. 39% of them will look for more information through
other connecting devices like laptop, 34% will click directly the advertising and 32% will
make the purchases.
More and more people feel that they cannot live now without computers, cell phones or
internet. They get used to reading the latest news on web pages, to sharing views or photos
with others through SNS (social networking service), to watching videos, to making online
purchases, to searching for information anywhere and anytime, to enjoying all the
convenience and fun brought by a digital epoch. A report of Netpop Research showed that
the Chinese internet users are more active than the American internet users. (Exhibit 8) All
their contribution and addiction to Internet as well as to digital equipments provide a solid
base for digital marketing in China.

Besides, the advancement of new technology and the development of local platforms create
various channels and new ideas for digital marketing. E-mails, SMS (short message
service), instant messaging, official websites, public web portals, search engines, RSS
(Really Simple Syndication), video-sharing websites, social networking sites, Weibo
(microblogging), smartphone applications, all these platforms have been used as tools of
digital marketing. There will be absolutely more members in this big family such as
connected TV.
Most companies have realized now the importance of digital marketing. According to the
figures published by DCCI (Data Center of China Internet), the total expense in digital
marketing has increased to 26.22 billion RMB in 2009 from 6.09 billion RMB in 2005. It is
expected to reach to 53.26 billion RMB in 2012. (Exhibit 9)
Starbucks’ digital marketing strategy in China
Digital marketing has made great contributions to Starbucks in foreign countries, especially
in the U.S. According to Mr. Wang Jinlong, President of Asia-Pacific of Starbucks
Corporation, based on the conception of the “Third Place”, they tend to create a “Fourth
place”, which is connected to digital development.
The use of Internet and digital forms plays important roles in the launches of new products,
promotion campaigns, drawing new customers. Considering the low costs, high efficiency
and easy participation, Starbucks also chose digital marketing as one of the key marketing
strategies in China. The company puts lots of efforts in social media and online
communication.
Starbucks’ digital marketing in China is not as mature as that in America, the channels and
platforms exploited in the local market are less, but Starbucks has already obtained some
achievements. Although Facebook is forbidden in China, its success in foreign countries
serves as a good example for Starbucks’ digital marketing operations. Starbucks keeps
building information exchange platforms through various local social media such as Renren
and Kaixin Networks – Chinese social networks like Facebook, Sina Weibo – Chinese

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microblogging website like Twitter. Chinese consumers can also find Starbucks’ stores
through the iPhone Application – MyStarbucks, even though this application does not work
perfectly well. Starbucks attempts to communicate with consumers as much as possible, to
encourage interactions and get feedbacks from customers.
Starbucks’ digital marketing operations in China
 Sina Weibo
Sina Weibo is a Chinese microblogging website launched by Sina Corporation in 2009. It is

now the most popular website in China. According to the report of CNNIC, from 2010 to
the end of June 2011, the number of its registered users has increased by 208.9%, which is
now 195 million, covering 40.2% of internet users. In addition, the percentage of cell phone
Weibo users grew from 15.5% to 34%. Sina Weibo has become one of the two largest
microblogging websites in the world, the other one is Twitter. It is claimed that Sina Weibo
is also preparing its English version and plans to enter the American market.

Starbucks has an official general account on Sina Weibo and some local accounts with the
name of cities where Starbucks exists. Several Starbucks’ stores also have their own Weibo
account. Apart from these, many fans name their Weibo account with the word “Starbucks”.
Actually, there is a user that registered on Weibo before the company and named himself
exactly “Starbucks”. When the company wanted to enter Weibo, it even asked the user to
change his account name. Obviously, that didn’t work. Now the official general account is
called “Starbucks China”.
The general account has more than 26 thousand fans and the number increases every day.
The blogger posts 5-7 contents per day. All the contents published seem casual but can be
classified as following:
- Recent event announcements

It informs the consumers about the news or recent events of Starbucks to initiate
topics and create buzz through Weibo, such as the opening of a store or a promotion
campaign. For example, the company posted a message “If you comment on and
forward the topic #Enjoy my Starbucks#, and @ one Starbucks fan, you will have
the chance to get a two-for-one coupon.”
- New product launches
Undoubtedly, a new product launch will be posted on Weibo to inform the
customers but in a relatively delicate way like “How to enjoy Starbucks coffee at
every moment and everywhere? With you Starbucks VIA and Starbucks mug, you
can travel to every Starbucks in the world.”
- Coffee related information
Starbucks also posts some coffee related information on Weibo to educate the
customers and reinforce the credibility of Starbucks as a coffee expert. “Kenyan
coffee is complex properly acid. It has berry and winery flavors and goes well with
citrus and grape based desserts.”

