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COMPARISON BETWEEN TRADITIONAL MARKETING & SOCIAL MEDIA MARKETING CASE STUDY: THE COCA-COLA COMPANY

SAHEEM SALEEMB12090003BACHELOR OF BUSINESS ADMINISTRATION (HONS)SEPTEMBER 2012 INTAKE

1.INTRODUCTION

RESEARCH QUESTION

What are the differences between traditional marketing and social media marketing?The study will focus on Coca-Cola Company.RESEARCH OBJECTIVESHow does traditional marketing and social media marketing differ in terms of communications?How does traditional marketing and social media marketing differ in terms of frequency?What is the effectiveness of traditional marketing and social media marketing?

CommunicationFrequencyTraditional MarketingSocial Media MarketingEffectiveness of marketing tool Marketing Communications ElementsTHEORETICAL FRAMEWORK

CONSTRAINTS OF STUDYLack of direct contact with the case company.Geographical constraint.

SIGNIFICANCEOF STUDYLimited understanding of the effects of the penetration of social media on traditional marketing and how it changed firms marketing strategies. Primary purpose of thesis to explore exponential opportunities in commercial marketing.

2.BACKGROUND OF STUDY

COMMUNICATIONExisting firm-to-customers and customers-to-firm relationships.Helps to achieve ease of contact, speed, volume and reach of marketing message.MARKETING COMMUNICATIONS ELEMENTS(Derived from McGraws Marketing Communications Framework)

FREQUENCYThe number of times and duration in which an individual is exposed to a message during a specific period correlates with reach. Crucial to measure brand awareness.Creates traffic for the web site and generate more online sales - firms can reach out to larger audience.

EFFECTIVENESS OF MARKETING TOOLSMeasured by brand awareness and brand engagement - indirectly affects the brands ROI. In traditional marketing - more is better - word-of-mouth among consumers.In social media marketing marketplace impact, brand value, brand loyalty and consumer engagement - the number of comments, wallposts and retweets.No statistically significant relationship between marketing and short-term sales - ROI has to be measured in terms of business performance over a longer period of time which will be the real mark of marketing success.

TRADITIONAL MARKETINGAdvertisements conducted through

Other techniques/names: direct and brand marketing, one-way, push-based, and interrupt-driven.SOCIAL MEDIA MARKETINGUses social networks such as

A process that gives organisations the availability to present their own services and products to the new or existing customers through online social channels.

3.RESEARCH METHODOLOGY

Comparative analysis approach a deterministic, theory-driven and non-probabilistic method.

Divided into two stages: Exploratory analysis of the existing literaturedata gathered from the knowledge base of marketing communication practitioners/scholars due to the relatively early stage of development.Comparatively exploring the tools and strategies of social media marketing and traditional marketing in the case company Coca-Cola from both qualitative and quantitative perspectives. for data collection, annual reports (from Coca-Colas website) were collected and analysed in intervals of decades despite using a qualitative research methodology due to the secondary research nature of the thesis.Also used quantitative information, figures and statistics from various credible online sources to establish calculative elements of thesis.

4.RESULTS & ANALYSIS

COMPANY PROFILEFounded and invented in 1886 by John Pemberton. After Pemberton's sudden death, Asa Griggs Candler became the sole owner of Coca-Cola in 1891 bringing real vision into the business brand.Produces four of the world's five best-selling soft drinks - the worlds most valuable brand. More than 500 beverage brands that includes diet, regular and still beverages.Supports global sports such as FIFA World Cup and Olympics amongst others.

COKES TRADITIONAL MARKETING

Past strategic objective: Coca-Cola connected its brand to fun, carefree American lifestyle, and applied an imagery of advertising that connected with the spirit of post-war America.

COKES CURRENT MARKETING

Current strategic objective: Coca-Colas main objective is maintaining a trust worthy local presence in every community its serving.

