Coca-cola_an_analysis_of_current_marketi.docx

COCA-COLA: AN ANALYSIS OF CURRENT MARKETING COMMUNICATION STRATEGY AND A NEW STRATEGY SUGGETION

1

Executive summary The Coca-Cola Company was first established in 1886 by John Styth Pemberton. Today, the company is world’s leading manufacturer of beverages, operating in more than 200 countries across the world with its head office located in Atlanta, USA. Coca-Cola produces more than 500 beverage brands and over 1.06 billion drinks are consumed per day all over the world. Coca Cola uses Integrated Marketing Communications (IMC) in order to communicate with its target customers/market. The communication plan is adapted regarding the market, the society, the potential, the product positioning etc. Coca Cola’s efforts are always pointed towards maintaining a good customer relationship- being close to its consumers, to be part of their daily life, to become a kind of ritual attached to specific moments; for that, they use social media and social marketing through social responsibility for example, creating emotions and feeling of affiliation toward its customers. For example, they raise funds for social causes like earthquake or hurricane. Also, it always focuses on fun and entertainment as the message to be delivered. Their messages to the target market are always based on the same values: sharing, happiness, fun, tradition of coke. Some of the catchy slogans are “Open happiness”, “Enjoy life”, “Life begins here”, “Life tastes good” etc The current communications organized by the firm are: Advertising, direct marketing, interactive/ internet marketing, sales promotion, public relations, personal selling, sponsorship marketing. New marketing communication strategy suggestion: Reinforcing advertisements- Coca-cola should focus more on reinforcing advertisements stating nutritional facts supported by doctors and researchers. Because consumers are health conscious and they do look for nutritional value. Thus by using different types of media, the message will be delivered to the whole target customers, who don’t necessarily have the same attitude toward the brand and toward communication. Some people are involved on TV while others more on Internet and others are willing to share an experience with the brand. Cokes uses a lot interaction with its consumers throughout PR and social media advertising.

2

Contents

1. Objectives …………………………………………………………………………….4-7 2. Marketing communication strategy …………………………………………..8-11 3. Campaign evaluation…………………………………………………………….12-14 4. Conclusion ………………………………………………………………………………15 5. Budget……………………………………………………………………………….16-17 5. References ………………………………………………………………………….18-19

3

Objectives Marketing objectives: Marketing strategy consists of elements relating to production, distribution, promotion and pricing. Through its marketing activities a company aims at satisfying its potential customers profitably which leads to an increase in their sales growth. Increase in sales leads to more profits and more customers are attracted towards a profit making company. Increase in the number of customers will add on to the company’s reputation. There are several marketing strategies organizations adapt in order to enter a market for the first time and to retain its consumer base. A marketing strategy can also serve as a marketing plan for the organization. Marketing objectives define what the company wants to achieve through its various marketing activities (Blakeman, 2007). The following are the main marketing objectives of Coca-cola (The coca-cola company, n.d.)  Growth of the company. Companies need to grow, but it must be profitable growth. The ultimate goal of any company is profitable growth and thus tries to perform their marketing activities in an efficient and effective manner so as to accelerate growth. Every company directs its marketing activities in such a way that the end result is achievement of maximum profit and sustainable growth. Coca-cola has been accelerating its growth since many years.  Market share. The only way of gaining market share is to improve the customer base, more number of customers implies huge market share. Companies aim to attract as many customers as possible. But more market share often results in picking up more unreliable customers. Therefore it would be smarter to focus on nurturing loyal customers. Analyzing the needs of these potential customers of the company will give an in depth understanding about their demands and will thus help the company in catering to their needs. In this way the loyal customers of the company can be retained. Coca-cola has successfully earned the trust of its potential customers and is always aiming at satisfying their needs in a profitable manner.  To achieve sales target. Achieving the sales target will help in increasing profits. Every company sets a certain target which it has to achieve within stipulated time. Therefore the marketing activities are performed in such a way that the target is achieved before the deadline. The sooner the sales targets are 4

achieved, more number of customer needs can be catered. More coverage of the market will again add on to the market share and profitability. Coca-cola sets its targets in such a manner that it is able to achieve its set targets on time efficiently.  Goodwill. Companies should strive for goodwill (Bloch, 2011). A company’s main reputational goals should be: to be (1) the supplier of choice to customers, (2) the employer of choice to employees, (3) the partner of choice to distributors, and (4) the company of choice to investors. This will enable the company in earning a higher return than the cost of capital. The more efficiently a company a company caters to the needs of its, customers, employees, partners and investors, the better will be its reputation in the market. All the marketing activities are thus directed towards gaining the trust of customers, employees, partner and investors in order to earn a good reputation in the market and maintain the same. Coca-cola has so far managed to maintain good reputation in the market even after being critically evaluated many a times (Dudovskiy, 2012). The company values its critics and improves accordingly and maintains its goodwill.  Global customers. Efficient and effective marketing helps in gaining the trust of customers across the world. Coca-cola through its effective marketing techniques has so far been successful in gaining and retaining the global customer base.

