Scholarly Activity

 Most problems companies face are due to a lack of information; with complete and accurate information, the problems could be solved.  Explore the topic of how research is conducted in organizations to address problems or issues. Then, select a company that is of interest to you, and respond to the following questions/topics: 

1. Briefly describe your company. Identify potential problems or issues (current or future) that your company might address with a research study. 

2. What indicators are prevalent demonstrating that the company is effectively (or ineffectively) using research studies within the organization? 

3. How might the company use secondary research? How might they use primary research? 

4. What might this company do in the future to expand its research? Include your rationale. 

Your APA-formatted response must be a minimum of three pages in length (not including the title page and the reference page) and must include an introduction, a thesis statement (concise summary of the main point of the paper), and a clear discussion of the questions/topics above. Your response must include a minimum of two credible references. All sources used must be referenced; paraphrased and quoted material must have accompanying citations. 

Customer knowledge management via
social media: the case of Starbucks

Alton Y.K Chua and Snehasish Banerjee

Abstract

Purpose – The purpose of this paper is to analyze the extent to which the use of social media can

support customer knowledge management (CKM) in organizations relying on a traditional

bricks-and-mortar business model.

Design/methodology/approach – The paper uses a combination of qualitative case study and

netnography on Starbucks, an international coffee house chain. Data retrieved from varied sources such

as newspapers, newswires, magazines, scholarly publications, books, and social media services were

textually analyzed.

Findings – Three major findings could be culled from the paper. First, Starbucks deploys a wide range

of social media tools for CKM that serve as effective branding and marketing instruments for the

organization.

Second, Starbucks redefines the roles of its customers through the use of social media by

transforming them from passive recipients of beverages to active contributors of innovation. Third,

Starbucks uses effective strategies to alleviate customers’ reluctance for voluntary knowledge sharing,

thereby promoting engagement in social media.

Research limitations/implications – The scope of the paper is limited by the window of the data

collection period. Hence, the findings should be interpreted in the light of this constraint.

Practical implications – The lessons gleaned from the case study suggest that social media is not a

tool exclusive to online businesses. It can be a potential game-changer in supporting CKM efforts even

for traditional businesses.

Originality/value – This paper represents one of the earliest works that analyzes the use of social media

for CKM in an organization that relies on a traditional bricks-and-mortar business model.

Keywords Customer knowledge management, Social media, Netnography, Brick-and-mortar business,
Knowledge management, Business enterprise

Paper type Case study

1. Introduction

Organizations have long recognized knowledge management (KM) as an important

business strategy (Hull et al., 2000). In order to manage customers’ increasing

sophistication and changing preferences, the static knowledge-warehouse based

approach of KM is undergoing a paradigm shift towards a dynamic customer-centric

approach. Organizations recognize the need to develop cordial relationships with

customers and serve them in their preferred ways. This calls for effective management of

customer knowledge (Davenport et al., 2001). In fact, organizations capable of continuously

creating new customer knowledge and effectively managing customer knowledge assets

are the ones with competitive advantage over their rivals (Zhang, 2011). Hence, an

emerging area of interest within KM research and practice involves customer knowledge

management (CKM) (Kuhlen, 2003; Rowley, 2002). It refers to KM strategies pertaining to the

management of organizational knowledge obtained through interactions between

organizations and their customers (Zanjani et al., 2008).

DOI 10.1108/13673271311315196 VOL. 17 NO. 2 2013, pp. 237-249, Q Emerald Group Publishing Limited, ISSN 1367-3270 j JOURNAL OF KNOWLEDGE MANAGEMENT j PAGE 237

Alton Y.K Chua and

Snehasish Banerjee are

based in the Wee Kim Wee

School of Communication

and Information, Nanyang

Technological University,

Singapore.

The authors wish to
acknowledge Erika Foo,
Louise Lai, Helena Lee and
Jacquelyn Wang for their roles
in collecting part of the data
used in this research.

Received 11 October 2012
Revised 3 January 2013
8 January 2013
10 January 2013
Accepted 10 January 2013

Against the backdrop of recent trends in web technologies, making profitable use of social

media is at the top of the agenda for many organizations (Levy, 2009). Social media refers to

online services that support social interactions among users through highly accessible and

scalable web-based publishing techniques (Dutta, 2010). As the society becomes

cognizant of the prowess of social media, organizations which do not utilize services such as

Twitter and Facebook are seen to be at a distinct strategic disadvantage (Kuhlen, 2003).

Given that social media has the potential to support multi-way communication between

organizations and their customers at relatively lower costs and higher levels of efficiency

vis-à-vis traditional communication channels (Gallaugher and Ransbotham, 2010), it is no

wonder customer-facing organizations such as Dell and American Express have been

prompt in jumping on the social media bandwagon.

Despite such potential benefits, using social media for CKM is a challenge for organizations

(Kaplan and Haenlein, 2010). For one, CKM involves bringing the customer perspective into

the knowledge management equation even though customers are largely reluctant to

engage in voluntary knowledge sharing (Desouza et al., 2008). Moreover, social media

allows customers to publish content without any peer-review process. They may share

incorrect or biased knowledge about an organization, which can adversely affect the

perceptions of other customers (Zanjani et al., 2008). Hence, it is not trivial for organizations

to effectively harness useful customer knowledge and propagate positive opinions about

themselves among

customers.

Scholarly attention has delved into the use of social media in online business and

e-commerce websites such as Amazon.com and eBay.com (e.g. Chua, 2011; Levy, 2009).

However, the extent to which the use of social media can support CKM in organizations

relying on a traditional bricks-and-mortar business model has not been adequately explored

hitherto. For this reason, the paper uses a combination of qualitative case study and

netnography to analyze the use of social media for CKM in Starbucks, an international coffee

house chain.

The remainder of the paper is structured as follows. The next section presents the literature,

which revolves around the two pivotal themes, i.e. CKM and social media. A theoretical

framework that integrates CKM strategies and social media services is also proposed.

Section 3 elaborates the data collection and analysis procedures. The case study is

presented and explained in section 4. Following that, section 5 discusses the three major

findings culled from the paper. Finally, the paper concludes with implications for managers

and scholars.

