There are 3 other key areas that businesses should
also take consideration of in order to succeed. These include:
People:
When researching, it is important to know who is in
the target market so that the business can understand who to pitch their ideas
and promotions to. Aside from this, it is also important that the company have
the right number and quality of people in their business. This is because it is
the people that will be delivering the services and will be the face of the company
to the public. An advantage of a business having people that are of high quality
and who support the business and the products they create, is that the
employees will usually carry out their work in the highest quality and highest
ability that they can. This will then help the business to grow and have
competitive advantage over their competition.
Process:
The way the business is carried out is also
important as it affects the service that the consumer will receive and in turn
the way the business is seen. This can include a pay system, distribution
system or steps that ensures the business works to its highest quality. This is
important as it involves the services provided to the customers which can
affect the business image and reputation. When the quality of the business is
reduced, the sales are also reduced therefore it is important to get this part
of the marketing mix correct and to the highest quality.
Physical evidence:
This is the part of the marketing mix that
consumers can physically see or experience through a service or a product. This
contributes to the quality of a business or product. Examples include, the image
of the brand, packaging of products, the logo and other things that contribute
to the bodily make up of a business.
Conclusion:
Overall, it can be seen that all features of the
marketing mix contribute to the business’s success equally. They all must be
implemented in order to achieve an advantage in the business world. All of them have to be analysed to make sure business objectives have been met while applying them into the company.
According to Statistic Brain, a whopping 1.8
billion Coca Cola bottles are sold every day. (Coca Cola Statistics, 2015). The
Coca Cola Company operates on a global scale in nearly every single community
and local area. In almost every single shop, there is almost always Coca Cola
available to purchase. This is due to the strong Coca Cola System which has over
250 bottling partners globally. (The Coca Cola System, n.d.). The Coca Cola
Company does not own or control any of their bottling partners. Although, Coca
Cola is a global business, their bottling is carried out through multiple local
channels. The company creates and retails beverages to bottling operatives, it
is these people that then sell the products to buyers. Bottling operators then have
a close working relationship with suppliers such as supermarkets, corner shops,
restaurant’s and cafes to create tactics to further sell to buyers.
Retailers:
Defined as – a business that sells products to
consumers for their personal and family use. Retailer is the final link in a
distribution channel that links manufacturers with consumers. (Dibbs., et al,
2016).
Retailing includes transactions that the customer aims
to use the product but only through personal, family or in their household.
A retailer is defined as a business or company that
buys products to re-trade them to the public people. Usually in a shop such as
a supermarket, but recently online as online shopping is expected to increase
by 16.7% in 2017. (Online Retailing: Britain, Europe, US and Canada 2016, 2016).
An example of retailing is Coca Cola’s partnership with Coca Cola European
Partners who are their bottling partner. They produce and distribute Coca Cola
soft drinks as well as supply them and their vending machines and Coca Cola
fridges to a wide range of supermarkets, corner shops, bars, pubs, restaurant’s,
cafes, and workplaces/schools/universities.
Distribution channels:
Coca Cola uses many forms of distribution. These
include:
·Wholesalers
·Retail such as supermarkets
·Restaurants, cafes, bars/pubs
·Petrol stations eg shell.
·Vending Machines (on the street/crowded areas
where a lot of people are around or see the vending machine)
Coca Cola’s distribution system is very well prearranged
and tactical compared to the other companies in the beverage industry. Another
way of distributing their products, is wholesale trading. By using wholesale
trading, Coca Cola can sell their products in large amounts and maximise their
sales. Another benefit by using wholesale trading is the reduced warehouse
expenses, this is because they do not have to store their products but rather they
can give it away to retailers to sell.
PepsiCo (the direct rival of Coca Cola) can
influence Coca Cola to quickly distribute their products and spend much more
than PepsiCo to get their products out there and on the shelves. This can be
costly as they need to pay for all the fees like transportation and warehouse
storage.
Overall, Coca Cola’s retail power has developed
over the last few years to the point where they have reached the top of the beverage
industry and own most of the market share for soft drinks.
Sales promotion: “action communications to generate extra sales,
both from existing customers purchasing more products and by temporarily
attracting new customers on the basis of an incentive or a deal” - (De Pelsmacker, Geuens and Van den Bergh,
2010)
The aim of promotion is usually to publicize a product and enable
communication towards customers to follow up by purchasing the product or
endorsing the brand. (Dibbs., et al, 2016).
