online marketing analysis report

Online Marketing Analysis Report

Fall 2015 – BUS135Business Marketing & The Internet

Ashlee Pitigliano

Starbucks Coffee Companywww.starbucks.com

Pitigliano, Ashlee – Fall 2015 – BUS135 – Online Marketing Analysis

Situation Analysis – The Company and Customers

Company Analysis:

As an avid coffee connoisseur, I chose to analyze and critique Starbucks Coffee

Company. Starbucks began in 1971 when English teacher Jerry Baldwin, history teacher

Zev Siegl, and writer Gordon Bowker opened the first brick and mortar store in Seattle,

Washington ("Company Information," 2015). When Howard Schultz, now CEO, joined

Starbucks in 1982 as Director of Retail Operations and Marketing, the company began to

take off. Forty-four years later, Starbucks employs over 182,000 people and operates

22,519 stores in sixty-seven countries ("Starbucks Company Profile," 2015). Starbucks

went public on June 26, 1992 at a price of $17 per share and closed trading that first day

at $21.50 per share. Starbucks Corporation's common stock is listed on NASDAQ under

the trading symbol SBUX ("Starbucks Company Profile," 2015).

While Starbucks began as a simple coffee shop, they now offer a range of

exceptional products that customers can enjoy in their stores, at home, and on the go. The

focus of the company is on their whole bean coffee. They offer more than thirty blends as

well as offering single-origin premium coffees in select stores. Starbucks also offers

brewed coffee, hot and iced espresso beverages, Frappuccino coffee and non-coffee

blended beverages, Starbucks Refreshers beverages, smoothies and teas. Customers may

also purchase coffee and tea brewing equipment, Verismo System by Starbucks, mugs

and accessories, fresh food, packaged goods, books and gifts at any of their company

operated locations. All of these products are held to the highest quality standards, a

concept that Starbucks Prides itself on.

1


Customer Analysis:

Starbucks targets two very specific demographic and does so in extremely

strategic ways. Their primary target market is men and women aged 25 to 40 (O'Farell,

2015). They account for 49% of its total business (O'Farell, 2015). Starbucks appeals to

this consumer age group through earthy, contemporary design that is consistent in each

store. Starbucks places much of its time and effort into keeping its products and locations

up-to-date and in style. Customers tend to be urbanites with relatively high income,

professional careers and a focus on social welfare. This target audience grows at a rate of

3 percent annually (O'Farell, 2015).

In addition to targeting adults, young adults aged 18 to 24 make up 40% of

Starbucks’ sales (O'Farell, 2015). Starbucks creates a welcoming and soft environment,

encouraging college students to use their facilities to hang out, meet people, study, and

write papers. They appeal to their young adult consumers by staying up to date with

technology and maintaining a trendy atmosphere. They encourage consumers to post

pictures of themselves with their drinks to Instagram, Twitter, and Facebook using

Starbucks hashtags. The young adult audience grows 4.6 percent each year, and is

projected to become their main consumer demographic (O'Farell, 2015).

Sample Customer Personas:

Jared is a 21 year old Caucasian working father and husband who lives in

Parkland, Washington. He is an Emerald Ridge High School graduate who recently

earned a 4.0 GPA at the University is Washington. He graduated college with a

degree in business management. Jared stops at Starbucks each morning with his

coworkers on his way to his management position at Boeing. Jared enjoys going to

2


Starbucks because he connects well with his baristas, who know him by name and

have memorized his drink. He loves talking politics and religion with his favorite

barista, Ashlee. Jared often buys Starbucks mugs and tumblers for his wife who

collects them.

Heather is a 33 year old Hispanic working mother and wife who lives in Puyallup,

Washington. She graduated from Rodgers High School and earned a degree in fashion

merchandising from Arizona State University. She works at Kohl’s department store as a

merchandiser and typically has one to two cups of coffee per day. She is a very outgoing

and energized person naturally, so she prefers a single decaf shot, so as not to be too

hyped up. She has a very low caffeine tolerance. Heather likes to stop at Starbucks every

day before dropping her kids off at school, and then again on her way to work around 3

PM. Heather likes to meet up with her sister Diane a few times a week to catch up over a

cup of coffee. She is a busy woman who needs a quick and convenient place to caffeinate

herself.

