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Saint Mary's University Intro to Marketing Coursepack - Weigand 2017 Heidi Weigand Summer 2017 Intro to Marketing Coursepack - Weigand 2017 Heidi Weigand Summer 2017 Saint Mary's University Table of Contents Note on Case Analysis. .................................................................................................................. 5 Hope Blooms: Marketing a Social Enterprise after Dragons' Den. ............................................... 15 Coca-Cola, Popular Music, and the FIFA World Cup. .................................................................. 25 Visa Inc. and the Global Payments Industry. .................................................................................35 Tesla Motors: Burning Up the Road to Market Domination or Doom. ............................................ 43 Healing Through Humour: Mixing Mental Health, Comedy and Business. ....................................53 Porsche: Harnessing Social Media. ...............................................................................................63 õ 9A81L002 NOTE ON CASE ANALYSIS Professor John Haywood-Farmer prepared this note solely to provide material for class discussion. The author does not intend to provide legal, tax, accounting or other professional advice. Such advice should be obtained from a qualified professional. Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written permission. This material is not covered under authorization from canopy or any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Management Services, c/o Richard Ivey School of Business, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail Copyright © 1979, Ivey Management Services Version: (A) 2000-11-08 Throughout your studies in Business Administration substantial emphasis will be placed on case analysis and discussion. A case may be used as a direct teaching vehicle taking the place of lectures, as the basis for written reports (see the Note on Report Writing), or as the basis for tutorial discussion. Cases bring real problems and issues into the classroom for training in decision making. Cases are widely (sometimes exclusively) used in business, law and medicine. The disciplines known collectively as “business administration” seek to identify the diverse internal and external elements of organizations and to explore their inter-relationships. The relevant factors are often uncontrollable, non-quantifiable or ill-defined. Case studies simulate or describe situations to allow students of management to practise some of the skills required of managers. This note describes case study and presents a rational approach to analysis, diagnosis and action to solve problems. Each of the somewhat arbitrary divisions of business education — marketing, organizational behavior, personnel, accounting, finance, production and operations, management science, policy, etc. will require mastery of these processes. Each subject area, each case, indeed each student, will require a somewhat different approach but the points made in this note are generally applicable. 5 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. û Page 2 9A81L002 1,2 A business case is a record of a business issue actually faced by a management decision-maker, along with the surrounding facts, prejudices and opinions upon which the decision must be made. Although most cases serve as vehicles to teach decision-making skills, others also serve to describe situations, to report research results or to drill in the use of conceptual schemes. Cases are usually written from the point of view of the decision-maker involved and usually present at least one problem. A case serves as a catalyst to speed the process of learning by experience. You, as a case analyst, will take the position of the decision-maker involved, analyse the situation presented, and answer the question, “what would you do if you were in this situation.” WHAT IS CASE STUDY? 1,2 The case method refers to the use of cases as educational vehicles to give students an opportunity to put themselves in the decision maker’s or problem solver’s shoes. Through repeated personal analysis, discussion with others, definition of problem, identification of alternatives, statement of objectives and decision criteria, choice of action and plan for implementation, the student gains an opportunity to develop analytical and planning skills in a laboratory setting. In medical analogy, the case provides the corpse for the student to practise on.3 The physical sciences are taught by formal lectures in which a body of knowledge and well-defined theory is presented to the student. The instructor’s job is to present the relevant formulae and equations to the student, whose job it is, in turn, to learn and understand the material presented. Practical problem solving is carried out in laboratories. Business situations are not like physical sciences because the variables are less controllable and the formulae and equations are much less well defined. Business problems are thus often more complex. The aim of case study is to practise techniques, apply theory and develop decisionmaking skills. Case study is one of the most effective means of achieving these aims. Case study is not a perfect teaching method (none exists). Nevertheless, if it is used well, its disadvantages (demands active student participation, only simulates reality) are far outweighed by its advantages (develops an appropriate 1 M.R. Leenders and J.A. Erskine, “Case Research: The Case Writing Process”, 2 nd Ed., The University of Western Ontario School of Business Administration, London, 1978, Chapter 2. 2 J.W. Hunt, L.V. Entrekin and G.E. Popp, “Administrative Analysis: Text and Cases”, McGraw-Hill Book Co., Sydney, 1977, Chapters 1-4. 3 Ref. 1, p. 11. 6 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. WHAT IS A BUSINESS CASE? Page 3 9A81L002 SUGGESTED STEPS IN CASE ANALYSIS The following sections present a general framework for case analysis which will be further developed in each subject area and by you as you practise the techniques. In summary, the recommended steps are: l. Reading 2. Problem definition 3. Information summary 4. Information analysis 5. Problem re-examination 6. Formulation of alternatives 7. Listing advantages and disadvantages 8. Evaluation of alternatives 9. Implementation of chosen alternative lO. Control ll. Re-examination l2. Report preparation 1. Read It This statement may sound trite but a surprising number of people attempt to analyse a case without reading it thoroughly. The initial reading should be done some time in advance of any serious attempt at analysis. This procedure allows the information to simmer in the analyst’s mind and enables him subconsciously to pick out the key information and establish relevant relationships. When the time comes for rigorous analysis, the case should be re-read carefully with special attention paid to developing a complete understanding of the situation. Analysis should begin during the third (and subsequent) readings. It is recognized that this approach may require truncation if the case is very long or if time is limited (for example in an exam). 