There are many different factors that influence sales promotions, these
include:
·Communications clutter
·Lack of differentiation
·Distribution channel power
·Measurability
·Short term orientedness
·Buying decision taken in store
·Declining brand loyalty
Why are promotions used?
To build a database – by getting emails so they can
advertise to them.
De-seasonalise sales – an example of this is Coca
Cola usually reducing their prices around the winter time as this is the
hardest time for them to make sales due to the cold weather.
Reward loyal customers – an example from Coca Cola
is the reward scheme where customers get points from purchasing Coca Cola items
and can load the points up to the Coca Cola website where they can then gain
prizes for getting a certain number of points.
Gain new customers – by Coca Cola reducing their
prices and creating offers for purchasing multipacks of Coca Cola, they are
attracting new customers who will hopefully stay loyal to the brand.
Develop new sales leads – by advertising themselves
accordingly, Coca Cola can gain new customers and further succeed in being
better than their competitors such as PepsiCo.
(Dibbs., et al, 2016).
Trade Promotions:
It is important when Coca Cola is trying to get
retailers to put their products on their shelves that they have trade
promotions which can create a better relationship so that Coca Cola can work
with the retailer to benefit both their business as well as the retailers.
Trade promotions include:
Buy back allowance
Count and recount
Free merchandise
Dealer listing
Premium or push money
Sales competitions (Dibbs., et al, 2016).
Promotional Mix:
PR:
“The deliberate, planned and sustained effort to establish and maintain mutual understanding between an organisation and its publics”. (Dibbs., et al, 2016).
PR Publics include:
Customers – past, present, future
Suppliers
Distributors
Employees
Wider community
Media
Competitors
PR Tools:
Publicity: through celebrities shown above such as Marc Jacobs, Karl
Lagerfeld, Selena Gomez and many others.
Community involvement: priority areas include – women
(entrepreneurship), water (access to water, conservation and recycling), health
(education, young development, other community activities). (The Coca Cola
Foundation, n.d.)
Charity
Awards (Dibbs., et al, 2016).
Goals:
Image creation – with sponsoring Selena Gomez,
the Coca Cola company created the image that they were part of the younger
generation too and not just for older generations as their Bill Cosby advert suggested
years ago.
Increase sales – many people buy products that
are endorsed by idols. An example is the Kardashians and their sponsorship with
Sugar Bear Hair Vitamins which leads to millions of young girls buying the
product as it was promoted by the Kardashians who are known for their good
looks.This is the same with Coca Cola, by sponsoring those celebrities who
are in the public eye, many will want to buy and drink Coca Cola due to the
fact their idols endorse it.
Image: @kimkardashian Instagram
Brand repositioning – Coca Cola uses their
sponsorships to appeal to different generations such as appealing to younger
people through sponsoring Selena Gomez who has an audience of young people.
Raising awareness of their brand.
Target new market segments.
Gain publicity – through getting products
promoted by celebrities, such as Selena Gomez promoting
Coca Cola which led to
many young girls and boys buying Coca Cola to send pictures of them supporting
Selena Gomez’ version of the bottle with her lyrics on them. This obviously
boosted Coca Cola’s sales and their popularity. By young people reposting
pictures of themselves with a Coca Cola bottle with Selena Gomez’s lyrics on
it, this provided Coca Cola with free promotion.
Internet Promotion:
Happiness Machine: this was an advertisement for Coca Cola to boost
their sales through introducing the Happiness Machine. This marketing strategy
was to get free promotion without having to pay anything towards it. The idea behind
the Happiness Machine was to offer rewards and free Coca Cola from a vending
machine after buying one drink. This video was posted to the Coca Cola Company’s
Facebook page and their Twitter page. After 10 days, the video ended up with 820,000
videos. This didn’t cost Coca Cola anything as it was shared through social
media which provided Coca Cola with popularity as people were looking to find a
Happiness Machine near them. (Broad, 2014).