A study done by Pew Internet Research shows that 97% of young adults aged 18-

29 use the Internet. The same study shows that 94% of adults aged 30-49 use the internet

(Anderson & Perrin, 2015). Another study shows that young adults and adults are not so

different in the way they are using the internet. This study shows that over the course of

one week, 91% of young adults and 77% of adults used the Internet for social

networking. The number of young adults watching videos is 76% while for adults it is

46%. The reasoning behind their usage ranged from avoiding being bored (93% of young

adults, 82% of adults), to avoiding others around them (47% of young adults, 32% of

adults), and finding a good way to get somewhere (57% of young adults, 37% of adults)

3


(Smith, 2015). While these findings do not show a direct connection to Starbucks, the

company has infiltrated social media in such a large way that it is safe to assume their

target customers are being exposed to their products while using the Internet for social

networking.

Competitor Benchmarking:

Starbucks has a wide variety of competitors. Smaller espresso stands appear and

then disappear just as quickly, in part because they have not mastered the marketing

techniques that Starbucks has. There are a few competitors who are quickly approaching

the level that Starbucks is on: Peet’s, Dunkin’ Donuts, Seattle’s Best, Tully’s, and Tim

Horton’s are the biggest coffee chain competitors to date.

1. Peet’s – http://www.peets.com/

Peet’s online presence is very similar to Starbucks; in fact their website design is

almost exactly the same. This makes sense, as their founders come from the same

family. Peet’s is considered to be the father of Starbucks, and the only real

difference between the two is that Starbucks is based in Washington and Peet’s is

based in California, so they have the monopoly in each of their respective states.

Starbucks differentiates itself by constantly experimenting, innovating, and

expanding while Peet’s stays in its comfort zone.

2. Dunkin’ Donuts – https://www.dunkindonuts.com/

Dunkin’ Donuts’ website design is very elementary. They only offer twelve

different beverages, and I assume this is mostly because they provide so many

other products like donuts and sandwiches. Starbucks blows this competition out

of the water by website design, product quality, and product variety. You simply

4


cannot get a gourmet cup of coffee from Dunkin’ Donuts. Starbucks specializes in

traditional coffee, while it would appear that Dunkin’ Donuts has a hand in

everything, specializing in nothing.

3. Seattle’s Best – http://www.seattlesbest.com/

Seattle’s Best has a very simple web design. The graphics are very large and there

is a lot of unused white space. They only offer twenty-five drinks, and are

extremely limited on at home coffee. Starbucks tops them by having a large

variety of at home coffee as well as many different customizable drinks. As they

are a wholly owned subsidiary of Starbucks, I doubt they will ever rise above the

brand Starbucks has created.

4. Tully’s – http://www.tullyscoffeeshops.com/

Tully’s website looks very similar to Peet’s because they use the same color

scheme. While they offer a rewards program similar to Starbucks, their social

media presence is sparse. Starbucks floods their social media channels regularly

to keep customers engaged. As far as I can see, they only have six stores in

Washington, giving Starbucks a huge advantage. Tully’s has been known to open

stores in close proximity to Starbucks, usually resulting in store closures as they

cannot compete.

5. Tim Horton’s – http://www.timhortons.com/

Tim Horton’s does a great job with the services and products they provide,

however in looking at their website it is clear they do not have a firm grasp on

what coffee truly is. Starbucks educated their partners on the basics of building

beverages and what those beverages mean. For example, Tim Horton’s promotes

5


a ‘Mocha Latte’ which is an impossible drink they are two completely different

things. Anyone who knows anything about coffee would know this, and it is a big

turn off for a customer who wants an actual mocha in the traditional sense.

Starbucks differentiates itself by sticking to traditional coffee values.

