The Impact of Digital Marketing on Starbucks Brand Loyalty

This report provides a comprehensive analysis of Starbucks' digital marketing strategies and their impact on brand loyalty. It explores how Starbucks utilizes social media platforms like Facebook, Twitter, Instagram, and LinkedIn to increase brand recognition, improve customer engagement, and drive sales. The report delves into Starbucks' social media audit, including follower counts, engagement rates, and conversion rates across different platforms. It also examines Starbucks' digital marketing strategy, including paid, owned, and earned media approaches. The report highlights the advantages of social media marketing, such as increased brand recognition, improved brand loyalty, and decreased marketing costs. Through detailed data analysis and case studies, the report demonstrates how Starbucks has successfully built a loyal customer base in the competitive coffee market. The report also provides insights into Starbucks' social media policy and brand positioning, offering a valuable resource for understanding the company's marketing successes.

Running head: Starbucks
Starbucks
The impact of brand awareness on consumers brand loyalty in the age of digital
marketing and social media

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Contents
Executive Summary.....................................................................................................................................3
Introduction.................................................................................................................................................4
Research problem........................................................................................................................................5
Literature review.........................................................................................................................................6
Advantages of social media marketing....................................................................................................6
Increased brand recognition.................................................................................................................6
Improved brand loyalty........................................................................................................................6
More opportunities to convert..............................................................................................................7
Higher brand authority.........................................................................................................................7
Decreased marketing costs..................................................................................................................8
Improved customer insights.................................................................................................................8
Richer customer experience.................................................................................................................8
Data Analysis............................................................................................................................................10
Starbucks’ Social Media Audit..............................................................................................................10
Facebook...........................................................................................................................................11
Twitter...............................................................................................................................................12
Instagram and Pinterest......................................................................................................................13
Strategies:..................................................................................................................................................13
Paid....................................................................................................................................................13

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Owned...............................................................................................................................................14
Earned................................................................................................................................................14
Starbucks’ Social Media Policy.................................................................................................................14
Brand positioning:.....................................................................................................................................15
Adjectives that define Starbucks:..............................................................................................................16
Digital Marketing Strategy........................................................................................................................17
Conclusion.................................................................................................................................................18
References.................................................................................................................................................19

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Executive Summary
Starbucks is a leading brand established across the world. Like every other brand today,
Starbucks has also made efficient use of Digital marketing and social media marketing. Unlike
other brands, Starbucks has one of the highest brand loyalty. This report throws light on how
Starbucks has used digital marketing and social media marketing to create this high level of
loyalty.

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Introduction
Starbucks was founded in 1971 and has been a success story ever since its days of inception. It is
better known as coffee joint where people can ‘expect more than coffee’ (Liu, 2015). Every time
someone visits a Starbucks in the area, their purpose is more than having coffee. Friends meet
each other at Starbucks to meet up with each other. Colleagues get together at Starbucks to
discuss work and it is not unusual to see clients closing deals over a cup of coffee at this joint
(Mitzi, 2015).
In this era of globalization, cut throat competition and severe strategic positioning, customer
loyalty towards a brand plays an important role in deciding the fate of the brand (Chua, 2013).
Many companies invest heavily in their marketing, PR and customer service strategies to ensure
that their customers are loyal and continue to come back to a brand. This customer loyalty not
only helps in generating increased revenues for the brand but also helps in establishing brand’s
goodwill in the market and defining a positive image in the minds of its consumers (Susanty,
2015).
Social media marketing is one of the most innovative and in trend tools used by companies to
market their products to its consumers (Tuten, 2014). It has been noted that every big and small
brand understands the importance and presence of social media in people’s lives. Gone are the
days when Facebook, Twitter, Instagram or Pinterest were used only as a medium to connect
with friends across the world. Today, they provide for a platform to market products of leading
brands and help reach out to many million customers (Armstrong, 2015).
Brands have been hiring consultants to reach out to a larger audience in this sector of social
media marketing. It is considered the next big thing in the marketing world (Ashley, 2015). As
per research, 92% of the marketers agreed that social media was important for their business
while 80% of them indicated that marketing through social media has increased traffic on their
websites
There are numerous advantages to this particular style of marketing (Miller, 2013). How
Starbucks has utilized social media marketing and turned the game around is detailed in this
report. Currently, Starbucks has one of the most loyal customer base in the coffee culture leaving

