Contribution of Social Media in Expanding into the Indian Market: A Case Study of Starbucks

This research project examines the role of social media in Starbucks' expansion into the Indian market. It investigates how social media tools are utilized to build brand image, influence customer preferences, and drive sales. The study employs a mixed-method approach, combining quantitative surveys of Starbucks employees and qualitative interviews with store managers. The research aims to identify the most effective social media strategies for Starbucks in India and provide recommendations for future expansion.

Contribution of social media in expanding into the Indian market: A
case study of Starbucks

Table of Contents
Proposal for the project- “Contribution of social media in expanding into the Indian market:
A case study of Starbucks”........................................................................................................3
1.0 Introduction..........................................................................................................................3
1.1 Research question and objectives.........................................................................................4
2.0 Preliminary literature review................................................................................................5
3.0 Method.................................................................................................................................7
4.0 Timescale.............................................................................................................................8
5.0 Resources...........................................................................................................................10
References................................................................................................................................12

Proposal for the project- “Contribution of social media in expanding into the Indian
market: A case study of Starbucks”
1.0 Introduction
There was a time when social media was used only for individual pleasures. Now, the
companies be it start-up enterprise or households name in corporate business, are indulging in
to incorporating social media approaches in their digital marketing endeavours. To
understand the growing importance of social media in the corporate sector of business, one
must have a clear idea of marketing. The activity and process of communicating, creating and
delivering a product or service that holds a value to the customers is known as marketing.
The purpose social media marketing is to create a brand and increase its visibility to the
followers and subscribers of social media, which accounts to millions of views. It avails a
wide scope of communication between the brand and its potential customers. This way it
creates a relationship with its customers and influences them on a daily basis. Social media
and marketing now go hand in hand building a vast reputation for the companies and
increasing its popularity even more. This strategy expands the market of the companies
overnight by bridging the gap between potential customers and the brands.
Starbucks is a global company of coffee shop, which has multiple chains and franchises all
around the world. It is based in Seattle, Washington, and is the largest coffee house company
in the world. It is established in 62 countries with 20,891 stores spread all over the globe.
Jerry Baldwin, Gordon Bowker and Zev Siegel opened the first store of Starbucks on 30th
March 1971 in Seattle (Starbucks Coffee Company, 2018).
Since the evolution of social media, Starbucks has been dominating the platform of several
media sites. With 16.1 million followers in Instagram, the food and beverage company is
changing the scenario of coffee house business. It is trending heavily on social media and
having a cup of coffee at Starbucks is one of the most happening trends in such platforms.
With its large influence in social media, it has gradually evolved into a symbol of high status
and class, especially amongst the millennial followers of social media. The social media
presence of Starbucks is significant and there are more than 37 million followers on

Facebook. A considerable number of followers also exist on other social media pages of
Starbucks, which makes it easily accessible by the customers.
The expansion of Starbucks in the Indian market is the current business issue of the company.
The traditional marketing of Starbucks is gradually turning obsolete and concentration in
Indian market will have a great boost in its business. Starbucks influence a wide number of
Indian followers in social media. Tata Global Beverages and Starbucks Corporation hold the
company outlets of Starbucks in India. It has only 100 stores in India and aims to open more
coffeehouse chains in the country.
According to John Culver, group president of Starbucks International, India is one of the
most important markets they operate at and a growing economy is the best place to set up
such commercial ventures. Instagram has a large number of Indian followers of Starbucks
and are very active on the site, which helps the company promote itself rather quickly and in
a simpler way amongst the Indian audiences.
The initial few stores saw a massive success in the Indian market and since coffee and tea is a
fast growing segment in the country; they plan to launch a number of tea products customised
according to the taste of Indian audiences. The products will be promoted through posts in
Instagram, Facebook and twitter accounts. The growth and expansion of Starbucks in India
will be adding a status symbol and class to the Indian market of coffeehouse chains. The
company engages its customers through web pages and social network sites. It uniquely
uploads stories in its social media post, grabbing the attention of millions, flourishing its
market. This report particularly throws light upon the influence of its social media post in the
expansion of its Indian market.
1.1 Research question and objectives
The research question for the project is: “How and which social media tool can be effectively
utilized by Starbucks, for expanding into Indian market more efficiently?”
The objectives for this research project would be:

 To study the benefits of social media marketing processes over the conventional
marketing processes in the food and beverage industry
 To explore the tools of social media and identify the most appropriate ones to be utilized
by the food and beverage companies for their promotion
 To study the impact of social media in building the brand image of the company
 To study the extent to which the social media influences the preferences of the customers
in the Indian Market
 To frame effective recommendations for Starbucks regarding the social media tool that
can be exploited, for expanding into the Indian markets successfully
2.0 Preliminary literature review
The growing importance of social media in food and beverage industry
Social media platforms are gaining importance in the modern world owing to its increasing
contributions to the business organizations and its ease of access, which allows the companies
to reach out to the customers effectively, even if they are not physically accessible at that
point of time. The social media platforms help in collecting the feedback and the reactions of
the customers about a particular product or service that is provided to the consumers by the
company and thus, the popularity of the product or the service as well as the drawbacks in the
same can be effectively gauged and corrected. With the advent of social media tools like
Facebook, YouTube and Instagram, reaching out to the customers have been made a whole
lot easier and thus, the current trend of advertising over the social media, by the food and
beverage industry came to the forefront.
As per recent researches, around 63% of the executives of the food and beverage companies
expressed their interests of promoting their products and interests on social media while 49%
revealed the fact that they had already started utilizing social media in order to reach out to
the customers effectively. The official company website is the most important and effective
way of reaching out to the customers, promoting the products, collecting feedbacks and
influencing the brand name and brand image of the company; around 79% of the company
executives agreed to the statement. Webrooming is an important way through which the
customer prefers to buy the products; they choose the products on the online pages of the
company and then they go and buy the products from the conventional stores. This

necessitates the presence of the company websites and official web pages of the company, in
more to attract the customers and enable them to get any information related to the products
at any time.
Social media tools used by the industry
As per the views of Robin Auld, the marketing director of Domino’s Pizza, UK and Ireland,
of all the social media tools present, Facebook is the one, which contributes maximally in the
social media strategies of their company. Spokesperson for PepsiCo, UK and Ireland as well
as Dominic Burch, the head of the Corporate Communications at ASDA voiced the fact that
Facebook and YouTube, after the company websites, contributes considerably to increasing
the sales of the company and in improving the brand image among the customers
(Chorneukar, 2014). In recent times, the percentage of viewers who avails Facebook for
consulting and retrieving information about products and services of the company, apart from
interacting with the peers and socializing with the society, has rose to close around 70% in
the global population. This explains the reason that Facebook is critical for the promotions of
the food and beverage industry.
As per recent researches, it was found that almost 58% of the food and beverage companies
advertised about their products and services on the social media and the sales of those
products increased by almost 20-30% following the advertisement ventures on the social
media. For example, in case of Starbucks, there are 37.32 million followers of their Facebook
page and 32 thousand followers on YouTube (Starbucks Coffee Company, 2018). The short
and eye-catching commercials on the social media increased the sales of the company by
around 38% in the developing countries, where the stores had been introduced recently
(Starbucks Coffee Company. 2018).
The influence of social media in building the brand image of the companies
The brand image refers to the impression of the products or services that are dealt with, by
the companies among the customers. There are numerous factors that affects the brand image
of the products and services like the name and logo of the brand, the characteristics of the
product sold by the brand, the attitude of the customers towards the products and similar
such factors. According to Cheng et al., (2012), through advertisements over the social

media, the customers are able to view the benefits of the products as well as get views about
the products from the existing customers; this helps them gain knowledge of the
characteristics and the qualities of the product from its previous customers. Since the
customers are furnished with all the information and the feedback about the products, the
transparency increases, leading to greater customer loyalty and trust. According to Mishra,
and Tyagi, (2015), the company launches products but the customers themselves establish
them as a brand in the market. Hence, helping the products gain maximum exposure among
the customers (by its advertisements through the social media) ensures that the products
would rule over the market for quite some time and it would encounter higher rates of sales.
The influence of social media tools on the preferences of the customers in the Indian
market
Whenever a new company aims to introduce their products or services in a new market, they
first need to carry out analysis of the market scenario in the new market and study the
preferences of the customers therein, in order to formulate the marketing strategies and the
policies effectively. According to Natarajan et al.,(2014), the Indian customers tends to be
influenced by whatever they see on the social media or on television platforms; hence
advertising on social media is a significant process to influence the choices of the Indian
customers. As per Yang et al., (2014), giving out the details of the products, the quality of the
product and the reviews and feedback of the existing customers to the same helps the Indian
customers to judge about the quality of the product and its utility; which is critical for
influencing their preferences of products and services they avail.
As per researches conducted in the Indian market, almost 72% of the companies located
either herein or sets up stores in India, from some foreign locations, requires setting aside
around 35-40% of their revenues for social media marketing methods, so that the customers
can be convinced effectively into buying the products or availing their services (Ey.com.
2018). In a worldwide survey, it was found out that India ranks fourth in utilizing the social
media platforms as a significant influence to buying behaviours.