SWOT Analysis:

A SWOT analysis is “a useful technique for understanding your Strengths and

Weaknesses, and for identifying both the Opportunities open to you and the Threats you

face” ("SWOT Analysis: Discover New Opportunities, Manage and Eliminate Threats,"

2015). In short, it is a way for a company to continually use a system of checks and

balances to make sure they stay ahead of the game and the business thrives. The SWOT

analysis I created for Starbucks is shown in the following diagram:

6


Online Strategies – The Web Site and Social Media

Company Branding and Positioning:

Starbucks specializes in gourmet beverages. They train each barista with precision

and have implemented a system called Playbook to ensure that no matter what location a

customer visits, they will get exactly what they want. This consistency aligns with their

objective as a company "to inspire and nurture the human spirit – one person, one

cup and one neighborhood at a time." Their products are all held to the highest quality

standards imaginable and include hand-crafted beverages, whole bean coffees, fresh

packaged food, pastries, syrups and sauces, equipment, and drinkware. Of these products,

the beverages, food and drinkware are the most prominent in the customer’s eye. Of all

the companies I have seen, none compare in regards to how well Starbucks customers are

treated. A customer need only ask, and they shall receive (within reason). Customers are

invited to take surveys, encouraged to hold meetings on their premises, and treated as if

they are family. Starbucks endeavors to create a “third place” for its customers, where

they can relax, socialize, study, and simply enjoy themselves.

The Starbucks personality and culture is genuine, kind, knowledgeable,

welcoming, and inviting. They give out green apron cards to recognize baristas who show

each of these characteristics, and upon receiving five of the same card, they receive an

award. They are unique because of the effort they put into making the world a better

place, starting with their employees, continuing with customers, and extending all the

way to the farmers who grow their coffee beans. They remain focused on humanity as a

whole, and strive to see the world through a lens that is unbiased and loving. Starbucks

does not use taglines or slogans; they only use their mission statement and company

7


vision. Printed on the inside of every apron given to employees is “We create inspired

moments in each customers day” to serve as a reminder that every time an employee puts

their green apron on, their goal is to remain customer focused. Their core values are as

follows:

Starbucks supports their core values by consistently creating warm, welcoming

environments that are designed the same way in every store. They take stances on

important world issues, such as same-sex marriage, gun rights, and military issues. They

remain transparent, never hiding behind their brand or their image and continually

supporting what they believe to be ethical. They strive for ethical souring and will only

buy coffee from fair-trade markets. Currently, they are running a campaign in which they

plant one tree for every bag of coffee purchased at their stores. They also support the

African communities that they purchase beans from by promoting STARBUCKS(RED),

a Global Fund to help finance HIV/AIDS prevention, education and treatment programs

("Starbucks," 2015). They are constantly working to minimize their environmental

8

Figure 1. Starbucks Values


footprint by using recycling programs, conversing water and energy, and helping coffee

farmers dull the impact of climate change on their farms ("Environment," 2015).

Website Analysis:

Starbucks has a greatly in-depth website that clearly was created with the

consumer in mind. The usability of the site is amazing, flowing well throughout the site.

The Starbucks logo remains at the top of the screen and when clicked, it will take you

back to the Starbucks home page. All navigation remains the same and is located in the

header on the right hand side. Visitors can easily find coffees, menus, drinkware, and

blogs. The only issue I found was that the site map is very wordy and not broken up well.

The Coffeehouse tab could use a bit of work, as it is sort of thrown together without any

direction or organization.

The language used on the site fits well with their customer demographic. IT is

sophisticated, but not so much that it is confusing. They use contrasting colors between

ads, large icons, and easily read fonts. There are drop down menus for each category and

subcategory, all well organized and separated. The tone of the web copy is soft, inviting,

and welcoming, staying consistent with the atmosphere they strive for in stores. There are

many features and benefits within the site, for example a pop up invitation to sign up for

a newsletter and receive 10% off the next purchase, and a tab for My Starbucks Rewards.

Bulleted information is present when necessary, and there are many examples of a call to

action, asking customers to join their rewards program or make a purchase in the online

Starbucks store using the search bar.

The visual clarity of the site is impeccable; Links are based on departments and

company commitments, while items pertaining directly to products or community events

9


that Starbucks supports are strategically places in the header and body. Their use of font

changes directs customers to their rewards program, Starbucks Reserve blends, and their

newest addition, Mobile Order & Pay. They use white space well on their products page,

listing pictures of the products with short descriptions that are organized and uncluttered.

