Starbucks: Integrated Marketing Communication

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Starbucks: Integrated Marketing Communication

Introduction

Starbucks Corporation, an American company founded in 1971 in Seattle, WA, is a premier roaster, marketer and retailer of specialty coffee around world. Starbucks has about 182,000 employees across 19,767 company operated & licensed stores in 62 countries.

Starbucks was established in 1971 by three local businessmen to sell high quality whole beans coffee. In 1981 when Howard Schultz visited the store, he plans to build a strong company and expand high quality coffee business with the name of Starbucks. Starbucks air is to provide high quality of coffee to its consumer and aim to achieve product innovation, retail expansion and provide service quality for long term.

Starbucks open its first coffee store in Seattle, Washington. In 1990 Starbucks expand its headquarters in Seattle and also build a new roasting plant. In 1990s Starbucks opens 60 retails shops in United Kingdom. At the end of 2000s Starbucks total branches was 3500.

Starbucks in India

TATA Starbucks Private Limited, formerly known as Tata Starbucks Limited, is a 50:50 joint venture company, owned by Tata Consumer Products and Starbucks Corporation, that owns and operates Starbucks outlets in India. The outlets are branded Starbucks ‘A Tata Alliance’. In January 2011, Starbucks Corporation and Tata Coffee announced plans to begin opening Starbucks locations in India.

Different in India

Apart from the usual products offered internationally, Starbucks in India has some Indian-style product offerings such as Tandoori Paneer Roll, Chocolate Rossomalai Mousse, Malai Chom Chom Tiramisu, Elaichi Mewa Croissant, Chicken Kathi Roll and Murg Tikka Panini to suit Indian customers. All espressos sold in Indian outlets are made from Indian roasted coffees supplied by Tata Coffee. Starbucks also sells Himalayan bottled mineral water. Free Wi-Fi is available at all Starbucks stores.

Tata Starbucks launched the Starbucks Delivers program in early 2019. The service offers home delivery from Starbucks outlets through a partnership with Swiggy. The service was first launched in Mumbai, with plans to roll it out to other cities.

As of July 2020, Starbucks operates 174 outlets in 10 cities of India. The latest store came up at Zirakpur Punjab which is also the first drive through store of India.

The role of IMC in Starbucks

The philosophy of marketing is changing and so are the instruments and approaches. It has been interactive; it has been powered by users, and has seen a massive change to social media. What’s now captured the marketers’ attention is Integrated Marketing Communications (IMC). It is a marketing technique that incorporates all of a company’s promotional mix, such as advertisement, social media promotion, sales promotion, direct marketing etc. to communicate and inform about a product or brand.

IMC is used by advertisers to provide an uninterrupted brand experience by incorporating contact across all open media platforms. As part of a effective integrated marketing plan, IMC integrates public relations, advertisement, internet , social media, and so on; as well as numerous other communication components into one single organisation, all transmitting the same message. It is a practical transversal mechanism to execute all kinds of vital tasks for the company such as marketing, operational, financial and production.

Starbucks adopted the integrated and multi-channel marketing strategies idea way in advance of other brands. Starbucks’ power base in IMC is twofold: strong branding and strong appreciation of the customers. Using famous platforms to encourage and connect has been on the cutting edge.

Things that makes Starbucks awesome is branding and creating meaningful content.

Consistent branding: Starbucks stores are recognisable in appearance and can be recognised from afar. Starbucks stores are present at nearly every airport which gets a strong footfall. Corporations are one of the large-scale target markets that Starbucks caters to. It has branded itself as a luxury coffee shop with good ambience, which also acts as a corporate meeting spot.
Website content: Starbucks provides its customers with Website content designed to meet their target audience. Customers can go online to check their benefits, locate local stores and be a part of their latest campaign. Videos are used for message delivery and storey telling.
Integrated Content: Starbucks communicates by email to its registered customers. These messages are well organised, visually focused and provide useful details about Starbucks products. It retains more emphasis on education and awareness than promotion.
Mobile Experience: One of the strongest tools in their marketing arsenal is the Starbucks app. Upon installing the app, one can use the phone to pay for items, reload funds to a bank, and locate shops. Starbucks leads the way in mobile experience, which makes total sense when considering their product.
Consumer Engagement: If any brand needs customer engagement lessons, all they have to do is go to Starbucks. Whether providing free coffee to random customers, or giving them presents at festivals, they’ve done everything. Starbucks recently gave their Venti (biggest size) cup coffees for Rs 100 to mark the opening of its 100th store in its relentless effort to engage customers.

The true strength of Starbucks’ effective marketing relations campaign is their specific content, incorporated seamlessly through the multiple platforms.

Role of the Ad agency in Starbucks

Starbucks works with three agencies primarily in India: JWT (for creative and digital), Edelman (PR), and Showtime (for event launches in Mumbai and Delhi). Apart from that, there’s a lot of work going on in house at Starbucks in Seattle (HQ). We have strong knowledge and expertise teams to work in global markets.

Starbucks’ goal in partnership with these ad agencies is to be highly trained professionals, have a wide range of experience and have a strong market perspective.