2. Define Problem(s) of Identify the Decision(s) that Must be Made Most, but not all, cases present the reader with a problem to be solved or a decision to be made. Sometimes the presentation is clear and straightforward; at other times it is rather obscure. Some cases are used as a means of practising the application of concepts to raw data but the steps of case analysis are still 7 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. analytical thought process, exposes one to a variety of situations, develops maturity and wisdom in an environment of risk). Page 4 9A81L002 The problem definition should be written. It should be clear, concise, specific and unambiguous but broad enough so that the analysis to follow is not unduly restricted. This step will help clarify your thinking, will serve as a basis for your analysis notes and will give you something concrete to refer to. Keep in mind that only a detailed analysis can give a proper understanding of the problems to be solved; you should, therefore, amend or add to your definition from time to time as your analysis clarifies your perception of the situation. In defining the problem, try to take the place of the decision-maker in the case. People in different situations will perceive problems in different ways; indeed what may well be a problem for Mr. Jones may not be perceived as a problem at all to his superior, Mrs. Miller. Keep in mind that most cases present more than one problem. Common errors are to recognize only one problem or to recognize many problems but to propose a course of action that solves only one. It is useful to classify problems according to their relative importance (for example: primary vs. secondary, short-term vs. longterm, etc.) and subject area (for example: motivation of staff, market segmentation, financial trouble, etc.). Surface “problems” are often simply symptoms of more fundamental underlying problems. Do not confuse “cause” and “effect”. The identification and solution of the underlying problems will go further than any other action to remove all problems in a given area. If you spend a lot of time addressing easily-seen surface problems, you will probably be wasting your time. Your actions and thinking will become confused and contradictory and you will not address the issues at the root of the situation. Beware of spending too much time defining problems before you analyse the situation and of becoming restricted in your thinking by your definition. Proper problem definition and classification will help you to organize the processes of analysis and solution. 3. Summarize the Information The purpose of this step is to reduce the mass of information presented in a case to a manageable size as an aid to analysis. The information should be grouped into appropriate sections and, at this stage, is only a list. The list will contain facts, estimates, truths, falsehoods, and opinions. It may be complete and consistent but probably will be neither. Such is the nature of the real-world business decisionmaking environment. 8 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. applicable. You cannot hope to get good solutions if you do not know what questions you are trying to answer. Problem definition is thus a crucial step. 9A81L002 Students should write down only major pieces of information and be very careful to identify it as fact, estimate, other’s opinion, assumption, etc. Do not elevate estimates or opinions to the unassailable status of fact. Make certain that any assumptions you make to take the place of missing information are reasonable and can be defended. 4. Analyse the Information This step is a crucial one in the solution of any problem. It is the step you should spend by far the largest amount of time on. Analysis forms the foundation for problem solution; any solution based on weak or incomplete analysis is inherently suspect. One of the features found by Skinner and Sasser4 in their study of managerial characteristics was that high-accomplishing managers analysed every situation and that low-accomplishers were unwilling to do so. Analysis consists of taking all the information summarized from the case, any assumptions you wish to make5, any other factors you can bring to bear, and using all of these to develop a complete understanding of the situation. Analysis involves drawing implications from the information presented. Get into the habit of asking “So what?” or, “What does this information imply?” as you work. Also, get into the habit of identifying and exploring the issues raised by the case. In the Hayden Tool Company case, for example, a good analysis would examine the issues of the power and position of authority of the foreman. Analysis involves all sorts of activities. You might, for example: ● Develop information helpful in constructing solutions ● Pull apart a complex situation and reconstruct it in a revised form ● Combine pieces of information (data) to create new information from which you can draw conclusions ● Judge the accuracy and relevance of information ● Look at the situation from many different points of view (perspectives), e.g., top management’s, the customers’, the decision-maker’s, government’s, disputant A’s, disputant B’s, etc. ● Apply specific concepts to the raw data ● Discuss your analysis with other students ● Take a position on relevant issues Above all, during analysis you will ask, and attempt to answer, a number of questions related to the identified problem(s) or decisions(s) to be made. Some examples: 4 W. Skinner and W.E. Sasser, “Managers with Impact: Versatile and Inconsistent”, Harvard Business Review, 55, No. 6, November–December 1977, pp 140–148. 5 Examine your assumptions for their validity. Be particularly careful not to assume away the problems. 9 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. Page 5 ● ● ● ● ● ● 9A81L002 What are the issues raised by this case? What are the constraints restricting Mrs. Henry? Why does Mr. Thompson arrive late? How should the market for chemicals be segmented? What must the organization (or Mr. Jones) do well? What is most important to Acme Industries? The list of possible relevant questions in any case analysis is very large but it is almost always worth asking “What business are we in, what do we have to do well, and how do the answers affect our decision?” The key to skill (and success) in case analysis is knowing what questions to ask, how they rank in relative importance, how to answer them, and what the implications of the answers are. Each subject area (e.g., marketing, organizational behavior, policy, etc.) will require a different set of questions or analytical framework, which you will develop as you study them. Your analysis should end with a succinct summary of conclusions which consolidates your thinking and provides a base upon which you can build solutions. An important component of this summary will be a definition of the criteria (preferably ranked) against which alternatives can be evaluated. The most common problems encountered in case analyses are: ● ● ● A failure to dig deeply enough into the information to remove the camouflage, draw appropriate inferences and get to the real issues (too shallow) A failure to consider the situation from a broad scope (too narrow) A failure to complete the analysis and get on to formulating an action plan (analysis paralysis) Finally, keep in mind that you must do your analysis at the time period indicated at the end (usually) of the case. Anyone can make a decision knowing what happened; only people with good judgement can do so before the outcome is known. Even if you do know what happened do not let it cloud your thinking — even apparently successful decisions might have been poor ones. 5. Return and Examine the Problem Definition It is impossible to define a problem precisely until the situation has been analysed in some depth. At this stage you should re-examine your problem definition now that you fully understand the situation. 10 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. Page 6 Page 7 9A81L002 A good case analysis should set the stage for consideration of alternative courses of action a decision-maker may take. At this stage you should let your mind range rather freely and put forth alternative courses of action within the constraints of the problem you have defined and the conclusions you have drawn from your analysis. The alternatives should cover a reasonably broad scope and should be clearly distinguishable from each other. Minor differences can be considered at a later stage. “Do nothing” or “the status quo” is usually worth considering. Avoid alternatives that do not address the problem. If there is more than one problem, group alternatives under each problem. Avoid too long or too short a list and avoid drawing fine lines between similar alternatives. 