Marketing in a Digital Age: A Starbucks New Zealand Case Study

Desklib provides past papers and solved assignments for students. This report analyzes Starbucks' digital marketing in New Zealand.

MARKETING IN A DIGITAL AGE ASSESSMENT 2 – MARKETING PROPOSAL
ASSIGNMENT
A CASE STUDY OF STARBUCKS NEW ZEALAND
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Table of Contents
Introduction......................................................................................................................................3
Existing Marketing Strategies of Starbucks....................................................................................4
Literature Review............................................................................................................................5
Market Research..............................................................................................................................6
Applicable Marketing Concepts......................................................................................................8
Evaluation of Existing Marketing Strategies of Starbucks..............................................................8
Development of New Digital Marketing Campaign for Starbucks...............................................10
Conclusion.....................................................................................................................................13
References......................................................................................................................................14
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Introduction
Digital marketing refers to the marketing efforts being undertaken by the organizations using a
digital platform such as the internet or an electronic device. The significance of digital marketing
in the current technological era has been clearly understood by the organizations. This has
enhanced competition in the digital marketing industry as well. Starbucks has been located in
major cities of New Zealand for many years such as Auckland, Southland, Wellington, Hamilton
and Christchurch and so on. The assignment is mainly focused on the offline and digital
marketing communication strategies of Starbucks New Zealand. On the basis of its evaluation, a
new creative marketing campaign will be designed and developed with the integration of
traditional marketing strategies including offline and digital. In New Zealand, the company has
adopted the joint venture strategy for entering into the markets of New Zealand.
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Existing Marketing Strategies of Starbucks
Starbucks origins in Seattle and now it's one of the most popular coffee retail brand all over the
world. Starbucks builds a strong reputation among other coffee brands. In New Zealand,
Starbucks had around 50 stores and 300 staff at their cafes in New Zealand but the coffee culture
there is slightly different and Starbucks faced very tough competition from their local coffee
makers. Starbucks has unique offline and digital marketing strategies. Offline strategies are the
following:-
1. Red cup theme – Starbucks red cup is now iconic for holidays around Christmas. They
first started it offline then it became so popular so launched its online format too. This
theme is related to holidays so, during holiday time, Starbucks changed the colour of
their cups to red cups which indicate holidays. It is one of the most successful marketing
strategies until now for Starbucks.
2. Contests – Starbucks has a reputation of running different contests all through the year
where they ask those participating to draw posters and themes for them. They announce
different prizes or benefits for their winners.
Here are a few digital marketing strategies of Starbucks:-
1. Social Media platforms – Starbucks prime customers in New Zealand are tourists and
students from other sides of the world. Posting picture with a cup of Starbucks is a new
trend on Instagram. Starbucks engages its customers on Twitter. If you follow them, they
will follow you back. Its nail art is the new sensation on social media. It offers different
gift cards for the customers and provides them with the facility of gifting them to
someone they like.
2. Starbucks app – Starbucks app is very popular among Starbucks coffee lover. This app
helps the customers to make the payment safely and fast. It gives notification about their
new and live online contests, something new addition on the menu. It allows customers to
builds star rating to get free drinks and many more. It has been very successful with its
customers.
3. Perks – For maintaining the loyalty of their customers, Starbucks offers them few perks
while they visit their stores. Free Wi-Fi is one of them. It encourages customers to stay in
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the shop for more time rather than go out. These days mostly coffee shops are offering
free Wi-Fi but once customers connect with the Wi-Fi connection at the store, they can
enjoy the Starbucks digital experience.
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Literature Review
Marketing strategies play an important role in promoting any company products and increases
their sales and profitability.
Social Media Contests
According to the words of Gorbatch, 2017 Starbucks social media contests are a huge part of its
digital marketing all over the world. Some campaigns do well and some don't but still social
media contests definitely increase the number of their customers like pictures holding a cup of
coffee in extreme cold weather, the red cup contest, tweet-a-coffee, meet me at Starbucks,
charity campaigns are those contests which gained popularity all over the social media but
contests like race together, spread the cheer did not perfume accordingly. Starbucks is getting
competition while running the online contests from a few other brands like dunk’in doughnuts.
The company must hire more creative people for setting up those social media contests.
Starbucks App
According to the words of Beuker, 2014 Starbucks app was not very popular at the starting but
later it gained popularity after a few years. The loyalty points and fast, secure payment are the
main attractions of this app. Rewards points can offer customers free drinks which are very
popular among youngsters. Mainly the upper middle class is the prime customers of Starbucks
and youngsters. This app allows notifications to the customers about their new add up in the
menu and new contests around. Starbucks app has a good star rating too.