2. Literature review

2.1 Customer knowledge management

The thrust of CKM is to capture, organize, share, transfer and control knowledge related to

customers for organizational benefits. It helps organizations address the specific needs of

their customers, and makes them more effective in enhancing customer satisfaction

(Plessis, 2007; Rowley, 2002). CKM allows acquiring new customers and retaining the

current ones, which in turn enables organizations to compete more effectively (Horovitz,

2000a). Being pivotal for improvements in customer value, it significantly influences

organizational performance (Zanjani et al., 2008).

For the purpose of this paper, three CKM strategies that organizations use to manage

customer knowledge are considered. These are:

1. management of knowledge for customers;

2. management of knowledge from customers; and

3. management of knowledge about customers.

First, management of knowledge for customers refers to CKM strategies that organizations

use to manage knowledge flow from organizations to customers. It is essential for

organizations to select an effective medium to communicate with customers about their

PAGE 238jJOURNAL OF KNOWLEDGE MANAGEMENTj VOL. 17 NO. 2 2013

products, services, markets, offers, and discounts (Taylor and Baker, 1994). Continuous

knowledge flow directed from organizations to customers is a prerequisite to assist

customers in their decision-making. Besides supporting customers in their buying cycle, it

also helps them in the use of products and services (Horovitz, 2000b). This enables

customers to understand organizations, their offers, as well as their products and services

better (Davenport and Klahr, 1998; Garcia-Murillo and Annabi, 2002).

Second, management of knowledge from customers refers to CKM strategies that

organizations use to manage knowledge flow from customers to organizations. Knowledge

acquired from customers helps organizations to enhance the quality of their products and

services as well as to develop new products and services (Garcia-Murillo and Annabi, 2002;

Salomann et al., 2005; Zanjani et al., 2008). Such knowledge must be incorporated for

innovation, idea generation and evaluation (Thomke and von Hippel, 2002; Tidd et al., 2005).

Knowledge from customers is essential for organizations to realize the concept of ‘‘design

with customers’’ (Sigala, 2012). It also acts as a powerful crisis management tool for

organizations (Bulearca and Bulearca,

2010).

Third, management of knowledge about customers refers to CKM strategies that

organizations use to manage knowledge flow among customers. Besides customers’

preferences and past transactions, knowledge about customers encompasses analyzing

customers’ present needs, future desires, changing tastes and trends (Davenport et al.,

2001; Gebert et al., 2003). It involves exploring customers’ perceptions on products and

services in order to identify their preferences and concerns. This enables organizations to

gain a sense of the sentiment on the ground so that their customers can be served in their

preferred ways (Salomann et al., 2005).

2.2 Social media

Social media refers to a collection of online services that supports social interactions among

users and allows them to co-create, find, share and evaluate the online information

repository. It is ‘‘a group of Internet-based applications that build on the ideological and

technological foundations of Web 2.0, and that allow the creation and exchange of User

Generated Content’’ (Kaplan and Haenlein, 2010, p. 61). Social media has transformed

users from passive content readers into content publishers, thereby making their role more

significant.

For the purpose of this paper, four emerging social media services that organizations often

use to communicate with their customers are considered. These are:

1. microblogging services;

2. social networking services;

3. location-aware mobile services; and

4. corporate discussion forum services.

First, microblogging services (MBS) are social media services that allow users to publish,

share and discuss in the form of short status updates, messages or commentaries, called

microposts (Gao et al., 2012). These services limit the length of microposts and permit users

to organize themselves in a follower-followee network without any stringent reciprocation

constraint (Kwak et al., 2010). MBS like Twitter and FriendFeed are gradually becoming

buzzwords in the age of social media.

Second, social networking services (SNS) are social media services that enable users to

construct and present their profiles within a bounded system, and articulate lists of other

users with whom they share connections (Ellison et al., 2007). Through these services, users

can establish and maintain connections with others of similar interests (Gunawardena et al.,

2009). Some actions that users perform through SNS include posting comments, receiving

comments from others, joining groups and fan pages, creating events, using customized

applications and playing games. SNS like Facebook and MySpace have become a

mainstream communication channel for users in recent years.

VOL. 17 NO. 2 2013 jJOURNAL OF KNOWLEDGE MANAGEMENTj PAGE 239

Third, location-aware mobile services (LMSs) are social media services that allow users to

check in online at real-world locations and receive context-sensitive information based on

their locations (Dhar and Varshney, 2011). Third generation communication technologies

have led to the rapid development of mobile internet, which in turn has triggered the

popularity of LMSs. Their ability to provide personalized location-based context-sensitive

information has earned them the nickname ‘‘killer application of mobile business’’ (Junglas

and Watson, 2008). Foursquare and Google Latitude are two well-known LMSs.

Fourth, corporate discussion forum services (CDS) of organizations are social media

services that provide dedicated avenues for customers to discuss organization-specific

issues (Lopez-Nicolas and Molina-Castillo, 2008). CDS allow for participation of a large and

diverse set of users to discuss collaboratively about products and services of the specific

organization (Maswera et al., 2006). Also, they serve as an outlet for electronic

word-of-mouth associated with the organization and promote customer-to-customer

know-how exchange (Hennig-Thurau et al., 2004). Dell IdeaStorm, launched by Dell, is a

prominent example of CDS.

2.3 CKM and social media

CKM literature emphasizes the importance of social media in bringing the human side into

the knowledge management equation (Levy, 2009). Social media services have distinct

technical features that unleash passion among users to engage in knowledge sharing

(Paroutis and Saleh, 2009). The openness and participation properties of social media

entwine users and content, rendering it suitable for the dynamic, customer-centric CKM

strategies (Lai and Turban, 2008). The extent to which the four identified social media

services facilitate the three CKM strategies culminates into a social media supported CKM

framework as shown in Table I.

