Marketing Communication Mix

As defined by Gary Armstrong and Philip Kotler, "A company's promotion mix consists of the specific blend of advertising, public relations, personal selling, sales promotion, and direct-marketing tools that the company uses to persuasively communicate customer value and build customer relationships." Coca-Cola uses a marketing communication mix to communicate customer value and build customer relationships. Coca-Cola's marketing communications mix consists of:

Advertising: According to Gary Armstrong and Philip Kotler, "Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor." Coca-Cola has used advertising to build an image for it's company. Here are some of the types of advertising that Coca-Cola uses:

• Coca-Cola uses the television for advertisements, such as this television commercial : http://www.youtube.com/watch?v=7Sz56mtQB1M. By using the television for advertising, Coca-Cola can gain good marketing coverage by appealing to consumer's senses.


• The company has also used magazines as a form of advertising, such as this 1950's ad in Time Magazine: http://www.time.com/time/covers/0,16641,19500515,00.html. By advertising in magazines, Coca-Cola can geographically and demographically select consumers that it wants to target.


• Outdoor advertising is also a form that Coca-Cola uses. According to allbusiness.com, Coca-Cola, among other business, ranks one of the top users of outdoor media (http://www.allbusiness.com/marketing-advertising/marketing-advertising/11817449-1.html). Here are some of the outdoor advertisements that Coca-Cola has used: http://upload.wikimedia.org/wikipedia/en/9/99/Coca_Cola_Billboard.jpg, http://pro.corbis.com/images/RA006112.jpg?size=67&uid=%7BADCA644E-0CED-4F63-9FC8-DA11CFA86E8D%7D, http://www.toxel.com/wp-content/uploads/2008/08/cocacolaads12.jpg, and http://www.zoomdisplay.co.uk/img/products/large/flying_banner_cocaCola.jpg. By advertising outdoors, Coca-Cola can strategically position it's advertisements and also achieve high repeat exposure.


• Coca-Cola uses the internet to promote it's products. The company has it's own website, which is quite simple to navigate through. The website allows customers to become interactive through various games, contests, shopping, and through a special section of the website that enables consumers to find out how they can help their community. That part of the website can be found here: http://www.livepositively.com/

Public Relations: As stated by Gary Armstrong and Philip Kotler, "Public relations allows companies to build good relations with the company's public by obtaining favorable publicity, building good corporate image, and handling or heading off unfavorable rumors, stories, and events." Coca-Cola handles public relations by including a press center on its website: http://www.thecoca-colacompany.com/presscenter/index.html. This section of the website allows consumers to view press releases, executive speeches, and statements made by the company regarding current information. In the statements, Coca-Cola can address law suits, rumors, stories, new products, and activities. There is also a section of the website devoted to investors. Here, current, or future, investors can access financial statements and up-to-the-minute stock information.

Personal Selling: Coca-Cola has many salespeople, who are individuals representing the company to communicate, sell, service, and build relationships with customers. These salespeople promote their product to different customers within their regions, and once they sustain a customer, they sell their products to them and service them many times per week. These individuals form close relationships with the customers in order to continue business with them.

Sales Promotion: A sales promotion is an activity that is implemented to boost the sales of a product or service temporarily. Coca-Cola often runs sales with stores to quickly increase sales. Coke gives its product to the retailer for a lower price, and in-turn the retailer sells the product on sale. To advertise for these sales, the retailer generally runs an ad in their store sales circular at attract consumers.