7. Determine the Advantages and Disadvantages of the Alternatives Reduce the list generated in the previous step to a manageable length of about 2 to 5 options that you can then evaluate in depth. Choose options that you judge to be reasonable. If you wish, draw up a table and list the pros, cons and other relevant features of each alternative as shown below. Do not restrict your ideas while listing and try to make the list complete (advantages of some may be disadvantages of others). Then edit, revise and trim to make the alternatives clear, relevant and non-repetitive. Alternative Advantages Disadvantages Other Relevant Features Accept/Reject 8. Evaluate the Alternatives From this section will come a proposed solution to the identified problem(s) or decision(s) to be made. Based on the criteria identified in the summary of your analysis, judge the relative importance of the advantages and disadvantages listed for each alternative. Some alternatives may contain a fatal disadvantage and thus be eliminated relatively quickly. Others have already been eliminated before indepth evaluation. Still others will require more time and consideration. From your evaluation you should be able to accept or reject each alternative (the last column in the above table) and ultimately select the “best” alternative using 11 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. 6. Formulate the Alternatives Page 8 9A81L002 Rarely, a combination of two alternatives might be adopted but this situation usually arises from an imprecise definition of the alternatives in the first place (unless, of course, more than one distinctly different problem is being addressed). Alternatives are by definition mutually exclusive. You should write down your reasons for choosing one alternative rather than another. Trade-offs of the advantages and disadvantages of the various alternatives must be made with reference to the section on analysis. Your understanding of the situation, your realization of the consequences of the options considered and your considered judgement are crucial to a well-done evaluation. 9. Make Recommendations for Implementation In many situations a good plan poorly implemented may be less successful than an inferior decision skillfully implemented. Consider, for example, the executive trying to decide what type of computer to buy to replace an existing manual system or a personnel manager intervening in a dispute between a foreman and a production line employee. Both situations are full of possible resistance to change, misunderstanding, attachment of blame, etc. and the approach the decision-makers take to their problem will probably be much more important to ultimate success than the decision itself. Compare these situations to that of the purchasing manager trying to decide which supplier to buy copper wire from. Implementation of his difficult decision is so simple that it merits no further attention. An implementation plan is a timed sequence of conditional moves: who does what to whom, with what, how, and in what order. Its aim is to devise a means to overcome resistance to change in order to make the transition implied by the decision reached as smooth as possible. It should address the disadvantages identified for the chosen alternative. You should have identified the factors that will facilitate or resist change as part of your thorough case analysis. Because the recommended course of action is not always attainable, you should include a contingency plan as well. Most student problems with implementation arise from an analysis that does not address the relevant issues in sufficient depth, from confusing it with other sections or from not being specific enough. 12 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. your chosen criteria. The complex nature of business decisions usually means selection of a least worse option rather than an ideal solution. Page 9 9A81L002 This step is intended to provide a feedback mechanism so that management can make sure that the implementation steps taken are having the desired result. As with implementation, the importance of control depends on the situation. Control loops consist of the establishment of targets, the determination of performance measures, the measurement of performance, the comparison of actual with expected results, the analysis of major discrepancies and the formulation of corrective action. The control system should be specific and focus on those elements of the plan of action that may not work. Implementation and control are, therefore, closely related. 11. Re-examine At this stage you will have several pages of notes (working documents) along with a very good idea of what the case is all about. These notes, properly edited for clarity, will form your support for discussion, the outline of a formal written report if one is required, or may be handed in to your instructor if a case analysis hand-in is required. Before you edit, step back and review the previous steps from as broad a perspective as possible. Check particularly for consistency and completeness and make sure you are satisfied with all aspects of your work. 12. Present the Results as a Formal Report Most courses require at least one formal report of a case study. Report writing flows naturally from good case analysis but is a completely separate task for which a companion document entitled “Note on Report Writing” has been prepared. GROUP STUDY Modern management is largely a group process involving cooperation, negotiation, compromise, conflict and resolution. Many studies have shown that groups make better decisions than individual members largely because much richer insight and breadth is possible when several points of view and skills are brought to bear on a problem. People working in groups learn about their own limitations, about group processes and about their own reactions to incompetence and criticism. They also learn that organizations are based on cooperation, not dictatorship, and that most organizational problems are human. There is no better way to learn from the case method than to analyse the case thoroughly first as an individual, then discuss it with a small group of fellow students, then discuss it with other groups in class under the leadership of the 13 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. 10. Make Suggestions to Monitor and Control the Chosen Action 9A81L002 instructor and, finally, possibly re-examine the individual and group analysis in the light of the wider discussion. Students are encouraged to form relatively permanent groups of four or five whose purpose it is to discuss cases and thus make a major contribution to the learning process. If working well, the study group will operate as a small management team. CONCLUSION The above material has described business cases and case study, and has presented a general framework to help you acquire skill at analysing business situations and take action to overcome problems. Case study is not easy and requires a responsible, active, cooperative and questioning approach by the student. It is hoped that this note will start you on the right track and make your experience and our efforts more effective. 