First, MBS enable organizations to reach out to customers via microposts. This serves as an

avenue for organizations to supply knowledge for customers about their products, markets,

Table I Social media supported CKM framework

Management of knowledge for
customers

Management of knowledge from
customers

Management of knowledge about
customers

Micro-blogging services Serve as an avenue for
organizations to supply
knowledge for customers about
their products, markets, offers and
also provide customer service
(Gao et al., 2012)

Allow organizations to draw
knowledge from customers by
actively seeking out
customer-driven innovation in their
design and production (Sigala,
2012)

Keep organizations
knowledgeable about their
customers and better manage the
potential areas of concerns
among them (Flanagin and Bator,
2011)

Social networking
services

Help organizations provide
knowledge for customers by
keeping them abreast of changes
in their products and services
(Padula, 2008)

Enable organizations gain
knowledge from customers by
comprehending how they react to
changes (Magnier-Watanabe
et al., 2010)

Facilitate accumulation of a body
of shared knowledge about
customers, which in turn help
promote customer loyalty (Chua,
2011)

Location-aware mobile
services

Permit organizations to provide
knowledge for customers about
offers and discounts available at a
particular branch, encouraging
them to check-in at that location
(Dooley et al., 2012)

Allow the checked in customers to
leave tips and comments, which
can be a useful source of
knowledge from customers
(Currie, 2011)

Connect geographically
separated customers and help
organizations acquire knowledge
about the variations in customers’
preferences based on different
locations (Bhalla, 2011)

Corporate
discussion-forum
services

Allow organizations to provide
knowledge for customers by
publishing content related to their
existing products and services, as
well as ideas that are currently
under experimentation (Wagner
and Majchrzak, 2007)

Encourage customers to express
their needs, doubts, purchase
intentions, and to contribute novel
ideas, which are valuable
knowledge that can be acquired
from customers (Maswera et al.,
2006)

Promote exchange of
customer-to-customer know-how,
which may be monitored to
unearth knowledge about
customers in the form of opinions,
preferences and electronic
word-of-mouth (Hennig-Thurau
et al., 2004)

PAGE 240jJOURNAL OF KNOWLEDGE MANAGEMENTj VOL. 17 NO. 2 2013

offers and also provide customer service (Gao et al., 2012). MBS also supports the concept

of ‘‘design with customers’’. Organizations can draw out knowledge from customers by

actively seeking out customer-driven innovation in their design and production (Sigala,

2012). Moreover, monitoring microposts to analyze the sentiment of what is being discussed

in the blogosphere keeps organizations knowledgeable about their customers (Castellanos

et al., 2011). This helps organizations better manage the potential areas of concerns among

the masses (Flanagin and Bator, 2011).

Second, SNS support interconnectedness between organizations and customers, thereby

initiating constructive conversation and dialogue. They act as avenues through which

organizations provide knowledge for customers and keep them abreast of changes in their

products and services (Padula, 2008). The interconnectedness also allows organizations to

gain knowledge from customers by comprehending how they react to such changes

(Magnier-Watanabe et al., 2010). Moreover, SNS facilitate the accumulation of a body of

shared knowledge about customers over time. This can help organizations better

understand their customers’ preferences and proliferate customer loyalty (Chua, 2011).

Third, LMS facilitate geo-tagging, an emerging form of folksonomy, and help organizations

manage location-specific customer knowledge. Organizations may use LMS to provide

knowledge for customers about offers and discounts available at a particular branch,

thereby encouraging them to check in at that location (Dooley et al., 2012). Customers who

check in can also choose to leave comments, which can be a useful source of knowledge

from customers (Currie, 2011). Since these services connect geographically segregated

customers, organizations can acquire knowledge about the variations in customers’

preferences based on different locations (Bhalla, 2011).

Fourth, CDS allow organizations provide knowledge for customers by publishing content

related to their existing products and services, as well as ideas that are currently under

experimentation (Wagner and Majchrzak, 2007). CDS also encourage customers to express

their needs, doubts, purchase intentions, and to contribute novel ideas (Maswera et al.,

2006). These are valuable knowledge acquired by organizations from their customers.

Moreover, CDS promote exchange of customer-to-customer know-how, which may be

monitored to unearth knowledge about customers in the form of opinions, preferences and

electronic word-of-mouth (Hennig-Thurau et al., 2004).

3. Methodology

This paper uses a combination of qualitative case study and netnography to analyze the

extent to which the use of social media supports CKM in Starbucks. Qualitative case studies

allow for rich and naturalistic data to be obtained (Stake, 1995). Being commonly used to

investigate emerging themes that lack strong theory (Yin, 2003), they are known to provide

descriptions and generate theories in previously under-investigated areas (Eisenhardt,

1989).

Netnography, on the other hand, is the online evolution of ethnography. Defined as the

‘‘written account of on-line cyberculture, informed by the methods of cultural anthropology’’

(Kozinets, 1997, p. 3), it is a qualitative research technique that draws data from

computer-mediated communication channels. Netnography provides the means for

accessing, gathering and interpreting computer-mediated textual discourse between

anonymous or pseudonymous participants on a public forum (Lugosi et al., 2012). Unlike

methods such as interviews or focus groups, netnography is used to represent a context not

confounded by the researcher’s presence (Sigala, 2012).

Starbucks was chosen as the case for analysis on the basis of two reasons. First, it is known

for its use of social media and its interest towards CKM (Sigala, 2012). Relying on a

traditional bricks-and-mortar business model, Starbucks provides an interesting context that

sees the confluence of social media and CKM. Second, it was possible to harvest copious

material on Starbucks’ use of social media for CKM from a variety of sources. These

materials could be analyzed to create a nuanced portrait of the organization.

VOL. 17 NO. 2 2013 jJOURNAL OF KNOWLEDGE MANAGEMENTj PAGE 241

The data collection procedure lasted for a period of 11 months from October 2011 to August

2012. It was a two-step process, the first lasting for three months and the second for the

subsequent eight months. First, words such as ‘‘Starbucks’’, ‘‘coffee chain’’ and

‘‘cappuccino’’ were used to search for data on Starbucks from varied sources such as

newspapers, newswires, and magazines through Factiva and LexisNexis. Scholarly

publications were trawled from subscription-based databases such as Ebscohost, Emerald

Management and ProQuest. Relevant books and publicly available contents on the web

were also retrieved. Use of such multiple sources helps generate data rich in detail and rigor,

providing better scope for triangulation (Miles and Huberman, 1994). The returned data

were analyzed using TextSTAT, a text analysis tool used to generate word frequency lists and

concordances (Chua, 2007; Khalifa et al., 2007), to identify the social media services

commonly used by Starbucks. Based on the results, the four social media services were

identified as Twitter (MBS), Facebook (SNS), Foursquare (LMS) and MyStarbucksIdea

(CDS).

