Abstract

US-based Starbucks Corporation (Starbucks), one of the largest coffee house chains in the world, was in trouble in 2008, when sales started to fall. The founder, Howard Schultz, who had left the company in 2000, returned as its CEO. At that time, along with several other initiatives to turn the company around, Schultz focused on providing the best customer experience. As a part of its effort to remain connected with the customers, Starbucks launched a website, MyStarbucksIdea.com, marking its entry into the social media. Starbucks started using microblogging site Twitter in July 2008 while its Facebook page was created in November 2008. While many companies used social media as a marketing platform, Starbucks used it to provide customer experience, build customer relationship, and give them insights into the company. Social media was used to relaunch products, launch new products, increase the understanding of the brand, build social awareness, etc. Customers could submit their ideas about improving products and services at Starbucks, the company considered the ideas and implemented several of those ideas. Starbucks was highly successful in staying connected with its customers through the social media, and by 2010, it had become the first consumer brand to have 10 million fans on Facebook. It was also ranked No.1 in online engagement. Besides, it became the most tweeted about brand. Starbucks also remained engaged with the customers through YouTube and a blog called ‘Ideas in Action’, where employees talked about the company and about the ideas they received from the customers. The case discusses the origins of the social media strategy at Starbucks and the efforts that the company took to be active on the social media platform in order to remain engaged with the customers and build their loyalty. The case also examines how Starbucks furthered its social media footprint by entering into mobile networking and location-based services. Besides, it analyzes the role played by the social media in turning the company around. This case is aimed at MBA/MS level students as part of the Marketing Management / Customer Relationship course curriculum. It can be used in the Corporate communications course.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Examine the impact of social media on business
• Assess how social media can be used to address the stakeholders
• Discuss how social media can be used as a communications channel
• Evaluate the role of social media in brand building
• Understand the use of social media to get targeted market response

Keywords

Starbucks, Social Media, Facebook, Twitter, YouTube, mystarbucksidea.com, customer engagement, social media engagement, Howard Schultz, Instagram, Foursquare, Brightkite, VIA, Frappuccino, Chief Digital Officer