Unconventional marketing tactics
According to the words of Pratap, 2019 Starbucks is a very well-known popular coffee retail
brand. Its merchandise is an important part of its marketing strategies. Starbucks logo is printed
on the merchandise of this brand. Starbucks didn't advertise its products on traditional marketing
tools like newspapers, poster, billboards etc. earlier. Not only the cups but each and every
merchandise has its logo on it and Starbucks cups are very attractive and pleasant-looking which
attracts customers to click the picture with it and post it on digital platforms. It is a new and
unique way of promoting their products and Starbucks is following this trend very well.
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Advertisement
According to the words of Pratap, 2019 Starbucks only got famous because of its premium
quality products and customer oriented services. In recent years, Starbucks made a few major
changes in its marketing strategies. Now they are investing money in advertisement too. Now the
ads are visible on social media and television, radio and on other mediums itself. TV
commercials are again very popular and they highlight the newest and most romantic flavours
which are available at stores. They increased their budget for marketing; after all, they are the
world's leading coffee retail brand.
Reward Schemes
According to the words of McEachern, 2017 Starbucks run different reward schemes for their
customers at stores and their online customers as well. Free drinks, Free Wi-Fi and many other
reward schemes are few of the benefits. Starbucks physical cards and e-card are a new attraction
for customers. Birthday treats for the customers, free customization of their drinks, green and
golden levels according to the star loyalty points which has different benefits for both the levels
as well. These rewards schemes are the main attractions for existing and prospective customers.
They play a huge part in making Starbucks more popular among the years.
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Market Research
Starbucks has been already expanding its criteria of marketing. Earlier they didn't have budget
oriented marketing strategies for getting more and more customer but now Starbucks had
changed strategies accordingly. Here are a few more improve strategies which Starbucks must
need to follow.
 Carve out of coffee – In US, reserving lunch, dinner tables are now possible at
Starbucks but it is working at the US only. It is one of those things which Starbucks
lovers were waiting all over the world. Earlier it was just about coffee and now lunch,
dinner and even a bottle of wine would be possible there. In New Zealand, Starbucks
need to start this service very soon because in New Zealand Starbucks prime customers
are mostly students and tourists from different countries, especially from the US. The
company should prepare their market before they start missing their countries Starbucks
stores. The company needs to launch this service very soon here so that Starbucks would
not lose its valuable customers (igorbeuker, 2014).
 Overall customer experience – Starbucks hold 40% of the coffee market share in the US.
It proves that it is one of the most leading and popular brands of retail coffee worldwide
but still Starbucks is getting tough competition from other local coffee makers in New
Zealand. Customer service is the key to their success at the US market; they provide
different perks, rewards and better fast services at stores to the customers. While in New
Zealand, Starbucks needs to improve its customer services at stores and have to maintain
the reputation of the brand. Starbucks is not really popular here like it is being popular
in the US and other places. Improving the quality of their services can make some
changes because at the end customers overall experience would count and make an
impact.
 Smart Speakers and Audio – Starbucks should optimize their website or mobile app with
voice search. This trend is getting popular day by day. Voice-based facilities are an
important and new trend to follow. It going to impact new generation Starbucks lovers.
The company can build a FAQ section and answer about most frequently asked question
and different topics like about stores timings, location and availability of some item on
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the menu. It definitely going to impact customer services and raise the productivity of
Starbucks employee. They can engage their employee to more important stuff which
will be more customer service oriented.
 Local Influencer Marketing – Starbucks is a well-renowned brand but still it's difficult
for Starbucks to create a better place at the New Zealand coffee market. So the company
needs to hire some local influencer for their marketing in New Zealand and this trend is
not new (Forbes, 2018). If a celebrity of local influencer endorses any brand products to
their millions of fans, it going to make a huge change. Starbucks needs to partner with
some celebrities or influencers for making more space among New Zealand's coffee
market.
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Applicable Marketing Concepts
The marketing strategy of Starbucks involves a wide scope of promotion through offline and
digital marketing strategies for communicating with the targeted customer segments. The
marketing strategy is developed on the basis of different marketing concepts such as production,
product, selling, societal marketing, and marketing as well. The marketing concept has been
utilized by the organization in which the consumers are considered as central for the
organizational activities and efforts. Under this concept, the organization puts efforts with an aim
of developing a clear understanding of what are the wants and needs of the target market or
customer segments in New Zealand. The marketing strategy by Starbucks has been developed as
per the information gained in the market research (Leung, et. al., 2015). After the strategy
execution, the organization makes efforts for attaining the feedback of the target market
regarding the perception, opinions, and views of the products and services. Irrespective of the
marketing changes, the organization performs market research as well as product development as
a continuous process for upgrading the marketing strategy.
