Impact of Social Media on Starbucks Consumer Behavior

Introduction

Consumer behavior is a phrase that is used to refer to the process through which an organization studies its customers and establishes important facts to help in the increase of their sales. First, it helps to maintain the customers that the organization has acquired and also ensures that they are able to acquire more customers. There are two ways through which they are able to achieve this desirable result. First, they find out the ways through which they can inflict consumer loyalty for their products. This guides them to determine the changes they should implement in their goods and services. This means that consumer behavior brings many fields into the equation. Some of these fields include economics and psychology. These are fields that can help in the study of the consumers, as well as the implementation of the relevant strategies to respond to these discoveries made. Consumer behavior has formed the major basis in this essay. However, it has given special reference to Starbucks (Aaker & Smith, 2010).

Social media has proven to be the major factor that affects modern day consumers. Most companies have noticed this and are beginning to adapt. For example, Facebook pages are being opened by organizations. Some have Twitter accounts to help them reach their customers. However, this does not mean that all companies have adapted to these changes. There are many that still have the space and room for improvement. For the biggest corporations in the world, the average money that is spent on social media is about 700,000 dollars. However, there are companies that have come to learn the importance of more investment in social media. These companies include Wal-Mart, American Express, Jet blue, and the chosen company, Starbucks.

These companies have come to learn the importance of social media in affecting consumer behavior. Therefore, they do not invest, so that they can affect consumer behavior. Instead, they do so to ensure that they use updated means, maintain their current customers, and acquire new ones (Gordon, 2014). For this reason, they invest more than the quoted average value. Their success can be based on this reason. This is because it is a show of their flexibility and ability to maneuver factors to ensure their success. This has caused Starbucks to be the leading company in providing tea and coffee in the world. Along with the ways through which they adapt to changes in the consumer behaviors, this essay has studied the ways through which the consumer behavior of Starbucks is affected by social media. This way, it will be easier to identify the methods and strategies that have made this company more successful than its competitors, with regards to studying and adapting to changes in the behavior of their consumers.

Literature Review

According to Honack (2009), one of the best ways through which companies used to acquire their customers is through advertisements in magazines and television. However, this method has seen considerable changes. Instead, there has been an adjustment with reference to the introduction of the Internet. The social technology refers to the ways through which people can relate over the internet. These are platforms that can be used by many people in their bid to communicate. Honack also mentions the importance of new technologies. Some companies think that the use of technology is just opening up a Facebook page and advertising their products. It is true that this is an influential network that can win customers. However, he notices that this is not enough. There is a need to involve creativeness and innovation along with the Internet to affect the consumer approach to their products. He claims that a business should invest a lot of resources and talent in the social media. This is what would ensure that they are successful in keeping up with the time. According to Honack, most of the corporations that are not dynamic and flexible have been trying to catch up with the industry, and if they do not manage to catch up fast enough, they can be kicked out of the market. There are many other dynamics that can affect business for any company. Solis (2012) believes that the best way to deal with all the problems is to accept the changes that have occurred and come up with the ways through which they can adapt to the same.

Schultz & Gordon (2011) have discovered that consumers are attracted to places that have Internet services. The beverage industry is one that is different from the others. In other industries, the consumers purchase their products and leave. However, the beverage industry requires the consumers to spend some time in the stores. Therefore, the experience that they get will determine repeat purchases. With advancement in technology, beverage companies have been compelled to provide Internet, which their users can utilize while taking their coffee. The major reason as to why consumers require the Internet is so that they can have access to social media. This book has explained that the companies that were not able to adapt to these changes have been outdone by their more successful competitors. The effect of this behavior on Starbucks can be explained by the advancements that they have done in their systems.

