Coca-Cola adds coffee with Costa acquisition

Diversifying its product and brand portfolio, Coca-Cola has moved to buy Costa, the UK-based coffee shop chain now owned by Whitbread. Currently, Costa has 4,000 locations in 32 countries, plus thousands of self-serve coffee vending machines.

This acquisition will enable Coca-Cola to build on Costa's strong brand identity and, at the same time, enhance the non-cola beverage elements of its product portfolio. The acquisition has implications for global marketing, as well. Costa does well in China, for instance, and Coca-Cola already owns the best-selling Georgia coffee brand in Japan.

But as consumer behaviour changes, and coffee consumption grows year after year, Coca-Cola sees Costa as a brand with significant potential for further global expansion. 'Costa has strengths in many countries and in many key distribution channels of the coffee business', says Coca-Cola's CEO.

The race to market electric cars

Although Tesla is one of the best-known electric car brands on the planet, many automakers have marketing plans that include the introduction of electric cars.

Especially now that Tesla appears to be having difficulty consistently producing its Model 3 mainstream auto in sufficient quantities to meet its objectives, other automakers see real opportunity to gain market share with their own electric vehicles.

For example, Germany's Mercedes recently introduced an all-electric SUV, branded the EQC (for 'crossover'). The interior has many familiar features, including a robust infotainment unit.

Porsche is preparing its Mission E vehicle for 2019 introduction, with the goal of having plug-in electric and hybrid vehicles comprise half of all of its vehicle deliveries by 2025.

Volkswagen is investing heavily to develop and market electric cars in global markets. Chinese carmaker Geely is also gearing up to introduce more electric cars in more markets, including its recently-launched SUV crossover.

As a result, Tesla will face global markets more crowded with electric cars than ever in the past. How will it keep its production and its marketing plan on pace?

This post updates the Marketing in Practice example in Chapter 6 of my Essential Guide to Marketing Planning.

Metro Bank continues its 'challenger' marketing

This post updates the preview and closer look at Metro Bank in Chapter 11

Metro Bank's marketing has, from its founding in 2010, encouraged customers to 'join the revolution'. This means, for example, an emphasis on retail hours that are convenient for customers, with lively and colourful branch interiors that have an attractive retail ambiance. It also means offering safety-deposit boxes when competitors are closing branches and eliminating boxes.

Despite intense competition, Metro Bank, as a challenger bank, has become profitable and is expanding its branch network, although a bit less aggressively than previously planned. The acquisition of a home loan portfolio is another way Metro Bank has added new customers in pursuit of growth. On the other hand, rising interest rates are putting pressure on profit margins.

Understanding that many customers want e-banking as well as retail banking services, Metro Bank has introduced a 'developer portal' for third-party developers who are creating apps to complement and enhance bank services.

At the same time, Metro Bank University is providing apprenticeship training to prepare new employees for delivering quality customer service in its busy branches--service that Metro Bank sees as being a differentiating factor in its competition for customers.

The global reach of Evolve Skateboards

More than 120k Facebook users 'like' Evolve Skateboards, more than 26k Instagram users follow Evolve Skateboards and nearly 16k people subscribe to the company's YouTube channel. Those social media interactions have helped accelerate word of mouth about this fast-growing brand of electric skateboards.

The Australian-based company founded by entrepreneur Jeff Anning and his wife, Fleur Anning, has an international customer base, distribution in multiple countries and many thousands of social media-minded brand fans. Target market: young professionals who see the boards as a convenient and fun way to commute on city streets.

The company was global from its first days in business. Two years ago, when Evolve launched a new product, it attracted A$ 1 million in orders in a single day. One challenge in growing so quickly has been signing with suppliers and manufacturing facilities that meet the firm's quality and performance standards.

Today, Evolve's annual turnover exceeds A$ 15 million as consumers worldwide are introduced to the product category of electric skateboards and come to prefer the Evolve brand. Thanks to social media, Evolve can stay in close contact with its target market in many nations, well beyond the firm's base in Australia.

UK advertising trends

The UK economy is growing, which helps the UK advertising business rebound. As of 2018's first quarter, advertisers increased investments in digital advertising by more than 10%, not a surprise. What was a surprise was the increase of 12.5% in spending on radio advertising by 12.5%, a very strong result for this medium.

Another surprise was the increase in national newspaper advertising. Newspaper advertising spend had been decreasing since the end of 2010--until now.

Digital is, of course, a major focus for many advertisers. Yet transparency and trust remain a concern. The UK Competition and Markets Authority recently warned several influencers that any sponsored/commissioned posts on social media must be clearly marked as such.

Because celebrities and social media stars have millions of followers, what they post can make a difference in brand recognition, awareness and preference. That's why, says the senior director of the CMA, consumers should be 'clearly told whether a celebrity is promoting a product because they have bought it themselves, or because they have been paid or thanked in some way by the brand'.

Meanwhile, the Advertising Standards Authority is looking closely at marketers targeting children. It recently told Cadbury, Chewits, Squashies, KFC and Kellogg's to stop targeting children with digital adverts for foods that contain large amounts of fat, sugar or salt. For more about how the ASA protects children and vulnerable audiences, and for examples of banned adverts, see its explanation here.

Discount train travel builds customer base

Italo (nick-named the 'Ferrari train') was founded in 2012 as a high-speed, low-fare direct competitor to Trenitalia, Italy's state-controlled railway system. The combination of low fares and speedy, comfortable travel has attracted millions of loyal passengers and given Italo a profit margin of more than 30%.

Some of these customers used to ride Trenitalia's trains and some used to fly Ryanair and Easyjet between Rome and Milan. Now Italo is adding more trains and extending its coverage to new destinations as its discount pricing structure has helped it grow to the second-largest train system in Italy.

Four price levels allow passengers to choose the value they're willing to pay for. Italo even has a frequent-rider loyalty reward scheme and a cobranded American Express credit card that offers upgrades and other benefits.

Watch for discount train travel to become more of a competitive challenge for railway systems and no-frills airlines in other European nations, as well.