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Department for Business and Management Studies

Marketing Principles Coursework Assignment

BTEC EDEXCEL LEVEL 5 HND IN BUSINESS

UNIT 4: MARKET PRINCIPLES

DATE: 17/07/2013

Submitted by Elena Diana

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Department for Business and Management Studies

Marketing Principles Coursework Assignment

TABLE OF CONTENTS

INTRODUCTION 3 TASK 1.. 4 TASK 2.. 6 TASK 3.. 8 TASK 4.. 11 CONCLUSION. 14 REFERENCES. 15

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Department for Business and Management Studies

Marketing Principles Coursework Assignment

INTRODUCTION

Invented in 1886 by John Pemberton, Coca Cola recipe has a long history behind. In this days Coca Cola brand is recognize around the world. Everyone can identify the brand from products such as: Fanta, Sprite, Diet Coke or Dr. Pepper. During the years the company come up with different slogans for the products such as: Coke is it, Catch the Wave, Cant Beat the Feeling or Enjoy Coca Cola which is todays slogan.

Other packages than the traditional 6.5-ounce bottle contour were introduced for the first time in 1950. Consumers could buy the drink on large 10, 12 and 26-ounce versions. Fanta, Fresca, TaB and Minute Maid were introduced in 1960 as new products. During the years the company has been successful and has became an icon of the American culture.

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Department for Business and Management Studies

Marketing Principles Coursework Assignment

TASK 1

Task 1a. The Chartered Institute of Marketing defines marketing, as is the management process responsible for identifying, anticipating and satisfying customer requirements profitable.

According to The American Marketing Association marketing is defined as an organizational function and set of processes for creating, communicating, and delivering value to the customers and for managing customer relationship in ways that benefit the organization and its stakeholders.

Hassel (2012) defines marketing as a social and managerial process by which companies create value for customers and build strong customer relationship in order to capture value from customer return.

What these definitions have in common are the satisfaction of customers wants and needs, the creation of value in return and create relationship with customers. Also in these definitions it is noticed how important is the management in marketing.

Marketing process is about identifying customers needs bringing in the market products to satisfy these needs following these important steps: analyzing the situation, developing marketing strategy, making decision in terms of marketing mix, implementing and controlling the market process and strategy.

Company Coca Cola analyzes the situation very carefully studying the internal and external factors in the business. The company is using SWOT model for internal situation and PEST model to monitor external factors that could provide opportunities or challenges.

After the situation analysis is complete, Coca Cola develops a marketing strategy that includes marketing analysis, identify the customers and how to use the 4 Ps.

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Department for Business and Management Studies

Marketing Principles Coursework Assignment

Marketing mix decisions is most important stage of marketing process for Coca Cola. This is where the marketing tactics for each product are determined.

Implementing is the process of turning plans into actions and involves all the activities that put the marketing plan to work.

Monitoring and controlling allows the business to check for variance in the budget and actual. This is important because it allows Coca Cola to take the necessary steeps to meet the marketing objectives. Coca Colas three tools to monitor the marketing plan are: sales analysis, market share analysis, and marketing profitability analysis.

Task 1b. According to BusinessDictionary.com marketing concept is the management philosophy where the companies goals are best achieved through identification and satisfaction of customers stated and unstated needs and wants. A company can satisfy customers needs by choosing from the next five orientations: 1. Product Orientation. It is focused on product with higher quality to make profit. 2. Production Orientation. It is focused to produce in mass production for profit. 3. Sale Orientation. It is focused on sales technique to make profit. 4. Market Orientation. It is focused on market research to found what customer need and then developing products to make profits. 5. Societal Orientation. It is to identify the public and focused on them and makes profits. Coca Cola is market orientated because the companys products Coke Zero and Diet Coke were introduced on the market after the company did market research to find what people liked and want. Coca Cola is more focused on younger generation but also on the adults. The consumers of Coca cola are not limited to drink only coke, they can choose from a variety of juices and mineral waters. Therefore Coca Cola has to be market orientated to satisfy customers wants and needs and keep making profits. The advantages for being marketing orientated are identifying the

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Department for Business and Management Studies

Marketing Principles Coursework Assignment

customers needs and then satisfied those needs. One of the disadvantages using marketing orientation is that it is possible that customers give a false need impression because sometimes costumers can be confused of what they want.

