THE EFFECTIVE ADAPTATION OF SPORTS MARKETING STRATEGIES TO PROMOTE COMPANY PRODUCTS (BRANDS): THE CASE OF COCA COLA

A marketing strategy is a must have for every company. It can be used for communication purpose and also to carefully plan (Smith, Pulford, and Berry 1999, p. 71). Shankar and Carpenter (2012, p. 2) reported that a marketing strategy is a plan of initiatives and actions used by an organization in order to relate with its customers including the entire market. Marketing strategies are being developed to integrate the marketing activities with regards to networking, sales, advertisement, and public relations. This will help to create, maintain, and satisfy the customers (Pinson 2008, p. 44). An effective marketing strategy can improve the company’s communication with the customers among other stakeholders. The Olympic Games that took place in 2008 in Beijing are an event that led to the modem day sports marketing. The enthusiasm from the public propelled companies to view sports as an opportunity that can be maximized to promote brand image (Wang 2015, p. 22).

Sports marketing refer to a special type of marketing that uses sports activities as carriers to promote and popularize products. This is attained through sponsoring, distribution, publicity, naming, and inviting sports stars or designing products that conform to the sporting culture (Shilbury et al. 2014, p. 11). Alonso (2014. p. 9) however, explained that companies are concerned about the costs associated with holding such events. It is focused on the sports market, which includes leagues, sports venue, Olympic Games, sporting associations, government sports departments, clubs, sporting apparel, media, teams, educational organizations, corporation, and private enterprises (Smith and Stewart 2014, p. 16).

The key changes in the sports arena have led to sports marketing strategies development. The objective of this type of marketing strategy is to use sports as a way of products promotion and making them to become popular in the market. Several companies have therefore, gained interest in the sports world. They are becoming great partners to sports events such as the Olympics and world games by acting as sponsors. In most cases, we see the logos of companies drawn on the walls of stadiums or using sports celebrities such as the coca cola when marketing their products. This in essence is a form of marketing strategy that companies are using to increase their brands visibility. Consequently, the companies have shifted their marketing strategies to the sports world (Desbordes and Richelieu 2012, p.1). This trend has resulted in a new form of marketing strategy referred to as “sports marketing”. Currently, several companies such as the coca cola are using it. The purpose of this paper therefore, is to examine how companies have effectively adapted sports marketing to promote their products. Coca cola will be used as the case study to back up the study.

The coca cola company is a multinational American corporation that was incorporated in 1886 (Anders 2013, p.4). Its headquarters is in Atlanta, Georgia (Vault 2002, p. 11). It produces and distributes beverages. It is recognized as one of the leading provider of soft drinks internationally (Donovan 2013, p. 111). The company’s subsidiaries exist in more than two hundred countries however; its products are found in nearly in all parts of the world. It is an internationally recognized brand (Lopez 2013, p. 10; Anders 2013, p. 4).

Notably, Coca-Cola uses undifferentiated marketing strategies to reach out to the target market as it has no specific market segmentation (Anders 2013, p. 18; Bodden 2009, p. 22) (Anders 2013, p. 18; Bodden 2009, p. 22). Lastly, it has competitive advantage in terms of brand awareness, cost control, collaborative customer relations, operations, channel marketing and distribution (Nganga 2014, p. 4).

1.2 Research problems

All firms require marketing strategies that are effective to reach out to the consumers. As competition for these strategies become stiffer, firms are seeking for better alternative marketing strategies. Most companies fail because they are using marketing strategies that are not effective.

Most companies are now resorting to sports marketing as a desirable tool for promoting their brands and products. MasterCard used the “#44daysofcrazy” in a campaign to win the Rugby fans attention during the Rugby world cup in 2015. With the help of Octagon, a company that assists talent and brands to create compelling messages that grant them the ability to gain competitive advantage, MasterCard was able to create thrilling experiences and content for forty-four days for ruby fans globally (Newland, 2017). Consequently, MasterCard was able to increase card spending and transactions. The company was also able to reach out to one hundred and forty five million people through social media (YouTube) enabling the company to expand their reach and effect. Apart from MasterCard’s case, little is known about the sports marketing effectiveness. Little evidence exists about its ability and effectiveness in marketing. (source) Additionally, little is known about sports marketing ability to assist companies promote their business, maintain corporate reputation, allocate the resources correctly, and attract and retain the right clients. (Source) Statistical figures indicate that sports sponsorship takes the lead with 70% of the marketing expenditures going to sports however, few research are there to explain sports marketing effect on companies. (Source) The other sectors are the entertainment, tours, and attractions which comes second with 10%, causes 9%, festivals, fairs, and annual events 4%, arts 4%, and associations and membership organizations 3% (ESP Properties, 2017).

A company takes into consideration several things when marketing its brand. These are corporate reputation, customer expectations, shareholder value, sales revenue, profitability, social responsibility, and market share. The marketing strategies that are ineffective can have adverse impacts on the confidence, reputation, and trust that the company had developed for the brand. Companies now view the sponsoring of sports as the best way to reach new markets. According to Koc (2013, pp. 30-34), companies are now using it to build their image and strategically position the brand. Companies can reach a wide market through sports sponsorship and even pass messages to the audiences that would not have been easy if normal advertising was implemented. Sports sponsorship increase brand’s awareness taking into consideration the press coverage and television commercialization. In addition, it can attract a wide section of community and it can reach small particular niches. It also has the ability to disintegrate cultural barriers. A consumer relates sport with values such as energetic, healthy, masculine, fast, and vibrant. The main objective of sponsoring therefore is to utilize the sport unit image to define. promote, or re-establish own image. The objectives of sponsorship are to attain publicity, promote favorable brand and company associations, create entrainment opportunities, create promotion opportunities, and increase community relations.

1.3 The aim of the study (Should be a statement)

The purpose of conducting this study is:

a. To personally experience how iconic brands such as the Coca cola apply and manipulate their marketing strategies to gain competitive advantage.

b. To identify how effective Coca cola is at adapting sports marketing strategies to promote its brand and products.

c. To improve the learner’s research skills and abilities and expand knowledge of the research topic.

d. To fill gaps in the literature. As sports marketing is a new concept, this study will bridge the gap in the literature as it is not available in most academic literature.

e. To provide a comprehensive analysis and understanding of the sports marketing concept.

f. To explore the possibility of using sports marketing strategy to enhance corporate reputation, customer expectations, and market share.

1.4 Research questions (Change to…)

The research questions for the study are as follows:

a. How have companies, especially Coca cola effectively adapted sports marketing to promote their products or brand? – How has Coca Cola adapted sports marketing to promote their products or brand?

b. Which mode of sports marketing is Coca Cola Company using?

c. What are the available kinds of marketing tools and which ones does the Coca Cola Company use? – What marketing tools does the Coca Cola Company use?

d. Has the use of sports marketing strategies helped the Coca Cola company to improve its (1) brand reputation, (2) market share, and (3) consumer expectations if yes, by how much? - Is there relations between sports marketing and (1) brand reputation, (2) market share, and (3) consumer expectation?

e. What is the role of sports in marketing?

1.5 Research Objectives (refine according to the research questions)

The objectives of this study are:

a. To find out how companies, especially Coca Cola have effectively adapted sports marketing to promote their products or brand.

b. To discover the mode of sports marketing used by the Coca Cola Company and the one that is effective

c. To identify the kinds of marketing tools that are available and the ones used by the Coca Cola Company

d. To determine how the use of sports marketing strategies has helped the Coca Cola company to improve its (1) brand reputation, (2) market share, and (3) consumer expectations if yes, the research will try to examine its impact either qualitatively or quantitatively

e. To verify the role of sports in marketing.

1.6 Structure of the report

This report will begin with an abstract. The abstract addresses the purpose of the study, the research methodologies, the key findings and recommendations. The second section is the introductory part. It will capture the background of the case study selected, research problems, research questions, the aim of the study, and research objectives. This will be followed by a literature review. This part covers what other researchers have found in relation to the study topic and to avoid replicating the information and simultaneously acknowledge the authors. The industry size, growth rate, major players, situational analysis proposed analysis will be included in this section. The next activity will be an explanation of the research methodology, results, conclusion and recommendations respectively.

CHAPTER 2: LITERATURE REVIEW

2.1 Introduction

Literature review is often conduced to find out what other researchers have gathered regarding the study topic to avoid information replication and to also acknowledge their works. In this chapter therefore, the researcher presents the result of a literature review that was conducted. A review of the available literature was conducted to establish the theoretical underpinnings of this study including what other researchers have found.