Schultz has explained that his company has invested in technology more than some companies that are, actually, in the technological industry. First, they have ensured that all their stores have free Wi-Fi. This is a move that has helped in aligning their company towards the ends that make it adaptable to the changes. According to reports, the introduction of Wi-Fi in their stores caused a massive increase in the number of consumers visiting their stores. They used this as an experiment on how social media would affect the behavior of their consumers. The result was positive and now they were sure that they were not investing their money towards a dark end. The amount of cash that they are willing to spend on the same can be seen from their recent partnership with Yahoo. They have come up with their own digital network. There are people who think that this could be a waste of resources. This is because the company does not have any stakes in technology. As a matter of fact, there are analysts who are claiming that the company was offering competition to social networks, such as Facebook. However, Schultz explains that it is because they have learnt the advantages and benefits that appear with adapting to the changes in social networks, since they significantly affect consumer behavior.

These claims have received retaliation from analysts around the world. Michelli (2013) has explained the things that customers are craving for in the modern times. First, it is in their nature to desire association with one another. Customers would like to have platforms from where they can share views on the products they use.  This is provided by social media, better than through any other way. This is the kind of platform that the company in question is seeking to develop through the establishing of their own digital network. Using their networks, as well as the free Internet they would provide, consumers can gain access to all the sites that they wish on the Internet. They can even download music and iTunes for free while in these stores. Even the children will enjoy the advantage of playing free online games. These are the games that will require them to pay on normal basis. There is no consumer that would not like that experience, especially in the modern times. This is the reason, as mentioned by Michelli, that Starbucks has always experienced success in their doings. They always try to be ahead of the consumer behaviors and be the pioneers of all the ways through which adaptation to these changes should be done.

The regular interviews by the CEO of Starbucks have been captured by many researchers who are interested in the consumer habits and the changes that come with them. In all his strategies, Schultz never forgets to mention the importance of social media in business. Solis (2012) has analyzed such remarks by this CEO according to his perspective. Schultz has succeeded in a business that is of great relevance to the society today. It has also gone a long way in helping Starbucks to ensure that its success is long lived. This is the issue of conscious capitalism. Nowadays, people are in the age when a company has to do more for their communities. In the communities they exist, they have to identify some of the problems that do not concern the major products that they offer. One of the major ways through which a company learns of the problems in society is by maintaining a strong bond with their consumers. This has been improved by the advancements that have taken place in social media (Abbas, 2009).

Consumers normally appreciate the help that they receive from companies. A company may be involved in these activities, but they still need their customers to know about this if it is to bear any fruits. The platforms over which customers can learn this are the social media. On a normal basis, people expect companies to be engaged in activities that favor their profit making motives. This is without consideration of the effects that this will have on the society. Starbucks has been involved in various activities to help society. For example, they have foundations that offer scholarships to the children around the world. This is an operation that works as a magical marketing strategy, as it ensures that they are able to retain their old customers and attain new ones. When consumers learn that the company is engaged in such acts through social media, they trust them more. This is because they have already proven to be thoughtful of their customers. In their industry, this is a fact that can be mostly helpful. Abbas has explained how it has been of help to the company.

Developments and advancements in social media, according to Abbas (2009), have increased the space to allow consumers to get more involved with the company that supplies them with a particular product. Before these advancements, consumers did not see it as a possibility. However, this has changed with time. The fact that social media has made customers more accessible causes them to crave this recognition and identification. This can be explained by the use of the old means. In the past, consumers appreciated simple gifts such as lime t-shirts, which showed that they were subscribed to a certain company. This is the kind of feeling that causes a consumer to be loyal to a company. At the moment, it has evolved to their desire to be recognized through the social media. This is a change in consumer behavior that has been caused by technological changes. A company such as Starbucks has not succeeded by watching, as they adapt to these changes accordingly. Michelli (2013) has explained an example by this company, which showed their adaptation to this change in consumer behavior.

When a customer visits the outlets of Starbucks, this company finds the need to recognize them and try to foster a relationship from this single purchase. This has, once again, been done by the use of the social media. An example can be seen in the Twitter account by Starbucks opened in the recent past. They have been acquiring different brands to help them sell some of the products that they have introduced to the market. When they start on a new brand, they have always introduced competitions for their consumers to be the first ones to share it to the public. Normally, there are many consumers who desire to be the first. Therefore, a competition develops among the consumers in a bid to outdo each other in the usage of the products. After such an engagement, the customers feel that their loyalty lies with this company. Those who obtain this information from Twitter desire to be involved with a company that recognizes and appreciates their step to buy their products. This is how successful companies operate. Santos (2013) has pointed out that these companies do not wait for time to catch up with them. Instead, they always project changes that may occur in technology and try to be ahead of them. Therefore, the changes in consumer behavior, brought about by social media are simply corrected through the advancement and improvement in the same.

