Contemporary Issues In Marketing - Essay Example

?Running head: CONTEMPORARY ISSUES IN MARKETING Contemporary issues in marketing Insert Insert number Insert 5th December 2011 Introduction Coca-Cola Company is an international firm that is headquartered in Atlanta, US. The company specializes in production and selling of non-alcoholic beverages which include Coke, Fanta and Sprite among others. With more than 500 brands, the company has acquired competitive position that has made it to effectively face off its competitors in the soft drink industry. One of the major products that have made the company to be successful and attain a strong customer loyalty is Coca-Cola brand that was established in 1886. Coca-Cola Company, whose annual revenue is more than US$ 35 billion, operates in more than 200 countries (August, 2008). In order to ensure that its products are effectively distributed across all parts of the world, the company uses distributors. In addition, bottlers are also used to dilute and package the syrup concentrate that is produced by Coca Cola Company. Under the leadership of Muhtar Kent, the company Chief Executive Officer, Coca-Cola has diversified its market share leading to increase of sales and revenue. The profitability of Coca-Cola is based on effective marketing strategies and management policies. For instance, the company has a long history of acquiring other companies thus making it to have a strong capital base and high number of consumers. Some of the major companies that were acquired by Coca-Cola include Minute Maid, Barq, Odwalla, Fuze Beverage and Huiyuan Juice Group. Contemporary marketing and changes in the 21st century Technology advancement, economic growth and the increased demand of products via the internet are some of the major factors that have resulted to adoption of new marketing strategies in the 21st century. Through evolvement of contemporary marketing strategies from the early orientations that included product orientation, selling orientation and production orientation, strong customer-company relationship has been attained (Webster, 1999). One of the major contemporary marketing approaches that exist in the 21st century is relationship marketing. Relationship marketing aims at enhancing customer loyalty through provision of excellent services and products that meet the needs of the customers. Industrial marketing is another contemporary marketing aspect. It entails changing the focus from the end products to capital goods. Industrial marketing utilizes advertising, promotion and communication to consumers in order to increase the sales. In the same way, companies are currently using social marketing as an avenue of generating benefits for members of the society. In order to reach customers regardless of their location, organizations adopt e-marketing that involve use of internet to market their products. This has been achieved through the advancement of technology in the contemporary world. Ethics in Coca-Cola Company Coca-Cola Company maintains corporate governance guidelines that depict the approaches adopted by the company in order to enhance corporate governance that is vital in meeting the needs of its consumers and employees. In order to ensure accountability and transparency in the company, Coca-Cola management team undertakes regular reviews of its system. The review is also undertaken to achieve international ethical practises thus ensuring the company retains its leadership in the soft drink industry. Code of business conduct is one of the major aspects that are adopted by directors, employees and other associates in order to enhance integrity and honesty during the performance of their duties. Any time new directors or employees are hired by the company, they should study and understand the ethics concepts that are covered by the code. In this way, they effectively emulate the required ethical procedures during their duties. The company also has put in place Ethics & Compliance Committee whose responsibilities include administering the Code. Other duties of the Ethics & Compliance Committee include monitoring, training, and regular assessment of the compliance of all the stakeholders to the code of business conduct. Ethics and Compliance training In its effort to ensure that high standards of ethics are maintained by the employees and the sales executives, Coca-Cola holds training sessions that are web based. For example, from 2007 to 2008, more than 30,000 employees completed training programs (Governance and ethics in Coca-Cola Company). Some of the major areas that are covered during the training include European Union competition law, business ethics, intellectual property, competitive intelligence, Latin American competition law as well as financial integrity. Ethicsline Ethicsline is an international telephone service that customers, bottling partners, suppliers and associates use in order ask questions that relate to the compliance issues and the code. In addition, the service that is available 7 days a week, allows the stakeholders to report bribery cases and potential violations. Based on the fact that Coca-Cola serves consumers from different parts of the world, translators are emulated in Ethicsline in order to improve communication within and outside the company premises. The section below discusses two ethical cases that were experienced by the company in the India market. Pesticide in Coca-Cola products In 2003, Centre for Science and Environment (CSE), a non-governmental organization in India claimed that it has detected dangerous chemicals in Coke and other brands. Sharma (2008) depicts that after the Coca-Cola sought the assistance of various research institutes including Central Science Laboratory in UK and the University of Michigan there was no chemical