5

Communication objectives: Communication enables a company to reach out to its customers and interact with them. Maintaining a good rapport with the customers by maintain communication connection with them helps in promoting products and services and building brand awareness. Communicating with the customers on a regular basis will help in retaining customer base. Marketing communication is all about staying in touch with its potential customers and conveying the message about its products and services to them (Kennaugh, n.d.). Communication objectives define what the company wants to achieve through its various advertising and promotional programs. The main objectives of communication are (Kotler, 2009):  Creating brand awareness among target customers: Market communication aims at creating awareness about the product among potential customers. Marketing communications such as advertisements and direct marketing, sales promotion, internet marketing etc can inform consumers about a company's products and services. This creates an image in the minds of customers and motivates them to purchase the product. Advertisements such as magazine ads are designed to follow the AIDA, or attention, interest, desire, action, principle. Most companies make catchy statements in its ads so as to capture customer attention and induce them to buy the product. Coca-cola has adopted innovative advertising strategies through which it has successfully captured the attention of a large number of customers (Blatchford, 2013). Its slogans are always directed towards happiness, enjoying life, sharing etc, which has attracted a large chunk of youth population.  Persuasion: Any marketing communication activity aims at persuading the customers to try the product. Persuasion influences the attitudes, feelings and beliefs of customers. Coca-cola has succeeded in influencing to a greater extent.  Increase productivity: Effective communication with the customers, partners, employees, investors etc helps in anticipating the problems and making marketing decisions accordingly. It also helps in coordinating the workflow without any communication gap among the superiors and subordinates; this will thereby lead to smooth functioning of the marketing activities. Moreover communication results in developing a good relationship with the customers and 6

to promote the products in an influential manner. All these ultimately results in increase in productivity. Coca-cola has adopted effective communication techniques which enable the company to accelerate its productivity (Blatchford, 2013).  Informing Management and Executives: Some marketing communications are designed to inform other managers or executives about happenings in the marketplace. So that they will be able to direct and control the managerial activities accordingly.  Informing Investors: Marketing communication often involves creating corporate brochures with the company's annual financial data for shareholders and investors. The financial data will inform the investors about the company’s financial positionits profit making ability. With the help of financial data the investors can judge the company’s ability to make profits in the future and about the value of its shares. If the investor gets a positive impression by analyzing the financial data then he/she will invest in the company’s shares. Coca-cola has a lot of potential investors.  Understanding the market condition: By communicating effectively with the potential customers, partners, investors etc, a company can draw inferences on the present market condition. This analysis will contribute in knowing various profitable opportunities and also the market threats (competitors). The company can thus manufacture products on the basis of the information available on the present market scenario so as to minimize the loss and make maximum profits from new opportunities in the market. The market analysis techniques of coca-cola are framed in such a way that it helps the professionals in capturing the market information without missing on any.  Effective decision making: All the marketing communication activities ultimately result in making effectively decisions for the successful functioning of the business. Coca-cola is one best example in the beverage industry for making profitable decisions.

7

Marketing communications strategy

1. Advertisement Advertising is a non personal form of marketing communication which creates awareness among the potential customers about a company’s products and services. It is a form of marketing communication which involves the use of mass media, for example magazines, newspapers, billboards, radios, television and other forms of media. Advertising is very important for coca-cola since it has a huge customer base globally. To reach out to all its loyal customers with the new launches as well as to inform new customers about all its products coca-cola uses influential advertising techniques. The slogans used in the coca-cola ads are very catch that it creates a permanent impact on the viewers (O’Reilly, 2014). The company uses such slogans which hits the target audience emotionally and encourages them to buy the product. Company introduces different innovative themes and concepts to sell their product and advertises mainly in electronic media and out of home advertising. These advertisements help in creating awareness as well as building brand image. Big celebrities of film industry as well as sports stars mainly become the brand ambassadors of the Company. Throughout the years, the slogans of the Coca-Cola have been memorable. Mediums of advertising  Print media: Coca-cola ads can be seen in various newspapers and magazines. When special offers are introduced or new products are launched then the company posts catchy ads on the entire cover page of the magazine or one full page of newspapers. Therefore all those who read newspapers or magazines can never miss out any influential ads of coca-cola.  Point Of purchase advertising: Posters and stickers are displayed in various stores on the coca-cola brands and new launches. When customers come to buy some coca-cola products or any other products such posters and stickers catch their attention and may induce them to buy more products than what they had planned before seeing the posters 8

