Digital Marketing Strategies for Coca-Cola Company - Essay Example

?Digital Marketing Strategies Report for Coca Cola Company Report Using concepts, models and theories associated with the effective use of Digital Marketing as presented in this unit, you are required to critically assess and evaluate a chosen organisation’s Digital Marketing activities and the underlying strategy or strategies (as far as they can be determined). Coca Cola Company was established in 1886, became an international company in 1984 and doubled the number of its marketing destinations in 1960. According to Senker and Foy (2012), the expansion in business size made the company expand its product line as well through the introduction of Sprite in 1961, Tab in 1963 and Fresca in 1966. The company zoned its marketing techniques in 1970 to dedicate their product as a representation of fun, freedom and playfulness. Currently, the company operates in 120 countries and serves over 1.3 billion customers daily (Senker and Foy, 2012). The company continues to be the leading marketer of the non-alcoholic drinks world wide. According to Goldberg and WHA-TV (1999), the company’s sustained success in marketing is related to its strategic focus on satisfying the customer needs through enhancing consumer awareness. Its focus on enhancing consumer awareness has led to adoption of digital marketing strategies which are relatively efficient compared to other traditional marketing methods such as newspapers. Traditionally, most business players used digital marketing to include other marketing strategies such as search engine optimisation (SEO) and banner advertisement that are currently not considered as constituents of digital marketing. Traditional forms of marketing such as radios and television means cannot be considered digital because they do not offer instant feedback or reports. Some such as telephones may offer responses but there is no means of ascertaining the number of people who assessed the information. Digital marketing is basically an internet service. The internet has the capability of sending messages such as email or voice broadcast as well as serving a banner ad. Digital marketing exists in two forms; pull and push. The pull digital marketing denotes the consumer actively seeking information through the various web search engines while the push digital marketing involves the marketer sending messages without the consumer or recipient’s consent (Raulas et al. 2003:293-300). This implies that the digital marketing applies both private and public means in promoting products. The company can then establish a reporting engine to relay information on the performance of the marketing strategy. The company has set high standards on the methods of promoting business activities through the use of social marketing on the internet (Darroch, 2009). Its success in digital marketing is related to its focus on quality maintenance. Most of the company ads are entertaining and creative. They are created through channelling of huge financial investments. The Coca Cola Company management is vividly aware that maintaining regular contact with consumers builds and sustains customer relationships. This is why they have enhanced the efforts geared towards application of digital marketing which is a more efficient strategy linking the customers to the company. Application of the digital marketing strategy is built on the premise that modern marketing is changing from exchange of goods and services to service quality, interaction, customer relationships and enhancing connectivity (Vargo and Lusch, 2012). According to Robbins and Stylianou, (2003), interactivity in the digital media offers better methods of searching for company information. Additionally, consumers utilize digital marketing to seek help on any problems related to company products. Digital connection has also provided efficient and cost effective means of spending free time with company brands such as participating in promotion games and learning about the product they are using. The company benefits from digital marketing through being informed on the changes in consumers needs. The guiding principle in the application of digital marketing is cost-effectiveness and efficiency compared to traditional marketing strategies such as sales forces and the modern electronic media channels such as Web and e-mail (Reinartz, Thomas and Kumar, 2005). Reinartz et al (2005) affirms that the application of the digital media has facilitated cost effectiveness and interactivity between the company and consumers. For instance, Senker and Foy (2012) affirms that Coca Cola Company face book page has more than 40 million fans. In addition to being efficient and cost-effective, use of social media allows instant sharing of product information from customers globally. This allows the company to establish a constant and personal contact with consumers at a lower cost. Coca Cola Company has utilised its popularity in the social media to build loyalty among consumers through offering extra services such as newsletters and constant awareness posts reminding the fans and consumers of the product changes and company plans. This enables the customers develop emotional attachment to the company products as they feel personally remembered and appreciated. According to Business Week (2003), the company uses the database and information on purchases to predict when distributors are running out of supply. The predicting capability enables them identify the repurchase periods that they use to design and personalise e-mails. This enables the company to conduct business cost-effectively with their existing customers and effectively preside over the repurchase process. To further popularize its global brand, the company has recently established an interactive magazine, Coca cola journey, as part of its multi-year investment in content publishing. The digital marketing strategy was launched to enhance consumer involvement and improve online awareness of the brand (Geyskens, Gielens and Dekimpe, 2012). The digital magazine is used by the company to post corporate updates related to earning reports, press releases, job vacancies and information on the work force. Some of the features that attract followership in the digital magazine include a story telling platform that allows customers to access information on a wide range of issues such as entertainment, health and brands. Jayachandran e al. (2005) asserts that maintaining regular contacts with customers through digital marketing plays a crucial role in promoting the organisation’s customer relationship performance. Most importantly, the Company has successfully won considerable consumer loyalty through application of digital marketing. This is due to enhanced customer knowledge and satisfaction provided. Arresting consumer loyalty is a comprehensive process that requires the application of Customer Relationship Management concept (CRM). According to Figure 1, winning consumer loyalty involves focus on strategies such as consumer prospecting, relations with the consumers, interactive management, understanding the consumer expectations, empowerment and personalisation (Reinartz and Kumar, 2003). Application of digital marketing simplifies the act of estimating the attainment of consumer loyalty through analysis of interactivity level and consumer presence