14 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. Page 10 HOPE BLOOMS: MARKETING A SOCIAL ENTERPRISE AFTER DRAGONS’ DEN Margaret McKee, Ethan Pancer, and Chantal Hervieux wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e); Copyright © 2016, Richard Ivey School of Business Foundation Version: 2016-10-07 A day before her last board of directors’ meeting for 2015, Jessie Jollymore, executive director and founder of Hope Blooms (HB), reflected on the past year. An appearance on the CBC show Dragons’ Den two years earlier had significantly increased the profile of HB and helped attract new customers and social investors. The organization had recently moved into a permanent home in a newly renovated retail and manufacturing space in the heart of Halifax, Nova Scotia. It had signed a new distribution deal with a major grocery store chain that would sell HB’s dressings in a few selected pilot stores and return 100 per cent of the sales to the organization. HB had also become a registered charity, which had its own unique opportunities and challenges. By making the business a registered charity, Jollymore aimed to protect and grow it for the youth involved in HB’s programs. Yet, being a registered charity brought constraints and did not solve two of the organization’s fundamental problems: how could the retail operations provide stable employment for its youth members, and how could HB increase its profits to continue to expand its activities? The retail business really had just one product category: fresh herb dressings. The dressings were popular and consistently sold out at local markets and grocery stores, which constrained certain growth opportunities based on production and capacity issues. As Jollymore prepared for her upcoming board of directors’ meeting, she had an eye on the future beyond securing charitable donations and grants. She was thinking of ways to successfully grow the business while creating sustainable funding for youth-driven projects in a community that had been marginalized for generations. THE GERMINATION OF AN IDEA Jollymore launched HB in 2007 while she was working as a registered dietitian at the North End Community Health Centre. She had been with the health centre for eight years, helping to educate people about healthy eating, food security issues, and dealing with food-related chronic illness such as diabetes. Jollymore had come to realize that simply telling people about the importance of a healthy diet was not enough. She realized that if people could not afford to buy healthy food, they felt disempowered. In getting to know the youth and families through her time in the North End community, Jollymore had developed a 15 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. 9B16A052 9B16A052 love for their rich culture and heritage. She was fond of saying that “beauty and brilliance are not defined by a postal code,” and she meant it. She had spent much of 2006 looking for a way to help the youth in the North End become change makers who would actively build brighter futures for themselves while contributing to the health and well-being of their home community. Six months later, with these ideas still in the back of her mind, Jollymore was walking past an abandoned garden next to Uniacke Square and Murray Warrington Park, in the heart of Halifax’s inner city. Jollymore thought back to a magazine photo she had recently seen on a flight back to Nova Scotia, which showed two African American teenagers from New York City’s Bronx district receiving a “Presidential Award” for starting their own social business with coffee beans. In a flash, the inspiration came to her. She could connect the teens in her community with the abandoned lot. The idea for HB was born: to create a business venture spearheaded by youth from the inner city, who would learn to grow organic food for their families and community, and develop as future business people and community leaders. LAUNCHING HOPE BLOOMS Jollymore contacted community members, local organizations and schools, and Halifax Regional Municipality (HRM) staff to see who might be interested in partnering with her on this venture. Four months later, after working through many meetings and speaking to elementary school classes, she managed to secure permission to use the land as a community garden. She was warned that the garden would be vandalized, and she was shrugged off as being too idealistic, but Jollymore did not get discouraged. In the first year of operation, Jollymore recruited nine youths between six and nine years of age to take part in the program. They had a launch party with a small barbeque, taking buckets of water to the garden in a kid-sized wagon. The city donated over 100 tomato transplants, so the youths learned how to grow tomatoes. They added some hot peppers and, after applying to the Black Business Initiative to have a summer business school, they decided to start a salsa business. They named it “Salsamania.” They made over 150 bottles of salsa and donated all of their profits to a shelter for women and children needing shortterm housing. Jollymore recounted that they walked away from the experience with two key learnings: they never wanted to make another bottle of salsa again, and they needed to diversify what they were growing. However, a love of entrepreneurship had also been born. The impact of this first year was so great that the youth who started in HB in 2007 were still with HB in 2015. The second year, they branched out and started planting seedlings themselves. They also expanded the garden and attracted seven more youths. They grew over 130 kilograms of vegetables that summer and held their own farmers’ market on-site at the garden, calling the business “Super Sonic Veggies.” Jollymore recalled the key learnings from that year: We learned a lot about the Four Ps of marketing. We learned that selling vegetables in a community that faces food insecurity on a daily basis is not a viable business. We charged people $21 for a bag of vegetables that they selected. They were happy, and so we were happy. But at the end of the harvest, it was not a sustainable enterprise. Over the next few months, Jollymore and the youths talked about their mistakes and performed market research. Jollymore’s daughter, a trained chef and recent competitor on Top Chef Canada, suggested salad dressing as a possible product. Some additional research showed there was strong consumer interest in healthy alternatives to rich, creamy dressings. The herb dressings they considered had the advantages of 1 All currency amounts are in Canadian dollars (CA$); CA$1.00 = US$0.94 on September 30, 2008. 16 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. Page 2 9B16A052 being relatively easy to make without a full industrial kitchen and of having a one-year shelf life, assuming pH levels were maintained. Having grown to include 26 youths and expanded from three garden plots to 15, the group felt this was doable and would allow them to stay true to their roots. They could continue to grow food, give much of it away to their community, and still have enough produce to create a product that would generate profits for community investment, including a scholarship fund for post-secondary studies. That next summer, in 2010, Jollymore and the youths grew over 360 kilograms of vegetables for their community. They also grew herbs and garlic for their dressings and sold over 500 bottles at the Saturday farmers’ market, generating $5002 for their scholarship fund. PITCHING ON DRAGONS’ DEN The momentum continued over the next two years, and in 2013, Jollymore and the kids rocketed to national attention. They were invited to appear on the hit CBC show, Dragons’ Den. Seven of the older youths between the ages of 10 and 14 were picked to represent HB on the show. They prepared and rehearsed for two months. They downloaded almost every episode of the program, and each person was assigned to be a specialist in some aspect of HB’s operations. Their pitch to the “dragons” was for funding to make a new greenhouse in return for a 5 per cent royalty until the initial loan could be repaid. They came home with a $40,0003 contribution from the dragons; however, it was a straight donation, with no stipulations regarding how monies were to be allocated. That year, viewers across Canada voted HB as the top story on “Only in Canada,” a news segment on CBC’s The National. Eight years since its conception, backed with a lot of perseverance and community support, HB was thriving. Over 50 youths and their families were changing their community for the better. As Jollymore said, “They’re demonstrating that, when you change the way you look at things, the things you look at change.” COMMUNITY OUTREACH PROGRAMS The stated mission of HB was “to empower at-risk youth to be actively engaged in building environments that directly impact the social determinants of health in their communities.” It worked to achieve this mission through a number of initiatives—some commercially focused and others more community and socially focused. Community Garden and Greenhouse The central activity of HB was operating a small, one-acre, urban community garden and greenhouse. Between April and October each year, the garden yielded over 1,000 kilograms of produce. The garden was subdivided into 30 plots, and 20 of these were made available free to local families. HB supported all the gardeners with training, seeds, transplants, tools, and biweekly support. The greenhouse was used to grow herbs for the dressings, and, with its aquaponics system and vertical farm, it also functioned as an innovative, hands-on, outdoor classroom for schools and the community. 