Download - Starbucks Cases

8/3/2019 Starbucks Cases

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AGO (AdAge.com) -- Let's get this straight right away: Return on investment in social media is not measured in how many

friends you have on Facebook or how many followers you have on Twitter. It's not calculated in trending topics or YouTube

comments. It should, in fact, be held to the same criteria other marketing channels are: Did it move your business?

It's done just that at Starbucks, which is a digital marketer worth watching. No one would have guessed at that turn of

events during the chain's dark days of early 2008. Sales and traffic had begun to slip for the first time in its history as a

public company. Founder Howard Schultz, returning to handle day-to-day management, even admitted that Starbucks had

lost its soul.

As part of Mr. Schultz's multifaceted turnaround plan, the chain launchedMyStarbucksIdea.comin July 2008 as a forum for

consumers to make suggestions, ask questions and, in some cases, vent their frustrations. The website now has 180,000

registered users. Some 80,000 ideas have been submitted, 50 of which have been implemented in -store.

Chris Bruzzo, Starbucks' VP-brand content and online, said amassing Starbucks' 5.7 million Facebook fans and 775,000

Twitter followers could be tougher for a dental-floss brand. "Maybe we have an unfair advantage because in so many ways

Starbucks and the store experience is like the original social network," he said.

Consumers "come in, hang out and talk to our store partners. They sort of got to know us as a brand in a very social

way." But he's quick to point out that Starbucks' advantage could easily have been squandered. "If we had approached it

not from 'what you know and love about Starbucks' but as a marketing channel, we would have taken this down a path that

would have been very different," he said. "This was not [built as a] marketing channel, but as a consumer relationship-

building environment." More important than the number of fans, however, is that the coffee chain is beginning to see sales

lifts following social-media promotions.

Results

Starbucks posted its first U.S. same-store sales gain in two years for the last quarter during a time when the company relied

on digital and social-media promotions instead of what had become an annual TV blitz. The chain partnered with Pandora to

sponsor holiday playlists, staged a Facebook sing-a-long and leveraged its partnership with Project RED to drive traffic to a

dedicated microsite -- and its stores, offering a free CD with a $15 purchase.
http://mystarbucksidea.com/http://mystarbucksidea.com/http://mystarbucksidea.com/http://1.bp.blogspot.com/_itcSxzl4l_Q/S6D6Pu7IQgI/AAAAAAAABa0/0iWVFh2c3wI/s1600-h/34-starbucks-customize-022210.jpghttp://mystarbucksidea.com/


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Mr. Bruzzo said that the company is benefitting from a trend "toward this intersection between digital and physical." "We're

seeing the beginning of that," he said. "The experiences you have online can translate to rich offline experiences."

The first time Mr. Bruzzo noticed this intersection was on Starbucks' "Free Pastry Day" last summer, when consumers could

visit the company website or its Facebook page and download a voucher for a free pastry. Mr. Bruzzo, who visited multiple

stores that day, said he was amazed at the number of people standing in line holding coupons they'd printed out. He said

the impetus for free pastries was the volume of faithful online followers asking to be included on new products or other

company news.

The secret to Starbucks' social-media success is, at least in part, the fact that it plays it cool. "It's not like we started our

Facebook community, got to a million people and started pushing offers at them," he said. "We built up a community of

people who enjoy engaging with our photo albums from our trip to Rwanda, who loved to have these shared moments

around their favorite drinks." Then, fans started asking the company what was going on, and how they could be included.

'Straight scoop An added benefit of Starbucks' social-media progress has been the ability to quickly manage rumors that

could have dogged the company for days. Last January, a story spread that Starbucks was donating its profits in Israel tofund the country's army -- even though Starbucks doesn't have any cafs in Israel. These days, Mr. Bruzzo said, when

misinformation gets out, it's easier to nip it in the bud.

Internally, it's called the "embassy strategy." Starbucks strives to make MyStarbucksIdea and its Facebook and Twitter

pages places that "when you go there you know you're going to get the straight scoop," he said.

After ceding its usual first-to-market status to competitors, Starbucks launched two iPhone apps in September, one for

general caf purposes, with store locators, details about specific blends and nutrition information, and the other to support

its loyalty card. Moving forward, Mr. Bruzzo said the company will be looking for ways that consumers can connect with

each other from inside the apps.

In the meantime, Starbucks is testing functionality that allows loyalty-card holders to pay with their phones. Starbucks'

agencies are BBDO, PHD and Blast Radius.