found in the soft drinks. Water and Solid waste issues in India Another criticism arose from the members of the public residing near the India Coca-Cola bottlers. The public claimed that there was environmental and health problems that were caused by sludge from the company. In addition, the Coca-Cola was also blamed for reducing the level of water in the rivers resulting to low level of water that was available for irrigation purposes. In order to improve the company relationship with the community, Coca-Cola Company engaged in more corporate social responsibilities that were focused at improving the company sales in India (Kripalani et al, 2003. Through improvements of the company operations by India bottlers, the water usage in the company was decreased by 34%. This was done through harvesting rainwater. In order to address the problem of solid waste the company in collaboration with the India government initiated more disposal sites. Additionally, Coca-Cola ceased to distribute sludge as a fertilizer since the community claimed it had negative implication on the environment (Sharma, 2008). Other strategies that were emulated by Coca-Cola included provision of medical services to members of the community. Segmentations Coca-Cola Company understands the diversified needs of its customers across the globe. As a result the company is able to keep its loyal customers despite the stiff competition from its rivals. Segmentation based on the demography In order to ensure that the company serves it customers effectively, Coca-Cola segments its market according to the age of its consumers, their nationality and the size of their families. Based on the fact that the company produces non alcoholic beverages, it makes it possible to attract all customers including the young and the old consumers (Ceaser, 2006). The level of income earned by the Coca-Cola customers is another significant aspect that is considered by the company. As a result, the company produces various packages that are consumer friendly. For instance, the 330ml tin pack is produced to cater for low income earners who are loyal towards Coca-Cola products (Webster, 1999). Segmentation according to geographical location In its effort to cater for its clients from different parts of the world Coca-Cola has initiated different brands with variety of colours, tastes and packaging. For instance, in areas with large population including China, the company has emulated recyclable bottles. By packing the Coca-Cola brands in such bottles, it makes it possible to carry the bottles. Based on the recyclable nature of the bottles, the company plays a vital role of reducing global warming. Different weather patterns also determine the volume of Coca-Cola brands that are consumed in different countries. According to Goldstein (2007) consumption of Coca-Cola products during winter is approximately 39% of the expected capacities while during the summer the consumption rate increases to 91%. Based on this argument, the company has come up with strategies where warm brands can be sold during cold seasons in order to raise the sales volumes. Segmentation based on customers behaviours Additionally, behavioral segmentation is adopted by the company in its marketing strategies. For example, in many occasions, the energetic brands of the company are used by the clients during the resting time after hard work. In addition, during the socialization among the consumers, the company products are on high demand. This makes the company to target social gatherings in order to diversify their sales and increase their profits. Due to the high level of consumption that has recently been depicted by customers from Europe and Asian markets, Coca-Cola has concentrated on these regions with the aim of providing brands that meet the needs of its consumers. In most cases, behavioral segmentation is evident during holiday seasons especially at the end of the year the when sales volume are projected to be high (Trout, 1996). Psychographic segmentation Psychographic segmentation is also a significant approach that is emulated by Coca-Cola Company in its effort effective serve its customers. For example, the company has recognised diverse customer’s habits as one of key areas in its market segmentation. The habit of taking beverages after every two hours by European consumers especially during summer has been used as an opportunity by Coca-Cola to expand its sales. One of the key strategies that are used by Coca-Cola Company to effectively address the increased demand of its brands in Europe is use of mobile shops. In this way, accessibility of its beverages is ensured thus resulting to a stronger customer relationship which is vital in attaining sustainable growth of the company in the region. In its effort to cater for the changing lifestyle of its customers based on the economic issues that have affected the purchasing power of its customers, Coca-Cola has embarked on providing affordable and high quality brands that have effectively addressed the needs of its customers. Branding and brand development One of the key aspects that have made Coca-Cola to be effectively positioned in the market is its branding and brand development. For example, in order to enhance customer awareness and remembrance, the company has adopted simple brand names. It is worth to note that despite the stiff competition that is present in the soft drink industry, the improvements that are regularly made on any company brands plays a vital role of retaining its customers. In this regard, Coca-Cola has regularly controlled the amount of sugar that is present in its brands such as coke. The regulation of sugar content has been undertaken in order to make the products be compatible with the needs of old people who do not require sugary