2.2 Literature review of the Industry

Soft drinks are made using flavor, sweeteners, and carbonated water. However, the type of favors and sweeteners used to vary. Soft drinks manufacture dates back to the late 1770s when carbonated water was discovered and developed (Steen and Ashurst 2006, p. 2). Soft drinks have grown since then to become a beverage that is widely consumers especially to quench thirst and for refreshing purposes (Hui 2007, p. 420).

The industry has several players. However, Coca-Cola, Pepsi, National Beverage, Dr Pepper Snapple Group and Buffalo Rock are the main players. These companies use various marketing strategies to promote their products to the consumers. The industry is however, challenged by consumer health and safety besides environmental issues (Nestle 2015, p. 53; Ferrell and Ferrell 2016, p. 572).

Marketing is a concept and a strategy used by companies to stay competitive, increase sales volume, maximize profits, and satisfies the customers. All companies need an effective marketing strategy and sound planning in the contemporary world to attain the above goals (Ferrell and Hartline 2013, p. 1). It has gained great attention in marketing because other fields are adopting it (Shankar and Carpenter 2012, p. 1; Motzek 2011, p. 29).

Marketing strategy is a plan of managerial actions and initiatives used by an organization to relate to its customers including the entire market (Carpenter 2012, p. 2). Marketing strategies are developed basing on production, marketing, product, societal, and sales concepts (Pinson 2008, p.45; Cant 2006, p.13). These concepts are developed based on the marketing philosophy of providing an exchange mechanism (Rajagopal 2000, p. 1; Hoffman and Bateson 2017, p. 66).

The production concept holds that the consumers will appreciate and choose the products. The product concept holds that the consumers only prefer the product which adds value to their needs. The selling concept holds that the consumer will buy enough of the product if the company tries to sell and promote it. The marketing concept holds that the company should understand the wants and needs of each market and design the products that meet those expectations.

The major changes in the sports industry has resulted in sports marketing strategies development. This type of marketing strategy is designed to use sports as a way of promoting and popularizing the company’s products. It can be done trough sponsoring sports events, the stars or the attires (Desbordes and Richelieu 2012, p. 99). In addition, the company can design products that conform to the sports culture. The marketing tools that can be employed are advertising, magazines, television commercialization, billboards, banners, telephone directories, newspapers, radio, and social media.

The most important aspect of sports marketing strategy is re-incorporating and integrating the company’s culture, resources, and brand into the sports culture (Shank and Lyberger 2014, p. 550). Sports marketing enhance brand image and popularity. Moreover, it enables the company to communicate its products and brands in an effective manner (Wang 2015, p. 23). A company can further utilize sports marketing to build global power brands that could enable it to gain competitive advantage. In a past campaign conducted by Coca cola requesting the audience to eat and sleep cricket but remember to drink coca cola alone, it indicated a new strategy about how companies can market their brands and products. Due to the love of crickets in India, Coca cola tried to link itself to the sport and the people’s obsession of cricket. Singh (2013, p. 62) explained that sports marketing mean how companies leverage the people’s emotional attachment to sporting heroes, teams, and sports in general. As sports have been viewed as a marketing medium, companies that are not related to sports are now using the strategy.

The need for marketing through sports and marketing sports grew when the broadcast of sports through television became famous when the summer Olympics which took place at Berlin in 19936 was broadcast. It was the first coverage of a sports event. The western nations are known for marketing through sports. They for instance, associate themselves with sports league such as the Barclays premier league, sponsor teams for example, which sponsors the Chelsea’s Jersey and Gillette that has popular sports celebrities acting as the brands ambassadors (Singh 2013, p. 62). Sports marketing therefore, grants the opportunity to reach out to the local audiences and even worldwide audiences in the case of international sports events such as the Olympics which are telecast globally.

Discuss about academic theories of:

· Sports marketing (sub heading)

· Brand reputation (sub heading)

· Marketing strategies (sub heading)

2.6 Situational analysis (Information below can be used in result chapter) Here, you need to write what kind of tools will be used. SWOT, 5 forces and so on. Discuss what these tools are, any criticisms, and limitations of these tools by using academic articles.

