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Student Name: Misha Cottam Student Number : Q79738346 Level of study: 5 Course title: Public Relations and Communications Unit title: Corporate Communication Assignment title: Individual Debate Essay Assignment tutor: Richard Berry Word count: Learner request for feedback:

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Your Student Name/Group Rep (Delete if required)/Student Number/Unit Code here Student work starts here… In 1971 Starbucks started out as a local coffee bean café and has since become one of the largest coffee chain retailers. With 20,366 stores in 61 countries, Starbucks aim is to “inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time” (Starbucks, Present) The phenomenal growth and success that Starbucks have achieved over time is dependent on the company’s stakeholders and their participation within the organisation. Starbucks stakeholders consist of people, groups or organizations that have an interest in their company, for example, customers, partnerships, shareholders and employees. Because these stakeholders share an interest in Starbucks it is essential that they receive relevant information about the company in relation to their concerns and interests as a stakeholder group. In order for this to happen, larger companies normally have a team consisting of community relations, public affairs, media relations and investor relations that will corporately communicate the companies past, present and future performance. This essay will focus on how the community relations department communicate with their stakeholders on behalf of Starbucks and will critically analyse the channels in which they communicate, the content they deliver and whether or not it is effective for the assigned stakeholder. “The emergence of corporate social responsibility (CSR) provides companies with a framework for structuring external relationships, enabling activities to be recorded and evaluated. It also raises awareness of the company’s community involvement practices among influential stakeholders such as funders and shareholders” (Mack, 2008) In reference to Starbucks the community relations corporate responsibility is to make sure the stakeholders are kept up to date with any events, fundraising and so on that has taken place. An example of this could be Starbucks `Back to Youth’ programme. Starbucks partnership with `The Princes Trust’ has made it possible for them to back the youth through a combination of volunteering and fundraising that will help improve communities and gives youths the support they may need. Community programmes like `Back to Youth’ are important in terms of maintaining Starbucks reputation of “Bringing people together, inspiring change and making a difference in people's lives” and so it is therefore crucial to inform all the relevant stakeholders that influence these programmes. Page 1 of 8


Your Student Name/Group Rep (Delete if required)/Student Number/Unit Code here Shareholders can invest either money or capital in Starbucks with expectations of receiving a profit; therefore it is likely that they’re interested in the company’s current performance. The community relations department currently communicate `Back to Youth’ (and any other community developments they’re working on) to shareholders through a variety of channels. Shareholders can attend Starbucks annual meeting events to review the company’s latest performance. Meetings also allow for shareholders “to facilitate discussion and interaction in a face-to-face manner, allowing the participants to express their opinions freely with the help of nonverbal communication”. (Exforsys,2009) This works effectively for the community relations department as they can discuss their current progress/achievements in `Back to Youth’ and inform shareholders of where their money is being invested and what the money is contributing towards. Within meetings shareholders also have the chance to feedback any queries or concerns they may have, it also means the community relations department can learn and progress from the feedback on a personal and professional level. Using nonverbal communications within meetings can also work in the community relations advantage as it can help emphasize verbal behaviour such as persuasion and passion that Starbucks may want to convey in their meeting. However nonverbal communication in meetings can also have its disadvantages “Non Verbal communication means different things to different people and different cultures and is therefore mainly responsible for misunderstandings” (J.Kruger.22). Therefore the community relations department need to make sure they are clear in meetings in terms of how they present themselves, how they address the shareholders and how they genuinely come across as a organisation. Politicians are also other possible stakeholders that may have an interest in what Starbucks is offering to the community. “Politicians above all want to make a difference. And so they like projects where they can see a real purpose, that is, those that can help improve people’s lives and change things locally” (S.Forbes, 2010). Therefore it is important that the projects Starbucks are involved with, aiming to help the community, are globally recognised. Starbucks will also have their own lobbyists that will go to officials in government in an attempt to influence decisions and vote for any possible ideas that the company may have. For example Starbucks may want to lobby the idea of helping the community and educating Page 2 of 8