2 3 CA$1.00 = US$0.97 on October 3, 2010. CA$1.00 = US$0.95 on November 14, 2013. 17 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. Page 3 Page 4 9B16A052 The herb dressing program provided a much needed revenue source for HB and, at the same time, contributed to the attainment of its broader social mission. The program helped develop the entrepreneurial and leadership skills of youth members. Participating youth received training and instruction in all aspects of the dressing operation. They attended sessions put on by HB’s staff and local volunteer experts on such topics as organic and sustainable farming; the health components of the dressing; safe food handling; dressing production; and public relations, marketing, and sales. Youth members who were interested in taking on a youth leadership role could take advantage of additional management skills training and mentorship. Junior Leadership Development Program HB’s mentorship program ran year-round, with meetings three times a week. Participating youth were matched with leaders in their fields of interest. They had opportunities to develop their skills in organic gardening, and four youth members completed a six-month master organic gardeners’ course. Members could also take other courses on training and innovation. Community Suppers and Soups for Seniors Youth members used produce from their gardens to host free community suppers, and they provided seniors facing food insecurity with homemade soup that HB members delivered to them free of charge. Post-secondary Scholarship Program A scholarship program was established for HB’s members. One dollar from every bottle of dressing sold was invested in the scholarship fund. To be eligible to receive scholarship support, youths needed to volunteer with HB for a minimum of four years and live in the catchment area. Community Investment A separate community investment fund was created. Again, one dollar from every bottle of dressing sold was invested in the fund, and, in this case, HB members decided how the funds would be distributed in the local community. Examples of contributions included: (1) a donation of funds to a shelter for women and children experiencing or at risk of homelessness; (2) a $500 scholarship for an individual youth in the community who was not involved in the program but was planning to attend college; (3) provision of lunches to a local school lunch program; and (4) preparation of a three-course meal for an organization for homeless and street-involved youth. HOPE BLOOMS IN 2015 Jollymore had recently established HB as a registered charity. This allowed HB to generate non-taxable income that kept pricing low and still presented adequate margins. HB also received direct donations and gifts that provided tax exemptions for donors. 18 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. Fresh Herb Dressing Program 9B16A052 The organization also established a board of directors. The board consisted of 10 people recruited from local businesses and the community. This step allowed Jollymore to establish the older youths as official members of HB and secure their position as the driving force and “owners” of the organization. It also helped ensure that HB’s business operations remained aligned with its original mission and values. Finally, Jollymore hoped the new charitable status would help ensure the sustainability of HB and position it to realize a new, longer-term goal with an educational focus. Jollymore wanted to build on HB’s successful track record of building a strong, impactful, child-to-adult mentorship program, to create a multiyear and multi-faceted educational program, and ultimately to lead HB participants to post-secondary education. Staffing HB had two full-time staff members, four part-time staff members, and over 50 volunteers. Jollymore was now the full-time executive director. She was responsible for operational management, fundraising, financials, public relations, social media, outreach, and speaking engagements. Alvero Wiggins was the program coordinator. He had been working with the organization since 2010. He had a background in youth and recreation and was a native of the area. Wiggins was responsible for working with Jollymore to create, implement, and oversee all programming. He was the lead on youth mentorship and program delivery. The part-time staff included Peter Wilkinson, the urban greenhouse coordinator; Tara Downey, the community garden coordinator; Ashley Cheverie, the bookkeeper; and Mamadou Wade, who was responsible for marketing. HB was fortunate to have a lean but dedicated staff who made compensation compromises to help achieve the HB vision. The total wages and benefits for all staff cost just $91,519 in the last fiscal year. There were 14 youth leaders, aged 13 to 16, involved in running the social enterprise. They were each given an honorarium up to a maximum of $1004 per month for four hours of work each week producing products, marketing and selling the dressings, or helping with finances and administration. The remaining 38 members of HB were responsible for greenhouse and garden operations. Facilities After being housed for six years in the North End Community Centre, HB moved into its own dedicated location on Cornwallis Street on December 5, 2014. The 93-square-metre space served as a production facility, retail outlet, and gathering place for the youth and community at large. Its state-of-the-art, stainless steel, commercial kitchen was built with the support of community members and donations from local businesses—especially the restaurant sector—and was designed for dressing production, cooking demonstrations, and community suppers. While the space met current needs, there was limited storage space for the bottles and other supplies. HB initially operated a small, cold-frame greenhouse and used that to start plants for six small garden plots that it operated for the dressing business. Thanks to generous support from the community, a new 139square-metre, year-round greenhouse was constructed adjacent to the garden on Brunswick Street. It officially opened on May 1, 2015. Built with generous contributions from Bullfrog Power and significant volunteer assistance from a host of tradespeople from Build Right Nova Scotia, this new greenhouse, built on HRM property, was a fully “off-grid” facility designed by a 14-year-old HB member involved with the 4 CA$1.00 = US$0.75 on December 1, 2015. 