Public Relations Practices at Starbucks Corporation

Introduction

Public relations practices are the activities of an individual, corporation, company, store, group and government geared towards promoting goodwill between itself and the public, the community, employees and customers among others (Smith, 2005).  Business environment in the current world is exceedingly competitive, thus requires something that brands the organization and makes them stand out to both the public and the media by creating positive public image. Public relations help the organizations to realize their full potential, majorly when good customer relations are attained. This is a managerial duty that is employed by both profit and nonprofit making organizations making them acceptable to members of the society.

Literature Review

Starbucks is an international corporation that is the largest coffee house company in the world and was first established on March 30, 1971 with its headquarters based at Seattle Washington in the United States of America. It presently has 17,009 distribution stores worldwide, spread in 50 countries in North America, South America, Asia, Europe, Africa and Oceania. It offers diversified products which include; drip prepared coffee, cold and hot sandwiches, coffee beans, espresso based hot drinks, salads, snacks, Panini, Pastries and other items like mugs and tumblers (Hoovers.com 2011). Starbucks is presently experiencing stiff rivalry from other coffee house companies like McDonald and the privately owned Dunkin Donuts.

Human Rights Action Center (HRAC) on the other hand is a nonprofit organization based in Washington, DC and is directed by world-renowned human rights activist and pioneer Jack Healey. The Center works on concerns of the Universal Declaration of Human Rights (UDHR) [1]  that was championed by United Nations in 1948 and uses the arts and technologies to create, innovate, and develop new mechanisms and strategies to stop human rights abuses all over the world.[2] HRAC also support emerging human rights groups and organizations all over the world.

Analysis of how Starbucks used public relations to create a brand name

Community Relations: On June 30, 2010, Starbucks engaged in a model project of flower and shrub planting that was led by a representative of the Ohio EPA. This activity brought together community members and their families, together with local, state and federal officials and other dignitaries who walked the new path and planted flowers and shrubs along the path as part of the celebration (Hoovers.com 2011).  The project was a joint effort which comprised the River works renovation team that transformed the Haley’s Ditch to a natural stream. The job involved excavating a meandering stream, adding rocks and woody debris to form a natural habitat in the water, planting native grasses, trees, shrubs to create an ecosystem that attracts a variety of animals. This public involvement project was used to build a strong brand of Starbucks, since those involved perceived the company as environment friendly.

Social Network: Starbucks recently used its good public image to collaborate with Foursquare which is a social network to capture pulse of stores, which enabled them to interact with customers in unique ways, by breaking down barriers of digital and physical worlds. The use of Foursquare was another method for Starbucks to take the rhythm of the experience in physical stores in real time and get feedback from customers (Hoovers.com 2011). This strategy helps Starbucks to market the brands in events and to reach areas that had not been maximized earlier. They also make use of the badge to help customers’ identify Starbucks location-sharing activity and the venues for such activities. They also open their brands to social media innovations and have gained approval of most influential personalities who command great following through the web. This method has been used by Starbucks where many influential celebrities are used to support and market the products through the social media leading to massive customer visits to the stores.

Brand Partnerships: Brand partnerships are vital in maintaining their competitive edge in the market. For example, use of friends they have made who can easily favor them on Twitter, Facebook, Foursquare and Chatroulette. Each of them except Chatroulette, succeeded to find brand associates they believed in, to include in their new feature testing phases. These Starbucks brands get invited into a private occasion that then changes into media coverage on launch, which eventually introduces them to more people in the circle. Brands found in Twitter’s good graces have been drawn in to Foursquare’s elite group of trusted businesses. This partnership style of public relation has seriously assisted Starbucks to promote its brands to the public with the social media being widely accepted and can be accessed by many all over the world.

Simple Communication: Starbucks used the keeping it super simple (K.I.S.S.) principle of communications to relay information about their products to the public (Rice & Atkin, 2001). This is because communication is a very important tool in building positive relationships with the audience and consumers. Simple messages require no technical explanations, making the principle to be positioned into people’s mind, well understood and not to be forgotten easily by either a 13 or 80-years old members of the society (Hoovers.com 2011).