Direct Marketing Tools: Coca-Cola uses direct marketing in many ways. First, the company partners with various restaurants, movie theaters, ect. to carry it's product. This way, when a customer orders a drink, the only brand they are offered is Coca-Cola, which forces them to buy a drink from that brand. By doing this, Coke forces out other competition, and keeps the restuarants, or other businesses, purchasing their product over and over again. Coca-Cola also uses it's name for sporting events, like the Allentown Iron Pigs baseball field. The Coca-Cola Field offers a fun time for family and friends while only serving Coke products. This also allows for salespeople to invite retailers to one of the many Coca-Cola boxes for great food, fun, and some "business talk", as well. Next, Coca-Cola has begun to use mobile advertising. According to mobilemarketingmagazine.com, Coke uses mobile graphics and texts to appeal to markets on a more personal level (http://www.mobilemarketingmagazine.co.uk/2007/05/cocacola_goes_m.html). Last, Coca-Cola uses viral marketing. The brand became a giant because of individuals telling their friends, family, or coworkers about how great Coke products were. Today, the company can still use viral marketing to their advantage. For instance, when Coke produces a new product, and someone on their lunch break purchases that new product, and enjoys it, they will tell others in the office about how great the new product is. This will cause others to purchase the product, and in-turn increase sales.

Coca-Cola's Pricing and Distribution

Pricing:

To first determine it's price, I believe Coca-Cola used a cost-based pricing system for it's Original Coke. They first designed the product, the original coke, determined the costs for the product (product costs, capital costs, and operational costs), set a price based on the cost of Coke, and finally convinced the consumers of the soda's value. From there, I think that Coke chose to use market-penetration pricing for it's price. Here, they set low initial prices in order to attract a large number of buyers quickly, to gain a large market share.

Coca-Cola uses the following pricing strategies for Original Coke:

• Coca-Cola uses the psychological pricing strategy for their Original Coke. For instance, on April 8, the price of a 2-liter bottle of Original Coke was $2.49 (http://shop.netgrocer.com/shop.aspx?&sid=28580561&sid_guid=93f0e5bc-1c27-4eb6-a3dd-e8fd84d5ae82&strid=2D462&sc=wwwNG_D1A024EE&strtab=Grocery&catL0=570&catL1=-1&catL2=-1&catL3=-1&HasProducts=0&ForceMenu=1&shopurl=browse.aspx&ns=1). They set the price to end in a 9, because this makes customers think the price is less than $2.50, to appeal to the customer.
• Coke also uses the promotional pricing strategy. In store that cell Coca-Cola, prices are often temporarily priced below the list price to increase short-run sales. It gives the product a sense of urgency and customers purchase the product because of the lower price.
• Coke uses the segmented pricing strategy for its Original Coke. For instance, Coca-Cola offers liter bottles, 6-pack cans, 6-pack bottles, and 12-pack cans of the same product, all for seperate prices. By their product in different sizes and at different costs, they get to increase their revenue, because there is not much difference in the costs required to produce the products.
• Coke also uses the international pricing strategy. For instance, the price of a 2-liter bottle of Coke in the United States is different from the price of the same product in China. This has to do with the difference in economic conditions, competitive situations, and laws.

I think Coca-Cola's pricing strategy is working well. Based on financial reports (http://www.thecoca-colacompany.com/presscenter/earnings04212004.html), Coca-Cola has increased profits and income, which means that customers are purchasing more of the products, and because of this, seem to be generally satisfied with the pricing. If they were not satisfied, they would choose another brand over Coca-Cola.

Distribution:

Coca-Cola has a strong distribution system. It's shelf-space is extensive, giving it an advantage over much competition. Along with having wide shelf-space, Coca-Cola also has intensive distribution. Coke is found in as many stores as possible. Coca-Cola is available to consumers when and where they want them, giving Coke maximum brand exposure. This means that Coke also has many marketing intermediaries involved in the process of delivering a superior product to consumers. For this reason, inventory management and good dealer relationships are difficult to maintain. I believe that this form of distribution works well for Coca-Cola. Coke's brand is so large, that they would be forced to downsize if they wanted a more close-knit distribution system. Also, they would not be able to enjoy such extensive shelf-space and brand exposure.