I did not find many instances of flash animation that were distracting, as all the videos

and animation related to the message each page was conveying. The only flaw I noticed

was that the size of the drop down menu constantly hanged depending on what tab you

are on from the home page.

Their use of simple and brief URLs enhances the user experience, and all the links

on the page have title attributes attached. Each page has descriptive title tags at the top

that range from one to three words, keeping it simple for the user. Unfortunately, there is

no option to share anything from their website to social media, which is a huge

disadvantage. They could improve their search engine visibility by adding alt tags to their

photos, and using more chiclets.

The main navigation scheme works well. The header tabs use horizontal menus

and are labeled Coffee, Menu, Coffeehouse, Responsibility, Card, Shop, and 1912 Pike

Blog. There is a sitemap available at the footer of the page, although it is not very easy to

use because there is a lot of information packed into one page with little distinction

between categories and subcategories. Getting back to the main page from a subpage can

be difficult, you have to click on the logo to get home and sometimes that is not evident.

Overall the layout is warm, inviting, and cozy. The main colors are black, green

and white and stay consistent within subpages. The company logo is clearly a siren, and

the main content area stays true to what the customer is usually looking for. You can get

10


information on My Starbucks Rewards, whole bean coffee, Mobile Order & Pay, and

nutritional information. While they lack a description on the home page, the company is

big enough to where it would be unnecessary. There are copyright and trademark

symbols everywhere, as well as information on how to contact the company through e-

mail, phone, or in-store visits. There are no site errors and their expertise is highlighted

throughout the website. Their news section is updated frequently and their ‘About Us’

page is thorough. The credibility of the website is indisputable.

SEO Analysis:

I used Google’s keyword tool to look up the keyword Starbucks, where I found

that people have searched for this word 110,000 times in the last month just within the

state of Washington, and upwards of five million times in the last month globally. These

numbers peaked in December, which makes sense as that is the busiest time of year.

What did surprise me is that when I searched for ‘coffee’ using Google, Starbucks

was the fourth listing, below Anthem Coffee. The only way I could get Starbucks to

move up on the page was by changing my search from ‘All Results’ to ‘Verbatim’. I

would think that considering Starbucks is such a huge brand, they would have the number

one slot. After searching for ‘espresso’, something Starbucks specializes in, I found that

Starbucks was sixth on the search page! This blows my mind. Starbucks was the seventh

listing for ‘tumblers’, and for ‘mugs’, I did not see a listing at all. However I did see a

listing for Crate and Barrel, a company a peer in this class is using, as the number four

listing. I think that my company is doing a poor job with web optimization.

I was blown away that in the four searches, Starbucks was not number one in any

of them. Judging simply by the fact that Starbucks is a multi-million dollar company, I

11


think they could definitely benefit from working on their search engine terms. You can

see where the competition lies, as Anthem showed up above Starbucks on multiple

searches. They have some work to do. The following screenshots show the keywords I

searched for, their use, and an example of the search engine results when searching for

the keyword “coffee”.

12


Social Media:

Starbucks uses a multitude of devices to get their messages to the public:

Facebook, Twitter, Instagram, Pinterest, and Google+. I think the most creative and

effective thing they are doing is, in all reality, their presence on social media in general.

Whether good or bad, Starbucks is making sure that it engages and continually entices its

customers. I believe their most prominent channels are Facebook, Twitter, and Instagram,

where their presence online is constant and engaging. I believe they use them the most

because those are the channels that their target demographic uses most.

Starbucks is doing a great job using Facebook as a social media channel. This is

the home for most of their promotion information. You can find seasonal information as

well as links to join their MSR program. They post to their account two to three times a

month using aesthetically pleasing photos that incorporate their current promotional

drink. On the left hand side of the page are some widgets, one gives you locations of a

few Starbucks’ that are near you, and the other lists recent comments from customers

(usually complaints that have been addressed and rectified.) You can also see that in a lot

of the complaints in the comment section people are spreading rumors about what the

company supports (American soldiers for example), in which case Starbucks posts a short

reply with an embedded link where the customer can go to find more information on the

topic.

