Senior Marketing Midterm

positioning: storytelling

"Storytelling evokes a strong neurological response." A skill not a trait Goal of Brand Storytelling: To tell your brand's story by creating characters that enable your audience to become emotionally engaged and stay

Market Research

"There are basically four risks we have to confront in each deal. • There is technical risk: Can we split the atom? • There is people risk: Will the key players on the team stay together? • There is financial risk: Can we keep the company well financed? • And there is market risk: Can we get the dogs to eat the dog food? The most dangerous of these risks is market risk. Removing market risk is expensive ... we're risk takers but we will take a technology risk over a market risk any day of the week."

what is the $ marigin and % margin for each channel Winery: $4: VC per unit $10: selling price to distrubtors Distributor: $10: purchase price from winery $15: selling price to restaurant Restaurant: $15 purchase price 45$ sell price to customer Customer: 45$ retail

$ Margin: $6 $5 $30 % margin: 60% 33% 66%

The typical South African automobile insurance consumer spends $2000 per year on insurance. The average consumer is 37 years old and drives a car worth $24,000. The industry retention rate is 75%. Companies spend $1000 to acquire 5 customers and make a 60% margin on all policies. What is the lifetime value of the typical customer?

$2000 per year at a 60% margin = $1200/year in contribution margin. With a churn rate of 25% the average customer will stay 4 years. They spend $200 to acquire a customer. $1200 * 4 - $200 = $4600.

The 5 C's

-Customers -Context -Company -Collaborators -Competitors

Whats wrong with the BCG Matrix

1. Closed Investment Loop 2. Pets can be great 3. Cows aren't necessarily profitable

Choosing a Research Technique

1. Exploratory 2. Descriptive 3. Causal/Experimental

Brand Positioning: Carhartt

1. What's it for? Work Clothing 2. Does it have what it takes? Durable, Respected, Full line 3. Why is it 'best'? Proven American Heritage Brand Brand Positioning Statement Example: For hard-working people who take pride in their work (target audience), Carhartt (brand) is the durable workwear (frame of reference) that helps you do the toughest jobs (point of difference and benefit) because for more than 100 years, Carhartt has been outfitting American workers with the most durable and reliable gear. (reason to believe)

Elements of a story

1. character 2. setting 3. plot/story arc 4. conflict 5. theme

expected lifetime: Retention Rate vs. Churn/Attrition Rate

1/Churn Rate1 = 1/.25 =4 1/Churn Rate= 1/.75 = 1.33 average years

Causal Research

3. Causal / Experimental: assess impact from a variable, measure the impact of one variable on another (causation)Causal Research The independent variable is the variable the experimenter manipulates or changes, and is assumed to have a direct effect on the dependent variable. For example, allocating participants to either drug or placebo conditions (independent variable) in order to measure any changes in the intensity of their anxiety (dependent variable). The dependent variable is the variable being tested and measured, and is 'dependent' on the independent variable. An example of a dependent variable is depression symptoms, which depends on the independent variable (type of therapy). Causal / Experimental: assess impact from a variable, measure the impact of one variable on another (causation)

You purchase a $1 ticket for the State Lottery. The probability of winning is 1 in 3 million. The prize is $1 million. What is the expected value of your ticket? What if the ticket cost $3?

= (1 / 3M) * $1M = $0.33

At a given units sold, at what unit price do we breakeven? BE Price

= (Fixed Cost / Quantity) + Variable Cost

You send out catalogs. The average profit from a catalog purchase is $100. However, the response rate is only 3%. What is the expected value of the catalog?

= 3% * $100 = $3

At what quantity (units) do we breakeven? BE Volume (units)

= Fixed Cost / Contribution Margin $ per unit

t what total sales volume (revenue) do we break even? BE Sales (total)

= Fixed Cost/Contribution margin %

CLV and The Pareto Principle

A large share of profit is often concentrated in a relatively small % of customers 80/20

CLV: Application: Blue Apron

Analysts estimated cost-per-customer to be closer to $400 in 2019, based on rising costs of TV and social media ads. In the Blue Apron annual report for 2018, there was about $667.6 million in revenue with a cost of goods (including both product and fulfillment costs) of$433.5 million. As a result, gross margin was about 35%. Average quarterly revenue per customer varied from $233 to $252 in 2018, By the 3 month mark, Blue Apron loses more than half of their customers. Within 1 year, Blue Apron loses about 80% of their customers. Annual Revenue * Margin * Years - AC$252*4 *.35* 1.25 - $400 = $41 1/Churn Rate= 1/.8= 1.25

Amy Lee is a custom dressmaker. She knows the best retail price for her signature gowns is $989.Amy only sells through boutique apparel stores that demand a 40% margin. Amy wants to earn a 30% margin.What is the most Amy can spend to make a dress if the retail price is $989?