]
When sponsorships go wrong:
Sponsorships are risky. An example is Wayne Rooney’s sponsorship deal
with Coca Cola in 2011. After Wayne Rooney was rumoured to be cheating on his
pregnant wife, Coca Cola issued the statement – “'Our contract with Wayne
Rooney came to an end last year and we mutually agreed that we would not renew
our relationship.” (Sportsmail Reporter, 2011). Coca Cola saw that Wayne Rooney
was tarnishing his image and this would lead to Coca Cola being associated with
a bad image therefore they pulled out of the sponsorship to spare their brand
name and brand image. This was a smart business move as many would have seen
Coca Cola in a different light if they had went on with their sponsorship deal
and advertised him with their products after such a scandal.
Examples of Coca Cola sponsorships:
Karl Lagerfeld: founder of Chanel, promotes ‘Coca Cola Light’ that is
marketed more towards women.
Brian Urlacher: American football player. This deal with Coca Cola
helped to get young people who were his fans to notice the brand and purchase
Cokes because their idol endorses it.
Selena
Gomez: singer, actress and songwriter with a large fanbase comprised of children all the way up to
older generations. The Coca Cola advert she featured on her Instagram page
helped Coca Cola reach the younger generations as they wanted to compete with
their rival PepsiCo who is usually known for having younger celebrities
endorsing them. This photo she featured on her Instagram then went on to become
the most liked picture on Instagram at the time she posted. This gave Coca Cola
a good audience and many of Selena Gomez's fans uploaded pictures of themselves with the Coca Cola bottle with her lyrics on it. This gave Coca Cola free advertisement as it spread through the internet and many would go out and buy the bottles which boosted Coca Cola's sales.
Image: @selenagomez Instagram
Marc Jacobs: a luxury brand designer who endorsed Coca Cola
when he redesigned some Diet Coke bottles. This appealed to many as he is a
luxury designer so by being associated with Coca Cola, it made Coca Cola seem
luxury too.
Price is the only component of the Marketing Mix that makes money – the
other parts of the Marketing Mix all come at a cost to the business.
Price competition: this is
when marketers promise to compete with their competitors and match their prices
or beat them by making their products cheaper than the competitors. In order
for this to take place effectively, the company must provide their products at
a lower cost than the other company.
Non-price competition: this
is when a retailer highlights their product quality, services, product
features, promotion, packaging or other factors to differentiate the product
from their competitor brands. (Dibbs., et al, 2016). This is what Coca Cola
rely on to explain their higher price over Pepsi Cola as they have always said
they have a higher quality Cola drink over Pepsi Cola. Example:
Due to the availability of the products that currently crowd the
beverage industry, pricing strategies are done per the market and geographic segments
thus Coca Cola’s pricing strategy can be described as “value oriented”.
(Kokemuller, N., n.d.)
Coca Cola’s pricing strategies are based on their competitors pricing.
Coca Cola’s direct competitor is PepsiCo, therefore this has forced Coca Cola
to keep their prices low to prevent being out competed by PepsiCo. At the
current moment, one can of regular Coca Cola in Tesco is 68p, whereas one can
of Pepsi Cola is around 38p. Coca Cola tend to price their drinks higher than
PepsiCo due to their large brand recognition and popularity which PepsiCo don’t
usually have. PepsiCo price their drinks lower than Coca Cola to undercut their
competition, however, this hasn’t worked in the past two years due to Coca
Cola’s revenue being higher than Pepsi’s. Coca Cola’s revenue finalised at
$44,294 million (Coca-Cola's revenue and income from 2009 to 2015 (in million
U.S. dollars), 2015) whereas Pepsi’s finalised at $4.57 million. (PepsiCo
Reports Fourth Quarter and Full-Year 2015 Results, 2016). Judging from this, it
is fair to say that Coca Cola pricing their products at a little higher than
Pepsi helps them make more money as well as sell more as customers feel that
they are getting a higher quality of product from Coca Cola.
Occasionally, Coca Cola will drop their prices very low for sales and
discounts which help boost their sales. Many critics have disagreed with Coca
Cola for doing this, however, Coca Cola’s strong hold in the market lets them
to drop their prices occasionally as they are not too risky for such a
successful business. Coca Cola’s brand awareness have convinced customers that
Coca Cola’s drinks are of higher quality than their competitors therefore they
must offer their products at a higher price than PepsiCo.
A strategy that Coca Cola use is to lower their prices when they enter
a new market that is very price delicate. This lets Coca Cola to raise their
brand awareness throughout the population while doing so. Once they have been
recognised by customers, they reposition themselves as a ‘high quality’ brand
compared to the other products in the same market such a PepsiCo.