TASK 2

Task 2a For this task to analyze the macro and micro environmental factors for Coca Cola organization I will use the PEST and SWOT models.

PEST analysis. 1. Political factors can support or not Coca Cola. For example, if government is increasing the taxes the company must to increase their price and this can reduce substantially the profits. 2. Economical factors. In times of recession can influence the consumer may not buy the Coca Cola products and this can decrease the profit. 3. Social factors. More and more people try to live a healthier lifestyle and this can negatively impact the non-alcoholic industry. Because of the high sugar and caffeine many see content Coca Cola as unhealthy thereby consumers will not buy it and profits will decrease. 4. Technological factors. Technology helps the company to produce and sell the products more efficiently by advertising on television and with faster lines of production.

The micro environmental factors analysis is done using the SWOT model. 1. Strengths. Coca Cola is easily recognized everywhere, is a Brand and the company has good financial resources. 2. Weaknesses. One of the companys weaknesses is the making of unhealthy products. 3. Opportunities. Growing coke demand in new markets. Increase demand for drinks like Diet Coke. 4. Threats. Competitors who make and sell healthier soft drinks than Coca Cola. Longer droughts and strong dollar.

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Department for Business and Management Studies

Marketing Principles Coursework Assignment

Task 2b. Hassell (2012) defines marketing segmentation as a process of dividing marketing into distinct groups of buyers who have different needs, characteristics, or behaviors.

The advantages for using market segmentation are a better understanding of customers needs and saving organization resources.

Segmentation is done geographic, demographic, psychographic, and behavioral. - Geographic segmentation. Coca Cola make products are made for any country and any region. - Demographic segmentation. Coca Cola targets different life style and ethnic groups. One example is the product OASIS, a juice made for younger adults between the ages 20 to 30. - Psychographic segmentation is based on lifestyle, level of education or social class of people. - Behavioral segmentation is about what actions the consumers will take in regards to Coca Cola products.

Based on the above explanations Coca Cola is using all four segmentation types.

There are three different target methods for a segment and these are: 1. Undifferentiated - targeting all segments the same. 2. Differentiated different targeting for different groups 3. Concentrated targeting one specific particular segment. Based on the above, Coca Cola is using the differentiated targeting method and undifferentiated targeting methods. Undifferentiated target is for regular Coke product while Diet Coke targets consumers who want to be on a diet or keep a diet.

Task 2c. There are four factors that influence buyer behavior and these are: 1. Social factors. Friends or family can influence a customer buying behavior. 2. Cultural factors. Social class and consumer culture influence what the customer may need.

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Marketing Principles Coursework Assignment

3. Psychological factors. Motivation, learning, beliefs and attitudes could change how a customer sees a product. 4. Personal factors relates to age, occupation, personality and self-concept.

Positioning strategy is based on product use, product user, price and quality, product features, product class, competitor, benefit and cultural symbol.

- Positioning by price-quality. This strategy is used to show that at higher prices mean higher quality. Other firms use a the strategy where they show higher quality for a lower price. - Positioning by product user. This strategy is associated with a product in a particular class. Using a celebrity to market a product is a strategy many firms use. - Positioning by culture symbol. This strategy consist in identifying something that is very meaningful to people and competitors are not using. Companies can associate the brand with a symbol. - Positioning by competitors. This strategy consists in making consumer think that your product is better than competitors.

Because of the high sugar and caffeine content, some consumers associate the company with drinks that are unhealthy. To change the perception of those consumers, Coca Cola should reposition the company by promoting more drinks like Diet Coke and Coke 0 as healthier for them.

TASK 3

Task 3a. The development of a new product requires to follow these following named stages: Idea generation, Screening, Business analysis, Product development,

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Marketing Principles Coursework Assignment

Test marketing Commercialization.

Coca Cola is using marketing research for the development of a new product. The company is analyzing the market to see what the consumers need and want first and then they develop a new product. Elements like distribution, advertising, product taste and packaging are take in consideration before launching the product.