Your Student Name/Group Rep (Delete if required)/Student Number/Unit Code here government officials and corporate officers on any current issues the community may be facing. “As part of its commitment to communities where it does business, Starbucks announced it will donate $100,000 in yearly profits to low-income areas” (The Independent , 2011). Donations like this will be widely recognised especially during the hard times of the recession. It will also help build the reputation of Starbucks and build great publicity for them. However not all publicity is good publicity as Starbucks have recently been in the press for avoiding tax. Word soon spread through the likes of social networking sites, media and general word of mouth causing communities to voice negative opinions on Starbucks as a brand along with their reputation. Headlines included `Starbucks: The Rise of Tax Shaming’ (BBC NEWS,2012) and ` Starbucks: The high street coffee giant hasn’t paid a bean in UK tax on sales of £1.2 billion’ (Mail Online 2012). Because Starbucks is a global coffee retailer their brand is likely to suffer huge coverage; therefore it was crucial for them to come up with an explanation quickly so their sales do not decrease. Starbucks became the victim of bad publicity and so it was crucial for them to actively demonstrate effective crisis management as soon as possible. “The purpose of the Starbucks Crisis Management Plan is to provide clear and concise guidance to our partners and organization, in the event of a crisis, to respond and recover from disasters.” (G.Phillip,2009) In the case of the tax avoidance, Starbucks announced that they would pay a share of somewhere `near 10 million in UK corporation tax for each of the next two years’ (The independent,2012). This strategic comeback proved Starbucks were able to deal with the situation and put the public’s thoughts first. They also had various speakers including the chief executive officer of Starbucks that spoke publicly on the issue. This form of communication works effectively as Starbucks acknowledge the fact that the tax avoidance could have caused harm to their stakeholders, they are then quick in their response and then they offer a solution to try and deal with the crisis. In the case of the tax avoidance, the media had an interest in Starbucks as a company and so would therefore also be considered as a stakeholder. Starbucks choose to use many different aspects of social media to reach out to their stakeholders and deliver all their content in relation to their company. Page 3 of 8


Your Student Name/Group Rep (Delete if required)/Student Number/Unit Code here Their www.starbucks.co.uk website is the content hub where stakeholders can create their own account and find out all the necessary information a coffee consumer may want to know, for example their current reward status, their nearest cafes and so on. A full photographic menu display also appears on the website alongside an online shop where stakeholders can buy merchandise. The website is also the perfect tool for the community relations department to communicate their current programmes in company with newsletters and visual elements. The community homepage provides stakeholders with a visual video that implements the companies aims to help change communities. It uses the colour green to establish brand identity and encourage stakeholders to get involved with helping the community by becoming a volunteer. Videos are used all around the website to communicate Starbucks as a brand "No more long, cumbersome marketing documents - no more boring presentations. Video is how companies and business should communicate," (M.Leaser,2010). The use of Starbucks videos works effectively in communicating with their stakeholders as it is a lot more engaging and memorable, videos of what the communities are doing also make it a lot more realistic rather than reading Starbucks achievements in black and white print. Social networking is also used as a communication tool for Starbucks to reach their stakeholders. Starbucks currently use Twitter, Facebook and Youtube as social platforms to update stakeholders on any relevant information as well listening to their feedback and consequently responding with one to one communication. A typical example of communicating with stakeholders could be “Got any idea to make a change your community - @sbuxyouthaction can help - see our website for details http://www.ukyouth.org/latest-news-hidden/item/312-starbucks-youthaction-supporting-community-change-projects.html … … #ukyouth” (Twitter, 2012) Using hash tags and direct links can get the subject trending and can also pull in any new potential stakeholders. The tweet also drives traffic to the website and encourages stakeholder participation to make them feel involved and part of the company. Although social networking reaches a mass audience and can be used as a great marketing tool, they can also undervalue a company’s reputation. An example of this is Starbucks #spreadthecheer campaign which was supposed to act as method of good PR. A big screen was put up on behalf of Starbucks showing a live feed of their Starbucks page along with an Page 4 of 8


Your Student Name/Group Rep (Delete if required)/Student Number/Unit Code here ice rink in an attempt to satisfy the community. However all back fired as negative tweets started to appear based on the recent story of Starbucks tax avoidance (as mentioned earlier) with comments such as “If firms like Starbucks paid proper taxes, Museums wouldn't have to prostitute themselves to advertiser’s #spreadthecheer” (F.Morse, 2012). Offensive language was also displayed for the community to see which could influence stakeholder’s opinion of Starbucks and its reputation. “ The pervasiveness of online social networking sites just makes it even easier to send out information and communicate with a large audience quickly and often without much forethought to the consequences.” (D.Morris,2010). This can apply to the staff of Starbucks, if a staff member was to write a negative comment about Starbucks it can tarnish the company’s reputation and can influence stakeholder’s opinions. As a consequence of using social media as a communication platform, employees need to monitor what is being written, if the scenario reflects Starbucks in a negative light then Starbucks need to respond efficiently and use crisis management to deal with the situation. In general community relations tend to be primarily focusing on communicating with communities and the public as stakeholders. Here are some other communication channels the community department may use to effectively communicate with their stake holdersEmail Communication- Emails can be used to send relevant content to the necessary stakeholders. For example, newsletters can be sent to investors informing them of any community achievements that have taken place. Lobbyists can send emails to politicians arranging meetings/dates and so on to discuss any possible new ideas and concepts the company may have. Email can be a great form of communication especially when stakeholders are hard to get hold of via the telephone, it can also reach a mass audience. They can also be used to attach relevant files such as images and hyperlinks. However emails can also have disadvantages, nonverbal communication can be taken the wrong way without verbal communication and can be misleading to stakeholders. Mobile Experience- Starbucks have their own app which markets their brand. The community relations page can be found on the app allowing stakeholders to explore the