19 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. Page 5 Page 6 9B16A052 Marketing HB’s primary retail product was a line of five fresh herb dressings. The dressings were made with herbs from HB’s own garden and greenhouse and high-quality ingredients sourced from a variety of suppliers (see Exhibit 1). The flavours consisted of Fresh Basil Pesto, Fire Roasted Oregano, Maple Sage Balsamic, Orange Rosemary Dijon, and—the latest addition—Peppered Cranberry Chive, which was introduced in 2014. While the dressings were traditionally associated with vegetable or pasta salads, they also functioned effectively as marinades for meat and fish or other dishes looking for flavour and spice. The dressings were sold in 250 millilitre glass bottles with a black plastic tamper-proof cap. Each variety featured a common label with a black and white photo of Barbara and Rylee, two of the youths participating in the program, a green HB logo, and the tag line “Plant a Seed—Harvest a Dream.” Different accent colours were used to distinguish the various flavours. One of the side labels featured a list of ingredients and nutrition facts, and the other side label told the story of HB. This side label also prominently stated, “All proceeds go back into community food security and access to education.” HB produced 6,000 bottles of dressing in 2013, and by 2015, that number had grown to over 10,000 bottles. Current production consistently sold out, so meeting demand presented a capacity challenge, and the greenhouse offered a potential solution. Once the new greenhouse was producing at full capacity, production was expected to increase to 15,000–20,000 bottles a year. The group had experimented with a few small-scale retail ventures. For Christmas, HB offered “dressing gift packs” in special bags the youth made from burlap. The bags were very labour intensive, so they only provided a limited number. The gift packs were popular, and the inventory sold out very quickly with little effort or publicity. The previous summer, a small team of HB members created a fresh vegetable juice business as a mini-venture and sold their product at the farmers’ market. They were able to generate $1,000 in profits that they used to host a community Christmas event. They considered other ideas, such as supplying high-end businesses in downtown Halifax with made-toorder salads using their own fresh greens paired with HB’s dressings. The new greenhouse needed to be in full production before such a venture could be launched. Jollymore described their typical dressing customer as someone who was socially conscious. They were interested in a high-quality product and liked to buy local. As Jollymore explained, “People tell me all the time they like supporting a socially responsible organization that has local impact. They see Hope Blooms as helping youth take control of their future, and they hope by supporting us they are making a difference.” Customers were willing to pay a premium price for the product. Individual dressing bottles retailed for $8.00, with the wholesale price being $6.00 per unit. This broke down as $0.95 for the bottle with cap, $1.80 for the extra-virgin olive oil, $0.25 for the label, $1.00 for vinegar and spices, and $2.00 for labour. Since 2010, HB had been selling its dressings on most weekends from September to December at the Halifax Seaport Farmers’ Market. Anywhere from two to four teens, who were members of HB, worked at the market every Saturday from 7:00 a.m. until 1:00 p.m., because they sold out each Saturday before the market closed at 3:00 p.m. They had a group of loyal customers and typically sold 20 cases of 12 bottles at the market every weekend. 20 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. project. The new facility made it possible for HB to grow as much as 900 kilograms of additional herbs and vegetables year-round for its retail products and educational programs. 9B16A052 HB’s dressings were also sold through a small number of retail outlets, including Local Jo, Local Source, Fred’s Café, and Nature’s Cove; there were some reports that the product sold out and deliveries of replacement product were somewhat unpredictable. In November 2015, HB signed a distribution deal with Atlantic Superstore, the regional brand of the Loblaws chain, which was now selling HB’s dressings in four metro store locations. Sales were an average of 15 cases per week across these stores. Under the terms of the deal, 100 per cent of the profits from these sales of the dressings were returned to HB to be invested in the youth scholarship fund. Customers could also go to the HB website and place orders for pickup. With two-day advance notice, they could stop by the HB retail location on Cornwallis Street and pick up their product weekdays between 3:30 p.m. and 7:00 p.m. Jollymore knew she could grow this side of the business if she had product that she could sell online and easily ship across Canada. HB promoted its products through social media and its website,5 but Jollymore acknowledged challenges with keeping this up-to-date. The group relied primarily on Facebook6 and Twitter7 to promote its products and activities. Total expenditures on advertising, promotion, and marketing amounted to $1,800 in 2014. Reruns of the group’s appearance on Dragons’ Den also helped to raise HB’s profile nationally and drove traffic to the website. Finances HB’s financial situation in 2014 was reasonably good, with revenues of $231,870 and expenses of $132,070 (see Exhibits 2 and 3). A year-end profit of $99,800 allowed HB to set aside $30,000 for its scholarship fund. The organization’s statement of earnings and net assets detailed its revenue sources: grant revenue from various government sources contributed 43 per cent, and 24 per cent came from 2014 sales of HB products. Donations and gifts accounted for almost 6 per cent of revenues. This did not include significant contributions from Build Right Nova Scotia, a partnership between the Mainland Nova Scotia Building Trades Council and the Nova Scotia Construction Labour Relations Association, who donated the materials and labour to build the new greenhouse. Given that the greenhouse was on HRM property, the dollar value of these contributions was recorded on HRM’s financial statements. Other revenue consisted of a one-time transfer of monies from HB’s pre-charitable-status operations; this consisted of profits from dressing sales and $40,000 from the Dragons’ Den appearance. On the expense side of the equation, wages and benefits for staff, comprising 69 per cent, clearly represented the single biggest expense. The honorarium paid to youth leaders was captured under “youth mentorship/sustainability.” The second-largest item was rent and utilities, which accounted for 6.7 per cent of expenses. THE FUTURE Looking forward, Jollymore knew that she, her board, and the youth members had some exciting opportunities. With the new greenhouse coming on stream in 2016 and the deal signed with Atlantic “Hope Blooms,” Hope Blooms, accessed August 15, 2016, Hope Blooms’s Facebook page, accessed August 15, 2016, 7 Hope Blooms’s Twitter page, accessed August 15, 2016, 5 6 21 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. Page 7 9B16A052 Superstore, there was potential to continue to expand HB’s operations, increase retail sales, and ultimately generate more profit to fund social programs. Sales from the new Superstore arrangement were strong, but there was potential to grow even more. Superstore initially offered HB shelf space in 11 of its stores, but Jollymore did not know if branching into additional retail outlets was the right approach to take. She had concerns about ongoing supply, production, and capacity issues, especially in light of product extension opportunities and a limited marketing budget. Increased efforts in any of these areas would make HB’s reliance on grant funding less critical, and that would help ensure longer-term stability for the organization. However, Jollymore knew that she and Wiggins already had a lot of work to do, and the board members were busy people, too. The youth members had big dreams and lots of passion and energy, but school was their main focus—as it should have been—and they only had so much free time to devote to HB. Jollymore knew they were in a good position relative to many social enterprises, but with so many growth opportunities paired with unique organizational challenges, the situation was not easy. 22 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. Page 8 Page 9 9B16A052 NEW! Peppered Cranberry Chive: ▪ Ingredients: extra-virgin kalamata olive oil, apple cider vinegar, grainy Dijon mustard, fresh garlic, dried local cranberries, local honey, fresh cracked pepper, and sea salt Fresh Basil