Table of Contents
Many debates have been held across the American and Europe corporate world about the meaning of business to business marketing. In simpler terms, the term business to business marketing refer to marketing of goods and services across other businesses in order to keep these companies operational (Gattung 2005). In any corporate world, the most common forms of business to business markets include the resellers, manufacturers, governments and non-profit making organizations. Though the companies engaging in business to business marketing make some profits from consumer based trading, majority of their cash come from other businesses for example, Coca-Cola company derive a lot of its profits from the bottle distribution agents and cola products trading centers globally. Currently, business to business marketing is one of the fastest growing marketing areas because it involves transactions between producers and wholesalers. Moreover, the technology boasts this marketing strategy by enhancing courtship among companies. Moreover, technology has contributed in making the world smaller for the sales and marketing professionals. The professionals fin it easy to implement the principles laid down in business to business marketing.
Apart from defining the business to business marketing, this report purpose to critically evaluate the key difference between business to business marketing and consumer marketing in the following sectors; commercial, not for profits and public sectors. Moreover, the report identifies one of the macroeconomic changes; technology and its affects to the coca cola company within the beverage industry. In the report, we analyze the impacts of technology changes on coca cola business to business marketing process. In regard to the impacts, the report addresses specifically the potential opportunities and threats that can occur if Coca-Cola Company implements the technology changes identified fully. Furthermore, the report contains recommendations on how the Coca-Cola Company can capitalize on technology changes to gain an upper hand competitive edge over its rivals. Moreover, it’s quite essential to critically analyze how the company can commit its resources to obtain the above mentioned competitive advantages both nationally and globally.
Difference between Business to Business and Consumer Marketing in Commercial Sector
Commercial sectors refer to those energy consuming sectors that provide goods and services to other businesses locate within or outside the country (Hutt 2007). They include mainly private organizations, living quarters, sewerage and water services treatment facilities among others. In most cases, they provide commercial services such as air conditioning, lighting, refrigeration, cooking, running of various equipments and space heating.
In a column article titled The 7 key differences between business to business and consumer marketing, Robert W. Bly identifies some key differences between the two by looking at the difference between business buyer and consumers in commercial sector. First, in any commercial marketing process, the business buyer buy commodities for the company benefits and not for their own consumptions as stated in consumer marketing. This means that the business buyer must buy those items expected to attract customers from the other company. The product purchased must save time, money improve productivity solve potential consumers problems an increase efficiency. Whenever, the products meet the above mentioned criteria, the business buyer is guaranteed profit which is core aim of any commercial sector.
Secondly, in consumer marketing, most of the advertisements offered to the people by the commercial sectors target consumers who enjoy them but in real sense do not want them. The consumers subscribe for the advertisements based on their own pleasure but not because the information offered is vital for their daily activities. On the other hand, business to business marketing the situation sound different because the business buyer subscribe for the commercial advertisements so as to get information about what they plan to but from other companies. They must seek information on all products so as to stay competitive, profitable and successful in commercial environment. Note that the business buyers’ deal with sophisticated audiences and thus the products sold must reflect consumers’ interest as much as possible.
Difference between Business to Business and Consumer Marketing in not for Profit Sectors
Not for profit institutions include churches, schools and other religious based organizations (Bly 2008). In not for profit institutions, the need for cost versus benefits analysis and quality service provision remain the most essential items to the donors who always expect such contributions. For these reasons, the differences between consumer and business to business marketing are significant. In consumer marketing, consumers buy something for own benefits while in business to business marketing; the donors purchase products for the benefits of others. For instance, any principal of any school would dream of employing highly qualified staffs for the benefits of students but not for their own benefit.
Secondly, in business to business marketing, the donors will always keep close eyes on grants and low ticket purchase budgets so as to ensure that the charity groups spent the money wisely. Moreover, they will monitor the marketing strategies used by the group in tapping beneficiaries to the charity institution through donation. However, the consumer marketing will be different from the above mentioned activities. Provided the consumers get satisfied from the products, no action taken to monitor the products.
