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Well, welcome back, and
now we're basically getting into the app era in digital social media.
All right, welcome back, folks, and now we are going to, in some sense,
see how apps much how ubiquitous on mobiles now, impact business problems.
Mostly in the domain of marketing, and branding, selling, and so
on, selling and branding while at apps.
Starbucks, Starbucks certainly looks like a coffee company, but
it is actually becoming more and
more of a digital company that happens to monetize through coffee.
All of this is enabled basically by a mobile app.
And what does the app do?
Well, there it is, yep, that's the coffee bit.
Hey, that's the app, the app basically allows customers to recharge, yep,
to order, to locate, to avoid lines.
So basically, if you're ordering via the app, you can go and pick
it up without having to stand in line, express pick-up, and you get more options.
The Baristas who are actually serving customers there, if you order through
the app, we'll know your names, what do you ordered, what do you look like, right?
Win-win-win for everyone.
And for the barista and for the company and for you the customer so,
all of it, recharge, locate, order, pick-up, all of it.
Without having to exchange money actually because the app itself is allowing that
transaction to happen.
How did it help?
Now, that it help sales, and so on.
Turns out, it did.
Starbucks' 2015 Q3 report says mobile transactions accounted for 20%,
a full one-fifth of in-store sales, which is actually 2x higher than for 2013.
And foot traffic actually rose 4%.
4% looks small, but nothing to sneeze at, right, all because of a mobile app.
Here's another nice example where a mobile app basically helped in selling and
branding, and this is Murphy's, a maker of beer in Ireland.
Budweiser in Ireland launched an Ice Cold beer Index, basically, they said, hey,
in the summer, higher the temperature, higher the discounts on Budweiser, okay.
Sadly for Budweiser, which is actually from the US, and
doesn't know Ireland very well, Irish summers tend to be usually rainy.
And so, who's going to take advantage of this?
Well, the local brewers there, Murphy's.
So, Murphy basically responded with an app which had said when it rains, it pours,
and every time it rains,
we are going to give away, 1,000 pints of beer at a discounted price.
So consumers using the app had four days to claim their free pint and some cents.
And then the app also showed them the closest pubs
in Cork County to redeem their offer at.
So there it goes, When It Rains It Pours, if it is raining, you get to book your
pint, and basically so here's the deal, I mean they're giving away 1,000 pints.
Does it not affect profitability?
Turns out it doesn't because once you are in the door, once you have claimed your
free pint, turns out people there actually sit down to have another and then another.
And so basically,
what is happening is this whole thing turned out to be profitable for them.
When could it backfire?
Well, not all is rosy there, and sometimes things backfired.
For instance, in China recently,
BMW advertised in China's WeChat messaging service.
However, the ads were not shown to everybody.
The ads were only shown to those people
whose profiles suggested that they were potential buyers of these expensive cars.
But remember others were shown other stuff.
WeChat is a social platform and what happens on social platforms,
word gets out and when word gets out well, egos can be bruised, right?
I wasn't shown the ad which means BMW believes I'm not good enough to be buying
their cars, right?
Now, think about it, there was a backlash.
Those not shown the ads started to complain.
And BMW's brand did take a small hit.
That the experience basically shows the complexities of
advertising on social platforms today.
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Sudhir VoletiAssistant Professor and ISB Research Fellow