At a retail price of $989 and a 40% margin, the boutique's COGS is ($989 * .6) = $593. At a price of $593 and a 30% margin, Amy's COGS is at most ($593 * .7) = $415

Chronological order of tools

BCG, 5C's , 5 forces

For the same product in number 4 above, if the firm's fixed costs are $52,500, how many units must the firm sell to breakeven? a. 7,000 b. 15,000 c. 13,125 d. 4,565

BEq = Fixed Costs/Unit Contribution = $52,500/3.50 = 15,000

Five Forces: Threat of New Entrants

Barriers determined by: Economies of Scale Capital Requirements Customer Switching Costs Incumbency Advantages Access to Distribution Channels Government Policy Expected Retaliation The threat of entry reduces profit as industry members attempt to deter the threat.

What is brand positioning?

Brand positioning refers to an articulation of why a target market would prefer your brand It is an internal roadmap for a brand to ensure that all brand activity has a common aim.

• Costs are $2.50 per unit, and $1M per year to run manufacturing plant.• What is breakeven volume if you want to sell the cough syrup at $5.00?• At a price of $4.50? What would our price have to be to breakeven at 250,000 units sold?

Break-Even Point = Fixed Costs / Contribution Margin Per Unit At a retail price of $5.00... our BE volume is 400,000 units At $4.50 BE Volume is 500,000 units 250,000 = $1MM/ Contribution Margin Per Unit CM per Unit = $4.00 Price = $4.00 (CM) + $2.50 (Cost) Price = $6.50

Coca-Cola: Bargaining Power of Customers

Buyer (bottler) power is low: -Buyers are concentrated -Purchase accounts for a significant fraction of supplier's sales - products are undifferentiated - doesnt: buyers face few switching costs - doesnt: buyer presents a credible threat of backward integration

Coca-Cola Case

By creating more efficient buyers without increasing their power, Coca-Cola will: • be more competitive against substitutes • increase its own efficiency • maintain or increase its margins • maintain entry barriers

margin

CM$= Price - variable cost per unit CM%=Contribution margin $ / price $ (Percentage of selling price the firm retains after variable costs)

Christopher Wallace buys XXXL velour track suits from London and resells them in Brooklyn. He pays $1200 for each suit and wants to make a 40% margin. How much should he charge? What is his % markup?

COGS is $1200. Christopher wants 40% margin. If margin is 40% of price, COGS must be 60%. So, COGS of $1200 = 60% of price. $1200 = .6*P $1200/.6 = P $2000 = P The price must be $2000 to make a 40% margin ($800). Check your math. Adding $800 to COGS of $1200 means markup is 66.7%.

PharmaSim Case

Company (Allstar Brands)A leading manufacturer of packaged goods, Allstar Brands consists of three divisions: - consumer products -pharmaceuiticals --->OCM Group:Allround Brand - international The OCM Group will: • manage the Allround brand using the 4Ps: Product, Pricing, Promotion, Place (distribution).• expand Allround's portfolio with reformulations, line extensions, and new product introductions. PharmaSim Context- 10 year stratgy Sales Force Allocation by channel - Product / Pricing - Advertising / Promotion - Creative Design - Research Reports Purchase - Other Markerketing planning: - situational analysis - marketing strategy -marketing mix The 4 P's must be aligned strategically . . . If I have a premium product strategy, which is most important? 1. Product Quality 2. Promotion (Differentiation) 3. Price Parity? 4. Wide Distribution? Collaborators (Distribution): -manufactueres: AllstarBrands -wholesalers: indirect 2 level distribution -retailers: indeprendent drugstores, grocery stores, convenience stores, mass merchandisers

Backward Market Research 1. What's the "big idea" in this article? 2. How is the idea executed? 3. What are the benefits?

