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: