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.

Week 8 - Chapter 17: Advertising and Public Relations

Diet Coke has topped rival Pepsi for the first time to become the second most popular soft drink in the country behind Coca Cola. This recent news marks a victory for the Coca Cola Company as its sodas now hold the top two spots, beating out its longtime rival PepsiCo Inc.

Coca Cola sold nearly 927 million cases of its diet soda in 2010, to Pepsi's 892 million. Regular Coke remains far and away the most popular soda, selling 1.6 billion cases.

Even by pumping up its traditional image and product advertising with commercials, posters, ads in magazines, newspapers and also online ads; Coca Cola Co. has sold 0.5 percent less soda in 2010 but still more than PepsiCo whose figure fell 2.6 percent. The top 10 sodas in the U.S. just for the sake of knowing, in order of popularity are: Coke, Diet Coke, Pepsi, Mountain Dew, Dr Pepper, Sprite, Diet Pepsi, Diet Mountain Dew, Diet Dr Pepper and Fanta.

Coca Cola has evolved its public relations campaigns with the changing times and has kept up with the modern standards of environmental sustainability. In past years, Coca Cola's PR hasn't really been anything particularly fantastic but something wonderful that is actually worth mentioning is their association with the World Wildlife Fund. They teamed up to promote giving money to a “Polar Bear Support Fund”. The tag line of the campaign is “It’s time for us all to take action. To reduce our human impact on global climate change. To help support the polar bear”. With this campaign, the Coca Cola Company appears concerned for the environment and they are actually doing something about it. The PR campaign has it's own interactive website where you can learn about the polar bear populations. It features interactive “E-Cards” that you can send to people about supporting the polar bears. There is also a section on the site where the Coca Cola company promises to be sustainable and provides a list of “commitments” that the company has in regards to being environmentally friendly.

So for those who were wondering why Coke chose polar bears for those unique commercials, this was why.

Week 7 – Chapter 15: Retailing Continued…

My second stop was Coach... let's just say that I thought it was a good experience, everyone was nice and I was happy with what I got even though deep down I felt like I just wasted the same amount of money there that I could have used for two weeks worth of groceries or maybe even a months rent. I suppose that's the price you pay for luxury. After that I was feeling kind of broke so I just went home and ate some Ramen, instead of buying food.

As a customer when I walk into a store I don't like to be bombarded by sales people trying to sell me stuff, but I also don't like to be ignored when I actually need help which is rare because I always do my shopping research and know exactly what I'm going to get ahead of time. I have found that stores like Best Buy, Home Depot and most of the higher end stores like Coach and other fancy places has a good balance of attentiveness in my experience, unless you go in there looking bummy then they might look at you funny.

Week 7 – Chapter 15: Retailing

It's agreeable that working in retail can be a real pain in the ass to say the least and that usually it's the customers that make it so. Why do you think someone came up with the saying that "the customer is always right"? It's so that the employees can have something to calm them when what they really want to do is punch the customer in the face for doing or asking something retarded. One time in Kmart I saw this lady walk up to the register with her stuff and tell the cashier to hurry up because they needed to go to work...at this moment I thought to myself, why the F are you shopping then you dumb cow? F'ing go to work and shop later. Another time, I was in Office Max and heard someone asking an employee where they kept the pianos... foreigner maybe? or maybe just a complete idiot? Also, lets face it most people are just never satisfied, and always have something to complain about. It's safe to assume that there is always more than one side to any story. In the case of retailing there's usually two, the retailer and the customer. Having suffered on both sides of the playing field I can conclude that it sure does take a hell of a lot of patience to work in and to shop in retail stores.