Point of purchase advertising includes: Posters and Stickers, cooler, Freezers, Display racks etc.  Television commercials: Television is the most common platform which unites all the potential customers, partners, investors etc. Therefore the ads aired on television will reach the maximum number of target audience, even more than other mediums of advertising. Coca-cola has always aired attention seeking television commercials.  Outdoor advertising: Outdoor advertising involves posting ads on billboards and hoardings. Coca cola is very much conscious about their billboards and hoardings. The billboards and hoardings of coca-cola can been seen in every nook and corner. Coca-cola makes sure that its hoardings and billboards are present in urban as well as rural areas. 2. Direct Marketing Coca-Cola uses direct marketing in many ways. The company has partnership with various theatres, restaurants, multinational organizations etc. Therefore, when a customer orders a drink, the only brand the restaurant offers is Coca-Cola, which forces them to buy a drink from that brand (Zhang, Jiao and Ma, 2011). By doing this, Coke forces out other competition, and keeps the restaurants, or other businesses, purchasing their product over and over again. E.g. McDonald’s. Also in many Multiplexes coke is the only brand available, so the people are left with only one option and in this way coca-cola succeeds in making the customers try out all its new launches. Various MNCs call meetings on a regular basis, and the companies having a tie up with coca cola offers the same brand to the delegates during the meeting, this is another way of promoting coca-cola brands. Coca Cola also sponsors various sporting events around the world in events like Cricket, Football, and Motor Racing etc. 3. Internet Marketing Coca-Cola uses the internet to promote its products. The company has its own website, which is user-friendly. The website has various attractive features which encourage customer interaction, it allows customers to become interactive through various games, contests, shopping, and through a special section of the website that enables 9

consumers to find out how they can help their community. The customers are even allowed to give their feedbacks on various coca-cola brands and also their suggestions for improving the product. Also in the modern era of communication and social networking, the company uses various social networking sites like Facebook, YouTube, and Twitter to connect with the consumers. There are coca-cola communities which also posts new launches of its products, so the attention of a large group of young audience are captured though internet advertising. The internet marketing thus helps to reach to those consumers who can’t afford to spend time on T.V and are always busy online for official or other purposes. So while doing their work, ads are flashed on various websites, which informs them about the product.

4. Sales promotion Sales promotion is used to boost up sales quickly and gain huge customer base. Sales promotion helps in boosting up the sales quickly for a limited period of time, this is done by offering attractive schemes so that more people are encouraged to buy the product. Coca-colas sales promotion is oriented towards consumers and trade. a) Consumer:  Discounts on buying two or more products  Chance to meet celebrity  Discount on other products on the purchase of coca-cola brands b) Trade:    

Discounts to retailers and stores Return back allowances if excess Merchandising assets Free goods or free tours

5. Public relations Public relation refers to non personal communications regarding an organization, product, service or idea. It involves maintaining public image for high profile people, renowned businessmen, reputed businesses and organizations etc. 10

The company has succeeded in creating a public image. For instance, when Coke launches a new product and someone on their lunch break purchases that new product, and enjoys it, and then they will definitely promote the product by telling others in the office about how great the new product is (O’Reilly, 2013). This will motivate others to purchase the product, resulting in increasing in sales of the company. Public relation is a function of the management, it evaluates public attitudes and beliefs, identifies the policies and procedures of an individual and organization with public interest, and on the basis of these understanding, it frames plans and executes a program of action to satisfy the needs of target customers or organizations to earn public understanding and acceptance (Ferrell, Freidrich and Ferrell, 2009). Coca-Cola has developed its website in such a way so that it can address law suits, rumors, stories, new products, and activities efficiently. There is also a section of the website devoted to investors. Here, current, or future, investors can access financial statements and understand the financial position of the company, this will help them in making correct investment decisions.

6. Personal selling Coca-Cola has many salespersons. These are the representatives of the company who reach the customers and create awareness among them about a new product or service and sell the products to the customers. These salespersons build a relationship with the customer, so that if the customer is satisfied with the coke product can contact those sales persons again to buy the product. These salespeople promote their product to different customers within their regions, and once they sustain a customer, they sell their products to them and service them many times per week, if required. Thus these individuals form close relationships with the customers in order to continue business with them. Thus though minimum, the company also thus have many sales people for personal selling.

