assignment marketing principle
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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”, “ Can’t Beat the
Feeling” or “ Enjoy Coca Cola” which is today’s 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 Cola’s 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 company’s 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 company’s 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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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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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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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 don’t 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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Department for Business and Management Studies 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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Department for Business and Management Studies 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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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 didn’t know previously about this company. More importantly now I
understand what marketing is about.
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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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