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- Life style descriptions

The communication of life style is a key point that Starbucks sells itself. People can
often find some messages like “Enjoy the afternoon sunshine outside your office”,
“Friday evening in the office, put aside your work, have a break, give a call to
her/him, or listen to the music…” These simple messages describe to the consumers
a modern, agreeable life style and inspire them to pursue the same thing.
- Brand image related information
To build a “Third Place” for consumers requires good services. Starbucks tries to
build emotional links with fans. It is not surprised to see on Weibo that a clerk
found the cell phone of a customer and returned it by express delivery with a card
wishing him “Happy every day”, or a barista had already prepared the breakfast for
a frequent client even before his arrival. When there is news about Starbucks’
contributions to social responsibility, for instance, donations for education,
consumers can also find it on Weibo.

The internet is not always credible. It is not surprising that a user’s account is hacked and
used to post something by someone else. Or, sometimes, there might be false information,
even from the official general account. Once, the blogger posted a promotion offer on
Weibo. But it turned out that the campaign was only effective in the U.S. The company had
to warn the blogger to delete immediately the message published.
Another part of Starbucks’ Weibo is Message Board, a communication platform between

Starbucks and the fans. Here Starbucks’ fans can comment on the products, give
recommendations, express their feelings about the brands, etc. It is the link between the
brand and the customers. This helps Starbucks to get closer to consumers and have
feedbacks instantly. However, all the Weibo users can say whatever they want, some
people like Starbucks, and some others don’t. There are inevitably negative messages or
complaints of consumers, for example, concerning the poor delivery service, bad attitude of
a barista, quality problems of products, etc.
 Social networking sites
Social networking sites appeared in China in 2008 and developed quickly. People can
participate in different activities, such as getting contact with old friends, making new
friends, playing games, etc. By the end of June 2011, there were 230 million registered
users of these websites. However, compared to the result of 2010, it has decreased by 2.2%,
ie 5.16 million users. In fact, many people lost their interests in those game-oriented social
networking sites since 2010. Besides, Weibo has switched their attention and has occupied
a lot of their time spent on the Internet. However, the conception of social networking sites
is always appreciated. Companies consider them as good communication platforms with
consumers.
- Renren and Kaixin Networks：
Renren and Kaixin Networks are now Chinese biggest and most influential social
networking sites. Approximately, 90% of the users are college students and
white-collar workers.

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Renren Network was created in 2005 and was named originally Xiaonei Network
(literally “On-campus” Network). It was a social networking site dedicated to
college students. Users need to provide real profiles for registration. Then, in July
2009, in order to extend its social network and also because most college students
enthusiastic about Xiaonei had graduated from school and entered the society, the
name of Xiaonei was changed into Renren (literally “Everyone”) so that everyone
can participate in this social network. It is considered as “Facebook of China”. More
than 70 million people have registered on Renren Network, 22 million users per day
log in their account.
Kaixin Network (literally “Happy” Network) was launched in 2008. Its business
models and targets are quite similar to those of Renren Network. But, with more
small online games, it seems more appealing to white-collar workers in China. In
2010, there were already more than 86 million registered users and about 50 million
active users per month.
Starbucks wasn’t presented on these two websites until 2011. It has now 72

thousand fans on Renren and 264 thousand fans on Kaixin. Starbucks uses the
public pages which are designed for companies or celebrities so that everyone can
get access to their account, read the news published and the messages left by others.
The contents posted by Starbucks on these two websites can be classified in the
same way as those on Weibo. But, unlike microblogging websites, there are no
limits of word number on Renren and Kaixin. Various content categories, such as
photos, journals, status, data, messages, allow the blogger to give more information
to fans. For example, the category of data is dedicated to the basic information of
the company. The blogger can also tell brand’s history stories. In journals,
Starbucks posts articles with images to present their campaigns, products,
contributions to the society, store opening, coffee education information, etc. The
blogger often uses different articles with the same theme to diffuse different
information for the same occasion. For instance, there are several articles about
Christmas which present respectively coffee drinks, refreshments, special Christmas
items and Christmas videos. Furthermore, there is a particular category on Renren
Network for Frappuccino to help people know more about the products. Starbucks
can also post brief messages in the column of status and receive feedback from fans
at once.
- iPart – “open red day” virtual store campaign：
iPart is a female social networking with 19 million members. It is targeted at young
office ladies and female college students, which corresponds well with the
objectives of Starbucks. In 2008, to promote its flagship store opening in Shanghai
on December 12th, Starbucks cooperated with iPart and created an online virtual
store since December 1st. (Exhibit 10)
Secret gift
Users who visit the virtual store on iPart can ask a secret gift for himself/herself or
his/her friends. Meanwhile, Starbucks flagship shop in Shanghai was packaged as a
huge gift. On the opening day of the flagship shop, this huge gift would be
“unpackaged” and the gifts users got on iPart would be revealed as well. These