Coca-Cola has such an expansive distribution system, that the company is beginning to formulate ways how the company can do more positive things with it's system. Coca-Cola is beginning to use part of its large distribution system to carry life-saving medicines to parts of Africa. More information about the project can be found at: http://www.worldchanging.com/archives/008319.html

Coke's Target Markets

Based on demographics, Coca-Cola's Original Coke is targeted to individuals between the ages of 14-30. These individuals tend to be young, unmarried, and often are students. Coca-Cola's website offers bright and playful colors, and also their online store offers many items geared toward young adults. Many commercials also focus on young adults, however I think it can be argue that certain commercials aired can be focused to a certain psychographic segment, as well.

I have found two commercials that Coca-Cola has recently used to promotes it's original Coke:
http://www.youtube.com/watch?v=R1NnyE6DDnQ
http://www.youtube.com/watch?v=hiMNMd1PLsw
While it seems that these commercials could be targeted to a younger audience, I believe that Coca-Cola could also be seeking a consumer with certain psychographic personalities. For instance, the playful music and fun cartoon characters can be considered attractive to a gregarious or ambitious person. Often, ambitious or gregarious individuals tend to be on-the-go, and constantly socializing. Coca-Cola would be able to conveniently provide a refreshing beverage for these individuals.

Coca-Cola has recently added a new webpage. The webpage focuses on how consumers can improve their community by buying it's product. The new "virtual community" provides consumers with insight on how Coke attempts to make our environment a better place. The website offers information on recycling, education, water conservation, wildlife preservation, and much more. In essence, Coca-Cola wants it's consumers to know the benefits of drinking a Coke, by appealing to behavior. There are more health conscience and environmentally friendly individuals on our planet now, than there have ever been. By providing this website, consumers can know that Coca-Cola is striving to make our world a better place.
http://www.livepositively.com/

Coca-Cola Environments

A company's microenvironment consists of the company, suppliers, marketing intermediaries, customers, competitors, and publics. Coca-Cola's microenvironment consists of the following:
Company: Coca-Cola and it's valuable employees. Coca-Cola prides itself in employing passionate and driven individuals. It's employees are inspired workers who can make a difference.
Suppliers: The Coca-Cola website offers a special page dedicated to suppliers. On the page are a list of supplier expectations, diversity, and guiding principles. Because suppliers are linked to customer value, Coca-Cola wants it's suppliers to maintain the best quality possible. Coca-Cola provides extensive training to suppliers, and also routine inspections. Suppliers are considered to be Coca-Colas partners.
Marketing Intermediaries: Coca-Cola works directly with it's intermediaries to maximize sales. Coke offers a website (http://www.cokesolutions.com/) to help it's intermediairies with problems such as: was to build traffic and strengthen operations, training employees to sell "value meals", and improving server hospitality to foster consumer satisfaction. Coca-Cola works directly with it's retailers, as they too are partners in business.
Customers: Coca-Cola touches millions of lives per day. Coke dedicates a page on their website for customers to share how Coke has shaped their lives. They also provide Coca-Cola recipes, interactive quizzes, and even email alerts for the lasts Coca-Cola news. Coke cares about every one of it's customers, and strives to reward it's customers with great service, and a great product.
Competitors: Coke's objective is to deliver a better product to it's consumers than any other competitor. Coke is successful in doing so, because it has created brand awareness with it's costumers, is successful in it's advertising, and is also constantly developing new products for its' customers to enjoy. For instance, Coca-Cola is in the process of developing a new resealable can for the convenience of consumers.
(http://www.drinks-business-review.com/article_feature.asp?guid=B5F3C673-5707-4525-98C1-436F56D6F4AB)
Publics: Coca-Cola provides up-to-the minute financial information on it's website for investors. Coke is interested in creating value for consumers and is successful in doing so. Coke also provides a section on it's website to respond to the public. For instance, it has various press releases, speeches and company statements readily available.