Second, netnography was used to collect data from the four social media services

commonly used by Starbucks (Kozinets, 1997; Sigala, 2012). To reduce any biases, 25

randomly selected data samples were drawn on an average from each of the social media

services over the period of eight months (January-August, 2012). Specifically, the collected

data comprised the following:

B 200 microposts posted by Starbucks along with their conversations from Twitter

(www.twitter.com/Starbucks);

B 200 posts contributed by either Starbucks or customers along with their comments from

Facebook (www.facebook.com/Starbucks);

B 200 tips submitted by either Starbucks or customers from Foursquare

(www.foursquare.com/Starbucks); and

B 200 discussion threads initiated by customers from MyStarbucksIdea

(www.mystarbucksidea.com).

After the data were collected, they were textually analyzed through unitizing and

categorizing (Chua, 2011; Stathopoulos and Harrison, 2003). The process of unitizing

involved identifying, isolating, and copying portions of text that appeared potentially relevant

for CKM into a Word file. Thereafter, the unitized contents in the Word file were categorized

into the 12 quadrants based on the three CKM strategies and the four social media services.

Only data in English and those found to be internally consistent were used for further

analysis and discussion.

4. The case of Starbucks

4.1 Background

Starbucks is an international coffee house chain founded in Seattle, Washington, in 1971.

From its humble beginnings, it has now expanded to more than 19,000 stores across 59

countries. However, its journey has not been smooth throughout. Although it was once known

to consistently attract around 60 million weekly visitors across the globe without

cannibalizing its own sales (Michelli, 2007), its earnings dipped drastically during the

April-June quarter of 2008 (York, 2010).

In response to its flagging financial performance, Starbucks started experimenting with

social media services in the latter half of 2008. The purpose was to ward off competition from

dominant players such as McDonald’s and Dunkin’s Donuts in the food and beverage

industry (Schultz and Gordon, 2011). Convinced that unhappy customers could switch over

to rival organizations without disclosing their complaints directly to the management,

Starbucks used social media as a means to connect with its customers. The success of this

effort was evident when its CDS MyStarbucksIdea was nominated the most embracing

social media application in the 2008 Forrester Groundswell Awards (Bernoff, 2008). As many

PAGE 242jJOURNAL OF KNOWLEDGE MANAGEMENTj VOL. 17 NO. 2 2013

as 41,000 ideas were contributed by customers within the first two months of its launch (York,

2010).

4.2 Use of Twitter

Twitter is one of the popular MBS that promotes sharing of microposts not exceeding 140

characters. These microposts, also known as tweets, are often accompanied by attached

photos. Twitter users can organize themselves in a follower-followee network without any

reciprocation constraint. Being a follower means that the user will receive all tweets from the

followees. Starbucks currently has over two million followers on Twitter.

Starbucks uses tweets, often with a combination of text and photos, to provide knowledge

for customers and promote their latest products, campaigns and events. For instance, a

tweet posted by Starbucks was used to promote its product ‘‘Pumpkin Spice Latte’’. In

another tweet, Starbucks revealed ‘‘Did you know you can mix it up? Green tea

@frappuccino þ java chips þ peppermint syrup ¼ minty goodness’’. Twitter helps

Starbucks acquire relevant knowledge from customers who express their expectations, likes

and dislikes about the organization via tweets. Starbucks is also prompt in responding to the

knowledge acquired from customers, with an average of ten tweets per day (Noff, 2009).

Tweets on their products and services enable Starbucks to discern key customer concerns

that warrant further investigation. Twitter helps Starbucks quickly manage rumors and

misconceptions among customers. For instance, a story once spread that Starbucks was

donating its profits in Israel to fund the country’s army. Through Twitter, Starbucks became

aware about its customers’ concerns and was able to quickly nip the misconception in the

bud (York, 2010).

4.3 Use of Facebook

Facebook is one of the popular SNS that allows users to construct, present and maintain their

profiles. At the same time, it permits organizations to create their dedicated Facebook

pages. Users can like pages of organizations to receive regular updates from them.

Facebook allows organizations to connect with interested customers through wall posts,

polling, discussions and events. Starbucks’ Facebook page currently has over 31 million

likes.

Through Facebook, Starbucks provides a wide array of knowledge for customers about its

products, locations and organizational cultures to keep its customers abreast of changes. It

uses posts such as ‘‘. . . drive-thru now accepting mobile payments’’ and ‘‘A free 12oz drink

. . . Ends today!-US and Canada only’’ to keep customers abreast of changes. Starbucks

promoted its ‘‘Frappuccino Happy Hour’’ through Facebook and was reported to sell one

Frappuccino every 15 seconds on average (Warren, 2011). It also draws knowledge from

customers through poll questions such as ‘‘Which iced beverage would you choose – Iced

Coffee with Milk or . . .?’’ and ‘‘. . . – hot or iced?’’. It uses Facebook to ask customers directly

about their personal opinions, preferences and feedback (West, 2012). Monitoring

comments such as ‘‘I Would drink This Delightful drink every single day’’ in response to its

posts also help Starbucks acquire knowledge about customers. This in turn allows it to

comprehend customers’ behaviors, preferences, expectations, levels of satisfaction, and

ways they react to new products and changes (The Nikkei Weekly, 2010).

4.4 Use of Foursquare

Foursquare is one of the popular LMS that enables users locate the nearest places of interest

and check in online at real-world locations. Based on the number of check-ins at a location,

users earn reputation in the form of badges and mayorships. Once checked in, they can also

choose to leave comments, called tips. Starbucks is reported to be one of the most searched

brands on Foursquare (Warren, 2011), and is currently supported by over 800,000 users.

Starbucks uses Foursquare to provide knowledge for customers on day-to-day events such

as offers and new product launches specific to a location. For example, Starbucks posted ‘‘If

you need to study late, this is the store . . . ’’ specifically for customers in Sheridan, Wyoming.

It also posted to offer free drinks and discounts to customers based on mayorships.

VOL. 17 NO. 2 2013 jJOURNAL OF KNOWLEDGE MANAGEMENTj PAGE 243

Starbucks has also created special badges and statuses on its Foursquare platform to

encourage visits from customers (Warren, 2011). Customers who check in often leave tips,

which can be a valuable source of knowledge from customers. For example, a customer who

checked in at a particular Starbucks store in Singapore left a tip ‘‘Love the new layout, lots of

high chairs . . . Fav starbucks outlet in Singapore’’. Such tips again enhance Starbucks’

understanding of their customers with respect to specific locations. However, no specific

evidence on Starbucks’ use of Foursquare to manage knowledge about customers was

found from the analyzed data.