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parallel activities did draw the attention of customers and kept them waiting for
Starbucks’ events.
Store design
Besides the secret gift, the Starbucks online virtual store was well designed in terms
of esthetic quality and marketing function. The whole image of the online store was
quite coherent with the flagship store, with the same decoration, logo and
atmosphere, which could have a synergetic effect once the client went into the real
store.
Bulletin board
As a part of the virtual store, the bulletin board posted all the online and offline
events to draw clients’ attention and to create buzz around them.

Product catalogue
The online products catalogue also promoted sales in some extent knowing that
clients now are getting increasingly interested in online shopping. These products
introductions allow clients to know about the products before going to the real store.
Starbucks can also lay emphasis on the key seasonal products to promote them.
Coffee classroom
Apart from their key business, Starbucks created a coffee classroom designed to
propagate coffee knowledge. Starbucks tends to develop loyal customers by means
of educating them coffee knowledge.
This project was really a success. In only 17 days, there were 125,536 visits. The
page of Starbucks still exists now on iPart. However the information is not updated
at all. The logo used is still the ancient one. The activities published were those of
2009. (Exhibit 11)
 Chinese Official Website
The official website is another channel for Starbucks to get itself known by the consumers.
Coffee, food, activities, new products, Starbucks cards, social responsibility, latest news,
online communities, consumers can find various information about Starbucks in China.
Some links are available on the website that permits visitors to get connected directly to 5
social media sites including Sina Weibo, Renren and Kaixin Networks. However, unlike the
global official website, there is no online shop for consumers to buy what they want
without going to stores.
 Smartphone Applications
Until now, Starbucks has not many smartphone applications especially for Chinese people.
On the Starbucks global official website, there is a column called Mobile Applications

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where consumers can find several applications for different smartphone systems: iPhone,
Android and Blackberry. But there is nothing about smartphone applications on Starbucks
China’s website. One basic application that Chinese consumer can use is “myStarbucks”,
which helps them to find the nearest Starbucks store in China. But the problem is that the
application is in English, even though consumers can find address, they cannot find the way
to go to the store on Google Map, because the search engine for Chinese map doesn’t work
with addresses in English.
How to maximize Starbucks’ influence and maintain this influence through digital
marketing channels in the United States? What are the suggestions for Starbucks
digital marketing operations in China?
Starbucks’ digital marketing has gained great success in the United States and contributed
to its business development throughout the world including China. How did Starbucks
succeed in expanding its influence through digital marketing in the United States? Are there

some improvements can be made? What are the suggestions for Starbucks’ digital
marketing operations in China?
These following questions are worth studying:
1. What is digital marketing? What are the differences between traditional advertising
channels and digital marketing channels?
2. Why does “My Starbucks Idea” function so well?
3. How to learn from “My Starbucks Idea” to maximize and keep the influence of
Starbucks through the existing social media channels in the United States?
4. What are the differences between Starbucks’ digital marketing in China and in the
U.S.? What improvements can be made for the Chinese market?

