Week 14 - Chapter 7: Business Marketing

Business Marketing Vs. Consumer Marketing

Although on the surface the differences between business and consumer marketing may seem obvious, there are more subtle distinctions between the two. Business marketing generally entails shorter and more direct channels of distribution. While consumer marketing is aimed at large groups through mass media and retailers, the negotiation process between the buyer and seller is more personal in business marketing. Most business marketers commit only a small part of their promotional budgets to advertising, and that is usually through direct mail efforts and trade journals. While that advertising is limited, it often helps the business marketer set up successful sales calls. Marketing to a business trying to make a profit (business-to-business marketing, B2B) as opposed to an individual for personal use (business-to-consumer, B2C) is similar in terms of the fundamental principles of marketing. In each marketing situation, the marketer must always:

• successfully match the product or service strengths with the needs of a definable target market;
• position and price to align the product or service with its market, often an intricate balance; and
• communicate and sell it in the fashion that demonstrates its value effectively to the target market.

These are the fundamental principles of the 4 P's of marketing (the marketing mix).

So what are the meaningful differences between B2B and B2C marketing?

A B2C sale is to an individual who may be influenced by other factors such as family members or friends, but ultimately the sale is to a single person who pays for the transaction, and the product is for personal use. A B2B sale is to an organization or firm. Given the complexity of organizational structure, B2B sales typically involve multiple decision makers. The marketing mix is affected by the B2B uniqueness which include complexity of business products and services, diversity of demand and the differing nature of the sales itself (including fewer customers buying larger volumes). Because there are some important subtleties to the B2B sale, the issues are broken down beyond just the original 4 P's.

With all that in mind, it's safe to assume that when the Coca-Cola company makes the beverages, the vending machines, the bottles, the cups, etc. and sells them to retailers, schools, movie theaters, office buildings and so on... they are, in turn, marketing to other businesses because those businesses intend to resell those items.

Since this is the last post of the semester, I thought I'd go out with a bang and post this sort of off topic video: still has to do with Coca-Cola though :)

Happy 125th Birthday Coca-Cola!

Today was Coca-Cola's 125th anniversary and there are marketing plans being made in honor of this special occasion. In the U.S., television commercials for Coca-Cola will be modified to change the tag line, “Open happiness,” to “125 years of sharing happiness.”
There will also be a campaign, to run throughout the summer, that will carry the theme “125 years of summer fun” and extend for 125 days. The campaign will include a new bottle size, with 1.25 liters of Coke, to be sold in stores, and commemorative versions of an existing bottle size, with eight ounces of Coke.

There will also be 125 days of prize giveaways in the U.S., through the existing My Coke Rewards program as well as through text-to-win codes that will be printed under the caps of various brands in the Coca-Cola trademark line-up.

Other elements of the campaign will include a message during the 125th lap of the Coca-Cola 600 race, displays in stores to mark the anniversary and collectible cups at outlets like fast-food restaurants.

Week 13 - Chapter 8: Segmenting and Targeting Markets

"Market segmentation plays a key role in the marketing strategy of almost all successful organizations."

Targeting the right market is critical since all subsequent marketing decisions will be directed toward satisfying the needs of chosen customers. But what approach should be taken to select markets the company will target?

One approach is to target at a very broad level (undifferentiated targeting) by viewing the market as consisting of all customers who have a basic need that must be satisfied. For example, one could consider the beverage market or Coca-Cola in this case as consisting of all customers who want to purchase refreshment products to solve a thirst need. While this may be the largest possible market a company could hope for (it would seem to contain just about everyone in the world) in reality there are no commercial products that would appeal to everyone in the world since individual nutritional needs, tastes, purchase situations, economic conditions, and many other issues lead to differences in what people seek to satisfy not only their thirst but other needs as well.