How Starbucks is adjusting to the Social Media Sites

Starbucks Corporation is operating in an environment with stiff competition and is making use of the social media like the Twitter, Facebook and social events to promote their brand in their bid to remain competitive in the market (Java Justice? 1997). Recently, Starbucks’s Vice President of Brand, Chris Bruzzo, was on stage at the Mashable Media Summit (Hoovers.com 2011) where he revealed that Free Pastry Day which was held last year was a whopping success and drove more than one million people to the stores. This also was circulated online. These social events created a big impact in marketing their brands and when was combined with promotions on social media sites such as Twitter and Facebook, the information spread instantly the same day of the event when news about free pastry was circulated in digital form (Hoovers.com 2011). Bruzzo’s tributes supporters for using social media to promote new business and his comments endorse that the increase of social media activity sent customers to Starbucks stores in large numbers to purchase their unique brands.

Starbucks also had the Tax Day green initiative which was very successful, especially when they asked customers to take in their tumblers to substitute withss free coffee. This was mainly promoted online through their Facebook page to reach many potential customers at ago (Hoovers.com 2011). Equally, the company’s My Starbucks Idea also generated over 80,000 ideas, a success Bruzzo owes to Product Manager Brad Nelson for assisting them tap into the power of Twitter. Currently, Starbucks has succeeded to dominate on Facebook, became the first company to offer a nationwide foursquare deal in United States, and was nominated to test Twitter’s Promoted Tweets advertisement platform, before other advertisers are given the chance (Rice & Atkin, 2001). This fast adoption of use of social media has given Starbucks competitive advantage in reaching more customers and building customer loyalty in their brands.

Starbucks’ also used Internet Week NY which is a festival used to celebrate New York Channel growing internet industry and community. This clearly proves that Starbucks is employing social media to change the way it approaches marketing and for launching products. The Internet Week New York 2011 wrap was also a big success (Java Justice? 1997).

Starbucks Corporation operates in a dynamic service industry where customer taste and preferences change with time. The management put more emphasis on quality customer service to be able to source more customers and maintain the current. Customer prospects revolve around product quality and service, value for money charged, timely service delivery and sustainability of service within an organized favorable atmosphere. The management has developed instant feedback mechanisms to get the views of the customers. This helps the corporation know the new market trends and customer expectations besides assisting it have personalized encounter with the customers to create positive image.

Crisis that Starbucks faced and its Response to handle the crisis

Coffee Crisis

In 2008, Starbucks faced Coffee Crisis that led to the closure of 600 stores. This was as a result of competition and the global economic recession that drove away customers and led to no sales of coffee at hundreds of Starbucks stores across United States, where coffee went cold without consumers. On July, 1 2008, the nation's leading coffee chain declared that it would close nearly 600 coffee stores that were not profitable.  Due to the decline of national economic growth, worried consumers saved their money and visited Starbucks less frequently, leading to a decline in consumption and profits by 28 percent compared with the figures as at March 30, 2007 (Hoovers.com 2011). This was confirmed by the statement of Starbucks CFO Pete Bocian delivered in a conference call, asserting that Starbucks is experiencing major impact from the economic meltdown. This effect was felt in all locations within the United States including California where, most of the stores were empty without any customers (Hoovers.com 2011).  

Starbucks handled this crisis by closing down 600 stores that were not profitable by end of 2008 to cut down on operation costs, majorly the stores that were opened between 2006 and 2007. This was to leave only the stores that still had moderate customer flow and to improve customer concentration in the few operation stores (Java Justice? 1997). It also opened 200 fewer stores than intended in 2009 as the company awaited the world economy to stabilize. Starbucks also diversified its market to seek cheaper coffee supplies from countries like Kenya that had not been fully considered. The company equally made plans to remove breakfast sandwiches, but re-focused on coffee by offering a new smoother blend and Pike Place Roast in all stores, grinding and brewing fresh groups of coffee more frequently during the day. This closure resulted in only 16,226 stores left to operate globally by March 2009 with 11,434 in the U.S. (Hoovers.com 2011).