Starbucks also uses Twitter to reach and engage their customers. On a daily basis

Starbucks updates their followers with different promotions and special offers using

pictures, videos, and gifs. In order for Starbucks to circulate their posts and

advertisements, they often use hashtags to trend related topics. Starbucks also endorses

13


different corporations like Red Cross and will post encouraging tweets to support the Red

Cross’s efforts to raise funds for refugees in need. This is helpful because it appeals to

viewers that may be advocates for Red Cross, making it more likely that they support

Starbucks in the process. Starbucks also shares “secret” tips and tricks on how to

customize your beverage and food items.

Instagram is used to post photographs and videos that engage not only customers,

but baristas as well. This channel is used most to promote campaigns in their

communities to band together and help others by building homes, volunteering, donating,

or even making purchases for a cause. Often times they will post a series of time lapse

videos showing what it looks like when baristas to holiday promotional set ups and show

the changes that happen in the store. Other times they will post pictures of the newest

featured drinks, and on occasion they will create a post in support of something that

aligns with their core values, such as (STARBUCKS)RED or efforts to be a green

company. They also use Instagram to spread the word about upcoming events and

promotions, both in-store and in the community.

Pinterest makes shopping for Starbucks merchandise convenient and keeps

customers up to date with promotions and seasonal-offerings. This is also where the

Starbucks “secret menu” originated, bringing a whole new level of business because

people realized they could customize their drinks. All 216k of their Pinterest followers

have access to DIY ideas, brewing methods and what makes Starbucks coffee oh-so-

special. They also appeal to Starbucks employees with how-to’s such as latte art and

opportunities provided by the company. Pinterest; however, makes it difficult for

14


Starbucks to engage with customers. Pinners are able to comment on posts but it is

difficult to track this activity and reply to specific comments.

The Google+ page is used about three times a month to post pictures, mostly up

their cups and beverages. There is not much communication happening right now on the

page. Customers are educated about the company on the home page, and are also invited

to leave comments and make suggestions. I believe this page will grow if and when

Google+ grows in popularity.

Online Benefits/Objectives

The Five S’s are defined as a useful framework for developing effective e-

marketing objectives. The five S’s are Sell, Serve, Speak, Save, and Sizzle. Sell products

and services, serve customers, communicate with customers both existing and potential,

save and reduce cost, and build a brand identity. Starbucks has done a great job using this

tool to be successful.

Starbucks is maximizing its potential by utilizing each of these objectives. They

sell to their customers online by promoting products on social media platforms. The also

use these platforms to speak to their customers about not only their promotions, but

global issues and campaigns within their respective communities. One way they engage

their customer specifically is that with each new promotion, they post a secret unlock

code on their social media sites that allows customers to “unlock” a new promotional

beverage at their home store a week before its scheduled launch date. All of these things

combined help to build their image. They have become known for their green attributes,

the way they serve their customers and the respect and opportunities they give their

employees.

15


Other Online Strategies

Email Marketing:

On the Starbucks website, the first widget that pops up is an invitation for a

customer to sign up for their newsletter and receive 10% off their next purchase. This

makes is very easy to find as it is one of the first things they see upon entering the site.

The anti-spam policy is located at the bottom of each e-mail sent, and directs you to a

form to submit a request to not receive any further e-mails. The two most prominent calls

to action I see are the website posting links and videos for their My Starbucks Rewards

program absolutely everywhere, as well as their newly launched Mobile Order + Pay.

They specifically ask you to sign up and encourage the visitor to do so by offering

discounts and freebies. Newsletters are sent on a daily or weekly basis depending on the

kind of account you sign up for. MSR members receive e-mails more frequently because

they get deals delivered to their inbox.

Paid Advertising:

In looking for paid advertisements, I could not find a single website that had

Starbucks ads on it. Upon searching I did find a website that compiles a list of ads and

what sites they are displayed on, and in the last year Starbucks has only shown ads on

100 sites total. To date, I have only seen one Starbucks commercial on television. This is

because Starbucks believes that the best form of advertisement is to not advertise at all.