over the internet. Figure 2: Research model for the establishment of customer loyalty Available at:< http://jcmc.indiana.edu/vol9/issue4/lawson_body.html > The level of consumer presence over the internet and their interactivity variables enable the company understand how customers interact, partner, empower, build relations, and personalise as well as their expectations in cultivating loyalty (Reinart and Kumar, 2002:86-94). The company has also established various strategies geared towards future promotion of business activities According to Senker and Foy (2012), the strategy for attaining coca cola’s 2020 vision of doubling their business activities is dubbed as “liquid and linked”. Liquid explains the company’s target of ensuring that communication reaches the widest audience and linked because the company must maintain its brand. The strategy was designed to transform the company from creative excellence to focus on content enhancement. The liquid and linked concept uses multifaceted, relevant and spreadable topics to generate conversations that last for a long time. Its target is the creation of interesting ideas among consumers while carrying crucial messages about the company products. Transformation of one-way story telling into dynamic and interactive story telling has enabled the company promote the brand image through weaving it into the fabric of the modern culture and attracting the youth market that forms the majority users of digital devices (Gefen, 2002:27-51). This has made the marketing department of the company abandon traditional media planning in favour of digital age means that incorporates face book, mobile applications and social gaming. This has enabled the small digital channels to work in cooperation to enhance information spread. The success of the liquid and linked strategy has been enhanced through the use of social marketing. Figure 2 summarises the step required for any social marketing strategy to succeed. Figure 2: Social marketing wheel. Source :< http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1463924/figure/fig1/> Digital marketing has not only enhanced the external performance of the company; it has also facilitated internal reorganisation of the company, improving productivity. For instance, consumer feedback has enabled the management identify performance weaknesses leading to application of more holistic and effective management models. Such model is the 7s framework of McKinsey (Philippe and Juan, 2003). Figure 3 represents the seven-S model that analyses an organisation and its effectiveness. Digital marketing supports the company’s strategy through offering the efficient and cost-effective means of marketing. The success in marketing transformation has been facilitated by technological advancement. Change in media environments and improvement of various channels of communication have facilitated the shift from the traditional means of marketing to digital ones. Figure 3: Framework for analysing and improving organisations Available at :< http://vectorstudy.com/management_theories/7S_framework.htm > The consumer purchasing attitudes and behaviours are explained and analysed by use of scientific approaches that presents the information in form of theories (Patel, 2007). Coca Cola Company uses this information in identifying the most efficient strategies of communicating product value with consumers. However, digital channels provide challenges because most of its channels are relatively new and consumers are not readily familiar with them. Successful application of digital marketing will require the company to apply digital marketing theories. These identify both similarities and differences to the traditional marketing strategies to ensure that they are readily applied by the consumers. One such theory is the game theory which is a form of mathematical concept whose analysis depicts how various interactions among individuals produce outcomes based on the choices they make. Anderson (2010) asserts that the practical application of the game theory in marketing is referred to as gameification. For instance, Coca Cola can apply gameification in the study of vending sales to establish the appropriate number of vending machines required to be placed in different locations depending on the marketing potential of the location. The network theory analyses all forms of relationships i.e. whether among people or systems. The theory is suitable for assessing the effectiveness of digital marketing in influencing the customer behaviour. Patel (2007) found out that that the success of company products is difficult to ascertain through the use of the traditional factors such as plot power. This is because most of the consumer decisions are due to environmental influence. Digital marketing strategies such as twitter or face book allows the company to personally interact with the consumer and ensure that there is no external influence factors in play. They also allow influential users such as celebrity figures to enhance marketing through their popular networks. Generational theory alludes that consumers born of the same age possess the same attitudes and behaviours due to their shared experiences (Green, 2010). The relevance of the theory is the manner in which different generational members interact online and the sites where marketers can reach them. For instance, the social media sites are more popular with young people below the age of 35 years. This has enabled the company to adopt the use of social media sites such as Face book, Twitter, Foursquare and Groupon that mainly taps on the young generation marketing. Senker and Foy, (2012) affirms that majority of the 40 million fans of the coca cola page are below 35 years. Collective intelligence theory portends that groups are more productive and efficient than the individual roles (Wood and Baer, 2006:862-884). The company applies crowd sourcing that engages individual consumers and make the building units of a successful marketing campaigns. The individual responses are compared to the responses from other individuals and that have enabled the company apply detailed and effective strategy meant to improve product quality to reflect customer preference. Conclusion Application of digital marketing has improved competitiveness and productivity of the company. Although most of the digital marketing strategies are new to most consumers, most of them have been able to maintain the modern technology trend as they tap knowledge from the modern technological advancement. The level of consumer presence over the internet and their interactivity variables enable the company understand how customers interact, partner, empower, build relations, and personalise as well as their expectations to cultivate loyalty. References Anderson, E. (2010) Social media marketing: game theory and the emergence of collaboration, Heidelberg, Springer. Darroch, J. (2009) Marketing through turbulent times, Basingstoke, Palgrave Macmillan. Gefen, D. (2002) ‘Customer loyalty in e-commerce’ Journal of the Association for Information Systems, vol. 3, pp. 27-51. Geyskens, I., Gielens, K. & Dekimpe, M.G. (2012) ‘The market valuation of Internet channel additions’ Journal of Marketing, vol. 66, no. 2, pp. 102-119. Goldberg, D., & WHA-TV (Television station: Madison, Wis.). 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