4.5 Use of MyStarbucksIdea

MyStarbucksIdea, a CDS dedicated for Starbucks, acts as an avenue for customers to ask

questions, offer novel ideas and vent out their frustrations on the organization. It was

launched in 2008, and 41,000 ideas were contributed by customers within the first two

months (York, 2010). It encourages participation by nurturing a point system to reward

customers who are frequent contributors of novel ideas (Sigala, 2012).

Starbucks provide knowledge for customers through MyStarbucksIdea by informing them

about the ideas that are ‘‘under review’’, ‘‘reviewed’’, ‘‘coming soon’’ and ‘‘launched’’. This

fosters loyalty among customers, who get the impression that Starbucks really care about

their submitted ideas. Knowledge from customers is mainly harvested through the ideas that

customers contribute, thereby promoting the concept of ‘‘design with customers’’ (Sigala,

2012). Some contributed ideas that have been adopted by Starbucks include the

introduction of ‘‘Starbucks Card eGifts’’ system and ‘‘Mocha Coconut and Coconut Crème

Frappuccino blended beverages’’. It draws knowledge about customers by publicly

revealing all submitted ideas, and asking other customers to evaluate them. Starbucks

implements submitted ideas based on their popularity, as revealed from customers’

comments and votes. For instance, the idea ‘‘wondering if an Orange Mocha would be a

possibility’’ attracted comments such as ‘‘Sounds good to me’’ and ‘‘Not sure I’d love it but

might try it’’. Customers are thus treated as both creators and evaluators of ideas. The ways

Starbucks use social media for CKM are summarized in Table II.

Table II Starbucks’ use of social media for CKM

Management of knowledge for
customers
Management of knowledge from
customers
Management of knowledge about
customers

Twitter (MBS) Serve as an avenue for Starbucks to
provide knowledge for customers and
help promote its latest products,
campaigns and events

Allow acquiring relevant
knowledge from customers via their
tweets, through which they express
their expectations, likes and
dislikes about Starbucks

Keep Starbucks knowledgeable
about customers’ concerns and
help quickly manage potential
rumors and misconceptions
among customers

Facebook (SNS) Help Starbucks provide knowledge for
customers about its products, locations
and organizational cultures to keep
them abreast of changes

Enable Starbucks to gain
knowledge from customers through
poll questions by directly asking
them about their personal opinions,
preferences and feedbacks

Facilitate accumulation of
knowledge about customers’
behaviors, preferences,
expectations, satisfaction levels
and their reactions to new products
and changes in Starbucks

Foursquare (LMS) Permit Starbucks to provide knowledge
for customers on day-to-day events
specific for a location, such as offers
and new product launches

Allow the checked in customers to
leave tips, which serve as
Starbucks’ knowledge from
customers based on specific
locations

No evidence found

MyStarbucksIdea
(CDS)

Allow Starbucks to provide knowledge
for customers by indicating the status
such as ‘‘under review’’, ‘‘reviewed’’,
‘‘coming soon’’ and ‘‘launched’’ of their
submitted ideas

Encourage knowledge flow from
customers in the form of
suggestions and novel ideas for
Starbucks to implement, thereby
promoting the concept of ‘‘design
with customers’’

Promote customer engagement by
treating them as evaluators of
submitted ideas, thereby drawing
out valuable knowledge about
customers via their comments to
submitted ideas

PAGE 244jJOURNAL OF KNOWLEDGE MANAGEMENTj VOL. 17 NO. 2 2013

5. Discussion

Three major findings can be culled from the paper. First, Starbucks deploys a wide range of

social media tools for CKM that serve as effective branding and marketing instruments for

the organization. Through social media, it provides knowledge for customers and keeps

them updated on its latest products, activities and events. Starbucks draws knowledge from

customers to analyze their expectations, behaviors and preferences. It also acquires

knowledge about customers by monitoring what is being discussed among customers to

gain a sense of the sentiment on the ground (Castellanos et al., 2011; Salomann et al., 2005).

Also, Starbucks does not treat social media services as isolated applications. The services

generally complement one another to mutually reinforce their overall impact (West, 2012).

For instance, Starbucks issued a 60-second advertisement prior to the 2008 presidential

election in the USA, promising a free cup of brewed coffee to every voter. Posting the

commercial in a video sharing website, Starbucks jointly used Facebook and Twitter to

stimulate its viewership and amplify its effect. Till the day of the election, the video was

viewed 419,000 times. In Facebook, it attracted over 400,000 comments while customers

were found tweeting on Starbucks every eight seconds (Miller, 2009). Such an integrated

approach of linking various social media services seems to have helped the organization

maximize its branding and marketing efforts.

Second, Starbucks redefines the roles of its customers through the use of social media by

transforming them from passive recipients of beverages to active contributors of innovation.

Starbucks closely follows the principle of ‘‘design with customers’’ (Sigala, 2012) by allowing

its customers play the dual role of creators and evaluators of ideas (Thomke and von Hippel,

2002; Tidd et al., 2005). Implementation of ideas contributed by customers at Starbucks

stores further fosters customer loyalty (Chua, 2011). The introduction of products like the

‘‘Mocha Coconut and Coconut Crème Frappuccino blended beverages’’, culled from

MyStarbucksIdea, are courtesy of the knowledge acquired by Starbucks from its customers.

Also, ideas such as ‘‘Have a Starbucks Calendar available on the website to let us know

about . . . promotions as well as when the seasonal flavors are available . . . ’’ culled from the

CDS, show that the knowledge drawn by Starbucks from its customers is not confined within

its products and beverages. Customers appear to possess a significant stake in the creation

and evaluation of innovative ideas that encompass the entire breadth of its business. The

widespread support for Starbucks can thus be attributed to the manner in which it

collaborates closely with its customers.

Third, Starbucks uses effective strategies to alleviate customers’ reluctance towards

voluntary knowledge sharing, thereby promoting engagement in social media (Desouza

et al., 2008). Starbucks deploys a number of former and present baristas to offer prompt

responses to customers. Such promptness makes customers feel that they are valued,

which in turn serves as motivation to continue their participation (Schultz and Gordon, 2011).