Another strategy that Coca Cola use is their regular discounts in
supermarkets such as Tesco and Farmfoods. This helps them to meet the company
quotas but also appeal to customers so that they purchase Coca Cola and not
Pepsi Cola.
Coca Cola prices in different supermarkets:
Pepsi Cola prices in different supermarkets:
As can be seen from the above pictures, Coca Cola retails at a
different price in different supermarkets but are not afraid of putting their
products on offer, especially around the winter time as this is not the most
popular time for many to buy cold beverages such as Coca Cola and Pepsi Cola. By putting their products on offer it does not damage their sales as they can afford to have discounts on their products during winter time.
Coca Cola and Irn Bru (Barr) are both brands that present their product under
one company name. Coca Cola’s products are presented under the Coca Cola
Company while their competition, Irn Bru is presented under the company BARR.
The Coca Cola Company was established by Asa Griggs Candler in 1889. Throughout
the years it has become an American multinational beverage corporation and
manufacturer, retailer, and marketer of non-alcoholic beverages. When Coca Cola was first created it was
served at Jacob’s Pharmacy as a syrup to mix with carbonated water. It then
became patented in 1887, registered trademark in 1893 and by 1895 it was sold
all over the United States. It wasn’t until 1906 that The Coca Cola Company
expanded internationally. (Product Descriptions, n.d.) The Coca Cola Company
offers a diverse range of soft drinks to be able to give customers a wide range
of items to choose from. It is because of this that their company has the
largest portfolio in the beverage business. Due to this, Coca Cola has a large
market presence in around 200 countries a the moment. This is due to the large
variety of brands under the Coca Cola Company. These include: Coca Cola Classic,
Diet Coke, Fanta, Sprite, Smart Water and many others which can be found on
their website - http://www.coca-cola.co.uk/drinks
(Brands, n.d.). By offering a large variety of brands under The Coca Cola
Company they are more likely to attract more customers and do better than their
competitions which can be seen as the annual profit for 2015 for The Coca Cola
Company finalised at $44,294 million (Coca-Cola's revenue and income from 2009
to 2015 (in million U.S. dollars), 2015) whereas in 2015, Barr’s final revenue
was at £130.3 million (Barr, 2016) which shows that The Coca Cola Company had a
significantly higher revenue than Barr.
The famous Scottish drink, Irn Bru, is presented under A. G. Barr Plc
(more commonly known as Barr). It was founded by Robert Barr in 1875 in
Falkirk. They later expanded to Glasgow and are now selling drinks all over the
UK and some other EU territories. (About A.G. BARR, n.d.)
Barr sells many products, most famously known for its popular Scottish
drink – Irn Bru and a sugar free version of Irn Bru. However, they also sell
many other drinks including Barr Flavours which is their own brand version of
flavours such as cola, bubblegum, lemonade, cherry and many others. While
selling their own brand versions of flavours, Barr also sell other drinks such
as Rockstar, Strathmore, Rubicon and many others which can be found on their
websites - http://www.agbarr.co.uk/our-brands/.
By offering a large variety of brands under Barr, they can meet customers’
demands much more easily and increase their market share which can further
limit competitors such as The Coca Cola Company.
Branding provides benefits for both the customer as well as the company
selling the products, as it helps customers identify which products they prefer
and which products they do not like. Another benefit of branding for the
customer is that it reduces the time spent looking around for the best brand to
purchase as without a selection of brands to pick from, customers would feel
confused and have no assurance as to which brand they liked as it would all be
in a random variety. An example is that both Coca Cola and Barr have different
drinks that customers can purchase and different versions of the drink such as
a sugar free or diet version which can help those who are cutting down sugar in
their diet. If brands were all over the place and both Barr and Coca Cola did
not have a wide variety of drinks to choose from, many customers would not know
which drink is best for them. Also by having a variety of brands under the one
company, this reinforces brand loyalty which helps both the customer as well as
the company as the customer will usually stay loyal to the brand and the
company will benefit from this through profits. (Dibb., et al, 2016).
Overall, both The Coca Cola Company and Barr have similar strategies
when it comes to branding products as they gain the ownership of many different
brands to increase their market share and increase customer attraction which
further increases the profit that both companies receive. This profit increase
comes from brand loyalty as well as having a wide range of items to choose from
and different versions of each drink which can appeal to everyone.