Starbucks tweeter in chief

Unlike many marketers, Starbucks doesn't run its Twitter feed out of its PR department. The chain's voice on Twitter is Brad

Nelson, 28, a former barista who rose through its IT ranks. When the company was looking for ideas to re-engage with its

core customer in 2008, Mr. Nelson suggested that he begin a Twitter handle for the brand, and it now has 775,000

followers. The brand relies on the 28-year old to translate the Starbucks experience for the online community, search out

confused or disgruntled consumers, chat about store offerings and even crack jokes.
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Chris Bruzzo, VP-brand, content and online, said that Starbucks was beginning to institute its turnaround plan in early 2008

when Mr. Nelson announced he was ready for something new and wanted to get involved in the chain's online efforts.

"I sent him away and said 'Fine, sure,'" Mr. Bruzzo said. But about two weeks later, Mr. Nelson gave him a presentation

about Twitter and the opportunity to communicate directly with consumers as questions arise. Mr. Nelson sweetened his

pitch by adding, "It's a lot like being a barista on the internet." Mr. Bruzzo recalls greenlighting the project, and after a

period of working with Mr. Nelson, let him loose on Twitter.

Mr. Bruzzo gives credit to Mr. Nelson and his "willingness to take smart risks," but shares some of the kudos for Starbucks.

"I guess you have to have a brand like this and an environment that's open to innovation and someone like Brad with the

passion and personality."

Starbucks and foresquare take over the world

I didnt really want a Frappuccino; I didnt even want coffee. All I really wanted to do was go home, get a shower,and curl up with a nice bottle of wine and watch the 9th Doctor take on the baddies on DVD. (Yes, Im a nerd.) So

why was I queuing in a Starbucks, playing with my iPod Touch, about to spend four dollars I didnt have on a drink Ididnt really want instead of racing home to end a rather rough day? Foursquare.You see, eight hours ago on an otherwise unremarkable morning, Id stopped into my local Starbucks for a cup oftea, having run out at home. I dont usually stop at Starbucks when Im in a hurry for a cup of something hot onthe go Dunkin Donuts is cheaper and WaWa is better but on this particular morning, Dunkin Donuts was offeringa free iced coffee, resulting in queues around the block and WaWa was well out of my way. Neither of these thingswould usually be a deterrent except for one key factor leading up to a perfect storm of coincidence, social media,and marketing savvy: I was running late.So, I pulled into the Starbucks Ive passed a million times but only occasionally visited and queued up.The line was moving fairly quickly, but Im practically ADHD and immediately felt my mind slowing down tosomething less than 5000 RMP. My hand, which seems to suffer from Alien Hand Syndrome in these situations, hadwhipped out my iPod Touch and logged onto the Starbucks network before I even realized what was happening tome.It was while on Twitter that I noticed a friend of mine had signed into Foursquare only a few minutes prior at this

same Starbucks. A quick glance around the room, however, revealed that she was no where to be found, but onthe off chance that she was in the bathroom or had moved to another store in the strip mall, I logged in.Special HERE! Foursquare said.Curious, I clicked.As mayor of this store, enjoy $1 off a NEW however-you-want-it Frappuccino blended beverage. Any size, anyflavor. Offer valid until 6/28.I shrugged, ordered my tea, and carried on with my day.My curiosity, however, was peaked. When I arrived at my destination, I logged into the Wi-Fi network and jumpedonto Foursquares website, curious to see how close I was to being the mayor of Foursquare, especially since I wasone mayorship away from the Super Mayor badge that Ive been trying to win for so long. Current Mayor: Priscilla J.Number of Visits: 5My visits: 5I was one visit away from becoming the mayor of Starbucks and getting that Super Mayor badge!

All day, all I could think about was logging in on the way home to get the badge. It seems so stupid, I kepttelling myself, trying to talk myself out of spending more money, but I could just get, like, a scone or something.They have those little mini donuts that are seventy-five cents or something. I could just get one of those.(Honestly, I could have just walked in, logged in, and walked out, but thats so not in the spirit of the game.)Convinced that Id merely spend the smallest amount possible on the cheapest item on the menu, I pulled into theparking lot at 5:30pm that evening. There was only one person ahead of me in line, so I logged in as quickly as Icould.You just ousted @cillajenkins as the mayor of Starbucks Coffee on @foursquare! http://4sq.com/aPC4sa said thefirst message, immediately followed by the more important, Congratulations! You just unlocked the SuperMayor badge on @foursquare! http://4sq.com/cejdqsAnd then the Special popped up again.


