A hodgepodge: of MS & RSS, thanks and good-byes

The first summer semester is over; grades for the final are in... It seems like the right time to say thank you to the classmates for sharing their stories and insights on the world of marketing, and to Alex for getting us interested not only in the 4 P's, but also in blogs, wikis, RSS, etc. For those of you who remain @ Wharton, I'll see you around; for others -- please stay in touch. And Lucian, best of luck in Belgium!

And, commenting on the subject of competive advantage covered... Microsoft has been known for quickly snatching every new technologies it could lay its eyes on. From PhysOrg.com, a technology blog, came a report that Microsoft is incorporating the RSS technology into the next release of Windows (code-names Longhorn).. The article iluustrates two points: how MS manage to stay competitive and 2) RSS, blogs, and wikis are becoming mainstream.

Final group post: Coca-Cola's marketing policy

Coca-Cola has excelled at managing the marketing mix. Created in 1886, it now owns nearly 400 brands in 200 countries. Coca-Cola employs a “hybrid brand structure” for its Products. Its main brand “Coke” enjoys nearly 100% brand recognition in the West and is promoted throughout the world while other brands cater to local tastes and serve as a sandbox for new products. After the fiascos with New Coke and C2, Coca-Cola relies heavily on extending brands for new products rather than introducing new brands.
Over time, Coca-Cola has succeeded with evolving its Promotion techniques. Earlier, television was their core tool to inform consumers about products and improve market position, but media fragmentation, technology and change in consumer behavior have decreased its effectiveness. In response, Coca-Cola developed an experiential approach to build a bond with consumers. Through partnerships with competitive sports, Coca-Cola built on its association with the spirit of competition and created a dynamic environment. These promotions gave consumers the promise of complete refreshment with a sense of celebration and passion. The “package” boosted the overall consumer experience while creating a feeling of inclusion.
Coca-Cola’s competitive relationship with Pepsi forced them to remain fluent with their Pricing strategy. As cola consumption decreased in the US, Coca-Cola, in pursuit of the goal of maximizing shareholders’ value, realized the untapped international market. To penetrate especially price-sensitive foreign markets, the company focused on a triumphant reduced price point strategy. To help the globalization effort, Coca-Cola had to utilize Place to make its product readily available. It opened a bottling factory in Mogadishu, Somalia, but had difficulty importing equipment through the local port. Instead, it used the El Ma’an port, protected by a local militia. Coca-Cola’s pioneering move attracted other businesses to Somalia, stabilized the economy and provided employment opportunities to the Somalians.
To drive the international expansion, Coca-Cola has adopted a “Think globally, act locally” global marketing policy at an annual cost of $US 900M. The company uses local advertising companies and ads to appeal to its consumers’ patriotism. Various distribution techniques haven proven effective: from selling door to door, to helping outfit retailers with refrigerating equipment. Coke’s strategies have paid off: Coke outsells Pepsi 2.5 to 1 and enjoys a 44% market share in the US.
The practice of Corporate Social Responsibility (CSR) at Coca-Cola has grown exponentially in the last decade. In Africa alone, Coca Cola has contributed over $US 40M to improve healthcare, education, and the environment. With over 75 years of experience, it continues to commit time, money and energy to community initiatives across the globe.

Too much of a good thing or almost good-bye.

Going back to one of the first topics covered in this class: managing demand and demarketing.. Blog is a product too: it offers knowlegde and insights as its core benefits. More importantly, though, blog readers (consumers) develop a sense of "connectedness" or "belonging" to the global internet community -- and this may qualify as an augmented benefit of a product called blog. And no one would deny the fact that each blog is brand by itself: some are quite strong, and some are striving to be popular..

What happens when your blog becomes more popular than Paris Hilton's video? How does one demarket the blog product? Clare and Alex discuss the topic (I managed to contributed my 2c too).

Blog comment: Blast from the past?.. or is there a future for a 50's car?

After expressing skepticism on Linda's post about the proposed arrival of a Chinese car to America I recalled having read another recent story on car imports. This time the contender is the Romanian-made Cross Lander 244X. The omniscient Edmunds.com provides a brief overview of the vehicle: based on the 1950's design, the 244X is supposed to appeal to rugged outdoor types who seek reliable no-thrills transporation, not soccer moms. Think a Land Rover on a budget (the base price is set to be around $20K). At a first glance, the SUV is a sure winner: inexpensive, designed for wilderness, and even visually appealing (albeit in a brutal way). In other words, a picture-perfect example of the winning "more-for-less" value proposition. However, the path to the American consumer isn't rosy: first the vehicle had to clear the EPA regulations; then, as AutoBlog reports, it was stalled by the NTHSA because of safety concerns. In the meantime, an AP article depicts other problems with the supply chain and marketing channels: particulary, a lukewarm response among potential dealers. And, to add insult to the injury, SUV sales are slumping.

What do these facts illustrate? Even a winning value proposition doesn't guarantee success if the timing isn't right or there are issues with the public, or problems with the marketing channels (Kotler, ch. 13). Another reason for my being less than optimistic about the future of both Chery and Cross Lander.