11

Campaign Evaluation  Coca-cola has successfully implemented all its communication strategies. This has helped the company in gaining customers and also maintaining a good rapport with the potential customers.

Evaluation of the Advertising strategy Coca-Cola advertisements have been devised according to the messages they aim to convey to its target audience, and images, words and sounds featuring within them have been developed by marketing professionals in a perfect way, in order to serve the purpose of attracting maximum people. Messages sent through images, words and audio materials promoting Coca-Cola are intended towards a happy life. Coca-Cola helps to best satisfy the thirst, drinking CocaCola is stylish, and drinking Coca-Cola is part of a lifestyle. Through its advertising strategy, the company tries to communicate a message that this drink satisfies the thirst in the best possible manner and this encourages millions of people per day to consume coca-cola. However, a range of scientists cast a doubt about the ability of Coca-Cola to satisfy the thirst efficiently, and argue that ‘thirst’ for CocaCola has been created by company marketing professionals in the first place and it is not similar to the natural thirst for water (Moenart and Souder, 1992). They thus are in a way trying to point out that the advertising strategies of coca-cola are misleading.

Evaluation of Direct marketing strategy The company has successfully implemented this strategy. Its partnership with various theatres and restaurants has created this habit among the customers to drink coca-cola products often. Mc Donald’s has contributed a lot in promoting coca-cola drinks to its customers, by offering only this brand with all its meal combos. Evaluation of internet marketing strategy

12

The internet marketing of coca-cola brands has succeeded in capturing the young population as well as other professionals who are mainly working online (Marxt and Hacklin, 2005). Coca-cola website has enabled people to share their views and suggestions thus enabling the brand to modify their products as per customer needs and wants. Evaluation of sales promotion Coca-cola offers attractive schemes during various seasons which help in gaining more customer support. Such sales promotional activities increased sales to a greater extent Evaluation of public relation strategy Through this strategy coca-cola has succeeded in creating a public image. All those who try a new product are so satisfied with the new launch that they encourage others also to try it through word of mouth. Evaluation of personal selling strategy A large number of sales representatives of the coca-cola company are successfully creating a good relationship with its customers and motivating the customers to buy the product again and again. Thus this strategy is contributing efficiently in increasing sales.

Evaluation of the success associated with the marketing communication initiatives Integrated marketing communication assessment criteria helps in assessing the efficient implementation of the marketing strategies, it include customer loyalty, market share, and the amount of sales revenue that was generated from the marketing campaign (Aydin, Cetin and Ozer, 2007). When evaluated on the basis of customer loyalty Coca-Cola marketing strategies can be considered to be highly successful. There are millions of people worldwide who consume Coca-Cola on a regular basis. The extent of efficiency of Coca-Cola marketing strategies can also be evaluated on the basis of its market share. The company is selling its products in more than two hundred countries . 13

If the efficiency of company marketing campaign is to be evaluated from the viewpoint of profitability it can be seen that partially as a result of effective integrated marketing communication strategy Coca-Cola was able to generate $8.2 billion from operations during the year of 2009. The internet marketing campaigns can be evaluated by application of a different range of assessment tools such as the total number of unique visitors to the website, length of visit to the website, free search engine results, paid search engine results, total number of feedbacks received through the website etc (Ge and Wang, 2007). Hence the evaluation of each marketing campaign proves that the campaigns are very efficient and are contributing to the achievement of the ultimate aims and objectives of Coca-cola.

14

Conclusion From the analysis of the marketing communication strategy of coca-cola, it can be concluded that the company has successfully implemented all its strategies efficiently and effectively and is thus accelerating its growth every year. Thus it can be said that  For any company to reach operate successfully and attract more and more customers it has to adopt the most efficient promotion mix.

 This analysis shows that the company is using its promotional mix in an effective and efficient manner.

 That is the reason why Coca-Cola has captured the global market and is one of the most valuable brands across the world.

 Corporate Social Responsibility activities play a significant role in building up goodwill. Coca-cola is efficiently performing all the activities directed towards corporate social responsibility (The Coca-Cola Company, 2013).