COMPARISON 1: COMMUNICATION

ANALYSIS

(the Communication Matrix Model)

COKES TRADITIONAL MARKETINGPAUSE THAT REFRESHES CAMPAIGN (1929)Awareness: The campaign first appeared in national magazines in 1929; ran through the 1950s reaching out to entire America. The message was appealing and uplifting to a country that was at war. Knowledge: Pause" became synonymous with Cokes brand image.Consideration: People would consider Coke in making purchase decisions because the advertisements made Coke familiar to Americans.Preference: 84% of consumers continued drinking Coke - no longer having trouble in selling during the winter season.Action: People continued to associate and drink Coca-Cola into the Great Depression. Business Result: Advertising Age ranked it No. 2 on its list of the top ad campaigns of the 20th century in 1999.

COKES SOCIAL MEDIA MARKETINGSHARE A COKE CAMPAIGN (2011)Awareness: 17,000 virtual name bottles were shared online across Europe. Knowledge: 998 million impressions on twitter; Cokes Facebook traffic increased by 870%, with page likes growing by 39%.Consideration: More than 230,000 tweets from more than 110,000 fans using the #shareacoke hashtag. Preference: More than 150 million personalized bottles were sold. Action: People loved to see their names on branded products. People would scour retail locations and even resort to eBay in the hopes of finding their name or a friends name on a Coke bottle.Business Result: 7% increase in Coke consumption; 2.5% increase in total sales and soft-drink volume went up by 0.4%.

The success of communication with target audience in social media marketing is more successful than in Coca-Colas traditional marketing.Traditional approach relays on creative excellence that links the brand image to fun and lifestyle (entertainment) has traditionally guided the brands communication success; while social media relays on communication excellence that connects the brand image to customers.Although the humorous ads and unique slogans were authentic to the brands goal, the sensation of entertainment message is short-lived because it entertains consumers rather than communicating with them. With social media, Coca-Cola gains better communication grounds with the consumers to build brand loyalty and maintain brand preference beyond traditional methods.KEY FINDINGS

COMPARISON 2: FREQUENCY

ANALYSISCOKES TRADITIONAL MARKETINGCoke persistently created advertising campaigns from the 70s till the 90s - forced people not to forget them as the leaders who brought happiness to their consumers. The frequency of advertising is most crucial for increasing sales and maintaining Cokes superiority in the market.With a budget of $180 mil, the Company decided to use pulsing strategy not only for more reach, but also to maintain and increase the levels of frequency for their advertising; and use reminder advertising from time to time. Pulsing strategy differed in the traditional marketing and social media marketing of Coke. Traditionally, Coke was consistently using advert prints, TV commercials and radio by talking to (or at) the customer. Television - the dominating media mix occupying 97% of advertising and producing the highest frequency rate among consumers compared to other traditional tools. The frequency level was limited to the exposure of TV commercials and the word-of-mouth resulting from the brand awareness helped Coke to maintain the desired level of frequency.

COKES SOCIAL MEDIA MARKETINGCoke launched the Christmas truck tour campaign online (for the first time) in 2014 - encouraged followers to share tweets on the Cokes Twitter page.Coke transmits its advert online mainly through Twitter, YouTube and Facebook - much faster and has a much wider reach viral advertising.Due to the exposure of the campaign in social media and the frequency of consumers sharing the campaign tweets and related campaign posts, the Coca-Colas Truck Tour website received nearly two million page views, while 50,000 official customer photos were taken across the tours 46 stops, higher than the reach achieved using the traditional marketing tools.The frequency of Coca-Colas advertising increased in 2012 due to customer-generated advertising and content that went viral through online shares and tweets.

KEY FINDINGSFrequency rate in social media marketing is higher than traditional marketing due to the presence of viral marketing in social media platforms.Coke have always focused on the frequency of advertising to boost sales and have shifted into pulse strategy in its maturity stage to increase and maintain the frequency level. In the traditional approach, the frequency level and consumer reach was limited to TV commercials, billboards, etc - a result of interrupted marketing, which pushes the marketing message onto consumers - more advertising was needed to maintain the goodwill effect of Coke on consumers. Social media marketing that operates in pulsing strategy incorporates less of push marketing and more of viral marketing that allows consumers to share and associate the brand to their peers.The frequency level attained at this level is obtained and heightened through consumer generated content and advertising of the brand through viral advertising (moderating variable), which is a much effective and convincing approach.