products (Murden, 2005). As mentioned earlier, the names of Coca-Cola brands are easy to remember. For example, the brand name Coca-Cola is easily remembered by customers without necessarily seeking the help of shops attendance. Since customers can easily remember the brand names emulated by the company, it becomes possible to make repeated purchases thus increasing the company sales both in the short-term and in the long-term. Extensive advertisement that has been put in place by Coca-Cola Company especially through the use of television, magazines, newspaper and on its website has significantly enhanced the marketing of its brands. For example, customers are in a position to be aware of new products once they are launched in the market. In the same way, Coca-Cola has kept on changing advertising slogans in order to attract the attention of its customers. Some of the notable slogans that were used in US in 2010 and 2011 respectively include twist the cap to refreshment and life begins here, A fundamental aspect that has enhanced promotion and positioning of Coca-Cola brands is the company involvement in sponsoring events regardless of whether they are culturally based or socially oriented. During most of the local and international sporting activities, Coca-Cola has initiated a wide range of attractive advertisement and promotion activities. A good example of the marketing strategy that was undertaken by Coca-Cola was the sponsoring of the FIFA World Cup in 2010 that was held in South Africa. Reaction of consumers towards Coca-Cola branding strategies Based on its objective to meet the needs of its consumers in US and other countries, Coca-Cola has taken effective initiatives to ensure that all its brands are in line with the needs of its customers as well as international standards. In turn, the company has benefited from a strong customer loyalty that has made it to effectively face off its competitors in the soft drink industry. As mentioned earlier, Coca-Cola brands are packaged in such a way that they can easily be carried by customers during their journeys. It is worth to note that even though the competitor’s brands are similarly packaged, most of them have negative impact on the environment an aspect that demotivate consumers from buying them. It is also imperative to note that most of the customers are currently seeking for products that have little or no green house emissions. In addition, the company has emulated various other aspects that may seem not to have an implication on buying behaviour of the customers but in the real sense they play a vital role as far as branding of the Coca-Cola products is concerned. For example, a slice of a lemon that was attached on the diet coke, did not only change the appearance and the taste of the diet coke, but also it effectively faced off its competing brands that were produced by the competitors including Pepsi (Murden, 2005). Conclusion In the contemporary world, marketing has been influenced by various aspects that include technology development, customer relationship management, globalization and stiff competition. To ensure that companies remain competitive and the sales volume are increased, it is imperative to ensure that ethical issues are appropriately addressed during the operations of any company. Coca-Cola Company, the world market leader in the soft drink industry has portrayed effective ways of dealing with ethical issues. Despite the criticism that faced the company mostly from India, Coca-Cola has not been left behind as far as undertaking social responsibilities is concerned. This has resulted to creation of strong customer-company relationship which has seen the company sales increase over the years. Another essential marketing aspect that Coca-Cola has adopted is effective segmentation of its market. Meeting of its customer needs is an important aspect that Coca-Cola has initiated in its effort to win customer’s loyalty and trust. This has been achieved through segmentation of its market based on the location and behaviours of its customers among other aspects as depicted in the discussion above. Additionally, Coca-Cola has embarked on various strategies in order to improve its brand awareness. These include extensive advertisement of its brands especially via its website and other avenues. Through advertisements and effective promotion, customers notice various brands that the company produces. Coca-Cola association with FIFA World cup is one of key strategy that highly benefits the company not in terms of sales increment but also creation of strong relationship with its customers. Through the various sponsorship strategies, Coca-Cola has significantly contributed to the development of its brands. Based on the above discussion, it is clear that in order for companies to be successful in the current marketing environment, they should consider the vital roles of their consumers, employees and other stakeholders. Bibliography August W. 2008. Coca-Cola Company. Georgia: Georgia Humanities Council. Ceaser, M. 2006.Colombian farmers launch Coke rivals. Columbia: Columbia University press. Goldstein, D. 2007. What is Customer Segmentation. New York: Wharton School Publishing Governance and ethics in Coca-Cola Company.http://www.thecoca-colacompany.com/citizenship/governance_ethics.html. Retrieved December 4, 2011. Kripalani, Manjeet and Mark L. 2003. Finally, Coke Gets It Right in India. New York: Macmillan Publishers. Murden, T. 2005. Coke adds life to health drinks sector. London: Sage. Sharma, A. 2008. Water in Coca-Cola in India pesticide free. New York: McGraw Hill Inc. Trout, J. 1996. The New Positioning: The latest on the world’s no.1 business strategy. New York: McGraw Hill Inc. Webster, F. 1999. Industrial Marketing. London: John Wiley & Sons. . Read More