At the same time, Starbucks makes conscious efforts to prevent overload of knowledge so

that its engagement strategies do not become sources of nuisance to customers (Noff,

2009). Also, it pays attention to both compliments and complaints alike, which further

encourages customers’ engagement. Starbucks treats unhappy customers as opportunities

for improvement and strives to turn frowns upside down (Horovitz, 2000a; Michelli, 2007).

For instance, in reply to the tweet ‘‘Hey @starbucks . . . disappointed the marina bay mariott

on San Diego has no . . . ’’ by an unhappy customer, Starbucks replied after three minutes

‘‘. . . sorry about that . . . is only around seasonally. Have you tried the gingerbread latte?’’.

These strategies appear to be effective in bridging the virtual world of social media with the

physical world of Starbucks stores, thereby fostering continuous participation of customers.

6. Conclusion

The increasing sophistication and changing preferences of customers has led to a paradigm

shift in KM towards a dynamic customer-centric approach, which has resulted in the rise of

CKM. At the same time, the emergence of social media has transformed online users from

content readers into content publishers, making their role more significant. Relying on a

traditional bricks-and-mortar business model, Starbucks provides an interesting context that

VOL. 17 NO. 2 2013 jJOURNAL OF KNOWLEDGE MANAGEMENTj PAGE 245

sees the confluence of social media and CKM. Riding on the waves of social media,

Starbucks seems to have re-written the rules of CKM. It demonstrates versatility in engaging

customers through various social media services such as Twitter (MBS), Facebook (SNS),

Foursquare (LMS) and MyStarbucksIdea (CDS) to support different aspects of CKM

strategies. In particular, Twitter, Facebook and MyStarbucksIdea are used for management

of knowledge for, from and about customers, whereas Foursquare is mainly used for

managing knowledge for and from customers.

A limitation inherent in this paper must be acknowledged. The scope of the paper is limited

by the window of the data collection period. Thus, it is conceivable that the patterns of

Starbucks’ use of social media could have been different had a different window of data

collection was chosen. Hence, the findings should be interpreted in light of this constraint.

For managers, this paper uses Starbucks as an exemplar to illustrate that social media is not

a tool exclusive to online businesses. The lessons gleaned from the case study suggest that

social media could be a potential game-changer in supporting CKM efforts even for

organizations relying on traditional brick-and-mortar business model. The implications

suggest that organizations should use social media to provide impetus to their businesses

by imbibing customers in their operations. A myriad of social media services could be used

in a mutually reinforcing manner to provide knowledge for customers on new products and to

offer ways to make their best use (Garcia-Murillo and Annabi, 2002; Horovitz, 2000b).

Knowledge from customers, especially those who are unhappy, could be utilized for

improvement by obtaining honest complaints and suggestions for free (Horovitz, 2000a;

Michelli, 2007). Knowledge about customers should also be used to gain a sense of the

sentiment on the ground, which in turn, could aid organizations in crisis management

(Castellanos et al., 2011; Salomann et al., 2005). Sincere efforts should be made to engage

customers in voluntary knowledge sharing to realize the concept of ‘‘design with customers’’

(Sigala, 2012). Such strategies could allow organizations bridge the bridge between their

actual and perceived performance (Horovitz, 2000a).

For scholars interested in investigating the role of social media in supporting CKM, this

paper provides more ideas for further inquiries. For example, the framework presented in

Table I can serve as a basis to compare among different traditional businesses, different

online businesses, as well as between traditional and online businesses. This could

contribute to a more textured perspective leading to verification, validation and refinement of

the framework. A second research direction may involve conducting a two-pronged user

study involving direct interactions with Starbucks management and Starbucks customers.

This can help obtain richer qualitative data and offer insights into the way Starbucks

translates enormous amounts of customers’ contributions in social media into knowledge.

These recommendations for future research can build upon the theoretical foundation to

generate more CKM ideas that can lead to win-win situations for both organizations and

customers.

References

Bernoff, J. (2008), ‘‘2008 Forrester Groundswell Awards winners’’, available at http://socialmediatoday.

com/index.php?q ¼ SMC/54276 (accessed August 16, 2012).

Bhalla, G. (2011), Collaboration and Co-creation: New Platforms for Marketing and Innovation, Springer,

Berlin.

Bulearca, M. and Bulearca, S. (2010), ‘‘Twitter: a viable marketing tool for SMEs?’’, Global Business and

Management Research: An International Journal, Vol. 2 No. 4, pp. 296-309.

Castellanos, M., Dayal, U., Hsu, M., Ghosh, R., Dekhil, M., Lu, Y., Zhang, L. and Schreiman, M. (2011),

‘‘LCI: a social channel analysis platform for live customer intelligence’’, Proceedings of the 2011

International Conference on Management of Data, ACM, New York, NY, pp. 1049-58.

Chua, A.Y.K. (2007), ‘‘A tale of two hurricanes: comparing Katrina and Rita through a KM perspective’’,

Journal of the American Society of Information Science and Technology, Vol. 58 No. 10, pp. 1518-28.

PAGE 246jJOURNAL OF KNOWLEDGE MANAGEMENTj VOL. 17 NO. 2 2013

Chua, A.Y.K. (2011), ‘‘How Web 2.0 supports customer relationship management in Amazon’’,

International Journal of Electronic Customer Relationship Management, Vol. 5 Nos 3/4, pp. 288-304.

Currie, T. (2011), ‘‘Experiments in location-based content: a case study of Postmedia’s use of

Foursquare’’, paper presented at the International Symposium of Journalism, April, Austin, TX, available

at: http://online.journalism.utexas.edu/2011/papers/Currie2011 (accessed July 31, 2012).

Davenport, T.H. and Klahr, P. (1998), ‘‘Managing customer support knowledge’’, California Management

Review, Vol. 40 No. 3, pp. 195-208.

Davenport, T.H., Harris, J.G. and Kohli, A.K. (2001), ‘‘How do they know their customers so well?’’,

MIT Sloan Management Review, Vol. 42 No. 2, pp. 63-73.