A company's macroenvironment includes demographic forces, economic forces, natural forces, technological forces, political forces, and cultural forces. Coca-Cola's macroenvironment includes the following:
Demographics: Coca-Cola employs certain employees to monitor the constant change in the population. The change in individuals leads to different preferences of brand or taste. The ever-changing factors in population must be constantly monitor to deliver the best product to consumers.
Economic Forces: Our country has recently faced an economic crisis. Consumers are begining to cut down on spending. For Coke's off-brand competitors, this could mean an increase in sales. Coca-Cola must begin watching consumer spending habits, as many could be opting to purchase a cheaper alternative cola.
Natural Forces: Coca-Cola is constantly monitoring natural forces on planet Earth. Coke has started a foundation for polar bears, to assist in the preservation of these incredable animals. They have also built the world's largest plastic bottle recycling plant. Also, they have developed cold drink equipment that is energy saving. Coca-Cola is constantly finding ways to help our natural environment.
Technological Forces: Technology is hard to keep up with in today's day in age. However, the clever scientists with Coca-Cola are constantly finding new ways to work with technology. For instance, one promotion that I found interesting, was the conversion of Coke cans into GPS devices. In 2004, Coke ran a promotion that 120 lucky cola drinkers could find a Coke can with a GPS device attached. This type of technology allowed the can to turn into a mobile phone. Who knew you could phone home from a coke can?
http://www.usatoday.com/money/industries/food/2004-05-09-coke_x.htm
Political Forces: All business must deal with political forces, such as laws and regulations. With increased awareness of sanitary issues, Coca-Cola must abide by many laws and regulations set forth by the government.
Cultural Forces: With Coca-Cola plants positioned throughout the world, Coke must be sensitive to the cultural needs of it's consumers and employees. It different countries, for instance, Coke markets it's soft drinks differently. Many commercials from different countries can be viewed on http://www.youtube.com/, or even on Coke's website.

Coca-Cola's Positioning

A company's positioning is it's desireable place relative to competing products in the minds of target consumers. After viewing Coca-Cola's website, it is clear that their target market is individuals who are preteens to early 20s. Their website offers flashy colors, "fresh" music to listen to, and a link to their own facebook page, among various Coca-Cola challenges and quizzes. Coca-Cola's Original Coke has a few cometitors as well. Dr. Pepper's cola and Pepsi's cola are the two major competitors; while off-brands, varying in different regions, can also be classified as competition. I think that many individuals choose Coke's Original cola because it has been a long-standing brand, and because Coke strives to keep it's consumers coming back with effective marketing across the globe. Coke's prices are also competitve. While an Original Coke may be more expensive than off-brand colas, they are priced competitively with Dr. Pepper's and Pepsi's colas. Coke's product, price, place, and promotion have positioned it's cola to be relatively high in the minds of consumers.

Coca-Cola's Core Competency

Brand building is Coca-Cola's core competency. Coca-Cola is known throughout the world. Their image is respectable and dependable, which took them years to build. From generation to generation, Coca-Cola has been one of the most popular soft drinks available. Not only is it a favorite among many individuals, but it has become a household name. Their brand and logo are never mistaken, which is why consumers feel comfortable in purchasing Coca-Cola products. Coca-Cola is a cash cow in the soft drink industry. Being a reliable company, I believe that Coca-Cola will continue to remain profitable in the soft drink industry for many years to come.

Coca-Cola's Mission Statement

Like every company, Coca-Cola has a mission regarding the type of company that they would like to be. It's mission is rather short, to the point, and accurate in it's description. Coca-Cola's primary goal is to make a difference in the lives of not only the consumers, but with anyone who comes into contact with a Coca-Cola product, image, or service. Coca-Cola is known to be a dependable company, and has been refreshing it's consumers since 1885. If anyone knows their cola, it's Coca-Cola! Coca-Cola's mission statement can be found at http://www.thecoca-colacompany.com/ourcompany/mission_vision_values.html.