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behind Café coffee day, Dunkin Donuts, McDonalds’ McCafe, Costa Coffee, Nescafe and small
retail coffee outlets which are locally well known (Scott, 2015).
Research problem
“To understand how Starbucks has made use of social media marketing and digital marketing to
increase brand loyalty among customers”

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Literature review
This section of the review throws light on the advantages of social media. Various articles from
renowned journals have been analyzed to conclude the benefits of social media and digital
marketing. Numerous businesses are taking advantage of these strategies and various case
studies have been written on the same. Few of those journals and online sources have been
compiled to understand how Starbucks has enhanced its customer loyalty.
Advantages of social media marketing
Social media has provided for an effective platform for marketers to help reach out to a large
number of consumers. This has helped companies establish their brand presence across
boundaries of geography or demography (Cader, 2013). Everyone is a social media user and this
is the exact opportunity used by marketers to enhance the presence of their products. Social
media offers various advantages as listed below:
Increased brand recognition
Brand recognition simply refers to the amount of people that recognize your brand when they see
an outlet, a logo or an advertisement (Hult, 2017). This recognition plays an important role
because it helps increasing TOMA (top of mind awareness) score for brands. Once that has been
effective, the brand becomes easier and accessible for new customers and familiar and
recognizable for existing customers (Huang, 2014).
Social media ads are helping brands increase this brand recognition by ensuring that these ads
reach a much wider audience as compared to newspaper or television. The reach of social media
is much higher and efficient usage of this tool can help increase brand awareness (Hutter, 2013).
Improved brand loyalty
Brand loyalty throws light on a major objective of brands which is repeated sales from the same
customers. This largely depends on the service offered by the firm, their pricing strategies and
their geographic positioning as compared to its competitors (Rubio, 2014). Brand loyalty is
essential as it helps improve brand image and leads to increased revenues for the firm.

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Social media marketing ensures that the brand is right in the face of the consumers at frequent
intervals. Today Starbucks has a huge following on all of its social media platforms. This makes
sure that all of these followers get regular updates from Starbucks about their upcoming offers,
latest trends, new products and new stores (Barreda, 2015). This increases brand awareness
among customers and leads to their repeated purchases and visits to Starbucks. Hence increasing
their brand loyalty.
More opportunities to convert
Every time a brand posts a status on Facebook, tweets an update on twitter or even uploads a
picture on Instagram or Pinterest, it gives the brand an opportunity to convert more customers.
Not every interaction on social media leads to a converted client but higher number of
interactions are sure to lead to an increased customer conversions (Malik, 2013). Social media
provides Starbucks with an opportunity to interact with more members of the target market as
compared to television, e-mails or newspaper. The many million followers of Starbucks see these
updates. If they have not followed the brand, and their friend comments on a Starbucks post, they
would still see it on their news feed. Hence every comment, every like and every follower that
Starbucks gains, is an opportunity to covert more customers (Pringle, 2001).
Higher brand authority
The frequency with which people visit social media platforms and websites are much higher as
compared to television and newspaper. Most people read newspaper once a day. The hours
people spend on binge watching shows has also considerably reduced owing to Netflix and
hotstar. That is both these mediums have becomes rather obsolete specifically for Starbucks
target market (Sasmita, 2015).
This is why social media marketing provides the brand with an opportunity to fix the issues if
there are any. It also involves a quicker response to customer queries and complaints. Starbucks
decides which ad to post, how frequently should that ad be seen, when to rework on the ad and
the exact demography people that should be targeted by that particular ad. This provides the
brand with a higher authority to position their products and have a stronger control over the
brand (O’Connor, 2017). The high number of opportunities to interact with their customers is

