Pablo del Pozo

MBA 2020

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Share a Coke: sharing real experiences

Image source: cokestore.com

Sharing real experiences

Coca Cola is one of the best examples of brands taking advantage of customer experiences and sharing them with the rest of the world on TV and social media to reinforce its brand image. 

The carbonated beverage company has always excelled for its marketing campaigns and advertisement (e.g., Christmast Ads), but today, I would like to deep dive on one of its latest and more successful marketing campaigns, which flooded several social networks with images and stories of customers in happy, relaxed and friendly situations sharing a coke with family and friends.

“Share a coke”

Share a coke was a marketing campaign launched by Coca Cola in 2011 first in Australia and later in almost every country in the world given its success. The well-known campaign consisted in bottles of the beverage with customers’ names on the labels.  Additionally, Coca Cola asked customers to share their pictures drinking coke with their personalized bottle on the social media.

Who has not felt the happiness of drinking a coke with her name on the bottle? The first time I saw it, I thought “it is a great idea”. Later, I saw many people collecting bottles with the names of family members, friends or even co-workers in the workplace. I even saw people sharing how they proposed to their significant others with four bottles of Coca Cola where you could read: “will” “you” “marry” “me”, as you were able to order cans with whatever word you wanted. Is there a heppiest moment to share? Well, in that moment, Coca Cola was present, increasing its brand perception, making customers associate Coca Cola with happiness... as they already did in previous marketing capaigns. 

This campaign was a  great example of how companies can use customers’ content to increase brand positioning. Moreover, the campaign was a success from the economic standpoint and social media impact. 76K virtual Cokes were shared online only in Australia, and consumption increased by 7% during the campaign. In the Us, the company attributed a 2% increase in sales to the “Share a Coke” campaign. 

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How do you get into the heads of customers? Knowing your persona

It is well known among entrepreneurs aiming at succeeding in a market, that the thorough knowledge and understanding of your target persona is a game changer for success.

A persona could be defined as “the profile of your ideal customer including demographics, behaviors, motivations, and goals, based on real data and educated guess”. The purpose of this information is not only building your solution around customer needs but also taking the actions to convince customers to choose your product. Selection of distribution channels, positioning against competition and marketing strategies, among others, constitute some of the previously mentioned actions.

Despite this “persona” definition is commonly used among entrepreneurs, I guess this strategy applies to well-stablished companies, which might have much more than one single persona, depending on their product portfolio.

The fact is that nowadays, these well-stablished companies know a lot about their customers. They have access to more information than ever, they can know their customers’ desires, fears, strengths and weaknesses, and it is their responsibility to use this information in a social-responsible way. Companies cannot do whatever it takes to increase sales. 

I liked the reflection in the Fair & Lovely Vs. Dark Is Beautiful case saying: “advertising should not encourage social discrimination of people based on aspects like the color of their skin”.  In a world where companies have so much power and advertising constitutes a one-sided communication tool (from one single company to millions and millions of customers in some cases), advertising should be used to increase sales, and if possible, make the world a better place to live, but never used as a “weapon” to discriminate neither to divide people.

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Collapsible wheel: failure or success?

There are two main approaches to forecast product diffusion of new products and technologies. The first one aggregates people-based frameworks, which are focused on the characteristics of customers, while the second one leverages qualities of the product to estimate the demand of that product.

According to Everett Rogers*, only 5 dimple characteristics of a product might encourage or hinder adoption among customers. These factors are (i) the relative advantage compared to substitutes, (ii) compatibility with current values and experiences, (iii) complexity, (iv) trialability and (v) observability by potential customers.

If we analyze these five characteristics of a given product, we could make a preliminary estimate of the product acceptance by future consumers. Let’s apply it!

The collapsible wheel is a new technology that allows commuters to fold their bike into a trunk or overhead with limited space. Will this collapsible wheel succeed?

· Relative advantage: Clearly, this bike will require less space once it is folded. Therefore, it offers an advantage to commuters when compared to existing folding bikes. However, this wheel will be extremely expensive compared to current models as they must be made with carbon composite, an extremely expensive material. Additionally, I am not sure whether folding bikes target customers are people with deep pockets to make such a considerable investment.

· Compatibility: Despite being a great development for folding bikes, I don’t really see these wheels could be applied to standard bikes such as race bikes or mountain bikes. I feel that a collapsible wheel might be “weird” for bike lovers as the last thing you want to see in your bike is that the wheels could collapse, and I know these wheels have to mechanism to avoid it. My point is that, bike designs have barely changed over the last century, are they going to change to include this new feature?

· Complexity: I understand the mechanism behind this new development is simple and users should not have problems to collapse the wheel. However, I would have some concerns regarding maintenance and repairments. Are the frequency and cost of these repairments going to increase compared to the current options?

· Trialability: Is there any way consumers could try this wheel in advance? That would be very helpful to increase customer acceptance. However, I believe that best practices such as test drives of automobiles, allowing “demo-ing”, would be very expensive for this type of product.

· Observability: I believe this is the most positive attribute of the collapsible wheel. If other commuters see users can fold their bikes in a much smaller space, probably they would be willing to purchase a bike with this type of wheel.

