Foundations of Marketing Theory: Marketing Analysis of Coca Cola - Term Paper Example

Running Head: COCA COLA MARKETING ANALYSIS OF THE COMPANY Marketing Analysis of Coca Cola Table of Contents Table of Contents 1 Abstract 2 Storytelling Marketing: 5 References 13 Abstract Marketing is a major part of any company and it plays an essential role in the development and building of a brand image. In the recent times, the concentration on storytelling marketing has grown to a great extent and a number of companies are attempting to use this technique for marketing their products and to build a stronger relationship with the customers. The marketers look at several factors while deciding the technique to be used for the brand building activities. A few of the main elements of focus for the company include, customer value, the four P’s of marketing, i.e. Price, Place, Product and Promotion, competitive advantage and the global marketplace. Coca Cola is one such company which has been able to develop a right mix of techniques and has been able to reach out to a wide and diverse range of customers. The company uses storytelling marketing as a part of their marketing activities and this is a major brand building tool used by the company. The paper has included a clear discussion of the techniques used by the company and a brief overview on the technique of storytelling marketing as well. Recommendations have also been included at the end of the paper. Marketing plays a very important role in every business. A company with a strong and well designed strategy for marketing can prove to be very successful unlike a company without a well thought out plan for the marketing. There are a number of different companies which have been able to correctly market their goods and have been able to create a name for themselves not only in the local markets but also in the international markets. These companies have been able to prove themselves in the markets and create a strong brand image for themselves. This paper aims at analysing one of the world’s largest soft drink manufacturers – Coca Cola. . Coca Cola has been noted to be successful in every market they enter, irrespective of whether it is an emerging market or a fully developed market. Coca Cola has used a very strong step to ensure a strong building and sustainment of the brand image by complete commitment. This is one of the biggest and strongest indicators that the company pays a lot of attention to the marketing both local as well as international is the fact that the company has spent as much as $ 2 billion on marketing alone in 2009 (TheCocaColaCompany.com, 2009). Coca Cola – Company Overview: Coca Cola is one of the leading companies throughout the world. It has had the highest and biggest selling soft drinks in the history and is one of the best known products in the world. Coca Cola was introduced in 1886 and was produced by mixing ‘Coca Cola’ syrup with carbonated water. This was started in Atlanta. However over the years the company has grown to become the world’s largest and most well known companies across the world. The company has created a trademark value for itself which has become invaluable and the goodwill that the company has been able to create for itself is very high. The company has made a name so strong for itself, that even if the company was faced with complete physical property losses, it could still borrow enough money to rebuild the entire company and still live up to its name (Kaye, 2004). Considering Coca Cola’s international strategy, it has been noted that the company has always been of the types which prefer to undertake risks. This is seen by the fact that the company prefers to invest into emerging markets and grow within these markets. The international strategy of the company is to reach out to all markets irrespective of their size or current standing in the markets. One of the most essential aspects that Coca Cola also keeps in mind while devising their international strategy is the fundamental rule of ‘Think local, Act Local’ (Kaye, 2004). This is the basic fundamental adopted by the company which makes the company more successful and one of the most invaluable brands of the world. It is noted in researches that people enjoy a drink not only based on the drink by itself but also to a great extent the cultural brand image that it has been able to build (Johnson, Scholes & Whittington, 2006). Coca Cola however faces a high level of competition from Pepsi. Coca Cola has a high competitive advantage over Pepsi. Coke has grown to be the biggest and most profitable drink across the world. The company has shown a high level of growth and has gained a much larger part of the, market when compared to Pepsi. 1995 statistics shows that Pepsi had a strong operating margin of 10% while Coca Cola was as high as 23% (Cristo, 2009). The company has also been able to gain a cultural benefit over Pepsi. It is noted in researches that people enjoy a drink not only based on the drink by itself but also to a great extent the cultural brand image that it has been able to build (Johnson, Scholes & Whittington, 2006). The table below highlights Coke’s Market Share compared to the other soft drinks that are available in the market. This is as of 2007 and it is clearly seen that the original Coke Classic has proved to be the highest in terms of the market share and has quite a difference compared to Pepsi Cola as much as 6.5%. This is quite a high range of difference and this is the factor that makes Coke stand out when compared to any other cold drink / beverage. Table: Market Share of the various drinks available in the market as of 2007 The company has been known for its storytelling techniques and for being able to reach out to a larger group of customers through the introduction of Santa Claus. This forms its competitive edge over Pepsi or any other soft drinks company and this allows Coke to be well recognised by all throughout the world. Storytelling Marketing: While understanding storytelling marketing as a technique or in that case any marketing techniques, it is essential to understand a very important element – Branding. Brands are a very essential element of every business. A company owned product that has under – gone the process of branding is called a brand. Branding is “the means by which a company aims to differentiate its products from competition and through marketing-protect its position in the market, profitably over time” (White 1999). It is recognised as “the sum of ail elements of the marketing mix” (Ambler and Styles, 1996). The most commonly accepted definition of