Marketing Principle - Coca-Cola Company - Essay Example

?MARKETING PRINCIPLE Introduction Coca-Cola Company is a world leader in the soft drink industry. Being headquartered in Atlanta Georgia, the company is best known for the production and selling of Coke one of its brands. Other brands that the company produces include Fanta, Sprite, Minute Maid, Dasani water, Simply Orange brand and Fruitopia among others. Being under the leadership of Muhtar Kent, Coca-Cola enjoys large number of loyal customers an aspect that makes it attain high level of profitability and sustainable growth of its revenue. The company has established bottling partners in more than 200 countries. To ensure that all its target customers are satisfied with its brands, the company has more than 500 brands in the international market. One of the major aspects that have made the company to attain a large market segment is the increased investment in the marketing activities of its products. Coca-Cola Company market share is approximately 75%. Despite stiff competition from its competitors such as Pepsi , McDonald and Cadburys among others, the company has emerged as a leader based on the extensive use of modern as well as traditional methods of promotion and advertising. One of the major objectives of the company is to raise market share by effectively penetrating Asia Pacific and Asia markets. Secondly, the company is focused at expanding its corporate social responsibilities in order to address social problems faced by children in Africa and Latin America markets. This paper covers major strategies that Coca-Cola adopts in its market segmentation, product positioning, and process of marketing as well marketing mix. Task 1 Marketing entails the process of communication the benefits of a product to the potential or existing customers. Being a vital way of attracting new customers, marketing takes a significant portion of company resources especially for the firms that are focused at going global. Marketing can also be defined as a management strategy of ensuring that products are moved from the concept to the final consumer. This entails the coordination of the 4Ps of marketing that included product, price, promotion and place. Marketing process entails identification of marketing opportunities and providing quality products that meet the needs of the target markets. Four major steps that are covered by marketing process are analyses of marketing opportunities, selection of target markets, development of marketing mix and management of the marketing efforts. In order to identify opportunities in the market, Coca-Cola undertakes extensive market research through the use of its marketing team. Coca-Cola Company has a number of opportunities. First, it can acquire more companies as a way of reducing competition in the soft drink industry. Secondly, the increased Hispanic population and their improved economic power will lead to high demand for its product in the local and international markets. Thirdly, due to the increasing demand for Dasani water in the world market, the company can expand its marketing activities especially in Asia, Africa and Asia pacific regions. In this way, it will capture the unexploited market thus increasing the total revenue. Coca-Cola targets all individuals regardless of their ages. Through effective market segmentation and targeting, the company is in a position to evaluate each of its segment thus providing quality brands that meet the needs of its customers. The company emulates Geographic segmentation, Demographic segmentation, Behavioral segmentation and Psychographic segmentation. Being a third step in the marketing process, developing an appropriate marketing mix is an aspect that Coca-Cola Company has not overlooked. For instance, the company has established wide range of quality brands such as Coke, Fanta, Sprite and Minute Maid among others. The company prices are affordable thus ensuring that its customers are in a position to purchase their favorite brands. In terms of place, the company has ensured that all its brands are available in major supermarkets and other outlets. Promotion of its brands is a major marketing strategy that the company has adopted. This is depicted by numerous competition and media adverts that the company undertakes. After coming up with the appropriate marketing mix, Coca-Cola put in place major planning and controlling functions as a way of managing marketing efforts. This entails establishment of marketing departments in all the regions that the company has established its operations. One of the key marketing concepts is relationship marketing. Relationship marketing is focused at creating good relations with the customers. Having being used for more than 50 years by companies, relationship marketing emphasis on relationship between customers and the suppliers. Industrial marketing also referred to as business marketing is another notable marketing concept. This entails production of goods that are industrial in nature instead of consumer products. Just like in the relationship marketing, advertising, promotion and communication are major tools that are used to market industrial products. Societal marketing involves production of goods and services that offer benefits to the society. Key aim of societal marketing is to prevent introduction of harmful products to the society. Another significant concept is branding. Being focused at improving brand value, branding creates a strong positive relationship between the customers and the marketers. One of the benefits of adopting market orientation in Coca-Cola is that it assists the company in addressing the requirements of its customers. For example, if the customer needs a particular attribute on their products, the company can easily modify its brands to meet that need. Based on the diversified need of customers, market orientation is vital in ensuring that the needs of each customer segment are taken into consideration. However, market orientation has a number of demerits. First, it leads to less product differentiation. This is based on the fact that competitors may produce products of distinct features that meet the needs of the market. Thus reducing the sales of Coca-Cola Company. Secondly, market orientation requires strong technology in order to capture the needs of the customers. In this way, the production process becomes complex thus increasing the operations costs. Task 2 One of the major macro environmental factors that influence marketing decision is government policies. Based on the corporate social responsibilities that Coca-Cola adopts, the company enjoys support of government authorities an aspect that assists the company in its marketing process. Strategies emulated by competitors such as Pepsi among other have a direct implication on the Coca-Cola marketing