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Starbucks’ Sales Strategy Through the Sinaweibo Platform

Nyamweya is a Kenyan scholar who has done many years of research on a diversity of topics

Chapter1 - Introduction and background

Introduction

According to Jack Milgram (2019), The main purpose of the research plan is to prove that you have a research plan for the project and the project will be successful. Another main purpose is to make readers believe the credibility, feasibility and value of project research. It is necessary to ensure that the project has profound research work.

The purpose of this report is to evaluate Starbuck's sales strategy and discuss it' s business operation through the SinaMicroblog which is the biggest social media in China. The research investigates how digital marketing on social networks can help improve sales volume. The WordStream Online (2019) pointed that the social media marketing is an effective way for enterprises of different sizes to create loyal customer groups and attract potential customers. With the development of science and technology, social media has become an indispensable part of marketing strategy. Excellent marketing on social media can bring extraordinary success to enterprises. The insights from this research will be useful to the management of Starbucks. This is because they will be able to understand whether the strategy they are deploying is working for them or not. Furthermore, other marketers will also get to know the value of SinaMicroblog and see the necessity of incorporating it in their marketing systems. On the same note, other researchers will be triggered by the findings and thus find the necessity of undertaking more case studies to evaluate the outcome. For this researcher, the study is particularly important since apart from it being a benchmark for graduation, it will also enable him gain a significant level of knowledge in his area of study.

Rationale

The rationale of this study is to generate insights that could be useful for marketers in their marketing endeavors. For competitors such like Costa Coffee or other coffee stores, they can learn from Starbucks' success. The competitor company can understand Starbucks' management model, and analyze what loopholes exist in its own company 's management. Moreover, they can imitate Starbucks' sales strategy to improve its marketing methods to increase sales.

For Starbucks' executives, this report can help them find out more clearly whether the sales strategy is effective and help them decide if they need to change their sales strategy or launch a new one.

This study seeks to evaluate Starbucks’ sales strategy through the SinaWeibo Platform and the influence of digital marketing on marketing endeavors. This way, the researcher will be able to understand how the application of SinaWeibo by Starbucks has affected its sales performance as well as the efficacy of this platform against the traditional forms of marketing.


Research objectives

This study seeks to address the following research objectives

A) To describe Starbucks' social media marketing strategies using the Microblog.

B) To identify how successful these social media marketing strategies have been, and who they were targeted towards.

C) Analyze why these strategies were successful, and why they were appropriate strategic (rather than say TV or print media)

D) To evaluate the strengths and weaknesses of these strategies and suggest ways Starbucks could build upon them.

RO1: To describe Starbucks' social media marketing strategies using the Microblog.

RO1 investigated what kind of digital marketing strategy Starbucks used on SinaWeibo and makes a detailed analysis of these examples. After investigating this part, we can clearly understand the advantages and unique marketing strategies of Starbucks in digital marketing.

RO2: To identify how successful these social media marketing strategies have been, and who they were targeted towards.

Collect detailed data to prove that Starbucks' digital marketing on Sina Weibo is successful.Examining the age group of Starbucks' digital marketing target group through the Microblog. Discuss the relationship between the different needs of different consumers' age group and the decision of Starbucks' digital marketing strategy. What's more to think about how effective this marketing strategy is for Starbucks.

RO3: Analyze why these strategies were successful, and why they were appropriate strategic (rather than say TV or print media)

Explore the differences between TV ads, print ads and social software ads. And analyze why nowadays social media advertising is the most suitable for digital marketing.

RO4: Evaluate the strengths and weaknesses of these strategies and suggest ways Starbucks could build upon them.

RO4 Evaluate the strengths and weaknesses of these digital marketing strategies and discusses the changes that Starbucks can make in its marketing strategy in the future market changes.

Therefore, the four main research objectives are as follows

RO1: To describe Starbucks' social media marketing strategies using theSina Microblog.

RO2: To identify how successful these social media marketing strategies have been, and who they were targeted towards.

RO3: Analyze why these strategies were successful, and why they were appropriate strategic (rather than say TV or print media)

RO4: Evaluate the strengths and weaknesses of these strategies and suggest ways Starbucks could build upon them.


Charpter2 Literature Review

Introduction

Through the theory of Yoon Sik Kim (2018), a detailed and careful literature review is very important for writing any research report or thesis. Literature review can effectively prove your point of view and avoid plagiarism.

The literature will include different papers and theorists from different perspectives to study the development of digital marketing technology of Starbucks through microblog. The literature review will focus on the four main research projects discussed in this proposal including Starbucks' digital marketing through Sina Weibo, Success of these strategies and targeted towards, Advantages of these strategies over other marketing strategies (such as TV or print media), The future of Starbucks’digital marketing.

RO1: Starbucks' digital marketing through Sina Weibo

When enterprises use social media for digital marketing, consumers will receive information in a more relaxed and effective way. As KERAN SMITH (2019) pointed that the users on social media platforms are highly active because they allow people to discover new information in an easy way and stay in touch with what's going on in the world. Social media users can also follow and interact with their favorite brands on the platform.

An enterprise can quickly publish information to customers through microblogging. Through the theory of Mike Allton (2012), This information can be a preview of a new product, or the address of a new physical store and the latest discounts and promotions. Sina Weibo can quickly generate a single message post. Therefore, the marketing staff of enterprises can generate a large number of information and actual website content in Sina Weibo. Weibo is a great way to support your online marketing.


From the data provided by eMarketer (2018) it can be seen that in 2018, China's microblog usage will grow to 340.1 million, accounting for 24.6% of China's population. Sina Weibo platform is known as Chinese Twitter which shows that the influence of SinaWeibo in China is very huge. there is a huge population base of more than one fifth of the Chinese people are using Sina Weibo. Therefore, microblog is a platform that any enterprise who wants to carry out digital marketing cannot ignore. Seizing the Sina Weibo platform means seizing the opportunity to make digital marketing to one fifth of Chinese population. This will attract a lot of potential customers.


Figure1: Sina Weibo Users (eMarketer 2018)

From the image data given by eMarketer, it is clear that the number of Sina Weibo users is increasing day by day and the growth rate is very stable. This detailed data shows that microblog is an important area that every enterprise who wants to do digital marketing cannot ignore.

With Normandy Madden (2011) discussed that Starbucks is a clear leader in online marketing. Starbucks is one of the first companies to enter the microblog for digital marketing. They have brought a lot of preferential activities and new product information to consumers on Sina Weibo. Starbucks' marketing method is not only the traditional rigid marketing products. They interact with the follower’s base and thank and reward followers. Their tone and attitude of digital marketing are very approachable and interesting. This good strategy will keep a large number of loyal customers for Starbucks and constantly attract new customers to join.

Starbucks' digital marketing strategy on Weibo is very ingenious and novel.

According to Jennifer Chan (2013), Starbucks held a digital marketing campaign "let's meet up" in China in 2013. The event encourages social media users on Weibo to share their store experience on the official homepage of Starbucks Weibo and Starbucks will reward these users with coupons. This interesting digital marketing strategy can attract more attention of Internet users. When people are attracted by coupons and fill in the store experience, more users will see these comments. These attracted users are all potential customers.

A good marketing strategy can make the brand's popularity expand very fast, and get more customers in a short time. Joel Buckler (2012) pointed that Starbucks allows consumers to "check in" via Weibo when visiting designated stores. Consumers who check in with this app can get a free opportunity to upgrade the size of the beverage cup. This digital marketing plan is very successful. Through the cooperation with the microblog market, Starbucks has aroused huge repercussions among Chinese customers. Starbucks' official Sina Weibo homepage receives 40000 hits a day.

RO2: Success of these strategies and targeted towards

Figure2: Starbucks official homepage opened (Sina Weibo)

This picture is the first tweet message sent by Starbucks on Sina Weibo. The content is "Starbucks China Fan Club opened". This picture proves that Starbucks opened the official account of Sina Weibo for the first time in 2010 and began to try digital marketing.

Figur3: The number of followers in Starbucks official homepage (Sina Weibo)

This picture is the official homepage of Starbucks Sina Weibo and the name is "Starbucks China". It is clear from the picture that Starbucks' official homepage has about 1.57 million fans. It's a huge number and it is going to grow with each passing day. This represents that Starbucks has achieved effective results after using digital marketing strategy in microblog. Now Starbucks has a lot of followers on Sina Weibo and these fans are loyal customers. What's more, Starbucks' special and effective digital marketing will attract more potential customers.

Figure4: Starbucks Annual Revenue (Macrotrends.net.)

The financial statements of Starbucks from 2006 to 2019 clearly show the effect of digital marketing of Sina Weibo by Starbucks in 2010. Until 2010, annual sales rarely exceeded $10000 million. However, after Starbucks entered the Sina Weibo digital marketing in 2010, its annual sales increased steadily and substantially. Starbucks' millions of fans on Weibo must have contributed a lot to Starbucks' annual sales growth. So it can be clearly seen that Starbucks' digital marketing strategy brings very high revenue.Starbucks' digital marketing is very successful.