brand is, “a distinguishing name and/or symbol (such as a logo, trademark or package design) intended to identify the goods or services of either on seller or a group of sellers or a group of sellers and to differentiate those goods or services from those of competitors” (Aaker, 1991.p.7). Storytelling is a form of art, which helps convey a message to people. Stories to a great extent shape the world of many. Storytelling for many is a basis for them to add complex religious dimensions to life (Niles, 1999, p. 2). Niles also mentions that people love stories, and no matter what the language of the story is people enjoy story telling. Storytelling is one of the oldest forms of art and in ancient times, this was one of the modes of communicating to the younger generation the history of tribes and families for the coming generations to learn from (Gunter, 2008). There have been a number of different definitions that have been developed about story telling in the past. It is not really possible to say that there is anyone definition which is right or wrong, as story telling as a term is one with a variety of meanings and is very broad (Robinson, 2004). According to T.J Walker, a famous public speaker and a consultant to the rich and famous people “Stories are not a luxury; they are the single most effective way to get your audience to remember your message” (Campbell, 2008). This research is based on highlighting storytelling as a marketing strategy. Marketing by itself is a very vast topic with a lot of importance in the working of every business. The concept of storytelling marketing is one, where the marketers, use stories to market their products and services. One of the finest examples of this has been the marketing effort of Coco – Cola. The advert of Coke depicted the looks of Santa to be a white bearded old man with a happy, jolly face in a bright red suit with a sack of Christmas gifts for everyone (thecocoa-colacompany, 2008). Talking about the storytelling marketing, it is essential to understand that word of mouth marketing falls into this category as well. According to Quealy, “one communication method that beats all others when it comes to delivering a memorable, motivating, and meaningful message: telling a story” (Rozgonyi, 2008). While considering story telling as a marketing tool it is essential to understand that story telling can help create images and visuals in the minds of the customers, which allows them to see what is being put across to them. This helps create a strong and successful connection with the customers as well as the clients. It is a known fact that stories to a great extent are more likely to be remembered than the facts, theories or even statistics. Thus it is safe to say that storytelling to a great extent tends to be much more successful than any other mode of conveying messages to customers or even to the clients. Birth of Storytelling Marketing: Although in 1931 Coca Cola has been able to bring in the concept of storytelling marketing, with the introduction of ‘Coco Cola Santa Claus’, the trend of this kind of marketing has not moved on for a very long time. Coca Cola has been known for its ads and for the various stories that it has been able to deliver to the corporate world. Also Coca Cola was the first brand to bring out the red colour to the corporate world and also introduce the Happiness Factory (Sridhar, 2008). The company has brought to life different stories of Santa Claus, Polar bears and a number of other fairy tales. The excellent imagination that the company has brought out in its ads, make people want to believe that each time a coin is put into the vending machine, the Coke is produced inside the machine in a fairy tale like environment. Coca cola has been able to use its ads to make such beautiful stories that each of them seems to be fairy tales on their own. The Santa Claus story became the main birth place of storytelling marketing (Sridhar, 2008). This story was such a hit among the people, that people actually started believing that Santa was real. In a picture if Santa’s wedding ring was missing, Coca Cola would receive a number of mails asking about Mrs Claus (thecoca-colacompany, 2008). This is one of the best and oldest examples that can be mentioned for the storytelling marketing. This as mentioned earlier has been the first company to introduce the story telling marketing to people. Storytelling Marketing and Coca Cola: Coca Cola has been using this style of marketing forever, there is now again a huge demand for this and a number of companies have started using this technique of marketing for their products and services. It has now become a clear fact that brands need to woo the consumers with excellent stories. The current use of storytelling marketing is one which requires a story which are timeless. Coca Cola has used a number of different characters that are loved by all, and take their customers for a beautiful journey and at the end of it show the actual truth to the customers. The happiness factory has been able to accommodate all these aspects and also has been able to build a strong bond with the customers. Coca Cola has been using this style of marketing forever, there is now again a huge demand for this and a number of companies have started using this technique of marketing for their products and services. It has now become a clear fact that brands need to woo the consumers with excellent stories. The current use of storytelling marketing is one which requires stories which are timeless. Coca Cola has used a number of different characters that are loved by all, and take their customers for a beautiful journey and at the end of it show the actual truth to the customers. The happiness factory has been able to accommodate all these aspects and also has been able to build a strong bond with the customers. With the growing technologies and the vast choice available for the companies, the current trends in the storytelling is very classy, and with a strong focus on the statement that the company’s aim to make. Recommendations and Conclusions: A relevant brand concepts include brand associations, brand image, brand identity and brand equity. Brand associations are “anything that connects the customer to the brand.” They include “user imagery, product attributes, use situations, organisational associations, brand personality, and symbols” (Aaker and Joachimathaler, 2000. p 17). Storytelling as a management tool has been recognised to very useful. ‘The stories that we share with others are building blocks of any human relationship’, this is a very true and proven view