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As mayor of this store, enjoy $1 off a NEW however-you-want-it Frappuccino blended beverage. Any size, anyflavor. Offer valid until 6/28.Can I help you? said the friendly guy behind the counter who looked all of fifteen years old. Um I said, the message staring at me. What kind of Frappuccino is good?You can now get a Frappuccino however you want it! he said, but most people like mocha. Um, okay then, Ill take a Mocha Frappuccino and, uh, can I have my Mayors discount? He looked down at my phone.

Awesome! he said. I just found out about this when I checked in for my shift!I found out about it when I checked in for tea! I replied.

Caribou coffee vs Starbucks

In order to test the application of SEO to intelligence analysis, I decided to do a comparison of twodifferent popular coffee shops, Caribou Coffee and Starbucks, using the information derived from SEOWebsites. I had originally wanted to use two different suspected terrorist sites to collect data on, howeverI chose not to follow through with this as I thought it best not to visit those sites while I was going throughthe security clearance process.

I chose these particular coffee sites because of their similarity in product. Not only do they both provide

similar food and drink products, they both offer customers a trendy place to enjoy those products. Mycollection requirements centered on the kind of information I would want to collect if I were examining theterrorist Websites. In particular, I focused on collecting page rank information, site backgroundinformation, number of sites linking in, visitor demographic, and visitor behavior information.

In order to organize the information collected, I decided to enter the information into a page on my GoogleSite. The page used a two-column layout, allowing me to compare the two coffee sites information side-by-side. I used a Snapz Pro X, a screen capture software designed for Macs, to save any relevantgraphics as pictures. The pictures were then embedded into each column of the Google Site. Tocompare the amount of site changes for the two coffee companies, I inputted the information into anExcel spreadsheet and created a graph to visually display the information. Once all the information wasdisplayed in a side-by-side fashion, I was easily able to compare the two sets of information to findsimilarities and differences.

Analysis of the two coffee Websites revealed many similarities and some expected differences.

One of the major differences between the two Websites was between page ranking. Caribou Coffeespage rank was only 44,860, attracting 42.2k visitors a month worldwide (30.8k US visitors/mo.); whileStarbucks held a ranking of 2,362 and attracted approximately 871.7k visitors a month worldwide (671.3kUS visitors/mo.).

(The above image illustrates the amount of daily unique visitor to the Caribou Coffee Website [red] andthe Starbucks Website [blue] from May 2007 to April 2009. Data was retrieved using Google Trends)
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This vast difference in popularity is most likely attributed to the success of the Starbucks franchise, beingthe most popular coffee shop in the world, while Caribou Coffee has not been as successful as Starbucksin establishing coffee shops across the United States, let alone the world. It is also likely that Starbuckshas increased its online popularity through the marketing and online selling of Starbucks coffeeproducts. Caribou Coffee also sells their own brand of coffee products online, however their products arefar less known as their geographic reach is not as wide as Starbucks leaving Starbucks with far-morebranding power.

(The above image illustrates the difference in geographical density of online visitors betweenCaribou Coffee [on left] to Starbucks [on right] both globally and in the US)

The images above starkly illustrate the search volumes geographically (both globally and in the US) for

these two Websites. Starbucks competitive edge regarding popularity is blatant - covering far morecountries and US states than Caribou Coffee. Analysis of the geographic distribution of search volume isindicative of the marketing strategy of the two coffee shops. Basing analysis form these charts, it is likelythat Starbucks took an aggressive approach and strategically focused on setting up their coffee shops inlarge metropolitan areas. This is why we see a larger density around the coastlines of the US - wheretrade and transportation have encouraged growth. These areas typically attract bigger businesses andhave larger populations who are more affluent, more educated, and have a busier lifestyle. Because ofthe targeted population, it is likely that Starbucks has molded the atmosphere of their coffee shop aroundthe lifestyle of these metropolitan areas; focusing mostly on quick, grab-and go service.Analysis of these charts also indicates that Caribou Coffee likely took a less aggressive approach tomarketing. It is more likely that Caribou Coffee went for a ripple-effect approach to their business,spreading outward from the first coffee shops established in Minnesota. The search volume indexillustrates that Caribou Coffee has slowly moved outward from the mid-west and will eventually creep-intothe larger cities as it draws near them. When Caribou Coffee shops migrate toward large cities, it is likelythat they will stick to the sprawl areas of the city and tend to avoid the downtown areas. It is more likelythat these coffee shops will migrate toward large and higher-end shopping areas. It is unlikely thatCaribou Coffee has marketed itself toward the busy metro lifestyle populations that Starbucks hasfocused on, and instead has appealed to customers who have more time on their hands and are lookingfor a place relax while they catch up on daily events and studies. It is for this reason that the atmosphereof Caribou Coffee shops are more lodge-like, with fireplaces and upholstered seating.