So I decided to go on a shopping trip to hopefully try and record if something stupid would happen and sure enough it did. My first stop was H&M; this was my first visit to any H&M and sad to say it would also be my last. I went to get a scarf and I stood in line for over 20 minutes. There was only one person in front of me and he was already at the register. First of all, the cashier was rude, didn't even acknowledge the customer. Secondly, they were chatting away with another employee about stupidness. Third of all, they were folding the clothes in slow motion like it was laundry day or something. To make things even slower they walk away from the register in the middle of the transaction for like 10 minutes to do god knows what. Now you would assume that someone would think to come and take over the register at least to finish up with that one guy... but nope. By this time, all the people in line including myself start thinking and saying WTF?! Eventually, he comes back and finishes but when I walked out of the store I made a mental note to never go back to that H&M ever again.

Week 6 - Chapter 6: Consumer Decision Making

What makes consumers choose Coke over Pepsi or Sprite over 7-UP?  I have no idea, but Coca Cola figures out ways to stir things up a bit, even when they don't seem to work in their favor. An example was when Coke launched a new promotion called “Don’t Dew It” it tried to convince Mountain Dew fans to switch to their new product, Vault. Coke distributed coupons for their “Vault Taste Challenge.”  The coupon offered consumers a free Vault with the purchase of a 20-oz Mountain Dew. My question towards that campaign was why are they doing that? Coke is actually requiring that everyone using one of their coupons pay retail price for one of their competitors products. Does that make sense? Yeah I guess in this economy people will likely utilize coupons for a free product. But giving away a free Vault costs Coke the same amount of money whether they attach it to the purchase of a Mountain Dew or not. Well, at least the people who wouldn't normally know about the drink would have some exposure to it? And isn't marketing just another way of persuasion?

P.S. I didn't even know Vault existed until now. I'm not too sure how sales are compared to Mountain Dew but I don't think I have ever seen it in stores or supermarkets.

How To Market To Diverse Populations

After our discussion about this topic in class the other day, I decided to "Google" :) just how and where does a marketer begin when trying to sell stuff to people who are all so different. This article seems pretty informative, thought I'd share it.

 
Diversity Yay!

Week 5 - Chapter 5: Developing A Global Vision

Coca Cola is sold in the stores, restaurants, and vending machines of more than 200 countries. From its inception more than 100 years ago, Coca-Cola has been known to contribute to fun times, to making life a little better, a little lighter, a little more enjoyable or simply to quench your thirst. Part of the brilliance of that original strategy was to make Coke into more than just a soft drink. Sounds like a lot of "puffery" to me but seems to work well for them. Whenever I'm in China and I see commercials or posters for Coke, they aren't as elaborate as the one's we have in the U.S. but it doesn't need to be because I suppose people are less difficult to impress over there. Come to think of it, the advertisement for all American made products in China don't really stand out... only if you include the Olympics or something. But anyway,

Click on the link to check out Coca Cola Bottles from around the world.

Week 4 Continued...

Ok so, I suppose I should get more specific. Coca Cola's beverages are generally for all consumers. However, there are some brands that target specific consumers. For example, Coca-Cola's diet soda's are targeted at consumers who are older in age, due to declining health or even to maintain health. PowerAde sports drinks target those who are fit, healthy and athletic. Their Minute Maid juice drinks target children, teens, and adults alike.

When advertising in commercials The Coca-Cola Company usually has a primary target market of those who are anywhere from 10-20, and a secondary market of 20s to the 30s. Below are some examples of both.

Week 4 - Chapter 4: The Marketing Environment

Coca Cola promotes sustainability, meaning they strive to evolve their business for continued success. By recognizing that the health of their business is directly linked to the health of the communities they serve; they accomplish so much. They assess everything -- from their operations and processes to how they work with partners and market their products -- to see where they can build better, more effective systems and improve their overall productivity, so the business can continue to grow.

Another way they function is by knowing which demographic to sell to, their commercials target consumers of every age, gender, size, color, even species. No discrimination here... or as far as we the customers can see.