Construal level theory (CLT) is a theory in social psychology that describes the relation between psychological distance and the extent to which people's thinking is abstract or concrete. The general idea is that the more distant an object is from the individual, the more abstract it will be thought of, while the closer the object is, the more concretely it will be thought of. imagine the end of the process: -What decision alternatives might be implemented? -What will the final report look like? Dummy tables. What analyses can support a choice between alternatives? Where and how to get the data for analysis -Time/cost/accuracy constraints -Secondary vs primary data Design the study ("need-" vs. "nice-to-know")

5 C's Application: The alternative meat industry

Consumers: Needs Analysis - Functional, meaning, identity, social role, emotional Decision Process -Relative importance of features -Cognitive or emotional choices Context: ** Economic Environment **SocioculturalEnvironment **Political/Legal **Natural Environment Technological Demographic Company: Competitive Advantages? What is Impossible Foods' Competitive Strategy? Lowest Cost? Superior performance on an attribute? Niche market? Collaborators and Complementers: Suppliers -Food Distributors - RawMaterials Complementary products or services -Vegan cheese - Ecopackaging Channel/Retail Competitors: -Current -Future

If a product sells for $7.50 and it cost of goods sold plus other variable costs are $4.00, what is the contribution margin % for this product? a. 46.7% b. 53.3% c. 87.5% d. 114.3%

Contribution Margin = (Price-UVC)/Price = ($7.50-4.00)/$7.50 = 46.7%

CLV and Strategies to drive CLV

Customer Lifetime Value = Revenue/visit*visits/yr. * margin * years - AC • CM/purchase • Frequency/year • Lifetime • Acquisition cost A marketing metric that allows us to assess the value of the customer. Based on the premise that all customers are not created equal. How will you decide what to do? -Compare the predicted changes to CLV vs. Investment -Return on Investment = (Profit-Investment)/Investment What specific data do you need? -Consumer research on why customers quit by segment -CLV by segment -Customer acquisition by segment by promotion tactic -Promotion tactic budget (investment) estimates

What is the purpose of a 5 C's analysis?

Determine how to use the 4 Ps to achieve our SBU objective by understanding customers, competitors, collaborators, context, and the company.

Expected Value

EV = (outcome value) * (probability of outcome occurring) Ex: lottery ticket, direct mail catalogs

why you would use 5 forces model?

Entrepreneurial/Investor: Should I enter this industry? Can I shape industry structure to my advantage? Redivide the industry profit Expand the profit pool? What is the best position considering the relative strengths of the 5-forces within the industry? How can I exploit change in the industry? • Position your company where the forces are weakest • Exploit changes in the forces • Reshape the forces in your favor

Why CLV?

Evaluate opportunities (ROI) Compare target markets Determine budget to: Acquire new customers Retain existing customers Increase consumption (Upsell)

Five Forces: Threat of Substitutes

Evaluating substitute products: -Products with similar function limit prices a firm can charge --Function may not be tangible -May be downstream The threat of substitutes is high if: -Substitutes have attractive price/performance tradeoffs -Buyer cost of switching is low The threat of substitutes limits an industry's profit potential by placing a ceiling on prices

markup

Markup % = Contribution margin $/cost $ (Percentage of cost that's been added to cost to arrive at selling price)

Combining Research Techniques

Often, exploratory research is used to formulate hypotheses, and descriptive or causal research to evaluate these hypotheses.

positioning: the science of consumer emotions

Our research across hundreds of brands in dozens of categories shows that it's possible to rigorously measure and strategically target the feelings that drive customers' behavior. Science of Consumer Emotions How? 1. Identify the emotional motivators for a category's most valuable customers. 2. Identifying spikes in buying that are associated with specific motivators. 3. Quantify the current and potential value of motivatorsWe find that customers become more valuable at each step of a predictable "emotional connection pathway" as they transition from (1) being unconnected to (2) being highly satisfied to (3) perceiving brand differentiation to (4) being fully connected.

The five forces: application: the alternative meat industry

Potential entrants: high buyers: high/moderate industry rival: low suppliers: low substitutes: high

Five Forces: Bargaining Power of Customers

Powerful if: Buyers are concentrated Purchase accounts for a significant fraction of supplier's sales Industry's products are undifferentiated Buyers face few switching costs Buyer presents a credible threat of backward integration Buyer has full information Buyers reduce industry profits by bargaining down prices or forcing higher quality

How does the BCG Matrix tell us about how the 4 Ps might grow?

Price: Promotion: Product: PDistribution:

Libertango, Inc. invested in a new customer acquisition program. They acquired 2,000 customers. Those customers are expected to generate an average of $400 each in contribution margin. The cost of the acquisition campaign was $500,000. What was the return on investment?Do you consider that a good return?

ROI = [Profit - Investment]/Investment [2,000*$400 - $500,000]/$500,000 = 60%, Heck yes.