Just like everything else has a life
cycle, so too do products. All products go through the stages of birth to death
and everything in between. When a product is born, it goes through the growing
stages and once it loses attraction from customers and the sales go down the
product is then killed off to save money. All products go through the 4 stages
of the product life cycle. (Dibb, S., et al, 2016).
The first stage is the introduction stage. This is when the product
makes it’s first appearance on the market. This is when sales are at 0 and
there is no profit.
The second stage is the growth stage. This is when sales and profits
are going up rapidly until they reach a maximum point where they then start to
deteriorate.
The third stage is the maturity stage where the sales reach a maximum
but then start to go down while the profits are continuously falling.
The final stage is called the decline stage. This is when the sales are
declining rapidly and this is usually due to new technology or a competitor
reducing the marketshare. (Dibbs. Et al, 2016).
An example of this product life cycle is when The Coca Cola Company
decided to pull off all the original formulas of their drink Coca Cola from
shelves after their rival Pepsi was found to have a sweeter tasting version of
cola in 1985. The reason for this was because after the initial growth stage,
The Coca Cola Company found out that Pepsi Cola was about to catch up to its
success and may even overtake Coca Cola as many people preferred the Pepsi
version of the popular drink. So, Coca Cola decided to create a new formula and
a whole new drink called ‘New Coke’. This failed as soon as it hit the shelves
as many people were protesting for the original version of the drink to be put
back as they did not like the ‘New’ Coke. This decision by Coca Cola has been
called ‘the biggest marketing blunder of all time’. (Bhasin, 2016). After Coca
Cola’s sales and profits dropped significantly due to the introduction of the
‘New’ Coke, they decided to scrap their idea and reintroduce the ‘classic’
version of the Coca Cola. This is a good example of the produce life cycle as
when it was introduced it immediately did not do well so it went from the
introduction stage to the decline stage very quickly as majority of the
American population were opting for their competition’s drink – the Pepsi Cola.
This also shows how this can be used as a strategy as when a product is pulled
from the shelves completely, many will want it back and so when it comes back
to market it does a lot better like the classic version of Coca Cola did after
it was brought back after the New Coke. (Bhasin., 2016).
New Product Development
A new product usually meets one of the following criterias:
·New to the world
·New to the company – an example is when Apple
released the first ever iPhone which was new for the company as they only made
computers and laptops.
·New product line
·New variation on existing products – new flavour
of foods that are already out there or example, different crisps flavours. An
example from Coca Cola and Barr is when they changed their drinks to introduce
healthier options such as Coke Zero, Diet Coke and sugar free Irn Bru.
·New position in the market – appealing to the
young when a product used to appeal to the older generation, an example would
be when Lucozade started to target their advertisements towards the younger
generation instead of the older generation like they used to. (Dibbs. Et al,
2016).
The Coca Cola Company decided to go for a healthier option when they
introduced different variations of their popular drink – coke – to appeal to a
wider segment of people such as those who want to cut down their sugar intake.
In 1983, diet coke was launched in Europe and 3 years later it quickly made
it’s way to the top of the low calorie drinks list. (Journey Staff, 2016).
Other examples of this strategic move includes The Coca Cola Company
introducing different variations of the already existing drink such as Coca
Cola Vanilla, Coca Cola Lemon, Coke Zero and the recent addition of Coca Cola
Life. (Brands, n.d.)
An example from Barr is when they introduced a sugar free version of
Irn Bru to appeal to a larger health conscious audience. Barr then decided that
they would also create a different version of Irn Bru such as Irn Bru XTRA. The
idea behind this new drink is that it is “full of extra taste” but has “no
sugar”. (Connelly, 2016).
Overall, both Coca Cola and Barr introducing new and healthier versions
of their most popular drinks are very beneficial to their companies as they can
provide their customers with more choice and appeal to everyone, no matter what
their taste is. However, new product development is very risky and expensive.
The initial production phase can take a very long time and can cost the company
a large amount of money, especially if the product fails or does not succeed as
well as it should have. Although developing new products and brands are risky,
failing to produce new products is also risky as the business can be seen as
old and not integrating with society’s new standards. (Dibbs., et al, 2016).