Week 3: Part 2

Here's a list of some Awards Coca Cola has received over the years:

• 2006 Corporate Social Responsibility Award, American Chamber in Shanghai (September 2006)

• Leader in Corporate Social Responsibility, Gerente (September 2006)

• Citizenship efforts, Committee for Economic Development (June 2006)

• Corporate Social Responsibility Award, National Puerto Rican Coalition (2005)

• China's Best Corporate Citizen Conduct Award, 21st Century Business Herald (December 2005)

• Best Corporate Citizen, China Ministry of Civil Affairs (November 2005)

• Guangming Corporate Social Responsibility Award for Multinationals, Guangming Daily (September 2005)

• Model Corporate Citizen, China Charity Federation and China Trade News (September 2005)

• The Coca-Cola Foundation in Mexico recognized by Mexican Philanthropic Society as a Socially Responsible Corporate Citizen for fourth consecutive year, and by Procura, one of Mexico's leading educational and training organizations, for its support of sponsorships, school programs and other non-profit initiatives.

• Coca-Cola Amatil received AA rating in social responsibility (RepuTex index, 2003)

• "The Service to Peace through Corporate Responsibility Award" from the Pacem in Terris (Peace on Earth) Institute in recognition of the company's long-term commitment and large-scale initiatives in the economic and community development of Africa.

Week 3 - Chapter 3: Ethics and Social Responsibility

Coca Cola does their part in protecting the environment. Our marketing textbook says that they are investing $44 million to build the worlds largest plastic-bottle-to-bottle recycling plant. Their community water programs are designed to support healthy watersheds and sustainable programs to balance the water used throughout the production process. Their commitment to responsible citizenship also includes conservation of natural resources and protection of the soil, water and climate required to sustain life on earth. The company can only do so much to help the environment though... it is ultimately up to the rest of us to do our parts. Simple things like recycling does tons.

Week 2 - Chapter 2: Strategic Planning For Competitive Advantage

It's apparent that most people these days are more health conscience than ever. In order to stay on top of their game, Coca Cola introduced a lot of alternatives to drink less sugar or no sugar at all. One of those alternatives was Diet Coke... personally, I think it tastes exactly the same as regular coke but less sweet.

But I find that if you're going to order a greasy cheeseburger and fries combo, there's no point in ordering a diet coke. I will never understand people who do that. Either go all the way healthy or don't pretend to be by simply getting a diet soda. Anyway, getting back to the point. Coca Cola's plan for their Diet Coke was to market it to the said "healthy conscience" and it worked. It was introduced in 1982 and was the first new brand since the original debut in 1886 to use the Coca Cola trademark. People love Diet Coke... they even take showers with it, just take a look at the picture below.

Week 1 - Chapter 1: Brief History and Mission Statement

When anyone asks me Coke or Pepsi... my answer is always Coke of course. I would drink it everyday if I could and if I wasn't aware of how bad it is for me. But when I do drink it, all I care about is how good it tastes. I decided to make a blog about it, and this blog will be my journey to discovering this beverage's origin and how their Cola flavor differs from others like it.
So the year was 1886, John Pemberton, an Atlanta pharmacist, was inspired by pure curiosity after mixing up a fragrant, caramel-colored liquid. He carried it a few doors down to Jacobs' Pharmacy where the mixture was combined with carbonated water and sampled by customers who all agreed that this new drink was something special. So Jacobs' Pharmacy put it on sale for five cents a glass. FIVE CENTS A GLASS... man. Anyway, Pemberton's bookkeeper Frank Robinson, named the mixture Coca-Cola, and wrote it out in his distinct script. To this day, Coca-Cola is written the same way. In the first year, Pemberton sold just 9 glasses of Coca-Cola a day. A century later, The Coca-Cola Company has produced more than 10 billion gallons of syrup. Unfortunately for Pemberton, he died in 1888 without realizing the success of the beverage he had created.

The Coca-Cola Company's mission is to refresh the world, inspire moments of optimism and happiness, and to create value and make a difference.