Story Arcs

Rags to Riches (rise) Riches to Rags (fall) Man in a Hole (fall then rise) Icarus (rise then fall) Cinderella (rise then fall then rise) Oedipus (fall then rise then fall)

What is the purpose of the BCG Matrix?

Resource/Investment Allocation, Objectives

Husk Inc. is Iowa's leading manufacturer of corn-related novelties and paraphernalia. Husk has decided to break into the lucrative corn market of Nebraska gradually. They plan on introducing Colonel Kernel, the talking corn on the cob, to the Nebraskan market. After negotiating with Nebraskan retailers, Husk expects the average retail price to be around $8. The retailer margins are estimated to be 25%. The cost of manufacturing per unit is $.90 for the parts, $.50 for assembly, $.75 for finishing, and $.35 for shipping. A rival vegetable novelty company, Tatercorp, courts the same retailers with a singing potato Spuddy Waters. Tatercorp expects Spuddy Waters average retail price to be $10. However, the retailer margins are only 23% and the cost of manufacturing is higher. It costs Tatercorp (per unit) $1 for the parts, $.50 for assembly, $.50 for finishing, $.50 for song rights, and $.40 for shipping. In your opinion, which product is more attractive to retailers? If each manufacturer sells 100,000 units, how much total contribution margin ($) will each manufacturer earn?

Retailers have a unit margin incentive to sell the competitive product rather than Colonel Kernel; however, Colonel Kernel will have a price advantage with consumers and therefore may sell more units. Col Kern retail price: 8$ manufac sell price: 6 VC: 2.5 retailer unit contribution: 2 manufac unit contribution: 3.5 tot contribution marg: 350,000 spuddy waters: retail price: 10$ manufac sell price: 7.70 VC: 2.90 retailer unit contribution: 2.30 manufac unit contribution: 4.80 tot contribution marg: 480,000

Five Forces: Rivalry Among Existing Firms

Rivalry Intensity is driven by: -# of competitors -Industry growth rate -Exit barriers Rivalry plays out in several ways: -Price competition -Increased advertising -Increasing consumer warranties or service -New product introductions -Positive or negative effect on industry profit

Coca-Cola: Rivalry Among Existing Firms

Rivalry Intensity is low/medium: -# of competitors (only 3) - industry growth rate (low) Rivalry plays out in several ways: -Increased advertising -New product introductions Oligopoly with rivalry based on brand

Much to Husk Inc.'s surprise and delight, a product from their sports-related novelties line has become a symbol of state and national pride and is used often in business-to-business marketing and promotions. The small figurine, often called "Ty Cob" or "Willie Maize," is sold to businesses for $4 per unit unless the order is over 1,000, in which case it is offered for a reduced "Econo-corn" package for $3 per unit. It costs $1 to make and another $1 to ship each unit. As of 1996 there were roughly 67,000 businesses in Iowa, half of which are interested in using corn-related novelties (this section of businesses is often referred to by Husk as the 'Stalk Market'). Iowan businesses are comprised of 5% large companies (more than 500 employees), and the remaining businesses are considered small. Large companies typically place two orders per year, each for 1,500 units, and the smaller businesses demand on average 200 units per year. What are the segment values for large and small businesses?

Segment Value = Number of Customers X Value Per Customer Large: (67000 x 5% x 50%) x (3,000 x $1) = $5,025,000 Small: (67000 x 95% x 50%) x (200 x $2) = $12,730,000

Coca-Cola: Bargaining Power of Suppliers

Supplier power is low: Suppliers' products have alot of substitutes Suppliers' products are not differentiated Suppliers' products have low switching costs

The five forces

The Five Forces are Porter's conclusions on the reasons for differing levels of competition, and hence profitability, in differing industries. -Industry Competitiveness -Potential Entrants (threat of mobility) -Substitutes -Buyer Power -Supplier Power

Calvin Broadus breeds specialty canines. The cost of breeding is $400 per animal. Calvin wants to make a 30% margin. How much should he charge?

The cost is $400. Calvin wants 30% margin. If margin is 30% of the price, COGS must be 70%. Therefore, COGS of $400 = 70% of the price. $400 = .7*P $400/.7 = P $571.43 = P The price must be $571.43 to make a 30% margin ($171.43). Check your math.