decisions. For example, by lowering their prices and improving the quality of their products, Coca-Cola Company has to intensify its marketing activities in order to effectively face off its competitors. As suppliers change their terms, the company should adjust their policies in order to be in line with the supplier’s policies. For example, if the prices of new material increase, Coca-Cola Company will be forced to reduce expenditure on marketing. This can lead to low customer awareness and reduced sales. Notable micro environmental factor that influence marketing decision is employees. In its endeavor to ensure that sales executives achieve their objectives, Coca-Cola Company has put in place various motivational strategies such as increased benefits, holidays, gifts among others. Maintaining adequate finance is vital in ensuring that the company has adequate resources to undertake marketing activities such as advertising, promotion and corporate social responsibilities. As the number of customers increase based on the increased world population, it is vital for local and international companies to segments their consumers depending on their needs. As the demand for Coke brand increases, the company should emulate behavioral segmentation. Based on different occasions, consumers behave differently. For example, during holidays such as Christmas, customers are engaged in parties and related social gatherings. It is during such occasions that Coke is extensively demanded. In this regard, the company should come up with various strategies to maintain the loyalty of their consumers during occasions. This can be done by initiating promotional strategies such as competition and free products. Another major product by Coca-Cola is Fanta. Coca-Cola Company can use demographic segmentation that encompasses segmenting its target customers based on the age and gender among others aspects. Based on the fact that Fanta is favorite among female consumers and children, Coca-Cola Company can target Fanta consumers by introducing a promotion that will lead to higher consumption of the brand. One of the major factors that influence buying behavior is culture that includes social class and subculture. For example, consumers who are in upper social class have no strong emphasis on price but the value of the products. Secondly, social factors such as reference group and families affect directly or indirectly consumers buying behavior. For instance, if a particular family value products of a certain company, it is possible that no member of such a family will purchase from any other company. Another aspect that influences buying behavior is personal factors. These include occupation, age, lifestyle, self concept and economic circumstances. Psychological factors also play a key role during purchasing process. These factors include beliefs, perception and attitudes. The strong positive customer-product relationship is one of the primary aspects that have resulted to the success of Coca-Cola Company. Based on the increased use of social sites such as face book and twitter by young consumers, Coca-Cola Company should establish an official face book page where Coke consumers can socialize and share ideas. This will not only act as word of mouth marketing but also it will create a positive relationship between the company and the consumers. It is through social media that the company can easily identify the problems faced by Coke consumers across the globe. Similarly, consumers will be given an opportunity to give feedback that will be used by the company to make adjustments in the marketing mix. Task 3 Coca-Cola Company is one of the firms that enjoy wide range of products. The company strategizes on ways of delivering the right product at the right time in the right place and at the right price. Coca Cola products are created in consideration of a particular group of consumers where same customers can find it with ease every time they visit that place and at a price which gives them value they feel the product offers. In order to do this the company bears in mind why consumers buy from them and not their competitors and what value that the business can offer its customers. The company uses innovation which integrates high technology oriented trends in the production of their consumer packaged products ((Levin, 2013). It attains competitive advantage over their competitors by implementing technology that is not currently being used by present competitors. Coca-Cola’s secret recipe, though imitated else where, is arguably the best in taste than any other soft drink. Coca-Cola’s ability to carry on making new products while re-inventing existing products puts them above competitors. The company’s comprehensive distribution system is unmatched; it accesses billions of people around the world. Coca-Cola products are mostly available even in areas other consumer good providers never think of penetrating. The production techniques innovated by Coca Cola are so advanced than of its rivals that it costs just a portion of the selling price to produce a product and this results in a very rewarding profit margin (Daly,1990). Coca-Cola arguably has the largest distribution network that reaches its destinations spread in over 200 countries. Since the 1940’s when Coca Cola first bought their white motor company delivery truck, the company has continued to use this method of delivery to reach its consumers. The company keeps on upgrading their trucking system and it is evident to see Coca-Cola trucks even in the rural areas. Just recently, the company introduced the six all electric zero emission delivery trucks and the fleet is intended to grow to over 750 by the end of 2013. This is a major step for the company in contributing to reduced gas emission which is blamed for global warming. The company use of delivery trucks has started a pre-sale system that separates sales and delivery functions whereby delivery trucks are loaded with a mixture of products previously ordered by retailers leading to an increase in sales and range of distribution. (Coca Cola Femsa 2011). Since 1889, Coca-Cola Company has used franchised distribution system and continues to expand its networks to meet the needs for refreshing drinks by its customers. The success of this is pegged to quality products and the company’s brand image power that creates a strong relationship with its franchisees. A good example is in Great Britain where Schweppes Beverages Ltd holds the GB franchise rights. With six bottling and canning plants, Schweppes has full control of production in specified geographical area. Once a product is designed, its production, capital and operational cost are weighed to determine the market price and the company sets out to convince the consumers of the products value. Along the years, Coca-Cola has