Research Paper on "International Expansion"

Research Paper 8 pages (2400 words) Sources: 8

[EXCERPT] . . . .

As mentioned briefly above, the small business marketing environment has changed dramatically as it relates to the soft drink industry. With the advent of the internet and other technology advances, companies are in a position to better target particular consumers. This precision can be obtained, in some instances without added cost. Small businesses, with finite marketing budgets, due to technology can effectively advertise across the world. This, as mentioned above is a threat to Coke as it relates to international expansion. Popular technological mediums such as Google Ad words, Twitter, Face book and Bing create new opportunities for small and medium sized businesses to expand and take market from Coke.

The marketing environment must now be altered to reflect these changing consumer preferences. In addition, the marketing environment is now predicated on cost conscious consumers. The purchase of soft drinks in particular is discretionary in nature. This means that consumers tend to purchase more during periods of mass optimism about the future. Due to these periods of mass pessimism, marketing materials must now focus on the value relative to the price of the item. Due periods of mass optimism, quality is more important relative to price. Consumers, due in part to a euphoric economic environment are more apt to purchase higher price toy products (Linden, 2008). Chart 2 shows personal savings rates in periods immediately prior and after the financial crisis. Notice how consumers saved less and spent more prior to the crisis as it was a period of mass euphoria. Also notice how consumes saved much more following the crisis, reflecting pessimism. As the soft drink industry is cyclical, marketing material must therefore cater the marketing environment as it relates to consumer sentiment (Catmull, 2014).

Chart 2

Chart 3 provides more observations relating to the marketing environment prevailing within the soft drink industry. This chart, from the U.S. Department of Commerce depicts year over year retail sales. Retail sales are historically a good gauge of the marketing environment. Much like chart 2, retails sales generally pick up during periods of mass optimism and taper off during periods of mass pessimism. As it relates to the overall marketing of toy products, small businesses must be cognizant of the prevailing economic environment. Depending on the environment, marketing tactics and strategies will change to reflect the preferences of consumers.

Chart 2

In a pessimistic environment, marketing emphasis must be placed on building the brand rather than gaining market share. Small businesses can do this by engaging with their customers through digital means (Moyer, 2012). This is a stark departure from "standard" marketing theory, as relationships are forged.

The marketing environment therefore requires a departure from the "standard" theories of marketing. The traditional applications of marketing were primarily slow responses to customer preferences and demands. The traditional approach focused on large markets with tactics that are often unidirectional. Marketing of toy products now requires fast reactions to changing consumer preferences. Customer knowledge of product specifications is vital to sales within the toy industry. For instance, Disney's critically acclaimed film, "Frozen," has generated nearly $258 million in product sales around the world. Marketing is needed to first identify the growing demand for these products, and subsequently communicate with customers of the offerings the firm provides. This approach differs dramatically from the more passive standard approach to marketing.

In addition to the marketing, discussed in detail above, "How" Coke expands overseas is unique and diversified product offering. The portfolio of products that Coke offers provides appeal to wide range of consumers with a basic thirst need. By leveraging this portfolio, Coke is better positioned to take advantage of international expansion. Depending on the cultural environment, Coke can leverage different brands to better capture market sure. If fast moving cultures such as American energy drinks may be desired. In a more health conscious society such as China, healthier drinks can be leveraged. Both aspects offer growth for Coca-Cola and are equally be leverage with its diversified portfolio.

In conclusion, Coke has all the key ingredients for international expansion. It has a marketing program that is second to none as it relates to building the brand. It offers diversified product assortments that are relatively inexpensive and are demanded by the world. It has a strong balance sheet which allows it to leverage its economies of scale to produce cheaply. Finally, it combines all of these aspects to generate high returns on capital that benefit the company. With all these benefits Coke can seamlessly and easily expand overseas.

References

1) Calderon, Justin (June 4, 2013). "Coca-Cola starts bottling in Myanmar." Inside Investor.

2) Catmull, Ed; Amy Wallace (2014). Creativity, Inc.: Overcoming the Unseen Forces That Stand in the Way of True Inspiration. New York: Random House. pp. 248 -- 252. ISBN 978-0812993011.

3) Linden, Fabian (1998). "A Marketer's Guide to Discretionary Income (abstract)." U.S. Department of Education.

4) Turke, Mary C. (February 9, 2011). "The "Safer Products" Database: Reports of Harm Made Public on March 11, 2011." The National Law Review

5) Moyer, Brian C.; Stewart, Kenneth J. "A Reconciliation between the Consumer Price Index and the Personal Consumption Expenditures Price Index"(2012). www.bea.gov. Bureau of Economic Analysis

6) Richbell, S.M., Wardle, P., and Watts, H.D., 2006. Owner-managers and Business planning in the Small Firm. International Small Business Journal, 24 (5), pp.496-514

7) Jones,… READ MORE

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