3.0 Method
Mixed method approach for ascertaining data has been used in the case of market
expansion of Starbucks in India.
Primary method of data collection has been adopted in this research. Both qualitative and
quantitative approaches have been implemented to complete this research successfully
(Palinkas et al., 2015). A survey was made on the marketing proficiency, demand and
expansion of Starbucks India. A quantitative survey was done where the employers of the
existing stores in Starbucks were questioned about the above-mentioned topics.
In the segment of qualitative survey, the store managers of the Starbucks India in different
cities of the country were interviewed to find out the influence of the company in Indian
crowd and its popularity amongst the youth of the country, who according to media reports
are the major portion of customers for the coffee house.
The concept of positivism philosophy is used in the research of Starbucks expansion in
Indian markets. Positivism philosophy of forces will help in determining the parameters to
research.
Deductive approach is taken under consideration which conducting this research (Bryman
et al., 2015). It served the investigation with the possibility of explaining casual
relationship between the variables and concepts, helped generalizing research findings to
some extent and provided measures of quantitative concepts of survey.
4.0 Timescale
Activities Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7

Deciding
on the topic
to be
chosen for
the study
Literature
Review
Drafting
the
proposal
Surveying
the
employees
employed
in
Starbucks,
India
Conducting
interviews
with the
managers
at Tata
Starbucks,
India

Analysing
the data
received
after the
qualitative
and the
quantitativ
e research
Conducting
secondary
research
for the
topic
Framing
the final
dissertation
and
proofreadi
ng the
same
Final
Submission
of the
dissertation

Poster
presentatio
n
5.0 Resources
Mixed approach for research will be resorted to, in order to effectively investigate the
influence of social media in the international expansion strategies of Starbucks in India.
Starbucks is present in India in a 50:50 joint venture with Tata Global Beverages (Das et al.,
2015). Thus, the managers of both Starbucks India and Tata Beverages, who are associated
with the management of all the business proceedings, are aimed to be interviewed for this
research. This would include travel allowances for travelling to their regional head offices,
for conducting the interviews and a certain amount of overhead expenses as well. Since the
data from the literatures and published journals will also be used for the purpose of this
research, there will be significant costs incurred for the access to the internet systems as well.

References
Bryman, A., 2015. Social research methods. Oxford university press.
Cheng, Y., Xie, Y., Zhang, K., Agrawal, A. and Choudhary, A., 2013, August. How online
content is received by users in social media: A case study on Facebook. com posts. In 2nd
Social Media Analytics Workshop, Beijing, China.
Chorneukar, M.M.J., 2014. To Study the Customer Perceptions of Electronic Food
Ordering (Doctoral dissertation, PONDICHERRY UNIVERSITY).
Das, D., Eisner, A.B. and Korn, H.J., 2015. Tata Starbucks: How to Brew a Sustainable
Blend for India. Journal of the International Academy for Case Studies, 21(3), p.43.
Ey.com. (2018). [online] Available at: http://www.ey.com/Publication/vwLUAssets/EY-
social-media-marketing-india-trends-study-2016/$File/EY-social-media-marketing-india-
trends-study-2016.pdf [Accessed 16 Mar. 2018].
Mishra, S. and Tyagi, A., 2015. Understanding social media mindset of consumers: an Indian
perspective. JISTEM-Journal of Information Systems and Technology Management, 12(2),
pp.203-218.
Natarajan, T., Balakrishnan, J., Balasubramanian, S.A. and Manickavasagam, J., 2014.
Perception of Indian consumers towards social media advertisements in Facebook, LinkedIn,
YouTube and Twitter. International Journal of Internet Marketing and Advertising, 8(4),
pp.264-284.
Palinkas, L.A., Horwitz, S.M., Green, C.A., Wisdom, J.P., Duan, N. and Hoagwood, K.,
2015. Purposeful sampling for qualitative data collection and analysis in mixed method
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Starbucks Coffee Company. (2018). Starbucks. [online] Available at:
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Yang, K.C., Yang, C., Huang, C.H., Shih, P.H. and Yang, S.Y., 2014, December. Consumer
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