Figure5: Sina Weibo users in China by age group in 2018 (Statista.net.)

It can be seen from the picture that users aged 18-30 account for 80% of all Sina Weibo users. Only 20% of the users are minors and middle-aged and elderly users over 40 years old. It can be seen that the main population of Sina Weibo users is 18-30-year-old young people.

The Minors under 16 are not suitable for coffee, and most of them are juice drinks consumers. As Amanda T(2019) pointed that, the body of a minor can't handle caffeine well. This can lead to many diseases. In addition, Starbucks' relatively high price is not suitable for teenagers under 16 years old to buy for a long time. So they are not the main customer base.

From About Time Magazine (2019) what has been discussed, Caffeine is a psychoactive substance. It can make people more awake and alert, and make people energetic. College students aged 18 to 22 are busy studying and often stay up late. They really need coffee to refresh themselves. What's more, College students have a stable source of income and can afford expensive coffee. People aged 23 to 30 have stable work and high quality of life. More importantly, they are also busy working people and refreshing coffee is essential for them every day. They have the pursuit of quality, so Starbucks' high-quality coffee will become their first choice. This shows that the people of these two age groups can become the main target group of Starbucks digital marketing customers.

People between the ages of 31 and 40 begin to prefer healthier drinks. So they are less willing to buy coffee every day. But this age group is still a very good customer base.

It can be seen that 18-30-year-old consumers are the main target customers of Starbucks. The main users of Sina Weibo are also young people aged 18-30. So it is a very effective decision for Starbucks to choose digital marketing on Sina Weibo.

RO3: Advantages of these strategies over other marketing strategies (such as TV or print media)

Nowadays, the digital marketing efficiency of social media has far exceeded that of traditional marketing. As Vinit Choudhary (2019) pointed that from the 15th century to the 20th century, printing media is the main channel of marketing strategy advertising. Print media include newspapers, magazines and billboards built in public places.

Until the second half of the 20th century, TV media advertising gradually surpassed the print media marketing strategy, becoming the most common marketing strategy at that time.

Nowadays, the popularity of social networks directly affects the proportion of advertising marketing of print media and TV media.

Figure6: Different cost of different marketing media (LYFE MARKETING.net.)

It is clear from the icon data that the digital marketing cost of social media is far lower than other ways. Social media marketing costs half as much to market as billboards. In addition, the social media digital marketing's cost is even one in twenty-three of the direct mail marketing costs. To achieve higher marketing efficiency at a lower cost is what every enterprise should pay attention to. So nowadays social media marketing strategy is the most successful way.


RO4: The future of Starbucks’ digital marketing

Figure7: What are the top three channels through which you expect your customers to experience your organization’s marketing efforts in 2020. (Smart Insights.net.)

It can be seen from the chart data that the proportion of social media digital marketing strategy is expected to reach 63% in 2020. Social media digital marketing is one of the most promising and potential marketing strategies.

According to SinanSoftBlog (2018), the network environment is vulnerable to threats, such as hacker attacks or fabric network crashes. So it depends a lot on technology. What’s more, the transparency of digital marketing is high, and the price leads to fierce competition.

Although there are many challenges in the digital marketing area, the future development prospect of digital marketing is very considerable.With PYMNTS (2018)discussed that Starbucks will continue to strengthen its digital marketing work in the future, especially in China, where there are huge business opportunities. Therefore, it is very important for Starbucks to continue to strengthen its digital marketing strategy on Sina Weibo.


Conclusion

To sum up, the efficiency and benefits of digital marketing through social media are very effective. Whether it's cost or benefit, social media is undoubtedly the best strategy of digital marketing.

Therefore, my second study concluded as follows:

RO1: It is very wise for Starbucks to use Sina Weibo as the main digital marketing means in the Chinese market. As the most influential social media platform in China, Sina Weibo has a growing number of users. This digital marketing strategy of Starbucks has generated a significant level of profits to it and attracted a large number of potential customers.

RO2: Starbucks as a coffee chain, its main customer age group is consistent with the main user age group of Sina Weibo. So it is very effective for Starbucks to choose Sina Weibo as the main marketing platform in China.

RO3: The cost of social media digital marketing strategy is far lower than that of other traditional marketing. What's more, digital marketing is faster, more convenient and more profitable.

RO4: Although there are some challenges in digital marketing, the future development prospect is very considerable. Starbucks will continue to increase its digital marketing efforts in the Chinese market


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