Extra credit: scoring those points

Enticed by Alex' promise of extra two percent point, I typed my name in Google and Technorati. Here are results:

1. Google search found my blog right away (2nd in the list). It also detected links to my blog from bloglines.com (#4) and blogshares via Wharton (#6).

2. Searching Technorati was a blast: returned were links to my blog and Alex's blog with the presentation schedule.

There are ways to increase one's blog visibility in the cyberspace: update your blog regularly, link it to other sources, make it interesting and encourage visitors link it to their blogs. In other words, don't be lazy when blogging and you'll be found! (Incidentally, "Be Found" is the motto that my friend Anton chose for his Internet marketing company, Acronym Media).

Another product post: Money makes the world go 'round or checking with Commerce

It came in the mail today. In a plain white envelope bearing the Commerce Bank logo, along with my monthly bank statement there was a copy of 'Commerce Notes," a newsletter "exclusively for Commerce Bank customers." The leaflet announced two new services available to Commerce customers free of charge: e-Statements, and extending the timeline for deposits to 6pm (deposit a check before 6pm and the money will be available next day!). I've been a Commerce client for a number of years, and I must admit, I'm beginning to get used to the free perks and services that the bank regularly bestows upon its customers.

When I became a Commerce customer six years ago, all I wanted was a simple checking account, with no monthly fees, and a direct deposit. Gradually, Commerce has added the following services without charging a penny:

1. Online banking
2. Extended hours of operations, 7 days a week.
3. Eliminated ATM fees
4. E-statements
5. Deposits available virtually within hours

Clearly, Commerce has adopted the "more-for-the-same" (or, sometimes, "more-for-less") value proposition (Kotler 263) as an effective tool in attracting scores of new customers, pampering existing ones, and increasing its overall market share.

A bank account, essentiually, is a service product (as defined in Kotler 300). Commerce has excelled in the art of service differentiation and service quality (Kotler 302). Chuck Salter in an article published in FastCompany analyzes the forces that propelled Commerce from a local bank to one of the fastest growing financial institutions (Commerce's stock grew more than 2000% in 10 years). Unlike its peers, Commerce markets itself as "America's most convenient bank" that strives to "wow" its customers by:

1. Opening more branches ("stores") and extending business hours (7 am until 8 pm on weekdays, 10-6 on weekends)
2. Encouraging customers to visit branches and deal with bank personnel rather than ATM ("personalizing service")
3. Enhancing the customer experience (well designed branches, coin machines, etc.)
4. Training and motivating employees; soliciting the customers' feedback about their experiences at local branches.

I love my bank (which, incidentally, is a brainchild of a Whartonite, Vernon Hill). My dog loves my bank. Every time we go there, Peppi will get a dog biscuit from one of the friendly tellers. We are spoiled rotten by Commerce. Can you say it about your bank?

Product post: Is it deja vu all over again or has Coke learnt its lessons

Reviving my earlier topic about the multitude of brands owned by Coca-Cola. The soft-drink giant has successfully employed what the marketing experts call a “hybrid brand structure”: a combination of corporate and local brands. According to the company’s web site, Coca-Cola owns nearly 400 brands in some 200 countries. A BrandChannel.com article on Coca-Cola’s branding strategy ("Painting South Africa Red") states that since 1886 (the year the company was founded) no efforts have been spared to get people across the globe familiar with the famous ref and white logo. Today “Coke enjoys one hundred percent of brand recognition throughout the Western world.” Other distinctive awards include: “Most Prestigious Company of the Past Decade” in Argentina and Uruguay, “Most Admired Company” in Chile, “Most Admired Brand” in South Africa, “Best Retail Brand” in Ireland and “Corporation of the Year” by the United States Hispanic Chamber of Commerce. (Source: The Coca-Cola Co. 2004 Annual report)


At the same time, Coca-Cola has invested heavily in developing and/or buying local brands. Such a strategy serves multiple purposes:

a. Cater to local tastes thus increasing Coke’s market share without directly competing with or affecting the value of the flagship brand
b. Serve as a sandbox for developing new products. The company has successfully moved some of its local brands (such as Fanta, once a strictly European name) into the global category.



Mindful of the recent fiascos (such as the botched launch of the “New Coke”), the company has adopted a rather cautious approach when it comes to introducing new products. Brand extensions (Kotler, 296) are popular: in early 2004, the company introduced diet Coke with lime in Australia, New Zealand and North America. By year end, worldwide, it was the second-best-selling diet Coke flavor extension, ahead of diet Cherry Coke and diet Vanilla Coke, and behind diet Coke with lemon. (Source: The Coca-Cola Co. 2004 Annual report). For riskier products, the company takes steps to prevent any impairment of the flagship brands. For example, when a new low-carb, low-sugar product was introduced, its name (C2) doesn’t make direct reference to the main (Coca-Cola) brand. (Source: Wharton@Work, Coca-Cola's C2: Anatomy of a New Product Launch: an interview with Javier Benito, Coke’s CMO, North America). At the same time, Coke chose not to leverage the Tab brand since it had such a narrow number of users and Benito believed that Tab didn't have a strong enough brand identification.

It should be noted that although C2 can hardly be called a success (source: MSN Money), the damage to the company was far less significant than that caused by the “New Coke.”