Because people are so different and seek different ways to satisfy their needs, nearly all organizations, whether for-profits or not-for-profits, industrial or consumer, domestic or international, must have a Market Segmentation approach to target marketing. This approach divides broad markets, consisting of customers possessing different characteristics, into smaller market segments in which customers are grouped by characteristic shared by others in the segment. To successfully target markets using a segmentation approach, organizations such as Coca-Cola engage in steps which include the following:

1. Identify segments within the overall market
2. Choose the segment that fits best with the organization’s objectives and goals
3. Develop a marketing strategy that appeals to the selected target market

Coca-Cola has a portfolio of more than 3,500 beverages, from diet and regular sparkling beverages to still beverages such as fruit juices and fruit drinks, waters, sports and energy drinks, teas and coffees, and milk-and soy-based beverages and offers them in over 200 countries. The target market of Coca-Cola is not limited to age, area or gender, it is present globally and serves people at offices, homes, parties, restaurants, bars and any place you can have people even in the middle of nowhere at times. It usually represents itself as a market for the younger generations but products are also offered specifically for older people.

At the end of day, the ultimate goal of the Coca-Cola Company is of course to make a profit from as many markets as possible but more importantly it is also for all the consumers in these markets to:

Week 12 - Chapter 11: Developing and Managing Products

The product and brand development strategy of Coca-Cola has been far reaching and has managed to remain in the limelight ever since it became a favorite within the soft drink market. It has been noticed that brand loyalty is an important factor in maintaining the number one position. The Coca-Cola Company enjoys the status of being one of the biggest beverage companies of the world. It has a distribution system, which makes it unique from the rest of beverage manufacturers. Over the years, Coca-Cola has passed several tests of brand enhancement and the company makes it a point that the products under the banner Coca-Cola continue to invade the minds of the consumers.

The brand development strategy of Coca-Cola comprised redesigning of its brand development policies and techniques to keep up with the changing mindset of its consumers. In their preliminary stages this brand believed in the following:

    * Affordability

    * Availability

    * Acceptability

However, this brand development strategy of Coca-Cola was reworked to stress on managing the following instead:

    * Price value

    * Preference

    * Pervasive Penetration

The essence of brand building of the company lies in the fact that it wants its consumer’s accessibility to be “within an arm's reach of desire”. In an attempt to build its brand identity, as many as 20 brand attributes are tested every month involving as many as 4,000 customers. The brand development strategy of Coca-Cola is effective as it has been able to construct, manage as well as maintain its brand image since its introduction. Another reason why Coca-Cola has gained unanimous acceptance all around the globe is due to the fact that it has been able to connect very well with its consumers. They believe in shelling out the best so that the consumers are retained by default. A part of the brand building technique is also to enhance “purchase frequency”. The company has also invested in various advertisement campaigns often engaging the services of celebrities around the globe. In addition to normal consumers there are also those who not only buy the drink but they buy collectible products as well, many in which are extremely expensive.

Below is a video example of an ordinary store being transformed into a working Coca-Cola promotion. Seriously, it looks like a Coca-Cola bomb exploded in there.

Week 11 - Chapter 16: Integrated Marketing Communications

Integrated Marketing Communication is the idea that a company's promotional efforts should all be coordinated to achieve the best combined effects. Promotion involves a number of tools they can use to increase demand for our products or services. The most well known component of promotion is advertising, but the company can also use tools such as the following:

• Public relations - the company's staff provides information to the media in the hopes of getting coverage, whether it be good or bad...
• Trade promotion - the company offers retailers and wholesalers temporary discounts, which may or may not be passed on to the consumer, to stimulate sales. 
• Sales promotion - the consumers are given either price discounts, coupons, or rebates.
• In-store displays - companies often pay a great deal of money to have their goods displayed prominently in the store. More desirable display spaces include:  end of an aisle, free-standing displays, and near the check-out counter. 
• Personal Selling - a salesperson representing the company uses skills and techniques for building personal relationships with the consumer, which ends up with beneficial results for both parties... usually.
• Premiums, Samples, etc.