in the book ‘Storytelling – branding in practice’ (Fog, Budtz, & Yakaboylu, 2004). Storytelling is something which is well accepted by all groups of people and is understood easily by all. As a marketing tool, storytelling has proved to be way more successful than the traditional modes of marketing. This is mainly due to the fact that people love stories and can relate to stories much better than to facts and details. A story which is well designed and planned with a clear focus on the business as well as the bottom line of the business proves to be much more beneficial. In the case of traditional marketing tools, the companies use a number of different tools like email marketing, direct marketing, website marketing etc (Benun, 2003). These form a strong mode to communicate to the customers and also helps brand the business. Understanding the basics of the traditional marketing methods is essential to be able to decide which of the two are more successful and more beneficial for the companies. Based on understanding of the traditional techniques of marketing, it is seen that each of them have their own benefits and positives. The best option and most successful way to market the goods, is by creating a mix of traditional marketing along with the storytelling. In simpler words, including stories in the emails marketing, websites, direct mailing, database marketing, e – bill marketing, and mobile marketing. A combination of the two modes of marketing will allow for the companies to build their brands in a stronger way. Consider an email that is received with a lot of information of the products and all the details of the business. This email will not be read and will be directly put into the trash (LeBlanc & Hogg, 2006). However, consider another email with a great story and with a clearer presentation of the details of the products and the services. Coca Cola have been able to correctly prove the importance of providing the customers with a strong story which attracts the customers to the brand and increases brand awareness immensely. Coca Cola has been one of the oldest storytelling efforts at branding and marketing and can clearly be considered to be the most successful attempt. The company has introduced Santa Clause as a part of their marketing efforts which has left the customers with a strong impact and a strong recognition of brands. When we think of ‘Santa Clause’, we immediately imagine a white- bearded old man with a jolly face wearing a red suit and carrying a sack of Christmas gifts but this image was developed by Coca-Cola for their adverting. (thecoca-colacompany.com 2008). Denning (2006) argues “when consumers drink a Coke, Corona or Snapple they are drinking not only a beverage but also imbibing identity myths anchored in these drinks. An effective cultural strategy creates a storied product. That is, a product that has distinctive brand features (mark, design, etc) through which customers experience identity myths” (Denning, 2006). Coke’s example has been used by many companies over the past. A lot of companies have immense amounts of information that can be quite complex for the customers, if used directly for marketing. Hence an increasingly popular method for avoiding information overload is to take the well- established storytelling strategy and then introduce enigmatic or even bizarre sub-plots to make the story more complex. Nilli Lavie, Professor of Psychology and Brand sciences in the department of psychology at University College London, states that there are two reasons why this seems to be an effective technique: “having additional, more meaningful information apart from just the product, and which is not event really relevant to the product, makes it not only a more interesting story, but also increases the information load and helps you focus attention on the source of information better than when the information is not as rich” (The Marketer, 2007, p7) Storytelling marketing is very beneficial simply because it can be done with or without the use of words. One of the best examples for this is that of coca cola, and the vending machine. The company has used a very strong mixture of music and colours and characters to provide a clear story for the product. Also companies that are genuinely strong brands use the storytelling as a way to express the illusions and also let go of the imagination to allow a strong and well built story (Benun, 2003). As we understand from the above discussion, storytelling is majorly to help a company name and spread the brand. The main aim of the story telling for the company is to help strengthen the brand image to a greater extent and to develop higher levels of customer loyalty. Hence Coca Cola can do so by publishing the stories in different print media like the magazines as well. This will allow them to reach out to a wider range of audiences. In conclusion, it is seen that Coca Cola uses the KISS technique (keeping it short and simple), this is the most beneficial as the span of human concentration is very limited and the shorter and simpler the attempt from the company, the more likely will an individual remember the advertisement or idea that has been used. Secondly, all the companies have used the technique of not directly trying to market the product or service but to use a different story line for the customers to relate to the product or service that they are dealing with. These factors have proven to be the major success factors for the company. Storytelling as discussed is an art and thus it is essential that every marketer trying to incorporate a story in the marketing effort understands the basic requirements for successful stories. Also if a marketer plans to try out something new with stories, then it is essential to go through the various advertisements and the other stories that have been developed in the past to gain tips and ideas of successful stories and learn from the mistakes of the unsuccessful ones. References Aaker, D. A. (1991). Managing Brand Equity. New York: The Free Press. Aaker, D., & Joachimathaler, E. (2000). Brand Leadership. New York: The Free Press. Ambler, T., & Styles, C. (1996). Brand development versus new product development: Towards a process model of extension decisions. Marketing Intelligence and Planning , 14(7), 10-20. Benun, I. (2003, April 15). Marketing is storytelling. Retrieved November 9, 2009, from Smallbusinessadvocate: http://www.smallbusinessadvocate.com/small-business-articles/marketing-is-storytelling-82 Campbell, A. (2008, May 29). Tell Stories and Improve your Marketing. 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