SWOT analysis is a tool that can be used to understand a company’s internal and external environment. The Coca Cola Company is a multinational corporation operating in the beverage sector. The company’s strengths are the brand portfolio, geographic presence, and bottling and distribution functions. In terms of the brand portfolio, coca cola offers at least five hundred brands under different classifications. Its brands portfolio includes sparkling beverages such as spire, coca-cola, Fanta, Diet Coke, Coca-cola zero among others. It also offers sports drinks such as Aquarius. Other brand portfolios are juices and juice drink such as Simply and Minute maid; iced tea and coffee; water brands; and still beverages such as Fuze. It owns and markets the four of the leading non-alcoholic beverages globally namely Fanta, sprite, Diet coke, and coca-cola. It sells around two billion beverages daily. The beverages owned by Coca-cola are accountable for around two billion of the fifty nine billion beverages served daily in the world. It also produces and distributes other third-party brands. Moreover, it is geographically spread over the Latin America, North America, south pacific, Africa, Europe, and Asia regions. Its capability with regards to bottling and distribution play a role in meeting the needs of the customer efficiently. The products are offered the customers in all corners of the world via a diversified network. It has bottling partners, manufacturing facilities, and distribution warehouses (Market Line 2017, p. 4-5). The distributors, wholesalers, and retailers also help the company to reach the customers.

The main areas of concern are the decline in revenue and lawsuits. Lawsuits could lead to fines and penalties which would, in turn, increase the company’s operating costs. In early this year, The Company was sued alongside the American Beverage Association by Praxis inc. for marketing their beverages basing on the notion that it improved people’s energy thus, blamed for deceptive marketing. In addition, both companies were accused of misleading the customers that the sugar-coated beverages were healthy despite its association with diabetes and obesity (Market Line 2017, p. 5-6). As a result, the companies violated the Federal Advertising Law. The company’s revenue declined by around 6% in 2016 compared to 2015.

The opportunities available for the company are acquisitions, focus on the Indian market, expansion of capacity, and growth in the consumption of soft drinks. Acquisitions promote the expansion of business functions. Some of the milestones made by the company are acquiring Coca-cola Beverages Africa, AdeS, Aloe Gloe, and Chi Ltd. New products launching would assist coca cola to cover a wide market and expand its presence including the product portfolio. Several new products were launched in India in 2016. The launch indicates Coca-cola entry into the Indian market that is dominated by thirst-quenching drinks. In relation to consumption, there is a rising need of the soft drinks. The soft drinks were 709,050.3 million liters in 2015 and are anticipated to hit 748,040.2 million markets by the close of 2017. The markets also forecasted to grow at 3.4% in the next three years. The factors attributed to the growth are a growing population, rising purchasing power of the customers. new flavors introduction, and changing customer needs besides the use of natural sweeteners and colors thus, attracting the health conscious customers. If coca-cola continues to expand its bottling capacity, it will be able to its product demand. Early this year, International Beverages Limited, one of its divisions opened a bottling plant in Bangladesh at a cost of sixty million dollars to produces the various drinks. In 2016, the company opened a new facility in Cambodia (Market Line 2017, p. 6-7). It also opened a new bottling plant In Palestine with National Beverage, its bottling partner. It is also planning to erect a plant in Kumming, China.

The threats are government regulations, stiff competition, health concerns, water issues, and foreign exchange risks. The company is challenged by stiff competition both locally and intentionally. This could affect the company’s margins. This may force the company to offer low-priced products or increase promotion expenses, which increase its operational costs. The key competitors are Dr Pepper, Danone, Kraft Foods, Pepsi, ConAgra foods, Nestle, Unilever, and National Beverage Corporation. Its products have also been related to health issues such as obesity. Several government units are planning to increase taxes on the sugar-coated beverages to minimize the consumption rate. Water scarcity is also an issue. Water is a scare resource and it tends to decline daily due to climatic change. It is the main ingredient of Coca cola’s beverages. The company is further found in different countries and is therefore, prone to foreign exchange rates fluctuation (Market Line 2017, p. 7-8). Coca-cola has to comply with the strict government regulations. The company is regulated in the U.S. by the Food and Drug Administration. Others are the U.S. department of Agriculture, the Federal Trade Act, workplace health and Safety Laws, competition laws, among others. There are fines and penalties for violating any law.

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