The key target market of Starbucks New Zealand involves mainly the customers, who belong to
the age group of 18-45 years, youngsters, adventurous and office-going. Coffee is mostly utilized
by such customers for whom the company has developed different varieties of coffees, fresh
food items, handmade beverages, ice-creams and ready to drink products. For marketing, the
company uses the platforms that are mostly and easily accessible by the customers being
targeted. Therefore, the marketing strategies are mainly involved the social media, app, contests,
public relations and red cup theme and so on (Martin, 2016). These strategies are developed
keeping in mind the interest and engagement of the targeted customers in New Zealand. Apart
from this, the organization also integrated the new concept of societal marketing in which the
attention has been shifted to the welfare and well-being of the customers and society as well.
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Evaluation of Existing Marketing Strategies of Starbucks
When it comes to marketing, Starbucks never fail to astonish the competitor firms and customers
with its offline and digital communication strategies. The offline marketing strategy of Red Cup
Theme involves the distribution of red coloured cups at the time of Christmas. This has helped in
making the company distinct and unique from the competitor companies in New Zealand. This
strategy was implemented offline and through online platforms as well including Android and
iPhone apps named Starbucks Cup Magic based on the augmented reality. Using this app, the
users have the opportunity to animate their cups and this strategy helped in attaining digital
innovation. As per the recent modification in this strategy, the red colour was transformed into
the green colour that promotes diversity at the workplace along with the co-creation with
customers (Harrington, Ottenbacher, & Fauser, 2017). This has helped in gaining a wide number
of customers since this strategy involves the opportunity for the personalization of the customer
experience. However, the main drawback of this strategy implies that the strategy is
implemented only at the time of Christmas and not the whole year. Although, it cannot be denied
that the strategy possesses a high success level even after having the characteristic of one-time
implementation within a year.
One of the key contests is conducted by Starbucks where the customers are required for
becoming a member. The required membership implies the registration in Starbucks Rewards
Loyalty Program and the prize for this contest is free Starbucks food and drinks for a lifetime.
With such a contest, it was realized that more than one million customers signed up from the
Starbucks mobile app. Another contest was a white cup contest involving the doodles or
drawings from customers and the winner would be printed with the limited edition. This contest
has been continued to gain success and high popularity that these cups are available at the stores
of Starbucks for purchasing. The designs are printed on reusable cups which are also considered
as a smart initiative from the point of view of sustainability (Berman, 2016). The winner for the
cup designing not only gets its design printed on limited edition but also receives a gift card and
large cash amount. In the initial phase, the organization received more than 4000 photo entries
within just three weeks. This shows the success of the organization’s contests being conducted as
an integral part of the marketing strategy.
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The online or digital marketing communication strategies of Starbucks involve social media
marketing, app and online perks given to the customers at the stores or cafes of Starbucks. The
key warriors of the company’s social media marketing strategy are basically Facebook,
Instagram, and Twitter. This strategy has assisted the company to the large extent in enhancing
the global brand presence on online platforms. The company is actively engaged in social media
that helps in the wide promotion and advertising of the brand. On Facebook, the growth of
Starbucks fan base has been reached to the number of 27,600,000 and on Twitter; Starbucks has
achieved more than 2 million followers. This shows the success factor of the social media
strategy of the company (Godey, et. al., 2016). However, it is a time-consuming strategy and can
attract negative publicity easily and quickly. The company has been investing a huge amount
with an aim of attaining effective outcomes that can transform into financial sources.
As per the analysis, it can be seen that the mobile app of Starbucks is considered as the most
utilized app for loyalty rewards on regular basis. It would not be wrong to consider that the
mobile app of Starbucks has assisted the company in attaining a competitive position in the
global industry. The customer preference has been increased for Starbucks due to the
convenience provided to the customers through this app. The success factors of the Starbucks
app imply in the design, loyalty program, integration, and other facilities. The app design is user-
friendly, involves high engagement of loyalty program, integration with other services as well as
the platforms of Starbucks and availability of mobile ordering and payment. This has helped the
company in developing sound digital relationships with the customers (Hofacker, et. al., 2016).
A significant part of sales belongs to the revenue through these digital relationships as well as the
Rewards programs of Starbucks. Till now, the company has made a huge investment for the
enhancement of customer experience through the mobile app.
Starbucks has been providing different perks to the customers at its stores and cafes such as free
Wi-Fi. The customers are getting attracted to this perk and it also enhances the customer
experience at Starbucks. The company is making efforts for enhancing the customer experience
through online and offline platforms as well. The stores and cafes of Starbucks have been
featured with the common looks and designing that helped in brand recognition by the
customers.
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