Pesto: ▪ Ingredients: extra-virgin kalamata olive oil, fresh basil, fresh garlic, fresh parmesan, red wine vinegar, fresh cracked pepper, honey, and sea salt Fire Roasted Oregano: ▪ Ingredients: extra-virgin kalamata olive oil, white balsamic vinegar, fresh oregano, red peppers, fresh garlic, honey, cracked pepper, and sea salt Maple Sage Balsamic: ▪ Ingredients: extra-virgin kalamata olive oil, balsamic vinegar, maple syrup, fresh sage, fresh garlic, cracked pepper, and sea salt Orange Rosemary Dijon: ▪ Ingredients: extra-virgin kalamata olive oil, fresh rosemary, fresh garlic, apple cider vinegar, orange juice, grainy Dijon mustard, honey, fresh cracked pepper, and sea salt Source: Company files. EXHIBIT 2: HOPE BLOOMS YOUTH AND SOCIAL ENTREPRENEURIAL VENTURES INC., BALANCE SHEET AS AT MARCH 31, 2015 ($) ASSETS CURRENT ASSETS Cash Accounts receivable Receiver general receivable PROPERTY AND EQUIPMENT INTELLECTUAL PROPERTY LIABILITIES CURRENT LIABILITIES Accounts payable and accrued liabilities Receiver general payable Deferred revenue 2,031 94,205 2,690 98,926 12,740 2 111,668 9,163 2,705 11,868 NET ASSETS Restricted net assets Unrestricted net assets TOTAL NET ASSETS 30,823 68,977 99,800 111,668 Source: Company files. 23 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. EXHIBIT 1: HERB DRESSING PRODUCT DESCRIPTIONS Page 10 9B16A052 REVENUES Grant revenue Sales Fundraising revenue Donations and gifts Other revenue 98,984 55,434 13,665 63,788 231,870 EXPENDITURES Wages and benefits Cost of sales Advertising, promotion, and marketing Bank charges, credit card fees, and interest Community events Dues, fees, and licences Farm tours and transportation Fundraising costs Insurance Office and general Operating - greenhouse Operating - community garden Program - youth mentorship/sustainability Professional fees Rent and utilities Telecommunications Training and workshops Travel Amortization EXCESS OF REVENUES OVER EXPENDITURES Expenditures over Revenues 91,519 6,921 1,800 145 498 503 1,142 620 1,818 141 2,878 2,381 4,797 4,364 8,854 1,857 327 90 1,415 132,070 99,800 UNRESTRICTED NET ASSETS (beginning of period) Allocation to Restricted Net Assets (Scholarship Fund) UNRESTRICTED NET ASSETS (end of period) Source: Company files. 24 99,800 (30,823) 68,977 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. EXHIBIT 3: HOPE BLOOMS YOUTH AND SOCIAL ENTREPRENEURIAL VENTURES INC., STATEMENT OF EARNINGS FOR THE PERIOD JANUARY 1, 2014 TO MARCH 31, 2015 ($) COCA-COLA, POPULAR MUSIC, AND THE FIFA WORLD CUP David Allan wrote this case solely to provide material for class discussion. The author does not intend to illustrate either effective or ineffective handling of a managerial situation. The author may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e); Copyright © 2016, Richard Ivey School of Business Foundation Version: 2016-09-30 On August 19, 2014, Joe Belliotti, group director, Global Music Marketing, The Coca-Cola Company (Coca-Cola, or Coke), sat in his office with packed boxes all around. He was getting ready to move to a temporary office while his was being remodelled. Belliotti felt a strong sense of déjà vu—that he had been in this same situation before. In fact, it was just four years earlier (in 2010) that he had become Coca-Cola’s new group director of Global Music Marketing and had sat in this room, his new office, with unpacked boxes all around; and four years before that (in 2006), he had sat in this same office, as the agency representative (for the Brand Asset Group), when his friend Umut Ozaydinli had held Belliotti’s current position. Then, almost like the movie, they traded places. Belliotti had been the client (i.e., representing Coca-Cola) for four years, while Ozaydinli was now the agency representative (i.e., for Deviant Ventures, the entertainment marketing company working with Coca-Cola). Belliotti jokingly debated with Ozaydinli which of them had been the better client and agency representative. But he turned serious again, knowing that they had together orchestrated two of the most successful marketing campaigns of all time to combine music in sports. “Wavin’ Flag” was almost bigger than the 2010 Fédération Internationale de Football Association (FIFA) World Cup itself, and the results for “The World Is Ours” were as impressive and still coming in. As Belliotti sat in a room full of memories of 2010 and 2014, he could only think of what to do in 2018. He reminded himself that, to know where you are going, you first need to know where you have been. Belliotti and Ozaydinli began to look back, knowing they would soon need to decide where to go from here. COCA-COLA PROFILE Brief History Company It was supposed to have been a drug, not a drink. Coca-Cola began in 1886 when Dr. John S. Pemberton, a pharmacist in Atlanta, Georgia, created a flavoured syrup. Mixed with carbonated water, the distinctivetasting beverage was deemed “excellent” by the first people to take a sip. Frank M. Robinson, who was Pemberton’s business partner, was credited with the name “Coca-Cola” and the trademarked, distinctive 25 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. 9B16A045 9B16A045 script that was still in use today. Two years after creating what would become the world’s top-selling sparkling beverage, Pemberton sold off portions of his business. Asa G. Candler, an Atlanta businessman, held the majority interest and expanded Coca-Cola’s distribution beyond Atlanta. In 1894, Coca-Cola was first bottled, which made the popular drink portable. Five years later, large-scale bottling was made possible after three Tennessee businessmen secured the exclusive rights to bottle and sell Coca-Cola, after having purchased the bottling rights from Candler for just $1. The early Coca-Cola bottlers faced two main challenges: competitors’ imitations of the beverage and a lack of packaging consistency among the company’s 1,000 bottling plants. Based on the premise that a distinctive beverage needed a standard and distinctive bottle, in 1915, the company launched Coca-Cola’s unique contour bottle. The distinctive new bottle effectively set the brand apart from competition. It was so unique that it could be identified in the dark. However, it was not until 1977 that the contoured Coca-Cola bottle was trademarked.1 Music Coca-Cola’s music history traced back to an 1899 Coca-Cola ad that featured Hilda Clark, a dance hall singer. In 1905, Coca-Cola distributed sheet music, associating its brand with such classic songs as “Nearer My God to Thee.”2 In the 1930s and 1940s, Coca-Cola sponsored many big-band radio shows and was featured in a radio hit (although had no direct involvement) with the Andrews Sisters’ “Rum and CocaCola” in 1945. Fast-forward to the mid-1960s, when such artists as Aretha Franklin, Roy Orbison, The Supremes, and “dozens of the biggest names in pop music recorded and released versions of the jingle for ‘Things Go Better with Coke’—an ahead-of-its-time, radio-ready campaign that delighted young music fans and parlayed a popular ad slogan into a series of hit songs.”3 In 1971, Coca-Cola created what was to become a hit ad and song. Bill Backer, who had written “Things Go Better with Coke” and the jingle for “The Real Thing” Coke campaign, joined Billy Davis, Roger Cook, and Roger Greenaway to write “I’d Like to Buy the World a Coke,” which, on the pop charts, became “I’d Like to Teach the World to Sing.” In July 1971, “I’d Like to Buy the World a Coke” was released in the United States. Fans sent more than 100,000 letters to both the Coca-Cola Company and its bottlers. Radio stations were bombarded with requests for the song. Billy Davis suggested using the New Seekers to produce a record version of the commercial, but it didn’t work out. Davis then allowed studio singers, who called themselves The Hillside Singers, to record the new song lyrics to “I’d Like to Buy the World a Coke.” Two weeks after the song’s release, it hit the national charts. And two weeks later, Davis finally convinced the New Seekers to record their version of the song, which had been renamed “I’d Like to Teach the World to Sing (in Perfect Harmony).” The song had a lasting connection with the public: it was consistently voted one of the best songs of all time, its sheet music continued to be sold, and, all over the world, the song was sung by school groups and church choirs, and played by high-school bands.4 In the 1980s, Coca-Cola had Robin Beck record “First Time, First Love,” which became a hit in Germany and the United Kingdom; the company also paid Run-DMC to appear in a commercial. “The brand,” Belliotti said, “looks for artists that embody an ‘optimistic’ sound.”5 In the 1990s, Coke partnered with Coca-Cola, “Coca-Cola History 2014,” accessed August 10, 2014, 2 Constance Hays, The Real Thing: Truth and Power and the Coca-Cola Company (New York: Random House, 2005), 19. 