Coca-Cola: Threat of New Entrants

The threat is low because entry barriers are high: -Economies of Scale (supply-side) -Customer Switching Costs -Incumbency Advantages - Expected Retaliation

Coca-Cola: Threat of Substitutes

The threat of substitutes is high (downstream): -Attractive price/performance tradeoffs -End consumer cost of switching is low Concentrate manufacturers have:Very strong brands

Sugalski, Inc. purchases jumpsuits from Warsaw for $50 each and resells them at their Nederland, CO store for $75 each. What is their % margin?What is their % mark-up?

These are fundamental marketing math calculations. You should be able to calculate margin and markup quickly. % margin is the % of the sales price retained by the seller after deducting COGS. Price: $75. COGS $50. They kept $25, so % margin is $25/$75 = 33.3%. % mark-up is the % of COGS added to COGS to determine price. They added $25 to COGS of $50, so % markup is $25/$50 = 50%.

Positioning

Things are not what they are; they are what we think they are Things are what we compare them to Psychological value is often the best kind Duration of a wait vs. uncertainty Three questions . . . Have we established a frame of reference? Are we leveraging our points of parity? Are the points of difference compelling?

Which costs more, oil or soda?A 55-gallon barrel of WTI crude oil currently sells for $76.79. Target sells a 2 liter bottle of Coca-Cola for $2.99.There are 3.785 liters in a gallon

This is a conversion problem. 1 gallon is 3.78541 liters. Therefore, 55-gallons is 208.198 liters. At $76.79 for 208.198 liters, the price of oil is $.37/liter. 2 liters of Coca-Cola costs $2.99, therefore $1.445/liter. Soda is ~4x the cost of oil, despite oil prices almost doubling in the last year. In gallons, oil is $1.40, Coca-Cola is $5.66

Althea Gibson purchases tennis equipment from a shop in Silver, South Carolina.She purchases a new racquet ($200) and 2 cases of balls ($40 ea.) whenever she visits. She visits 3 times per year. The tennis shop makes a 25% margin on all sales. The average tennis enthusiast plays for 6 years before their knees and elbows fail or they find another sport. What is the lifetime value of customers like Ms. Gibson?

This is a customer lifetime value (CLV) problem. CLV is used for segmentation, targeting, and budgeting decisions. It typically also includes a deduction for the cost to acquire the customer. CLV = revenue/visit * margin * visits/yr. * years CLV = $280 * 25% * 3 * 6 = $1,260

Canadian Railroad's top selling products were Economy, Silver, and 1st Class train tickets. 2021 sales were: ticket class | Units Sold | % margin economy | 350 | 18% Silver | 160 | 10.2% 1st Class | 240 | 15% What was the average % margin for Canadian Railroad in 2021?

This is a weighted average problem. You might use this type of solution to predict your grade in a course. Step 1: Find the ratio of each product's sales to the total (C = A/750) Step 2: Multiply each product's weight by its % margin (D=B*C) Step 3: Add the totals (D) 15.38% average % margin

Your friend operates a convenience store that sells Mega Millions lottery tickets. She accidentally printed an extra ticket for next Friday's drawing. The prize is expected to be $970 million*. The odds of winning are 1 in 302.5 million. Tickets cost $2.00. Assume 1 winner What is the value of the ticket?What would the value be if the price for a Mega Millions ticket was $4.00?

This is an expected value problem. You might use this analysis when determining the maximum budget for a direct mail catalog or other promotion. The expected value of an asset is the potential (expected) value times the probability of that outcome occurring. Solution: $970,000,000 * 1/302,500,000 = $3.21. As with many transactions, the value is not affected by the price paid. Example: Paying $10 vs. $100,000 for a car does not change the value of the car.

Carley Bobby and her husband Ricky distill spirits and distribute them along Whitehouse Rd. It costs them $28 to produce each case of spirits, and they want to earn a 20% profit margin. What should the price be?

This is another version of a profit margin analysis.% margin is the % of the sales price retained by the seller after deducting COGS. If margin is 20% of the price, we know COGS must be 80%. Therefore, COGS of $28 = 80% of the price. $28 = .8*P $28/.8 = P $35 = P The price must be $35 to make a 20% margin ($7)

The Company of Corporate Conglomerations (3C) has recently developed a new product. 3C estimates that the total potential market for this product is 10 million units. The product is expected to be sold to the consumer at $40 a unit. The retailer margins are estimated to be 25%. 3C gave the following projections for the product's cost: $5 per unit on materials, $3 per unit on labor, and $2 per unit on shipping. 3C spends $15,000,000 in General Selling, and Administrative expense, $7,500,000 on research and development, and $3,000,000 on promotions and communications for their stockholders. The company is launching an impressive ad campaign to precede the product's release. These costs include $8,000,000 for TV ads, $5,000,000 for magazine and newspaper ads, and $1,750,000 for advertising to retailers. What share of the potential market does 3C need to capture to break-even?