Just like in the commercial sector, the donor of any charity goes by the mind set of seeking the cheapest alternative for the other user (Egan 2007). They would do so instead of purchasing something that actually provides consumers with full functionality at the expense of the charity group. Moreover in business to business marketing, the person who approves the budgets or make buying decisions do not use the product but ideally to do for the need of other people. However, in consumer marketing, the person approving money to be spent is the final end user and thus money misappropriation is rampant in this kind of marketing.
Difference between Business to Business and Consumer Marketing in Public Sectors
Public sectors are those portions of the community controlled by the state or provincial, local government or national form of governance (Blythe 2009). In united states, the public sector involve critical services such as homeland security, national defense, police protection, urban planning, fire fighting taxation processes, corrections among other social programs. Just like in commercial sector, the public sectors deal with goods and services such as firearms and security respectively. To meet the parastatal demands, government stakeholders practices consumer and business to business marketing across the country or within the cities.
Difference between business to business and consumer marketing strategies in public sectors surround the type of goods and services marketed and the type of government entities marketing the goods and services. In business to business marketing, the government parastatals will use it to promote those public goods found to help other companies with the economy run. The government will order and ship the raw materials, products or imports of all the companies found to create employment and enhance economic growth and development. On the other hand, the public sector employs the consumer marketing strategies when providing cheap services to the public for example security and water. The will reduce the distribution channels from manufacturers to consumers in order to save time and costs of operation.
Moreover, because the business to business marketers in public sector targets other companies locally and internationally harbored, they tend to have large market base compared to consumer based marketers. However, the business to business marketing is entirely driven by consumer demand. The consumers are decision makers of what should be advertised or sold by the companies across the globe. Moreover, the goals of public institutions (businesses) and citizens (consumers) circulate around the quality, price delivery time and history of the market products.
Macroeconomic Change and Coca-Cola Company Functions
Technology changes such as online marketing internets and e-mails have heavily influenced coca cola operations across the across the globe. The international market is highly competitive due to the spontaneous technological advances experienced from time to time. The essence of the business embracing technology in the product market was to add vale on their innovation, reduce costs of operation, and improve the quality of the product, among other consumer benefits provide by the business (Frederick 2009). Most of the business excelling in these markets are those few one embracing the most convenient form of technology for example some of the businesses are currently using the online shopping to market their products to the international community. The company coke products volume seems to decline in India, China and Brazil. The main rival Pepsico Company has intensified technological production and online marketing through the internet tapping a lot of coco cola products consumers globally. Moreover, the technological changes have adversely affecting the business to business marketing strategies used by Coca Cola Company and the bottling company.
Technological Changes and Business to Business Marketing in Coca-Cola Company
Coca Cola Company relies on business to business marketing in distribution of the coke products cross over 200 countries (Chartered Institute of Marketing 2012). The company relies on the bottling companies across these countries to bottle the coke drinks and sell to its customers. However, due to stiff competition, the company seems to lose the soft drink industry battle to its rivals such as PepsiCo Company. In order to maintain the market and retain customers, the company has recently embraced technology and innovation across the marketing sector. The technology used will expose the company products to some opportunities and threats as discussed below.
In order to improve the business to business marketing opportunities and retain the customers both locally and nationally, the company invented greener bottles and other drinks packaging in 2009.This reduced the petroleum costs and increased the products by 2.5 billion. This technological innovation has been successful with other rival companies such as Heinz imitates it. Since then the coca cola packaging process has rapidly grown with billions of additional bottles shipped globally every year (Peppers 2010).
Moreover, the technological changes have opened more market opportunities for company to meet other customers. Currently, Coca Cola Company maintains a visible twitter, linked in and face book that had over 34 million fans by 2011 (Pickton 2011). These social networking sites have enabled it to spread the word of new products, new bottling systems, invite coke products users in advertisement campaigns and answering queries from customers. The Coca-Cola Company use the social networks technology to enable it brand stay young, current and fresh hence boasting business to business marketing. The Coca-Cola wholesalers do not need to advertise the coke products because the company has already done it.
In addition to that, the technological changes such as use of free style dispensers among its customers enable the company to maintain and expand business to business marketing. Coca cola company started rolling own its freestyle dispensers in 2011.Unlike the soda fountains packed from the company depots or from the bottling companies, the free style dispensers gave customers opportunities to choose and create own beverages from over 100 drinks combinations. The company does not only provide variety of drinks through the computer based interface but also it help the company to keep dispenser records containing consumer drink choices and compliments.