15

Budget (Boundless, n.d.; Paul, n.d.) Budget category

Amount (in billion $) (estimate)

Advertising

1.6

Advertising Specialties and Premiums

2.7

Merchandising

5.0

Publicity/Public Relations

7.2

Analyst Relations

2.3

Event support—Product Level

6.2

Event support—Corporate Mandate

2.2

Endorsements

3.4

Sales Incentives

5.5

Sales Support

6.8

Sales Training

6.0

Customer Service Support

8.2

Creative Services

6.5

Copywriting

9.0

Publishing/Printing

7.5

Fulfillment

2.5

Web Site Design

1.6

16

Web Site Maintenance

3.4

Corporate Program Support

1.3

Product Design Services

4.5

Consulting Services

6.5

Other Marketing Services and Expenditures 1.5 Design and Packaging Services

3.5

Branding Support

6.5

TOTAL FUNDING REQUIRED

111.4

17

References  Aydin, S., Cetin, A. and Ozer, G. (2007). “The relationship between marketing and product development process and their effects on firm performance,” Academy of Marketing Studies Journal, vol. 11, no. 1, pp. 53-68.  Blakeman, R. (2007) Integrated marketing communication: creative strategy from idea to implementation. Lanham, Md.: Rowman and Littlefield.  Blatchford, J. (2013) Coca Cola – Global Marketing Communications. Manifested Marketing. Available at http://manifestedmarketing.com/2013/05/05/coca-cola-globalmarketing-communications/  Bloch, P. (2011). “Product Design and Marketing: Reflections After Fifteen Years,” The Journal of Product Innovation Management, vol. 28, no. 3, pp. 378-380.  Boundless (n.d.) Determining a budget. Available at https://www.boundless.com/marketing/integrated-marketing-communication/integratedmarketing-communication/determining-a-budget/  Conversations Staff – The Coca-Cola Company (2012) A History of Coca-Cola Advertising Slogans. The Coca-Cola Company. Available at http://www.cocacolacompany.com/stories/coke-lore-slogans  Dudovskiy, J. (2012) Coca-Cola Marketing Communications: A Critical Analysis. Research Methodology. Available at http://research-methodology.net/coca-colamarketing-communications-a-critical-analysis/  Ferrell, O.C., Fraedrich, J. & Ferrell, L. (2009) Business Ethics: Ethical Decision Making and Cases. Cengage Learning.

18

 Ge, C.P. and Wang, B. (2007). “An activity-based modelling approach for assessing the key stakeholder's corporation in the eco-conscious design of electronic products,” Journal of Engineering Design, vol. 18, no. 1, pp. 55-71.  Kennaugh, C. (n.d.) Develop a marketing communication plan. Microsoft Office. Available at http://office.microsoft.com/en-in/word-help/develop-a-marketingcommunications-plan-HA001171113.aspx  Kotler, P. (2009) Marketing management 13th edition.  Lindgreen, A., Hingley, M. & Vanhamme, J. (2009) The crisis of food brands. Gower.  Marxt, C. and Hacklin, F. (2005). “Design, product development, innovation: all the same in the end? A short discussion on terminology,” Journal of Engineering Design, vol. 16, no. 4, pp. 413-421.  Moenart & Souder W.E. (1992). “Information Styles of Marketing and R&D Personnel during Technological Production Innovation Projects”, R&D Management, Vol. 22, No.1, pp. 21-39.  O’Reilly, L. (2013) Coke serves up ‘Reasons to Believe’ Brand Campaign. Marketing Week. http://www.marketingweek.co.uk/sectors/food-and-drink/news/coke-serves-upreasons-to-believe-brand-campaign/4008973.article  O’Reilly, L. (2014) Coca-Cola Relaunches an edgier brand. Marketing Week. Available at http://www.marketingweek.co.uk/sectors/food-and-drink/news/coke-zero-relaunchesas-edgier-brand/4009066.article  Parcus Group (n.d.) Marketing Objectives and Marketing Budget Template. Available at http://www.parcusgroup.com/bustec/Sample_Marketing_Budget_Template.pdf

19

 Paul, S. (n.d.) Cost of Marketing: What Is the Average Budget? LegalZoom. Available at http://www.legalzoom.com/business-management/promoting-your-business/costmarketing-what-is  The Coca-Cola Company (2011) Coca-Cola Marketing Tops $4 Billion, Tripodi Says. http://www.coca-colacompany.com/our-company/coca-cola-marketing-tops-4-billiontripodi-says  The Coca-Cola Company (2013) Available at www.coca-colacompany.com  The Coca-Cola Company (n.d.) Company Reports. Available at http://www.cocacolacompany.com/our-company/company-reports  Zhang, Y., Jiao, J. and Ma, Y. (2007). “Market segmentation for product family positioning based on fuzzy clustering,” Journal of Engineering Design, vol. 18, no. 3, pp. 227-241.

20