Total fixed cost = $15,000,000 + $7,500,000 + $3,000,000 + $8,000,000 + $5,000,000 + $1,750,000 = $40,250,000 Average Unit Contribution = .75($40) - ($5 + $3 + $2) = $20 TBEV = $40,250,000/$20= 2,012,500 units Share of Market = 2,012,500/10,000,000 = 20.125%

How does The strength of the five forces determine the level of profit within an industry?

Type of rivalry affects margins

Expanding internationally

Understanding your local target audience (culture) - Hiring local management & partners Adapting your offering -Risk of over-standardization vs. brand dilution

Exploratory Research

Uses open-ended questions and observation to generate qualitative data 1. Individual / In-Depth Interviews 2. Focus Groups 3. Ethnography 4. Social Listening Why are focus groups 'dead'? . . . they create artificial data as a response to artificial situations and social dynamics . . . and force participants to explain what they can't explain. But nobody in a group would say 'I don't know how I shop'. So they guess. - Spark (agency) 1/21/21

positioning: points of parity

What Matters to the Target? 5 C's Research: Primary or Secondary Attributes, strength, behavior Market Segmentation

Characters

a great character? Every object has three dimensions: depth, height, width. Human beings have an additional three dimensions: physiology, sociology, psychology. Without a knowledge of these three dimensions we cannot appraise a human being."- Lajos Egri, The Art of Dramatic Writing

A high threat of new entrants reduces industry profitability because: a. The threat increases consumer switching costs b. The threat increases costs for firms in the industry c. Buyer power pushes down prices d. New entrants take market share e. Industry revenue is lower

b

3 C's

consumer analysis - relevant -resonant -realistic competitive analysis -distinctive -defensible -durable company analysis -feasible -favorable -faithful

positioning: perceptual maps

dont use quality and price can be multi dimensional

SBU

ex: Sony SBU: playstation, music, cameras, movies, financial services

The BCG Matrix

investment strategies: - grow - maintain/hold -harvest - divest

Descriptive Research

marketing research to better describe marketing problems, situations, or markets, such as the market potential for a product or the demographics and attitudes of consumers Employee Satisfaction FCQs

marketing strategy flow:

objectives-> situation analysis(internal and external)-> define the value proposition-> create exchanges tools: BCG-> 5 C's-> 5 forces-> segmentation and targeting-> differentiation and positioning

Five forces: Bargaining Power of Suppliers

powerful if: Supplier industry is dominated by a few firms Suppliers' products have few substitutes Buyer is not an important customer to supplier Suppliers' product is an important input to buyers' product Suppliers' products are differentiated Suppliers' products have high switching costs Suppliers exert power in the industry by threatening to raise prices or to reduce quality, obtaining a higher share of industry profit

Kurt Vonnegut

story teller

What to do with CCE?

strategies: Keep: -increases economies of scale -Adds flexibility and speed to market -Switch to more powerful buyer -Lower margin business Fix and Flip: -Retain local skills and knowledge -Narrows Coke's focus to marketing and NPD -improves balance sheet -Must avoid creating a strong buyer Beer Model: -Economies of scale in manufacturing -New supplier with some power -Keep local skills and knowledge -Switch to more powerful buyer -Improves balance sheet (-distribution assets)

marketing strategy

strategy: The plan. The how-we're going to do it. Incorporates the many objectives and capabilities of the business and its environment. + marketing: Creating exchanges.All activities in the organization that create, deliver, and communicate value to create exchanges.

Bottling indusry 5 forces:

suppliers: high (coke) threat of entrants: low buyers: high substitutes: high industry rivalry: bottlers(franchisees) moderate By modernizing and consolidating the bottlers, Coca-Cola made its own buyers stronger vs. retailers

Soda concentrate indusry 5 forces:

suppliers: low threat of entrants: low buyers: hlow substitutes: high industry rivalry: ?? By modernizing and consolidating the bottlers, Coca-Cola made its own buyers stronger vs. retailers

Breakeven analysis

the process of determining the number of units a firm must sell to cover all costs Revenue = Price * QuantityTotal cost = Fixed cost + (Variable cost * Quantity)