Threats Resulting from Technological Changes in Coca-Cola Company
Amid of the technological changes opportunities cited above, the company faces a lot of external harms from its rival partners. Some of the rival companies such as Pepsi posts competitive advertisements in the coke websites claiming that the coke flavor is harming health. The inevitable result of such advert lead to decline in market shares particularly in Asian countries. Moreover, some of them search information posted within the coca cola company website to devise new competitive strategies hence a threat to future prosperity. The technological changes such as online advertising and internet customer communication serve the impact of transferring patent right information and knowledge to the rivals. Pepsi and Cadbury uses this information to develop substitute products found to increase competitive rivalry for example in February 2010, Pepsi Company introduced non carbonated products in the Asian countries (Cook 2012). Moreover, the technology changes adopted by Coca Cola Company are driven to block new entrant in the market hence a threat. If the market strategies used are going to be fruitful, the business to business marketing strategies will be strengthened and thus no firms will be accepted in the market by the wholesalers said to distribute coke products.
Lastly through the style dispenser process, the technological changes of allowing consumers to synthesize own drinks from the 100 drinks flavor combination may lead to disclosure of trade secrets such as recipes and software to rivals hence leading to more competition and hence loss of market share. The coca cola company should avoid some of these technological changes by addressing their market implication before implementation. The impact of these changes will not only interfere with its market share but also affect the partnership with over 275 bottling companies distributing coke products across the world.
Possible Recommendations of how Coca-Cola Company can Capitalize on Technological Changes
From this report, the coca cola company can adopt some valuable recommendations so to maintain the technological changes and opportunities discussed above. Currently, no company can do without these changes as they are said to enable them retain the market share and improve quality among products. The company must open up more branches in different places in Asia so as to derive economic benefits and still maintain the high market status. Secondly, the company management should train employees’ new strategic tools capable of finding new technological opportunities for instance non carbonated drinks. The company must ensure that the employees enjoy good benefits so that they do not migrate to competitors. The company must also harness new products such as Tesco which are capable of supporting the company’s social economic and technical levels. Moreover, the company should open up innovation incubation centers where the employees are trained on how to come up with new ideas. Moreover, they should be provided with adequate resources so as to meet the technological demands capable of beating the rival competitors. Companies that excel in technological changes respect the patent rights and innovative actions of the employees. The coca cola management must be ready to recognize and reward those coming up with new products ideas. Lastly, I would command coca cola company to pay a lot of attention on business management computerized system tools and models found to increase policy implementation. In addition to that, technological change is always capitalized in conducive business environment. The company should ensure that the political, social natural and demographic environment surrounding the business to business and consumer marketing are smooth for effective business operations.
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Use of Resources to Obtain Technological Competitive Advantages
Coca-Cola Company is the leading manufacturer and distributors of non alcoholic drinks all over the world. In fact, the company has branches in over 200 countries and 275 partnered bottling companies. In order to maintain its soft drinks global leadership, the company must embrace quality products in the market (McCall 2011). Secondly it must maintain its household brand by adopting new technological changes such as introduction of non carbonated drinks. New technology changes are always enhanced through resource based view approach where the managers use the few resources available to motivate employees and to formulate new companies strategies. The company management must use the financial resources available to service employees’ benefits and to assemble necessary strategic tools for technological development. For instance in 2010, the company increased revenues by 6.48 billion dollars due to improved employees environment. Secondly, the company put over 72.929 billion in researches and development and hence the technology changes were observed later (Reid 2012). However, for it to succeed all the tangible resources either in human, financial or physical oriented must be incorporated with non tangible resources such as knowledge and experience to meet the competitive advantage objectives.
An analysis of coca cola company performance reveals that technological change as one of the macroeconomic change in business environment impact greatly on its future prosperity. The company must use technological changes such as on line marketing and social media networking to tap new and retain the existing customers. Moreover, the technological changes discussed above can greatly help to boost the business to business marketing found to support coke products across the globe. If the company implements the above recommended solution, the competitors such as PepsiCo Company and Cadbury will be kept at bay and thus continue to be a global beverage leading marketer and producer.