Desouza, K.C., Awazu, Y., Jha, S., Dombrowski, C., Papagari, S., Baloh, P. and Kim, J.Y. (2008),

‘‘Customer-driven innovation’’, Research Technology Management, Vol. 51 No. 3, pp. 35-44.

Dhar, S. and Varshney, U. (2011), ‘‘Challenges and business models for mobile location-based services

and advertising’’, Communications of the ACM, Vol. 54 No. 5, pp. 121-9.

Dooley, J., Jones, S. and Iverson, D. (2012), ‘‘Web 2.0: An assessment of social marketing principles’’,

Journal of Social Marketing, Vol. 2 No. 3, pp. 207-21.

Dutta, S. (2010), ‘‘What’s your personal social media strategy?’’, Harvard Business Review, Vol. 88

No. 11, pp. 127-30.

Eisenhardt, K.M. (1989), ‘‘Building theories from case study research’’, Academy of Management

Review, Vol. 14 No. 4, pp. 532-50.

Ellison, N.B., Steinfield, C. and Lampe, C. (2007), ‘‘The benefits of Facebook ‘friends:’ social capital and

college students’ use of online social network sites’’, Journal of Computer-mediated Communication,

Vol. 12 No. 4, pp. 1143-68.

Flanagin, A.J. and Bator, M. (2011), ‘‘The utility of information and communication technologies in

organizational knowledge management’’, in Canary, H. and McPhee, R. (Eds), Communication and

Organizational Knowledge: Contemporary Issues for Theory and Practice, Routledge, New York, NY,

pp. 173-90.

Gallaugher, J. and Ransbotham, S. (2010), ‘‘Social media and customer dialog management at

Starbucks’’, MIS Quarterly Executive, Vol. 9 No. 4, pp. 197-212.

Gao, Q., Abel, F., Houben, G.J. and Yu, Y. (2012), ‘‘A comparative study of users’ microblogging

behavior on Sina Weibo and Twitter’’, in Masthoff, J., Mobasher, B., Desmarais, M. and Nkambou, R.

(Eds), User Modeling, Adaptation, and Personalization, Springer, Berlin, pp. 88-101.

Garcia-Murillo, M. and Annabi, H. (2002), ‘‘Customer knowledge management’’, Journal of the

Operational Research Society, Vol. 53 No. 8, pp. 875-84.

Gebert, H., Geib, M., Kolbe, L. and Brenner, W. (2003), ‘‘Knowledge enabled customer relationship

management: integrating customer relationship management and knowledge management concepts’’,

Journal of Knowledge Management, Vol. 7 No. 5, pp. 107-23.

Gunawardena, C.N., Hermans, M.B., Sanchez, D., Richmond, C., Bohley, M. and Tuttle, R. (2009),

‘‘A theoretical framework for building online communities of practice with social networking tools’’,

Educational Media International, Vol. 46 No. 1, pp. 3-6.

Hennig-Thurau, T., Gwinner, K.P., Walsh, G. and Gremler, D.D. (2004), ‘‘Electronic word-of-mouth via

consumer-opinion platforms: what motivates consumers to articulate themselves on the Internet?’’,

Journal of Interactive Marketing, Vol. 18 No. 1, pp. 38-52.

Horovitz, J. (2000a), ‘‘Using information to bond with customers’’, in Marchand, D.A. (Ed.), Competing

with Information: A Manager’s Guide to Creating Business Value with Information Content, Wiley,

Chichester, pp. 35-53.

Horovitz, J. (2000b), ‘‘Information as a service to the customer’’, in Marchand, D.A. (Ed.), Competing

with Information: A Manager’s Guide to Creating Business Value with Information Content, Wiley,

Chichester, pp. 55-68.

Hull, R., Coombs, R. and Peltu, M. (2000), ‘‘Knowledge management practices for innovation: an audit

tool for improvement’’, International Journal of Technology Management, Vol. 20, pp. 633-56.

VOL. 17 NO. 2 2013 jJOURNAL OF KNOWLEDGE MANAGEMENTj PAGE 247

Junglas, I.A. and Watson, R.T. (2008), ‘‘Location-based services’’, Communications of the ACM, Vol. 51

No. 3, pp. 65-9.

Kaplan, A.M. and Haenlein, M. (2010), ‘‘Users of the world, unite! The challenges and opportunities of

social media’’, Business Horizons, Vol. 53 No. 1, pp. 59-68.

Khalifa, R., Sharma, N., Humphrey, C. and Robson, K. (2007), ‘‘Discourse and audit change:

transformations in methodology in the professional audit field’’, Accounting, Auditing & Accountability

Journal, Vol. 20 No. 6, pp. 825-54.

Kozinets, R.V. (1997), ‘‘I want to believe: a netnography of the X-Philes’ subculture of consumption’’,

Advances in Consumer Research, Vol. 24, pp. 470-5.

Kuhlen, R. (2003), ‘‘Change of paradigm in knowledge management – framework for the collaborative

production and exchange of knowledge’’, paper presented at the 69th IFLA General Conference and

Council, Berlin, August 30, available at: http://fiz1.fh-potsdam.de/volltext/konstanz/05079a

(accessed July 26, 2012).

Kwak, H., Lee, C., Park, H. and Moon, S. (2010), ‘‘What is Twitter, a social network or a news media?’’,

Proceedings of the International Conference on the World Wide Web, ACM, New York, NY, pp. 591-600.

Lai, L.S.L. and Turban, E. (2008), ‘‘Group formation and operations in the Web 2.0 environment and

social networks’’, Group Decision and Negotiation, Vol. 17 No. 5, pp. 387-402.

Levy, M. (2009), ‘‘Web 2.0 implications on knowledge management’’, Journal of Knowledge

Management, Vol. 13 No. 1, pp. 120-34.

Lopez-Nicolas, C. and Molina-Castillo, F.J. (2008), ‘‘Customer knowledge management and

e-commerce: the role of customer perceived risk’’, International Journal of Information Management,

Vol. 28 No. 2, pp. 102-13.

Lugosi, P., Janta, H. and Watson, P. (2012), ‘‘Investigative management and consumer research on the

internet’’, International Journal of Contemporary Hospitality Management, Vol. 24 No. 6, pp. 838-54.

Magnier-Watanabe, R., Yoshida, M. and Watanabe, T. (2010), ‘‘Social network productivity in the use of

SNS’’, Journal of Knowledge Management, Vol. 14 No. 6, pp. 910-27.