Both sites essentially attract the same type of online visitor:Caribou Coffee visitors tend to be predominately female (56% Female versus 44% Male), middle-aged
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(36% of visitors were between the ages of 35 and 49), Caucasian (91%), college-educated (48% withcollege education and 17% with graduate degrees), no children in the household (65%), and who areaffluent (33% make $60-100k).

Starbucksvisitors tend to mirror that of Caribou Coffees, with only some slight differences. Starbuckstends to attract more young adults (42% between ages of 18 and 34), and while the majority of thevisitors are also Caucasian, Starbucks attracts a slightly more diverse population as well as an above-average amount of Asians. Starbucks visitors also tend to me more affluent, with 31% making more than$100k annually.

Analysis of visitor demographics reveals that Caribou Coffee could possibly have more online success ifthey pull-in some of the same types of online visitors as Starbucks does. For example, while CaribouCoffee attracts a respectable amount of young adults (32% between the ages of 18 and 34), this does notcompare to the 42% that Starbucks attracts. 68% of Caribou Coffees visitors are between the ages of 18and 49, while Starbucks attracts 76% of the same age group. Since the two companies attract the sameeducation levels, Caribou Coffee may want to curb its online marketing campaign toward the young adultcategory. Paying for advertisements on social networking sites where educated young adults visitfrequently, such as Facebook, may likely prove to be a wise strategic move for Caribou Coffee.Facebook refers 3.92% of Starbucks traffic to the Starbucks Website, while Caribou coffee lacks inFacebook referrals. In addition, Caribou Coffee might want to further investigate what sites Asians

typically visit, and focus marketing campaigns toward that particular audience as well.

Other than Facebook, referring site analysis shows that aol.com has increased referrals to the Caribou

Coffee Website over the past couple of months. This indicates that a current Caribou Coffee marketing

campaign posted on aol Sites is working, or that Caribou Coffee may want to invest more into aol as it is

producing traffic referrals (3.57%, which is a +553.4% increase since February). The same information

applies to yahoo.com, a major referring site for both coffee companies; however referrals from yahoo to

Caribou Coffee are rising at a greater rate than that of Starbucks (+91.15% vs. +3.33%).

Lastly, analysis of visitor behavior aids in the decision making process of what types of sites your visitors

also go on a regular basis. Caribou Coffee visitors have strong affinity levels toward sites relating to

schools/universities, insurance, toys, pharmacy, and healthcare. There are also strong trends toward

news agencies/sites (particularly in the St. Paul/Minneapolis area), airline travel, and workforce related

sites (insurance and management).

Starbucks visitors have strong affinity levels toward commerce/food, fragrances/cosmetics, jewelry/luxury

goods, women, and pharmacy. Their visitors also tend to visit sites related to other restaurants,

shopping, and printing/graphics sites.

The key to the analysis is to find the common threads and themes across the variety of information

collected. SEO will help you assess the route to get a particular population from one area of the Web to

your site. If you know what kind of visitors a site attracts, you can find what other sites those same

visitors frequent. If you know what keywords are used to search for your site or product, and what

keywords are associated with the other likes and preferences of your visitors, then you can invest on the

keywords that attract that particular population. If you know what sites push the majority of traffic to your

site, then you can focus your keyword campaign on those sites. Its a complex process with many routes

to take; the trick is just finding the route that gets you the quickest and best results.
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When applying SEO to law enforcement intelligence and the national security sector, an analyst can

obviously discover a wealth of information regarding a sites online user. This type of analysis may be

best suited to aid in operational intelligence. As more information is analyzed about what types of online

users go to specific illicit/suspect Websites, resources to combat these illicit activities can be better

allocated. Since the World Wide Web is such a large medium in which we communicate and interact,

being efficient with the resources available to counter criminal activity on the Web is a necessity.

Download - Starbucks Cases

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