Headquartered near the historic Pike Place Market in Seattle, Starbucks was founded in 1971 by Jerry Baldwin, Gordon Bowker and Zev Siegl. Their business model was based on a simple concept: sales of highquality coffee beans and equipment. In 1987, the company was purchased by Howard Schultz, who was quick to adopt the café concept for the business. Over the years, Starbucks built the brand through its employees, known as partners. The baristas in each of its retail outlets are renowned for being customer-friendly, providing a high level of service and an excellent customer experience. The company has expanded to become a global success, with more than 31,000 stores, making it the largest coffee-house chain in the world. In 2021, Starbucks celebrated its 50th anniversary, serving 100 million customers on a weekly basis.
Over the years, the company has been at the forefront of many innovations and has shown its prescience in adopting new technologies and its savviness in creating a seamless digital experience. Starbucks’ digital tools helped the company enhance the customer experience and increase customer engagement. Starbucks has continued to evolve in the form of elevating in-store experiences with mobile payment on the Starbucks app; mobile ordering; drive-thru experiences, and new beverage platforms such as its Nitro Cold Brew – its signature brew, which is infused with nitrogen as it pours from the tap. The company has used data and analytics to accelerate business transformation and growth, recognizing that in the digital age, data offer an incredibly powerful way to connect with people.

Since 2008, Starbucks has been diligently building up a virtual brand community, My Starbucks Idea, based around fans’ shared lifestyles, activities and ethos. Starbucks harnesses the power of its virtual community to expand its global reach by allowing consumers to voice their opinions and suggest ideas for improvement.  The virtual community provides the firm with access to invaluable information about members’ behaviours and lifestyles. It also provides opportunities for the company to tailor offerings to the specific needs of its customers. In its first year, My Starbucks Idea generated more than 70,000 ideas. Some of the suggestions implemented that year included reintroducing the Yukon blend of coffee, which had been discontinued, and the development of an iPhone app to find the nearest Starbucks store.
By 2021, My Starbucks Idea had received more than 190,000 idea submissions, which received over 2 million votes and resulted in 277 ideas being implemented. This led to several innovations to which Starbucks owes its continued success. For example, in 2017, Starbucks debuted the limited-edition Unicorn Frappuccino in the USA, Canada and Mexico.
Unsurprisingly, news of this magical beverage, which changes colour and flavour, spun social media into a tizzy, with unicorn lovers hotly anticipating the pretty Frappuccino. Other innovations resulting from My Starbucks Idea include the introduction of mobile payment drivethrus, free birthday treats (more than 100,000 customers celebrated their birthday with a free treat over just two days in March 2021), Cake Pops (more than 5,800,000 cake pop treats are enjoyed each year) and free Wi-Fi (7,500 Starbucks locations in the USA and Canada alone have Wi-Fi that can be accessed with just one click and at no cost).
By leveraging these highly engaged consumers, listening to their needs, observing their behaviour and gathering their product ideas, the company has involved its fans in value co-creation and facilitated the development of direct and deeper relationships. In 2021, during the global COVID-
19 pandemic, Starbucks utilized its virtual community to experiment with concepts such as electronic payments, mobile apps, pickup-only stores and third-party delivery networks.

Questions 

1. Discuss the benefits of using virtual communities to engage and develop relationships with consumers.
2. Discuss the benefits of deploying social media listening and AI technology for marketing research purposes.
3. Discuss the downside of using computer-aided methods in market research.
4. Suggest alternative methods that Starbucks might use to research its market.
5. Critically evaluate the ethical issues that may be associated with the use of AI technology.