- Through market research Coca Cola is looking at the needs of customers for generating new product ideas. The company research will generate lots of products ideas. In the case o Cola 0 the market need was for a healthier product. - Cola 0 was the result of screening many different ideas for a healthier drink. - The company did a business analysis to determine the profit after the costs for Cola 0. Before putting the product on the market CC researches the market, competitors and projected revenue to determine if it will be profitably. - Coca Cola, main interests for this prototype is how the product will taste and keeping the texture and color the same as regular coke. - For testing Cola 0 was supplied to a target market, mainly young males between 25-35. - After it passed all stages it was decide to start production of Coca Cola 0.

Task 3b. There are three different types of distribution channel for Coca Cola products to reach customers: 1. Producer Wholesaler Retailer Consumer This type of channel of distribution is the most common in business. Here the producer are selling their products to the wholesaler, the wholesaler are selling the products to the retail and in finally the retail are put the products into the market and selling to the consumers. 2. Producer Retailer Consumer Here there is one intermediary, the retailer, which is buying products from the producers and sells to the consumer.

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Department for Business and Management Studies

Marketing Principles Coursework Assignment

3. Producer Consumer This type of channel distribution is the simplest and more profitable because the producer is selling the products directly to consumers. Coca Cola products are reaching customers more through the first channel of distribution. The company is selling the products to the large distributors which they are transporting the products to the retailers and smaller distributors. The disadvantage for the company is that it makes a lesser profit than if it was to use the other channels of distribution and for the consumer the product can be a little too expensive. Coca Cola is also selling the product straightway to the retailer using their own vehicle for transporting the products. The advantages are that retailers are buying from producer and they can keep the price low and profits are bigger for the company and retailer and a lower price for the consumer.

Task 3c. There are three different strategies for pricing a product that a company can adapt: 1. Customer-based. The advantage of this strategy is that is based on what customer can afford and the product will sell. The disadvantage of using this strategy is that the customer can give false information and that they dont know the cost of making the product and the company can run at a loss. Coca Cola id doing research to find what the customer can afford to pay for the product and set a price that anyone is willing to pay. 2. Competitor-based. The advantage here is the price is always set lower than that of the your competitors and will attract their customers. The disadvantage is that the cost of production of competitor in not known hence the company could make lesser profits than competitors. Coca Cola is a strong brand and a big company with a immense capital that can afford to keep product prices on the market at reasonable prices. 3. Cost-based. The advantage of this strategy is that is realistic and because it is based on how much it cost to produce the product. The disadvantage is that the customer can find the price higher than expected and the competitors can have a lower price hence the company can run at a loss. Coca-Cola sets a price that satisfies everyone on the market and the company as well.

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Marketing Principles Coursework Assignment

Task 3d. Integrated marketing communication is a process where the five elements of promotional mix are used together for promoting a company product or service. In the 4Ps, advertising, sales promotion, personal selling, direct marketing and public relation are elements that form the Promotion mix and are referred to as the marketing communication elements. When all these five elements are used at one time this will become known as Integrated Marketing Communication (IMC).

Coca-Cola is one of the first pioneers to adopt the IMC to get in touch with customers and look for them wherever they may be. The company adapts the IMC in regard to things like the market, the society, the potential and product positioning.

Through advertising the company is reaching customers worldwide and creates brand awareness. Direct marketing is used when partnerships with restaurants and hotels and campaigning through emails and now texting/SMS. The company has its own website. Through sales promotion like buy one get one free Coca Cola products are distinguished in stores from other competitors. PR is used through musical and movies events.

Cocal Cola is willing to be close to the consumers and to be part of their daily life and the IMC is very relevant in achieving the company goals.

TASK 4

Task 4a The four basic elements of the marketing mix are product, price, place and promotion. Today the marketing mix was extended and now includes physical evidence, process and people.

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Department for Business and Management Studies

Marketing Principles Coursework Assignment

The product and the price in services marketing are intangible. Promotion for services can be based on the extension of the original service. For example, extra nights stay for the same price as the original stay. The place in marketing mix is where the services are consumed and the hotel is the example. Physical evidence is referring at what is seen in the place where the service is consumed. The process is how the services are carried out for the consumers. The people are the employees who are delivering the service for consumers.

