Explain how the company has been successful in increasing its brand recognition in order to improving its customer relationship management.

Case Study

Starbucks: Managing Customer Relationships One Cup at a Time

Customer Values

One of the most successful companies around, Starbucks, with a presence in 65 different countries, wants to provide consumers with more than just a cup of coffee – it is looking for a personal relationship with them. Starbucks has been on the cutting edge of incorporating digital marketing, social media and the latest technology in terms of improving its customer relationship management. By successfully incorporating these key success factors into its operations, the company has also increased its brand profile and has generated higher sales. As a sign of its commitment to strengthening the relationship that it has with its customers, Starbucks has reportedly shifted its entire media spending to digital and social media marketing.

Starbucks believes that this new technology can really help it to maintain contact with customers in order to understand their wants and needs, and in turn, Starbucks can improve customer service levels and a customer’s experience with the brand. All of which, it is hoped, will build a strong customer relationship. One example of this is the ‘MyStarbucksIdea.com’ site where over 500,000 people have left ideas, thoughts and opinions on how Starbucks can improve its business. The site ranks the ideas and informs consumers which ideas are being considered and recommended as a key decision making.

Digital marketing and social media have also changed the marketing game in terms of how companies manage the relationships they have with the people who interact with their products and brands. Forcing yourself onto customers in the digital age does not work. Today a company needs to be ‘invited’ by a consumer and it is the consumer that decides to what degree they want to be engaged by a brand or product. Starbucks has been effective in engaging with its consumers and increasing customer relationship management; it has a huge social media presence with a community of over 50 million people on Facebook, YouTube, Twitter, Google+ and Instagram and asks ‘permission’ to interact with them through competitions, promotions, payment app, and real-time ‘ads’. One criticism of Starbucks is that it does not update the content of its social media platforms quickly enough.

“Starbucks’ aspiration is to become resource positive,” said Michael Kobori, chief sustainability officer at Starbucks. “This aspiration, coupled with the insight that our customers are looking for more plant-based choices, has inspired the development of exciting and delicious plant-based beverages and food. Our customers continue to look for new ways to enjoy plant-based options at Starbucks and customize their Starbucks moment, and we are delighted to introduce these new menu items to our customers over the coming years.” Starbucks would have remained a very small niche player or vanished from the market had it not invested in consumer education.

Answer all the Questions and with suggested answers:

1. Identify some of the ways that Starbucks ‘engages’ its consumers in customer relationships? (1 mark)
2. How can an understanding of digital marketing and social media strategies helped companies gain a competitive advantage and choose a right decision when it comes to customer relationship management? (1 mark)
3. Analyze the methods used by Starbucks and explain how the company has been successful in increasing its brand recognition in order to improving its customer relationship management. (1.5 marks)
4. “Successfully incorporating the key factors into its operations, the increased brand profile has generated higher sales”. This strategic decision making will accelerate to bring higher growth in Starbucks. Comment? (1. mark)
5. Give suggestions regarding the developing innovative strategies for keeping the sustainable competency of Starbucks. ? (1 mark)
6. Write down some of the latest and effective emerging trends of Starbucks business. ? (1. 5 marks)

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