COMPARISON 3: EFFECTIVENESSConsidering Coke to be one of the biggest sponsors in the past decades, and as it still is today; the author will compare the companys performance of sponsorship in the past, and sponsorship at the present time with the existence of social media to identify the differences in the effectiveness of these tools.

ANALYSISCOKES TRADITIONAL MARKETINGThe company first advertised during the Super Bowl in 1990s. The company's market share still declined in 1999, due to higher selling price - slower global sales growth due to major price adjustment.Despite the traditional expense of commercial awareness through sponsorship, the companys sales growth were still prominently intervened by external variables such as market dynamics.Between 2000 and 2001, Coca-Cola advertised in Super Bowl each year with a total ad spending of $61.0 mil. Although the change in share price in 10 years showed a surplus of 51.8 per cent, the market share declined by 2.3 per cent between 2002 and 2010, with a 22% loss in Coca-Cola Classics during the period of decline - another evidence of how higher sponsorship spend may not directly secure the market leadership of brand due to external intervening dynamics.

COKES SOCIAL MEDIA MARKETINGCokes 2012 Super Bowl sponsorship - used its iconic polar bears and a social live stream across digital and mobile media - housed on Cokes website, Twitter account and Facebook page.9 million consumers across various social media platforms engaged. Coca-Colas Twitter followers grew by 38% within a four-hour period during Super Bowl. The key success to Polar Bowl - initiatives leg work on social media platforms before and after the Super Bowl. Prior to the game, Coca-Cola activated multiple digital networks, TV commercials and encouraged consumers to RSVP for the event on Facebook. More than 30,000 consumers registered for the event, 15 times the expected number. After the Big Game, the company allowed video snippets from the Polar Bowl to be tweeted and shared by consumers - successfully encouraged crowd engagement.Due to increased social media engagement higher traffic that generates higher brand ROI this can only happen at the condition of identifying the content that really works in Coca-Colas social media engagement.

KEY FINDINGSSocial media marketing is more effective than traditional marketing, content excellence being a moderator of success and a competitive advantage to it; but is affected by external factors such as the changing consumer taste.A notable increase in brand engagement at the presence of social media marketing in Cokes sponsorship.Coke has transitioned from using sponsorship as an instrument of traditional media buy towards using it as a crowd engagement opportunity.Coke has shifted from creative excellence towards content excellence. Content excellence (moderating variable) caused higher effectiveness in its social media marketing.Both in traditional and social media marketing, market dynamics (consumers rising health awareness) seem to be an intervening variable that affects the marketing tools dependent relationship with Coca-Colas sales, presenting a gap to this thesis.

DISCUSSION ON KEY FINDINGSAttract users

Customer engagementCustomer retention

Learn about preferencesRelate and customize solution

Coke doesnt have problem in attracting users - maturity stage in product cycle. Coke consistently works in its communications and frequency to maintain brand awareness and customer engagement; to ensure customer retention (the focus area of Coke in all strategies).Coca-Cola also fulfils the learning about customer preferences.This cycle is repetitively undergone by most corporations regardless of the product type and industry.A gap (intervening variable) - between Coca-Colas effectiveness of marketing tools and its effect on the brands sales - the rising health awareness among consumers about the health hazards of soft-drinks.

CHANGE IN MARKETING SEGMENTATIONCoke needed the cultural relevance and modern appeal to younger generation (a different market segmentation) while retaining brand relationship with older consumers shift from mass communications (traditional) to one-to-one customised marketing (social media).Objective of market segmentation: changed from traditionally classifying similar needs of customers towards identifying the potential lifetime value of the customer to the organisation.THE RISE OF VIRAL ADVERTISINGViral marketing (moderating variable) affected the overall media scheduling strategy and advertising frequency of Coke.Generates brand awareness, not by pushing the brand messages (traditional advertising).Enables co-creation of unique content by consumers.Brings the highest impact in the frequency rate when the content is focused on engaging the customer.

SIGNIFICANCE OF CONTENT CREATIONModerating variable for communication, frequency and the effectiveness of marketing tool.Coca-Colas shift from creativity towards content excellence.Coke have decided to stop talking or selling at consumers, and instead market with them = relationship marketingActive interaction, communication, dialogue and value - contributes towards customer engagement followed by customer re...