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Exhibit 1
SPECIALTY COFFEE IN THE USA (SCAA)
U.S. Coffee Market 2008 2009 2010

Dollar size of the U.S. Coffee Market (billions) $13.63* N/A N/A
Estimated Number of Operating Units** 27,715 N/A N/A
Cafes 19,300 N/A N/A
Kiosks 5,100 N/A N/A
Carts 970 N/A N/A
Roaster Retailers 2,300 N/A N/A
Chain Stores 47% N/A N/A

Independents (three or fewer locations) 53% N/A N/A

Percentage of Adults Drinking Specialty Coffee***
Cups Per Day (specialty coffee drinkers) 2.63 2.30 N/A
Daily Consumption (specialty coffee drinkers) 17% 14% N/A
Weekly Consumption (specialty coffee drinkers) 34% 29% N/A
Occasional Consumption (specialty coffee drinkers) 62% 58% N/A

Percentage of Adults Drinking Either Specialty or Conventional Coffee***

All Coffee Drinkers (drank coffee in the past year) 82% 84% 77%
Daily Consumption (past day coffee drinkers) 60% 59% 56%
Weekly Consumption (past week coffee drinkers) 72% 70% 68%
Percentage of Coffee Drinkers Consuming Gourmet Coffee 36% 32% 40%
Coffee Consumed at Home (past day coffee drinkers) 85% 80% 82%
*Estimates based on prior data from Mintel International in combination with a review of selected filings of publicly available
information (Excludes Wal-Mart)
**Specialty coffee outlets defined as businesses deriving 50% or more of total revenue from the sale of coffee, coffee beverages
and coffee accessories.
***Source: National Coffee Association (National Coffee Drinking Trends Studay 2008-09-10.

Source: Digital surgeons.com

Exhibit 2 Facebook vs Twitter
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Exhibit 3 Twitter analytics tools
Exhibit 4 Youtube analytics tool

Source: ReadWriteWeb: Top Twitter Analytics Tools (David Strom)
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Exhibit 5

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Exhibit 6
Exhibit 7:
Moon cakes

Starbucks’ localized products
Rice dumplings
The age construction of Chinese netizens, from CNNIC Report, 2011)

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2011
Exhibit 8:

during 2005 and 2012, from DCCI
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Exhibit 9: 2005- 2012, expenses invested and expected in digital marketing in China
Social media activities in China and in the U.S., from Netpop Research,


Exhibit 10: Starbucks’ virtual store campaign on iPart
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Exhibit 11: Starbucks present pages on iPart
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How To Maximize Starbucks' Influence Through Digital Marketing?

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512-009-1

Usage permitted only within these parameters otherwise contact info@thecasecentre.org

The case was compiled from published sources.

Distributed by The Case Centre North America Rest of the world

Starbucks in the United States

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Starbucks marketing strategy

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around 3% of Starbucks’ overall business and it is one of the fastest growing

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Instead of embedding some kind of brand image in consumers’ mind or boasting

U.S. digital market

According to a report of U.S. department of commerce in 2010, as much as 89.23% of

- 500 million total users

- 30% login via mobile device

- 106 million total users

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Starbucks digital Marketing operations in the US

 Starbucks digital business management

- management of global technology functions and business process which includes

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Taught by Joshie Juggessur, from 10-May-2021 to 27-Aug-2021. Order ref F413445.

Starbucks operates several different accounts on Twitter:

My Starbucks Idea: Announcement of new ideas’ launch, new products or events,

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@Starbucks tweets: Starbucks forwards the contents that @Starbucks (address to

Starbucks Calendar : This account tells every day in Starbucks history

Frappuccino: This account answers questions about Starbucks Frappuccino

In addition to Starbucks official website, it created a mini website – My Starbucks Idea,

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Starbucks’ two smartphone applications are designed to facilitate consumers’ consumption

Chinese coffee market

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Taught by Joshie Juggessur, from 10-May-2021 to 27-Aug-2021. Order ref F413445.

Starbucks’ development in China

Starbucks’ marketing strategy in China

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Digital marketing in China

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Starbucks’ digital marketing strategy in China

Starbucks’ digital marketing operations in China

Sina Weibo is a Chinese microblogging website launched by Sina Corporation in 2009. It is

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- Recent event announcements

- Life style descriptions

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Another part of Starbucks’ Weibo is Message Board, a communication platform between

 Social networking sites

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 Chinese Official Website

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These following questions are worth studying:

channels and digital marketing channels?

2. Why does “My Starbucks Idea” function so well?

SPECIALTY COFFEE IN THE USA (SCAA)

U.S. Coffee Market 2008 2009 2010

Usage permitted only within these parameters otherwise contact info@thecasecentre.org

Taught by Joshie Juggessur, from 10-May-2021 to 27-Aug-2021. Order ref F413445.

Occasional Consumption (specialty coffee drinkers) 62% 58% N/A

Percentage of Adults Drinking Either Specialty or Conventional Coffee***

Source: Digital surgeons.com

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