No company's promotional mixing is easy. But for the sake of stating the obvious in the case of what Coca Cola's AIDA model would look like, I think it would go something like this:

Attention - Typical promotion, commercials, print ads, billboards, contests, etc.

Commercials Like These:

Ok you have my attention, now what?

Interest - Making people buy their beverages by peaking interests, both emotionally (feel good commericals) and physically (makes you thirsty for a Coke)

I Feel Good & I'm Thirsty

Desire - convincing customers that they want and desire the product and that it will satisfy their needs. I don't know about you guys but after seeing those commercials, I pretty much want a Coke.

Action - leading customers towards taking action and or purchasing. If I wasn't so lazy I'd totally go out and buy some right now. I will most likely get some next time I'm outside.

Our marketing textbook only mentions attention, interest, desire and action. Now a days, some marketers have added another letter to form AIDA(S) The S stands for:

Satisfaction - making sure the customer is satisfied so they become a repeat customer and give referrals to a product.

Week 10 - Chapter 10: Product Concepts

In an attempt to not repeat the same old things that other Coca-Cola blogs have mentioned about their product concepts, I'm going to introduce a fan-made idea by a guy named Andrew Kim.

This Coca-Cola bottle concept takes up less space than traditional round bottles and comes with a cool collapsible design for easy recycling. As an added bonus, each bottle features an opening at the bottom that allows multiple bottles to be stacked. This increases efficiency during transportation and reduces the amount of space needed for storage.

Some comments on this idea from Coke customers claim that this was a "very neat and well thought out design concept." It is aesthetically more pleasing for some people as their taste are more contemporary. However, the shape of the bottle has become part of Coca-Cola’s identity. When you see that shape it automatically correlates with the Coca-Cola brand. They have changed it slightly over the years but stayed true to the overall shape and design. Changing this would be huge and may have a negative impact.

Innovative idea, yes... would it work, not really. Having the bottle be collapsible is great, but the bottle's rectangular shape would not stay that way for long because the carbonation or pressure of the soda would make the sides pop out and become rounded anyway.

Disclaimer: Coca-Cola did NOT come up with this concept. Follow the link for the facts. Andrew Kim's Site

Week 9 - Chapter 18: Sales Promotion and Personal Selling

As part of the arsenal of marketing, sales promotions are strategies wherein an incentive is offered to the final consumer to impact sales in the short term. Also part of the family are trade promotions that have the same objective, but whose incentives are targeted to the channel of distribution. Coca-Cola is able to display, offer samples and coupons, hand out information regarding new products, and establish additional partners. 

Trade Promotion: Coca-Cola Company gives incentives to retailers in a way that offer them free samples and free bottles, the retailers then sometimes uses the same method when trying to sell to consumers. Sometimes Coca-Cola Company change their product prices according to the season. Summer is supposed to be a good season for beverage industry. So in winter they reduce their prices to maintain their sales and profit in some countries such as Pakistan.

Coca-Cola's Promotional Strategies include:

Getting shelves: They purchase shelves in big supermarkets or places like Costco and display their products as attractively as possible.

Eye Catching Positions: Salesman of the Coca-Cola Company positions their freezers (vending machines) and their products in eye-catching positions. Normally they keep their freezers near the entrance of the stores, and refrigerator's with Coke at the registers. (Gotta love the impulse buys)

The company also does sponsorships with different college and school's cafes, and with their sports events and other extra curriculum activities to hopefully form a partnership.

At the moment, Coca-Cola is sponsoring a butt load of contests and sweepstakes on their MyCokeRewards website. Contests like, winning a VIP trip for 4 to the Coca-Cola 600 NASCAR race or winning a trip for 4 to the American Idol Season 10 Finale. They also have ongoing prizes for people who drink coke products and enter the codes they get from the bottle caps. The more points you have the fancier the prizes you can trade them in for. Prizes like movie tickets, magazine subscriptions, all kinds of gift cards, cookware, and of course your usual Coca-Cola collectibles.