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Your Student Name/Group Rep (Delete if required)/Student Number/Unit Code here latest events, achievements and so on making it easy for them to consume content whilst on the go. “A well-executed and useful iPhone app is quickly becoming a necessary part of a company’s marketing strategy” (Bryan, 2010) With everyone upgrading to iphones and smartphones, the Starbucks app can reach a huge audience base of stakeholders and create great brand exposure. MyStarbucksIdea- This page is available on the Starbucks website and is used as an opportunity for stakeholders to feel involved with Starbucks as a company and to give them a chance to pitch any possible ideas that may add to the success of Starbucks. This is perfect for the community relations department as it can seek great ideas from the public and is less costly than paying staff to contribute. It also encourages members of the community to get involved, making them feel part of the company with their voice counting. A voting system is also used to vote for the best idea which can then consequently be put into action. Using MyStarbucksIdea can not only help to improve the conditions of Starbucks but also show consideration of what their stakeholders think matter to the company. On conclusion, Starbucks offer a variety of channels to communicate to specific stakeholders effectively. The combination of different channels means they can use different communication techniques to their advantage, for example pitches to investors to enhance verbal communication and social networking sites to encourage feedback and use as a promotional tool. The separate webpage dedicated to the community offers everything possible stakeholders may need to know including current programmes, visuals on how to get involved and online application forms. Unfortunately they do not promote the likes of the Starbucks social networking pages on the community page which could limit the chance for stakeholders to make their voice count. The iconic youtube symbol is also nowhere to be found, promoting their youtube channel would be a great way for Starbucks to visually prove their achievements and gain trust in their stakeholders. However overall Starbucks seem to prioritise their stakeholders (particularly customers) and reach them through a diverse range of communication channels in relevance to the stakeholder, they are also great in overcoming company crisis’ by effectively managing careful responses to make sure their stakeholders do not change their opinion of Starbucks as a successful established coffee retailer. Page 6 of 8


Your Student Name/Group Rep (Delete if required)/Student Number/Unit Code here References Websites Mack.P. (2008). Why practice good community relations? . Available: http://www.hotwireprc.com/documents/Top%20Tips%20to%20Community %20Relations.pdf. Last accessed 15th Dec 2012 Exforsys Inc. (Oct 2009). Advantages of Meetings. Available: http://www.exforsys.com/career-center/meeting-management/advantages-ofmeetings.html. Last accessed 17th Dec 2012. Cheng.H. (2010). Starbucks: Helping Communities One Cup at a Time. Available: http://www.nbclosangeles.com/news/local/Starbucks-Helping-Communities-One-Cup-at-aTim Leaser.M. (2010). IBM Embraces Web Video As A Vital Internal Communication Tool . Available: http://www.reelseo.com/ibm-video-communication/. Last accessed 18th Dec 2012.e-131105768.html. Last accessed 18th Dec 2012. F.Morse. (2012). Starbucks PR Fail At Natural History Museum After #SpreadTheCheer Tweets Hijacked. Available: http://www.huffingtonpost.co.uk/2012/12/17/starbucks-prrage-natural-history-museum_n_2314892.html. Last accessed 19th Dec 2012 D.Morris. (2010). Employee social networking can be bad for business. Available: http://www.hrfuture.net/daily-article/employee-social-networking-can-be-bad-forbusiness.php?Itemid=114. Last accessed 19th Dec 2012. Bryan. (2010). SHOULD YOUR COMPANY INVEST IN AN IPHONE APP?. Available: http://www.gkbusiness.com/2010/03/01/should-your-company-invest-iphone-app/. Last accessed 19th Dec 2012.

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Your Student Name/Group Rep (Delete if required)/Student Number/Unit Code here Books Kruger.J (2003). Non Verbal Communications. 2nd ed. London: Gruinc. p22. Journals Dr. Phillip G. Clampitt. (2009). Case Study- Stabucks. Crisis Case - Part I. 1 (1), p4. Social Networking Sites Twitter- searched- `starbucks community’ Available:https://twitter.com/search?q=starbucks %20community&src=typd Accessed on: 19th Dec 2012

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Debate Essay