chosen to use the market-penetration pricing method whereby it sets low initial prices so as to attract a huge number of customers quickly and gain a larger market share. The company also uses promotional pricing scheme whereby the prices of some brands in selected stores are temporarily lowered than it is normally sold to create short run. Coca-Cola also uses the promotional pricing strategy. In stores that sell Coca-Cola products, prices are often temporarily priced below the list price to increase short-run demand thus giving a sense of urgency to the product and the low price makes the customers to purchase the product. Marketing is one of the most significant ways of conducting business within all industries globally and for a business offering consumer goods to succeed, then all the aspects of integrated marketing should be seen as working together. The elements of integrated marketing include communications, advertising and promotions which must be exercised with perfection in order to have an anticipated outcome favorable to the company profit margin as well as adding value to the consumer. Coca-Cola Company integrates these elements through the media and other out door activities to reach out to the public. The company has used promotional events like sponsoring sporting affairs like FIFA World Cup, organizing soccer events at regional level and sponsoring sports competitions for learning institutions at localized level. Use of banners has also enhanced public awareness of Coca-Cola products where such banners display Coca-Cola popular slogans or educational messages. The electronic media arguably reaches a wider population. Coca-Cola Company has utilized this opportunity by advertizing through television which has wider reception in many countries now (Levin, 2013). Through radio adverts which mostly are short but have a very expansive listening population, Coca-Cola products are exposed to millions of people. Task 4 Marketing mix for a product consists of four major aspects that include Product, Price, Place and Promotion. However, since a service is not tangible, the marketing mix of service marketing consists of additional three aspects that include people, process and physical evidence. In the service marketing people plays a vital role. This implies that for any company to provide excellent services that meet the needs of its customers, it is prudent for managers to recruit skilled work force and offer extensive training to the existing employees. It is imperative to note that customers make their judgment based on the people representing an organization. To ensure that employees are productive in their jobs, it is prudent for a service providing company to motivate tem through provision of flexible benefits such as training, increased salaries, training and holidays among others. Process in service marketing entails the time taken to serve a customer as well as the efficient of the whole system. In this regard, a firm should avoid complexity in its services in order to avoid time wastage and confusion that may demotivate its customers. In service marketing, physical evidence encompasses the location where services are being delivered. Being one of the aspects that distinguish a firm from its competitors, physical evidence helps customers to make their judgment during the purchase process. This implies that companies in the service industry must improve their system by emulating a friendly environment that attracts and maintain their customers. For example, a restaurant must ensure appropriate lighting, avoid smelly condition and maintain minimum silence in order to attract new customers. A major aspect of a marketing mix in a consumer market is product. A product that is focused at meeting the needs of low income consumers must not only be low priced but also it must offer benefits that customers need. This implies that any company that is targeting low income earners should not compromise the quality of its products just because it is offering products of low prices. Similarity, firms targeting high income earners should maximize their profits and sales by increasing their prices but to a reasonable level. This is based on the fact that high income earners are not very keen on the prices of the products but the high value that is equivalent to their social status. Business-to-business service entails the transactions between members of a supply chain (Chew, 2010). Since the services among businesses are not touchable, firms should ensure that trust and accountability are emulated. While a product should be clearly priced to maintain the loyalty of the consumers, business to business transactions highly value the quality of the services. Some of the major aspects in business-to-business services include negotiation of prices, time spent in the delivery of a service and efficiency of a service among others. Domestic marketing entails facing one set of economic aspects, limited competition and market issues. This is based on the fact that a firm only operates within a limited area. As a result, a firm in a domestic market experiences less customers since they share the available market with the existing competitors. Additionally, the quality of products for companies in the domestic market is focused at meeting the needs of the local consumers. This implies that a foreign consumer may face difficult in getting a product or a service that meets his or her needs. Domestic marketing has limited growth. This is due to the less sales and reduced profits that result to limited expansion of companies. On the other hand, international marketing entails exporting, forming a joint venture or having a direct entry of marketing activities in another country (Hollensen, 2011). While a domestic market is characterized by fewer customers, an international market has large number of consumers that a global firm should sustain. Being a global Company, Coca-Cola Company has expansive investment due to the increased sales and profit. In terms of advertising firms in the international market extensively use internet, social media and international TV station to attract customers. This is contrary to domestic market where companies value traditional methods of advertising including newspapers, magazines and local TV stations. References Chew, W. 2010. Debunking Common Myths of B2B Branding For SMEs. New York: Brandbank Coca Cola Femsa. 2011.Strategy and Competitive Advantages. http://www.cocacolafemsa.com/femsa/web/conteudo_en.asp?idioma=1&conta=44&tipo=27617. Viewed 20st April 2013 Daly, J. 1990. Coca-Cola Business Model. http://www.businessmodelalchemist.com/. Viewed 21st April 2013 Hollensen, S. 2011. Global Marketing - A Decision-oriented Approach. New York: Pearson. Levin, R. 2013. Driving the top line with technology. London: McKinsey & Company. Read More