How consumer enjoys the service can be affected by all seven elements separately or together. For example, People and Process can together affect the quality of the services provided to customers. Although the extended marketing mix is more relevant to companies who make profit from selling a service, the 7Ps are also important to companies who make profit from selling goods to customers.

Task 4b As explained above in task 4a there are 7 variables for service marketing and 4 elements for product marketing.

Two segments of interest for this task are the hotel industry and railway industry. Hotels offer the same type of service to all but the difference maker is what customers can afford. Businesses can afford to pay more for the same accommodation as regular folks. But for businesses the physical evidence will be different as in having the best room in the hotel, in term of process business people have free access to other services that are not included in the price for the regular people.

In the railway industry the product is the transportation service. In this type of industry the price for the same services differs between regular consumer and business people. Companies offer to transport people in economy and business class for different prices. In business class for higher prices customers experience more space, free different types of drinks and better food selection. In the economy class for a lower price the consumer experiences only the ride from point a to point b.

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Marketing Principles Coursework Assignment

Task 4c In the world of soft drink market Coca-Cola is positioned very well. Coca-Cola operates in more than 200 countries employing around 30,000 people. Entering the international market has made it possible for bigger profits.

Before entering the international market, Cola products were marketed only nationally. Some of the advantages of producing, promoting and selling on a domestic market are: Dealing with one set of customers The company can use the same marketing or price strategies It requires less financial resources Dealing with one set of regulation

But there are also disadvantages in a domestic marketing such as limited access to raw materials and labor and a small market.

International marketing presents different challenges for Coca-Cola such as: Dealing with different types of consumers with different tastes Requires more financial resources Language barriers Barriers such as tariffs and regulation of different countries Different climates Many competitors

Although it may be better to deal with customers in a domestic market only, entering international markets Coca-Cola has profited more even though the company had to deal with different challenges that were more complex and risky.

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Marketing Principles Coursework Assignment

CONCLUSION

For this assignment I did a lot of research to achieve all the points. The lecturer notes were very useful to guide me on doing all tasks. During this assignment I learned how to apply the marketing theory in practice using a company. By doing research about Coca-Cola I have learned things which I didnt know previously about this company. More importantly now I understand what marketing is about.

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Department for Business and Management Studies

Marketing Principles Coursework Assignment

REFERENCES Differences Between. (n/a). Difference Between Domestic and International Marketing. Available: http://www.differencebetween.net/business/difference-between-domestic-

and-international-marketing/. Last accessed 12 Jul 2013. USC Marshall. (n/a). The Marketing Mix: Product. Available:

http://www.consumerpsychologist.com/intro_Product.html. Last accessed 11 Jul 2013. DOCSTOC. (n/a). Coca-Cola New Product Development & Product Life Cycle. Available: http://www.docstoc.com/docs/104351503/Coca-Cola-New-Product-

Development--and-Product-Life-Cycle. Last accessed 11 Jul 2013. Entrepreneur. (n/a). Product Development. Available:

http://www.entrepreneur.com/encyclopedia/product-development. Last accessed 11 Jul 2013. Business Knowledge Resources Online. (n/a). Managing a Business. Available: http://business.gov.in/manage_business/channels_distribution.php. Last accessed 12 Jul 2013. Business Dictionary. (n/a). Dictionary. Available: http://www.businessdictionary.com/. Last accessed 12 Jul 2013. Coca Cola. (n/a). n/a. Available: http://www.coca-cola.co.uk/. Last accessed 12 Jul 2013. Investopedia. (n/a). Dictionary. Available: http://www.investopedia.com/dictionary/. Last accessed 11 Jul 2013. Hassell, A (2012). Study Guide, Principles of Marketing. 14th ed. New Jersey: Pearson Education. n/a. Soft Drinks Cola War. ( 2012). Coca Cola distribution strategy. Available: http://softdrinkcolawar.blogspot.co.uk/2012/12/coca-cola-distribution-strategy.html. Last accessed 17 Jul 2013 Soft Drinks Cola War. (2012). Coca Cola Integrated marketing communications . Available: http://softdrinkcolawar.blogspot.co.uk/2012/12/coca-cola-intergrated-

marketing.html. Last accessed 17 jul 2013.

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