Communication Strategy as Means of an Organisations Competitive Advantage with Application on Coke and Pepsi - Coursework Example

STUDY ON COMMUNICATION STRATEGY AS MEANS OF AN ORGANISATION’S COMPETITIVE ADVANTAGE WITH APPLICATION ON COKE AND PEPSI Communication strategy is the vital component of any company. The study undertaken will research whether the communication strategy in marketing gives any company a competitive advantage or not. Companies are coming up different strategies increasing to present themselves as more appealing to the audience through means of marketing communication. To understand how this concept can create a competitive advantage for any corporate, two successful and giant multinational companies in the beverage industry will be taken into consideration. These are Pepsi Cola and Coca Cola. The marketing communication of both these companies contributes much towards their success. Marketing communication strategies are planned in many different forms but advertising is one of the best and fundamental tools for both these companies. Based on this assumption, the research will establish whether or not the communication strategy can give companies a competitive advantage or not. INTRODUCTION Communication Strategy Communication is said to be the binding agent between the corporation and its distribution channel. Communication strategy can be related to internal communication of the company or the external communication. The communication strategy discussed in this study is marketing communication strategy. Communication in the marketing channel is of vital importance from both managerial perspective as well as theoretical perspective. Marketing communication strategy is a process or plan through which influential and persuasive information is transferred. According to Keller (2001) the objective of marketing communication is to symbolize the voice of brand and the way organizations can establish relation with customers regarding their products and offerings. Marketing communication strategy is based on building brand strategy that can give a competitive edge in the market (Madhavaram et al. 2005). Due to this reason, according to Madhavaram et al. (2005), communication strategy has now evolved into the concept of integrated marketing communication (IMC). Competitive Advantage Any company if it wants to be in the front of battle lines can do so if it can create a difference that it can maintain (Porter, 1996). This difference is known as competitive advantage. The advantage is about being different as compared to others. This advantage can be created using thousands of unique mix of value (Potter, 1996). In order to maintain a competitive edge companies have to align their activities to the strategy. Combined with the perfect strategy fit, a company can achieve competitive advantage in the market and the industry. The following research is also based on the same assumption that marketing communication strategy can provide organizations with the competitive edge that they require in today’s evolving market conditions. Aims and Objectives of the Study The aim of this study is to assess the impact of a good and efficient marketing communication strategy on the success of any company and how can it be planned effectively as to take the position of company’s competitive advantage. The research will aim to answer the following questions: 1. What constitutes a good marketing communication strategy? 2. Can a good marketing communication strategy give a competitive edge to a company? 3. In what ways can a company achieve competitive advantage using communication strategy? LITERATURE REVIEW Communication Strategy as an Organization’s Competitive Advantage Over the past decade, market realities have been continuously changing and many corporations are re-designing their strategies in communication both internal and external. The focus of this paper is external communication narrowing it down to marketing communications. In this era, marketing communication has become a fundamental advantage for companies to increase and capitalize their value (Phelps et al., 1996). According to Schultz (2003) marketing communication strategy is supported by two pillars: (a) complete and thorough understanding of customer needs and wants (b) significant analysis of prospects for competitive advantage. It is the marketing communication strategies that can “the competitive strategy, position, and capability of the core organization to insure success” (Schultz, 2003). It is essential to realize that marketing communication strategy targets a particular segment of audience. In case of Pepsi and Coke, both the companies differentiate their target market segments from the mass. In order to achieve effective implementation of marketing communication strategy, it has be well defined and audience specific. Another point to focus on is that, the strategy focuses on brands rather than on companies itself. This is known as building brand equity. The question that arises here is how can companies convert its communication strategies into their competitive advantage. The answer is simple. Marketing communications are aimed at creating and building brand equity. It means that marketing can enable brand awareness thus creating positive brand image of a company’s product (Madhavaram et al. 2005). Developing on this tactic, companies can achieve the competitive edge that they desire the most in order to remain in the leadership position. In order to further elaborate on the concept, Pepsi’s and Coke’s communication strategy is reviewed as it has been giving them a competitive advantage over each other as well as other beverages. Pepsi’s Communication Strategy Argenti et al. (2005) while discussing the importance of communication strategy in PepsiCo said that “the communication function supports the businesses and brand building efforts. It moves the organization.” Local economies of scale in advertising and marketing have given Pepsi the edge it needs to sustain itself locally and globally. The use of effective marketing communication has helped Pepsi maintain its competitive edge in the market not just locally but globally as well. The communication strategy of Pepsi relies on the celebrity endorsements and youth appealing advertisements that have given the company a strong brand loyalty and edge over the world. Another attribute that adds to its advantages is the segmentation of the target audience. Pepsi has segmented itself as the beverage that is the choice of ‘New Generation’ or ‘Generation Next’ and aims its advertisement and communication strategies towards this theme. Long-term success of Pepsi is owed to its brand equity that is creating a competitive edge over other brands. Coke’s Communication Strategy The marketing communication strategy of Coke has been changing over the years as the customers become more and more market aware. But thanks to the strong marketing communications such as advertising and promotion, the customers remain loyal to the company. Coke after failure of New Coke launch conducted a market survey of customers as to what motivated them to buy the drink. The result conveyed that the brand was established on the emotions of the company and the consumers. Drinking Coke allowed the consumers to connect with the company and enjoy the experience. This building on emotions strategy by the company helped to create brand equity for its drink which increased its sales from $9 million to $15 million a year (Schwartz, 2009). By building on its brand equity Coke has created itself a competitive edge in the market just like PepsiCo but the positioning of both the brands is different. Coke targets itself as the head of household. This can be seen from the marketing campaigns such as ‘Always Coca-Cola’ that allows the brand to be positioned as the traditional heritage. The company is now increasing re-positioning itself to appeal to younger and elderly crowd by means of vast promotional and advertising campaigns. In order to sustain its edge in the market, the company has to develop strong communication strategies that appeal to the people. RESEARCH METHODOLOGY As the study is primarily a theoretical based research, the data will be collected using secondary resources. The sources will comprise of newspapers, articles, journals, books, periodicals and internet search. The data collection will be established on concepts and theory relating to communication strategy, marketing communication strategy and competitive advantage and its link with each other. In order to make the research results more valid two companies’ competitive advantage will be studied as part of the marketing communication strategy. The literature review will be conducted based on the aforementioned sources and the results of the research questions will be answered on the basis of the information collected. CONCLUSION According to aforementioned details of links between communication strategy and competitive advantage, it is observed that there is a possibility that marketing communication strategy can give an organization the competitive edge it needs in the competitive market of today. Communication strategy is closely associated with brand equity that creates any competitive advantage for an organization. If organizations fail to consider this fact then they may find themselves battered in the war of the gaining the most market. Tactically and strategically oriented integrated marketing communications can help organizations move ahead in the exceedingly competitive world of the 21st century. The main thesis based on this proposal, will further clarify and prove this hypothesis. Word Count: 1443 REFERENCES Argenti, P., Howell, R. & Beck, K. “The Strategic Communication Imperative.” MIT Sloan Management Review. Vol. 46. (2005). Greenwald, B. & Kahn, J. “All Strategy is Local.” Harvard Business Review. (2005). Keller, L. “Mastering the Marketing Communications Mix: Micro and Macro Perspectives on Integrated Marketing Communication Programs,” Journal of Marketing Management. Vol 17. (2001) Lindberg, K. 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