Competition was another cause of the Coffee Crisis Starbucks faced. Its close competitors include other coffee shops, restaurants and doughnut shops. Starbucks, that has increased its prices twice in the past year, is experiencing major competition from McDonald’s and privately owned Dunkin Donuts (Java Justice? 1997). Dunkin Donuts currently has nearly 5,000 stores in the U.S. targeting the same customer as Starbucks. Starbucks also faces significant setbacks as its stores face saturation in the domestic market and a change in consumer spending activated by the global recession has also compelled consumers to shift to less costly competitors such as McDonald’s. There is also specialty coffeehouse competitor - Caribou Coffee that has 415 stores in the US and offers considerable competition to Starbucks due to its specialty among the thousands of independent and small-chain coffee shops around United States and the world.

Competition has been dealt with through high level public relations strategies Starbucks has put in place that has given rise to classic working environment that attract great employees, who provide better customer service, leading to improved sales. Being that this is a service industry, quality service plays a major role in the success of the company with attractive environment, for example, in Starbucks; one can take coffee as he listens to a good music, thus creating added value to their service. Starbucks has also adopted the ‘work and relax’ model that attracts more qualified customer service representatives (Java Justice? 1997). This model encourages high productivity among the employees.  Starbucks has also diversified its products to a variety, ranging from high quality whole bean coffee, premium teas, freshly brewed coffee, a variety of cold blended beverages, coffee and beverage, various food pastry items, as well as a line of CDs. This diversification gives them competitive edge over other rivals making its stores a one stop shop where a number of drinks needed by customers are found.

Similarities between Public Relations Campaigns for Starbucks and HRAC

The tools used to build public relations are similar both in profit and nonprofit making organizations. Traditional tools comprise press releases and media kits which are released to generate positive image of the organization, brochures, and annual reports newsletters (Wilcox, Ault & Agee, 1992). There is also increase in the use of interactive social media outlets, such as Twitter, Facebook, and foursquare which is a social network as tools for public relations campaigns. The social media tools allow the organization to utilize two way communications, and receive instant feedback from various stakeholders and public. The methods used to find out what is appealing to target audiences include the use of focus groups, surveys and conducting research (Wilcox, Ault & Agee, 1992).

Both profit and nonprofit organizations have a similarity in the main role of public relations of maintaining and harnessing the relationship between an organization and its publics. This reason makes public relations to become the custodian of the organization’s reputation. This is achieved through a high level of professionalism exhibited by the practitioners both in profit and nonprofit organizations.

Differences between public relations campaigns for Starbucks and HRAC

The aim of Public relations in nonprofit organizations like Human Rights Action Center is to

build understanding and public relations activity that can be sustained to be effective in the long run while public relations for profit making organizations like Starbucks are geared towards influencing the minds of members of public with a view of convincing them to change their mind in terms of what to consume. The role of the public relations professionals is to develop and sustain long relationships with the public by giving the most favorable, but honest information.

HRAC organizations public relations campaigns are not personalized but are run by voluntary sector and civil society with their missions not to make money who help people in difficult situations in delivering essential services and are supported by charity organizations. The campaigns are geared towards educating the public concerning the UDHR, to enlighten members of the public on their rights and to represent the vulnerable groups like the children.Profit making organizations Campaigns on the other hand sponsor their marketing activities with their sole objective to make sales irrespective the level of public knowledge on their products.

Conclusion

Public relations is very vital in individual, corporation and government operation   that ensures an organization commands public goodwill and makes an organization to realize its full potential  (Smith, 2005). Starbucks Corporation, a profit making company fully employed several public relations techniques to engage the community using public functions including Internet Week NY and Foursquare deal and the use of social media like the Twitter, Facebook to change opinions of consumers to fully accept the Starbucks’ brands. This technique made Starbucks have a competitive advantage over its rivals in the coffee industry. Starbucks however faced Coffee Crisis that arose as a result of economic recession and competition in 2008 that led to the closure of 600 stores.