For Starbucks, Digital is a very relevant and essential tool, as it is a main pillar that we use to connect with our clients. We have tried to do things other than social media contact and Facebook and Twitter that are innovative and imaginative for the new media platforms. They also developed an app to launch our first Delhi sales outlet that customers could share with their friends and family, as well as share their views about Starbucks as a passion for brand and coffee.

Role of the consumer behaviour towards Starbucks

Members of the loyalty have earned a ‘star’ for every visit to a Starbucks location since. In April, Starbucks announced a shift from a visit-based model to a $-spent model, and is now awarding 2 stars for every dollar spent (125 stars per reward). But many Starbucks customers are still dissatisfied with the service ‘s latest setup — Maybe because the new model rewards people who spend more per transaction, instead of rewarding people who visit Starbucks more frequently.

People have taken to social media to express their dissatisfaction with the brand, saying that this move back to Starbucks makes them extremely reluctant. According to Starbuck’s, the old version of the loyalty programme has led to a number of Starbucks clients doing ‘transaction splitting’ If more bonus points are won, each item in the transaction will need to be paid separately, which has contributed to slower transactions and dissatisfaction for other customers.

This latest loyalty programme, Starbucks said, simplifies the process and makes it easier for consumers to do so. If real then it makes sense not to have a ‘reward hack’ for the most loyal clients in order to optimise their rewards. But the distinction may be immaterial to most customers. Starbucks may have caught lightning in a bottle, or they may have done a better job of aligning the rewards with the desired behaviour and adapting them to the optimal effect, and changing the reward package to do so again.

Brands with ambitions similar to Starbucks could see consumer loyalty value improvements by delivering more customer-focused promotions, if they were willing to play the longer game. Consider heading towards rewarding at the time of sale for add-on purchases, ‘Double incentives if you buy a pastry with your coffee!

Role of Source, Message & Channel of Starbucks

The communication strategy of Starbucks is implemented by ads, ads, launch deals, media use, product promotion, social support, public relations, and expenses. These are the secret to getting closer to the customers. These are the basis for pulling customers to make a final decision on buying the product. The contact process model is ‘the mechanism of knowledge exchange and transfer to exchanging information and conveying. The model of the communication mechanism consists of encoded, distributed, decoded, and eventually received. There is background noise in the advancement of the communication process model that can undermine the message and likely discourage the objectives together.

The sender of the message, in this case Starbucks is looking through the feedback loop for a response from the target. The process of encoding involves translating an idea into a figurative image, using words, pictures and facts. Starbucks is a brand-oriented company. Hence this communication process is helpful. The next step of the model for the communication process is a transition. Using various avenues for Starbucks to convey the message would include social media, the internet, emails and mobile apps. Starbucks has substantial virtual communication. To reach the maximum number of targeted recipients and a minimum number of non-target receivers; companies must select the most effective avenue that best fulfils their purpose. The third and fourth step outlined in the communication process model is decoding and the receiver. The decoding process occurs when the receiver interprets the significance of the message symbols as encoded by the sender. The intended receiver is the person who is the communication ‘s target. One challenge for any message sender is how the receiver interprets the message.

Promotional Budget

Starbucks is strongly committed to a positive image in the community according to the Corporate Social Responsibility. Through cultural and environmental events Starbucks has transparent relationships with consumers and the media.

Their stores are friendly to the community, with a focus on recycling and waste reduction. They build goodwill among communities they operate in Strong Social Responsibility Initiatives undertaken

Starbucks spent 245.7 million US dollars on advertising in its fiscal year ending in September 2019. In the coffee chain, which spent nearly 15 million dollars more on promoting its products and services, there is a decline in global advertising investments compared to the previous year. On a global scale, the Starbucks brand was worth 32.42 billion U.S. dollars in 2018.

Starbucks Creative strategies

Starbucks embrace various types of strategy to build their branding in the market. Starbucks has numerous capabilities that likes market leadership, and its outlets, as customers mean their locations, which means that it is the place where customers can relax from work or home and manage their supply chain. According to Porter (1998) there are three types of basic strategies a company can use to establish itself like cost leadership, differentiation itself from the others and focus on the market. Cost leadership has the strategy of develop a low-cost product but it has a high quality and also reduces operational cost. Differentiation means a strategy which is unique and self-created strategy.

Starbucks’ first outside American store was joint venture with a local company Sazaby Inc. to start its business in Tokyo in 1996. The pace of international expansion significantly increased after Starbucks established the business. Starbucks expanded its business in the UK in 1998 with more than 60 busy town hall locations and opened stores in Taiwan, New Zealand, Malaysia and Taiwan the same year.

Starbucks opened their first store in China (Beijing), South Korea, Lebanon and Kuwait in 1999, and seven markets in Hong Kong, Shanghai, Qatar, Saudi Arabia, Dubai, Australia and Bahrain in the next year. Due to the position of its coffee shops, Starbucks is using the approach which is real estate management approach. Starbucks prohibited smoking in order to try to keep the coffee taste safe in the shops, and asked staff to refresh from drying perfumes. Prepared foods were kept sealed, so that customers would smell coffee rather than other foods. Starbucks is a community-oriented business that launches new strategies in various regions of the USA, such as commuter mugs and T-shirts, in line with the culture of each city. (like peach shape coffee mugs for Atlanta State, Paul Revere picture for Boston State and the Statue of Liberty for New York city).