Maswera, T., Dawson, R. and Edwards, J. (2006), ‘‘Assessing the levels of knowledge transfer within

e-commerce websites of tourist organisations in Africa’’, Electronic Journal of Knowledge Management,

Vol. 4 No. 1, pp. 59-66.

Michelli, J.A. (2007), The Starbucks Experience: Five Principles for Turning Ordinary into Extraordinary,

McGraw-Hill, New York, NY.

Miles, M.B. and Huberman, A.M. (1994), Qualitative Data Analysis: An Expanded Sourcebook, Sage

Publications, Thousand Oaks, CA.

Miller, C.C. (2009), ‘‘New Starbucks ads seek to recruit online fans’’, The New York Times, May 18, p. 27,

available at: www.nytimes.com/2009/05/19/business/media/19starbux.html (accessed July 27, 2012).

Noff, A. (2009), ‘‘Learning from Starbucks – one tweet at a time’’, available at: www.blonde20.com/blog/

2009/11/19/learning-from-starbucks-one-tweet-at-a-time/ (accessed August 25, 2012).

Padula, G. (2008), ‘‘Enhancing the innovation performance of firms by balancing cohesiveness and

bridging ties’’, Long Range Planning, Vol. 41 No. 4, pp. 395-419.

Paroutis, S. and Saleh, A.A. (2009), ‘‘Determinants of knowledge sharing using Web 2.0 technologies’’,

Journal of Knowledge Management, Vol. 13 No. 4, pp. 52-63.

Plessis, M.D. (2007), ‘‘The role of knowledge management in innovation’’, Journal of Knowledge

Management, Vol. 11 No. 4, pp. 20-9.

Rowley, J. (2002), ‘‘Eight questions for customer knowledge management in e-business’’, Journal of

Knowledge Management, Vol. 6 No. 5, pp. 500-11.

Salomann, H., Dous, M., Kolbe, L. and Brenner, W. (2005), ‘‘Rejuvenating customer management: how to

make knowledge for, from and about customers work’’, Journal of European Management, Vol. 23 No. 4,

pp. 392-403.

Schultz, H. and Gordon, J. (2011), Onward: How Starbucks Fought for its Life without Losing its Soul,

Rodale, New York, NY.

PAGE 248jJOURNAL OF KNOWLEDGE MANAGEMENTj VOL. 17 NO. 2 2013

Sigala, M. (2012), ‘‘Social networks and customer involvement in new service development (NSD):

the case of www.mystarbucksidea.com’’, International Journal of Contemporary Hospitality

Management, Vol. 24 No. 7, pp. 966-90.

Stake, R.E. (1995), The Art of Case Study Research, Sage Publications, Thousand Oaks, CA.

Stathopoulos, I. and Harrison, K. (2003), ‘‘Study at Master’s level by practising physiotherapists’’,

Physiotherapy, Vol. 89 No. 3, pp. 158-69.

Taylor, S.A. and Baker, T.L. (1994), ‘‘An assessment of the relationship between service quality and

customer satisfaction in the formation of consumers’ purchase intentions’’, Journal of Retailing, Vol. 70

No. 2, pp. 163-78.

(The) Nikkei Weekly (2010), ‘‘How many ‘fans’ does your firm have?’’, The Nikkei Weekly, August 30.

Thomke, S. and von Hippel, E. (2002), ‘‘Customers as innovators: a new way to create value’’, Harvard

Business Review, Vol. 80 No. 4, pp. 5-11.

Tidd, J., Bessant, J.R. and Pavitt, K. (2005), Managing Innovation: Integrating Technological, Market and

Organizational Change, Wiley, Chichester.

Wagner, C. and Majchrzak, A. (2007), ‘‘Enabling customer-centricity using wikis and the wiki way’’,

Journal of Management Information Systems, Vol. 23 No. 3, pp. 17-43.

Warren, K. (2011), ‘‘Starbucks’ social media strategy’’, Business Review, August 2, pp. 34-43.

West, T. (2012), ‘‘Starbucks tops social engagement study: what can your biz learn?’’, Birmingham

Business Journal, April 2, available at www.bizjournals.com/albuquerque/blog/socialmadness/2012/04/

starbucks-tops-social-engagement.html?page ¼ all (accessed August 25, 2012).

Yin, R.K. (2003), Case Study Research: Design and Methods, Sage Publications, Thousand Oaks, CA.

York, E.B. (2010), ‘‘Starbucks gets its business brewing again with social media’’, Advertising Age,

February 22, available at: http://vandymkting.typepad.com/files/2010-2-22-advertising-age-starbuks-

gets-its-business-brewing-again-with-social-media (accessed August 7, 2012).

Zanjani, M., Rouzbehani, R. and Dabbagh, H. (2008), ‘‘Proposing a conceptual model of customer

knowledge management: a study of CKM tools in British dotcoms’’, International Journal of Human and

Social Sciences, Vol. 3 No. 5, pp. 363-7.

Zhang, Z. (2011), ‘‘Customer knowledge management and the strategies of social software’’, Business

Process Management Journal, Vol. 17 No. 1, pp. 82-106.

About the authors

Alton Y.K Chua is Associate Professor and Program Director, Master of Science (Information
Systems) at Nanyang Technological University. His research interests include information
and knowledge management as well as social computing. As an active researcher, he has
published more than 100 refereed journal articles and conference papers. He serves on the
editorial board of three international refereed journals, namely Journal of Information
Science, Journal of Universal Computer Science and Journal of Information and Knowledge
Management. Alton Y.K Chua is the corresponding author and can be contacted at:
altonchua@ntu.edu.sg

Snehasish Banerjee is a Research Associate at Nanyang Technological University. His
research focus is in information science, and in particular, on the theme of user-generated
content. He has published papers in journals including Journal of the American Society for
Information Science and Technology. He holds a Master of Science (Information Systems).

VOL. 17 NO. 2 2013 jJOURNAL OF KNOWLEDGE MANAGEMENTj PAGE 249

To purchase reprints of this article please e-mail: reprints@emeraldinsight.com

Or visit our web site for further details: www.emeraldinsight.com/reprints

Reproduced with permission of the copyright owner. Further reproduction prohibited without
permission.