In summary, I believe that Rogers’ five factors analysis provides a great reflection on whether one product is going to have a great or poor customer acceptance. Nevertheless, it is only one analysis, real acceptance will be assess only when the product is launched.

 * Diffusion of Innovations (New York, NY: The Free Press, 1995)

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Model 3: Tesla’s Top-Down Strategy

In my view, Tesla’s Model 3 launched in 2019 was not only an effort to democratize sustainable transportation but also a last bullet to make the electric car company profitable.

Many companies advocate a “top-down” strategies by exploiting the prestige of a high-end product to expand sales to the mass segment. This is happening not only in the automotive industry but in many others, such as the wine sector.

With this movement, Tesla leveraged the quality and “status” of previous models (e.g., Model X, Model S) to offer a more affordable product that will account for the most relevant portion of Tesla’s future sales. This will allow Tesla to increase margins by leveraging economies of scale. However, this effort must be accompanied by several parallel movements such as an increase in production capacity and distribution channels (due to most Tesla dealers are vertically integrated). Correctly executed, this strategy might bring an outstanding growth as many customers will perceive the quality of Tesla products in Model 3. 

Furthermore, this strategy is key for Tesla in order to make the whole business viable as the infrastructure for electric vehicles must be developed and mass adoption is a key lever to make other competitors, providers or even public stakeholders contribute to the development of the whole network of charging points.

For sure, Tesla chose the right approach by starting their business targeting high-end models and shifting to the mass market later. 

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How do we choose financial players?

During the last two years, I have completely changed all my “providers” of financial services, but I am not sure that I made those decisions because of their marketing efforts...

There is an outstanding range of players providing financial services, from incumbents such as BoA, Chase or City… to a wide spectrum of startups that are trying to find a niche to serve or that have already found it, such as Venmo or Square.

Where do I want to save my money? How do I want to make payments? And which platform is better if I travel abroad? How do I want to invest my money? Which is the best way to file my tax return form? These are, among many others, some of the many questions that consumers have to answer to decide what to do with their money…

There is such a huge number of players and services, that making accurate comparisons of their value propositions is almost an impossible or titanic effort. In my case, despite the millions spent in marketing, two main triggers defined my choices: context-dependent choice and peer advice.

First, I had to open a bank account to operate in the US. To do so, I reviewed different options and decided to operate with the financial institution linked to the university. I perceived this institution as a “default option” and believed it would smooth my transition from the Spanish banking system to the US one. Now, I see this was a context-dependent choice.

After that, all my decisions were made by peer advice. I decided to talk with other colleagues to understand the providers they were using for their payments and investments. I realized that some of my friends had already done a great research about potential options while others, like me, were only following the advice of those with more experience. My last decision was five days ago when I selected a free software for my tax return filing.

As a result, I would like to reflect on how my decision-making process is not linked to their marketing efforts, or it is? Some people could argue that so much marketing is a waste of money if customers decisions are made by peer advice. Others could state that those influencers were captured by marketing campaigns instead of by a thorough value proposition comparison.

It is also interesting that now, my “financial providers” are mostly new entrants in the market, whose investments in marketing are not comparable to those of incumbents. Probably I am also the product of a generational shift, in which millennials are not yet engaged by the marketing campaigns of some more traditional financial institutions.

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Intel’s direct-to-consumer marketing strategy: B2B Inside

Many companies have realized that direct-to-consumer marketing is a game changer to foster sales in a B2B environment. Convincing end customers that your item is an essential component of an OEM’s final product is an outstanding approach to foster brand awareness, enhance bargaining power with OEMs, and the most important point, increase sales. Certainly, Intel was a pioneer in this area with their Intel Inside Campaig, which allowed the microprocessor manufacturer to discover a “new product” for PC users. 

What Intel did almost 30 years ago, I mean, B2C marketing to foster B2B sales, is replicated today by many other companies with very different outcomes. Personally, I had the opportunity to work with one of these companies and I realized that this marketing strategy presents three key challenges that Intel clearly overcame.

· High-quality product: If you create awareness of a high quality “new product”, your marketing strategy must be backed up by a real product meeting these expectations. In this case, PC users would expect a powerful, resistant and high-speed chip, and that’s exactly what Intel provided. Otherwise, end consumers won’t require your processors in the final product and OEMs will have arguments to force cost cutting or even to look for other suppliers.

· Continuous improvements: Once you convince customers that they have to think about microprocessors when they decide buying a PC, you are opening a new market. You may spend a lot of resources educating customers and competitors may leverage a second mover advantage by creating a better product. This was the case when AMB threatened Intel’s dominance by launching the 1 GHz microprocessor in 2000. Intel was able to overcome the situation because in the 90’s they had “doubled up” their development cycles.  

· Joint effort with OEMs: OEMs are the real owners of the end customer, therefore you cannot launch this strategy alone. First, some OEMs could get offended if you pursue this marketing strategy without consulting them. Second, you must remember OEMs are your paying customer. And third, OEMs have several suppliers for each type of component. Therefore, most of the times you can be easily replaced. Intel played very smart when they designed their co-op advertising program jointly with OEMs. Surely, this played an essential role in the Intel Inside campaign success. This represented a win-win strategy for both OEMs and Intel, and the most important point, it was a safety net for the relationship between Intel and PC manufacturers.