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one of the biggest advantages of social media marketing leading to increased authority of
marketers on their brand image.
Decreased marketing costs
The practice of increased and more frequent visits to social media platforms by individuals has
provided marketers with an opportunity to display their products to customers more frequently at
a lesser cost. Many social media platforms are now even a source of earning for the brand
(Tiago, 2014). A television ad can cost a firm millions of dollars depending on the time and
frequency of its broadcast, but a single interaction on twitter can gain more followers and
increase visibility at almost no cost.
84% of the marketers believed that as much as 6 hours of efforts into the social media marketing
was good enough as an investment to generate higher traffic. Which effectively concludes that an
hour a day for a week spent on social media can increase traffic to the website and in turn
generate revenue (Schivinski, 2016). Even paid marketing on Facebook is much less expensive
and hence leads to decreased marketing costs.
Improved customer insights
The advancement of digital marketing has now become a two way street. Now even the brands
can know their customers better rather than just the other way round. Customer profiling has now
become a latest trend which guides brands to market and position their products better.
Today, Starbucks has the ability to target people from a specific age group, geography or even
social and cultural interests. The brand can know the other pages followed by their customers,
the places they are visiting and the posts that they share. This helps Starbucks in knowing the
exact needs and wants of their target market and hence improves customer service in the longer
run (Strachan, 2015).
Richer customer experience
Unlike a one way advertisement, social media has become a two way communication between
customers and brands. Any issue or problem addressed on social media gets immediate attention
and hence the firms work intensively to resolve it. Similarly, if the customer uses social media as

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a way to compliment a brand, the firm can immediately thank the customer and provide for a
more personal experience. All these are opportunities for firms to showcase their customer
service abilities to the general public. Similarly, for the customers these platforms are way to
connect with the core values of the brand and avail customized as well as personalized service.

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Data Analysis
Starbucks’ Social Media Audit
Social Network Follower count Avg. weekly activity Avg. engagement rate
Facebook 37 million current
likes on the page
8 posts per week 21%
Twitter 11.9 million
followers currently
20 posts per week 30%
Instagram 15.5 million
followers currently
10 posts per week 35%
LinkedIn 0.8 million followers
currently
3 posts per week 5%
Social Network Volume % of overall traffic Conversion rate
Facebook 35000 unique visits
per week(Schoultz,
2013)
41% 20%
Twitter 20000 unique visits
per week
30% 5%

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Instagram 45000 unique visits
per week
58% 12%
LinkedIn 1000 unique visits
per week
5% 1%
Facebook
Just like every other leading brand, Starbucks has effectively utilized the platform of Facebook
as a way to generate sales for their firm (Leung, 2015). Besides a common Facebook page,
Starbucks in also actively involved in promoting locally by creating different pages like
Starbucks offers, Starbucks Frappuccino, Starbucks UAE, Starbucks Australia, Starbucks Middle
East and more on similar lines of work. This provides for a local connect with the customer in
different walks of life.
Starbucks has used Facebook as a promotional tool in the most efficient manner. Few of the
successful Starbucks campaigns are given as below:
1. Blonde Roast: When Starbucks introduced its new product blonde roast, it was promoted
through Facebook media and provided for customers to gift a free cup of coffee to their
loved ones. This ensured that people became aware about the product, tried the new
product and gifted E-cards to their friends who in turn became aware about the product.
2. Pumpkin Latte: When Starbucks was to introduce the new pumpkin latte, it fed on
people’s curiosity and excitement of experiencing a new product. Starbucks started this
Facebook generated app where users collected points and Starbucks offered that the city
with most points will have the pumpkin latte a week before the rest of the world.
3. #TreatReceipt: This was another remarkable advantage that Starbucks took of the entire
hashtag efficacy. This offered the customers who had already purchased a coffee in the
morning to avail a free coffee by noon. All they had to do was tag the Receipt using
Hashtag #TreatReceipt.