Most business organizations to do not give much thought to the effect of social media on consumer behavior in their planning. They believe in ensuring that their product is better for the sake of improvement of their market. This means that they only deal with the supply side and pay less attention to the people who ensure that there is demand for their products. However, these are the companies that have not achieved the success as compared to Starbucks. This company has recently announced that it has plans to make use of patterns and knowledge on consumer behavior by studying the social media. To this end, they have publicized a five-year strategy to help in the marketing of their products. Through the use of the different forms of social media that they invested in, they have been able to make their intentions known to their consumers. This has been used as a marketing strategy even before the actual steps have been made (Schultz & Gordon, 2011).

Santos (2013) has pointed out that the purchase of tea and coffee is being affected by a seismic shift. This represents a change in the technological world, which will affect the sales and purchases of the products, their delivery, information transfer, and customer response. Most companies in the industry have not realized this yet. This is a competitive advantage that Starbucks can utilize to ensure that they remain competitive over time. In addition to the strategy that they have laid, this company has used its experts to determine the effect that they shall have on their company. One of the most promising finding was made by the team of researchers. They claim that the strategy is bound to double the revenue of the company. This is a result that may be encouraging in case it materializes. By 2019, they are expected to have revenue of about 25 billion dollars. This increase in revenue will be solely attributed to their measures towards consumer behavior and the application of the strategies that have been laid out to adjust their social media towards better consumer service (Kimmel, 2010).

Data Analysis

In the investigation on the impact of social media on consumer habits, the methods that have been used in the research are an important factor. This is because different methods are expected to yield different degrees of accuracy. However, this does not mean that only one method should be used in the analyses. Instead, one can combine different methods and come up with a comprehensive report. Furthermore, this creates the possibility for comparison of the different results obtained. This explains the need for this particular part of the research. First, it is vital to remember that the major objective of this essay is to find out the effect of social media on consumer behavior. Therefore, it is vital to mention how this has been achieved. The research on the marketing tactic of studying consumer behavior has been done by the use of a case study. Starbucks is the chosen organization. This choice of organization was based on the challenges that the company has been forced to overcome due to the changes in social media causing changes in consumer behavior (Andersen, 2008).

Most of the facts and figures that have been obtained from the company are based on the research that has been carried out by other researchers on the company. This is because there are many other people that have had an eye for the knowledge that can be obtained from this company especially through the study of their different developments on the social media for ensuring consumer loyalty. More specifically, interviews that have been conducted by the CEO of this organization are important in finding firsthand information in the secondary sources. This way, the theoretical marketing strategies could easily be seen in the real world. When conclusions and comparisons are drawn between these two sets of situations, it becomes easy to decide on the different ways through which the application of this principle can be made simpler. In addition, there is a need to conduct analyses on the information that has been obtained on the company, with regards to the topic in discussion. Apart from the perspectives that have been learnt in the class, there is a need to use different perspectives from different researchers who have more experience in marketing, consumer behavior, and combination of both for companies in the same industry as Starbucks. These have been used to analyze the data that is collected from the above mentioned and explained sources (Hoyer & Pieters, 2013).

Apart from the activities in which Starbucks has been involved in the past, this research took special interest in looking at its future. All the strategies that this company has put in place have been based on their planning for the future. Most of their plans have been successful, which explains their success. However, the plans that were laid in the past and results obtained may not draw interest. This is because results have already been achieved. There is a need to come up with a more important way through which readers can put their attention towards ensuring that they lay important strategies (Honack, 2009). Therefore, research was done on the future strategies of this company. From their public announcements, information was collected, regarding the ways through which they planned to deal with consumer behavior in the future.

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