© Imperial College Business School

Tutorial: Starbucks

Strategic Marketing – SUMMER SCHOOL 2013 1

Crowdsourcing, Marketing & Open Innovation

© Imperial College Business School

Today’s Session

2

What we are going to cover…

• Three things from Tuesday’s lecture on e-retail, seo and

open innovation?

• Recap from the Starbuck’s Case Study:

– Digital marketing operations in the US

– Digital marketing operations in China

– My Starbucks Idea

• Truly understanding Open Innovation

© Imperial College Business School

Tuesday’s Lecture

3

Key Digital Marketing Concepts

Three things from Tuesday’s lecture on e-retail, seo and

open innovation?

1. List six ways digital has impacted traditional retailing.

2. Name some digital touchpoints? At what stage are they

important?

3. Difference between multi-channel vs omnichannel

marketing?

Starbucks Digital Marketing

4

Omnichannel Marketing Experience in the US?

SOCIAL

LOCAL

WEB / MOBILE

Starbucks Digital Marketing

5

Omnichannel Marketing Experience in China?

SOCIAL

LOCAL

WEB / MOBILE

© Imperial College Business School

What is Open Innovation?

6

‘My Starbucks Idea’ Open Innovation Campaign

© Imperial College Business School

Starbucks Case

7

Source of new product innovations?

© Imperial College Business School

What is Open Innovation?

8

Getting under the skin of a very ‘hot’ concept

Definition:

- Open innovation is the use of purposive inflows and

outflows of knowledge to accelerate product innovation and

expand the market

- Open platforms or spaces where customers employees and

other stakeholders can provide input and ideas.

Marketing Benefits:

- User engagement and promotion / direct marketing

- Customer insight, real product development, personalisation

© Imperial College Business School

What is Open Innovation?

9

How do companies use (or understand) it?

© Imperial College Business School

Marketing or Innovation?

10

What does the firm actually want?

Marketing:

- Increase brand/product awareness and identification

- Increase interaction with brand/product

Innovation: access and transfer external knowledge

- About problems: what are their needs?

- About solutions: can they solve problems you have?

Example: BP Oil Spill

11

VIDEO: How did they use Open Innovation?

- Call for ideas to solve the Gulf of

Mexico disaster.

- More than 120,000 ideas received;

many acknowledged to be innovative

- Not a single one implemented

Example: Toyota

12

VIDEO: How did they use Open Innovation?

© Imperial College Business School

Where to get good ideas?

13

The importance of lead users

Lead users:

- Have needs that foreshadow demand in the marketplace

- Expect to obtain high benefit from a solution

- Innovate to solve problems at private expense

Examples of consumer product innovations…

© Imperial College Business School

Where to get good ideas?

14

The importance of lead users

Lead users:

- Have needs that foreshadow demand in the marketplace

- Expect to obtain high benefit from a solution

- Innovate to solve problems at private expense

Examples of consumer product innovations…

Lead users in unusual places

15

The story behind Play-Doh?

‘Innomediaries’

16

Source of new ideas and solutions to problems

Colgate-Palmolive:

Getting fluoride into

toothpaste tubes

© Imperial College Business School

Example: Nestlé

17

Toolkits at Nestle Foodservices

Line of business: Customised

food for restaurant chains i.e.

Mexican dressing for Taco Bell

Problem: Ingredients and process are

different in industrial production

requiring many iterations

Solution: Nestle offers toolkit with

ingredients used in industrial production

– error free!

Result: Reduction of development time

(prototype to large scale production)

from 26 to 3 weeks!

© Imperial College Business School

Example: Threadless

18

Community-based business model

VIDEO

Threadless is a t-shirt

company with unique

designs for its clothing,

yet it spends nothing on

copyright, design or

marketing

Q. How do they do it?

What are the benefits?