There are a few Starbucks commercials, but the company prefers to stray from traditional

advertising methods. “It really is about connecting with someone in a more intimate,

experiential way that we think will have longer lasting ability to build affinity than a 30-

second TV commercial or an ad,” says Senior Vice-President of Marketing at Starbucks

16


Anne Saunders ("Starbucks Commercials by Starbucks Starbucks," 2015). Following is a

screenshot of the website I found listing all 739 Starbucks ads in existence:

Conclusion

Starbucks is a multi-million dollar company that clearly has a handle on what

good marketing techniques look like. While there are some areas for improvement, I

believe they are doing exactly what they need to do in order to continue to grow and be

impactful in their communities. I believe that Starbucks does well with its website

17


organization because of its easy of usability and the clear amount of time and effort put

into making the visitors experience as seamless ad hassle free as possible. They also do

well with their use of social media platforms. They update Facebook, Instagram, and

Twitter on a daily basis, giving customers vital information and encouraging them to

purchase products or participate in community events. The brand that Starbucks has

created for itself is one that commands respect from any demographic, not just their

target. They strive to spread their values to communities and make their company part of

the solution to pressing world issues rather than part of the problem. Starbucks treats its

employees well, offering free beverages and food as well as 30% off any purchase, and

they treat their customers with the exact same respect. They are available at any time for

any comments, questions, or concerns. The only area where I see room for improvement

is with SEO, where they did not reach the top of the page for Google listings. Even that in

and of itself does not seem like much of an issue, considering the reach they have as a

company globally. Starbucks has done well with its online strategy. They have social

media pages they are engaging and updated frequently, they offer superior online

customer service with a quick twenty-four hour response time, and they have created a

website that is not only beautiful, but easy for the visitor to navigate. Starbucks clearly

has a hold on what it takes to become a successful business in today’s dog eat dog world.

18


Bibliography

Anderson, M., & Perrin, A. (2015, July 28). 15% of Americans don't use the internet.

Who are they? Retrieved November 12, 2015, from

http://www.pewresearch.org/fact-tank/2015/07/28/15-of-americans-dont-use-the-

internet-who-are-they/

Company Information. (2015). Retrieved November 13, 2015, from

http://www.starbucks.com/about-us/company-information

Environment. (2015). Retrieved November 13, 2015, from

http://www.starbucks.com/responsibility/environment

Mission Statement. (2015). Retrieved November 13, 2015, from

http://www.starbucks.com/about-us/company-information/mission-statement

O'Farell, R. (2015). Who Is Starbucks' Target Audience? Retrieved November 12, 2015,

from http://smallbusiness.chron.com/starbucks-target-audience-10553.html

Smith, A. (2015, April 01). A “Week in the Life” Analysis of Smartphone Users.

Retrieved November 12, 2015, from

http://www.pewinternet.org/2015/04/01/chapter-three-a-week-in-the-life-analysis-

of-smartphone-users/

Starbucks. (2014). Retrieved November 15, 2015, from

http://www.red.org/en/learn/partners/starbucks

Starbucks. (2015). Retrieved November 14, 2015, from

https://en.wikipedia.org/wiki/Starbucks

19


Starbucks Commercials by Starbucks Starbucks. (2015). Retrieved November 14, 2015,

from http://www.evancarmichael.com/Other/612/Starbucks-Commercials.html

Starbucks Company Profile. (2015). Retrieved November 13, 2015, from

http://www.starbucks.com/about-us/company-information/starbucks-company-

profile

Starbucks Company Timeline. (2015). Retrieved November 13, 2015, from

http://www.starbucks.com/about-us/company-information/starbucks-company-

timeline

Statistic Brain. (2015). Retrieved November 12, 2015, from

http://www.statisticbrain.com/starbucks-company-statistics/

SWOT Analysis: Discover New Opportunities, Manage and Eliminate Threats. (2015).

Retrieved November 14, 2015, from

https://www.mindtools.com/pages/article/newTMC_05.htm

20

online marketing analysis report

Documents