3 Ted Ryan, “Pop Songs: How Coca-Cola Invited Music’s Biggest Stars to ‘Swing the Jingle’ in the 1960s,” August 12, 2013, accessed August 10, 2016, 4 Ted Ryan, “The Making of ‘I’d Like to Buy the World a Coke,’” Coca-Cola, January 1, 2012, accessed August 11, 2014, 5 Emma Hall and Shareen Pathak, “How Coke Teaches the World to Sing: Local-Artist Partnerships for FIFA, Sochi Anthems Continue Beverage Giant’s Musical Legacy,” Advertising Age, October 4, 2013, accessed August 10, 2014, 1 26 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. Page 2 9B16A045 Sony on a CD release. In 2002, Coca-Cola became the “cup” that viewers saw when they tuned into the new hit television show American Idol. More recently, in 2012, Coca-Cola announced a music partnership with Spotify to find and share music. At the time, Belliotti said: We are trying to bring value as a marketing partner to the music makers, but I think even more so we’re trying to bring value to the audience and create content and experiences that maybe weren’t accessible to them—to really try to bring the music fans something that they couldn’t find anywhere else. . . . We’re not a record label. We’re a beverage company and we do really good marketing. And I think if we can put that at the service of the music industry and the artists, that’s a good role for us to play.6 COCA-COLA MUSIC STRATEGY When Coca-Cola first announced it would “Like to Teach the World to Sing (in Perfect Harmony),” it also launched an association with global music that remained a priority in its marketing agenda. 7 Since then, music had been Coca-Cola’s link to popular culture, namely music in a “brand-to-band” extension. Belliotti recalled that Coca-Cola’s goal was “to create campaigns that become a part of popular culture. I think consumers already associate music with Coke because of our history—the hilltop (‘I’d Like to Teach the World to Sing’) campaign and our links with artists like Aretha Franklin and Ray Charles.”8 Through the years, the strategy focused on different artists who had different sounds, all unique and compelling, then came the five-note melody. The company with the red can and the iconic graphic logo now had a “sound logo.”9 It all began with the animated “Happiness Factory” commercial about life inside a Coca-Cola vending machine. As Nick Felder, Coke’s global director of film and music production, explained: As we were developing the “Open Happiness” campaign, we wanted an audio branding device similar to the ones used by McDonald’s and Intel. We went through our existing library of music assets, and it quickly became obvious that the hook we were looking for could be found in the spine of the melody of the “Happiness Factory” score, which was running in every market.10 According to Belliotti, the starting point for all of Coke’s subsequent musical work was the “five-note melody,” the tell-tale “happy sound” that first appeared in the 2009 “Open Happiness” campaign.11 Ozaydinli had told him that in 2009, Coca-Cola was working on a new campaign, right after the Happiness Factory commercial had launched, and was seeking a platform to launch the famous five-note melody. Coca-Cola partnered with Gnarls Barkley’s CeeLo Green, Patrick Stump from Fall Out Boy, Brendon Urie Judy Cantor-Navas, “Coke’s Joe Belliotti Talks World Cup and Coca-Cola’s Global Music Strategy,” Billboard, April 15, 2014, accessed August 10, 2014, 7 Hall and Pathak, op. cit. 8 Lara O-Reilly, “Coca-Cola Aims to Become ‘Established Music Brand,” Marketing Week, August 16, 2011, accessed August 10, 2014, 9 A Sound Logo is the acoustic match of the visual logo and therefore one of the most commonly used elements of sound branding. It should be a distinctive sound (differentiation), which reflects the brand character (brand fit). Moreover it should be easy to remember (memorability) and flexible enough for usage at the relevant brand touchpoints (flexibility). In most cases it is a short (1–2 seconds) melody (Nokia), sometimes just a sound sequence (e.g., BMW). Some refer to it as the soundmark of a brand. The Sound Logo should be used . . . in combination with other sound branding elements to create an Acoustic/Sound Identity. It should be registered and it is a legally protectable form of intellectual brand property. Well known examples are: Intel, T-Mobile, Nokia and Window’s start up sound (Source: Karlheinz Illner, “Sound Branding Term 8: Definition Sound Logo,” Sound Branding Blog, May 23 2011, accessed August 8, 2014, 10 Jay Moye, “5 Facts about Coke’s 5-Note Melody,” Coca-Cola, July 15, 2013, accessed August 8, 2014, 11 Hall and Pathak, op. cit. 6 27 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. Page 3 9B16A045 from Panic! at the Disco, Travie McCoy from Gym Class Heroes, and Janelle Monáe. The track was produced by Polow Da Don and Butch Walker. Coca-Cola launched the new campaign in the form of a single. It was not a number-one single in the United States, but it allowed Coca-Cola to localize the song all around the world, delivering many top-10 hit singles. Belliotti was a big fan of the integration of music in sports in brand marketing. He had always believed that when a brand or a media company—whether Coke, Spotify, or Yahoo—became involved in music, opportunities were created. For the brand, music helped to achieve greater reach and its marketing objectives. For the artists, Coke provided the largest distribution channel in the world with a large communication channel, thereby connecting them with millions of potential fans. In terms of sports and music, from a consumer perspective, you don’t have one without the other. Every sporting event included music. Belliotti knew that in celebrations after a sporting event, music played a large role, and that people identified special moments of their lives with music because music has always had a connection with sports. Ozaydinli knew it too, and cited Africa as an example: Music in Africa is an authentic part of football experience. It’s far beyond music breaks. Music unites fans in a way that allows them be part of the game. It allows them to be the 13th player with their chants. You cannot chat and motivate alone, you need to unite with rest of the supporters to be able to motivate your team. You can even go one layer down. Coke is about connecting people and when people come together, there is always music. Think about a wedding or a funeral, a party, going out, or any sporting event. The magic for Coke is its capability to bring people together. FIFA WORLD CUP 2010 Belliotti remembered that when Ozaydinli had put together the creative brief for the FIFA World Cup in 2010, the campaign idea had been “What’s your celebration?” It had been inspired by Roger Milla, who performed the first corner flag dance when he had played for Cameroon. When you think about the idea of music and football celebration, waving a flag is indicative of how people celebrate. You have those sorts of moments where music is so tightly wound. Coca-Cola started looking at K’naan’s song “Wavin’ Flag.” People in the stadium waved flags during the game, and people outside of their cars held their flags out their windows, celebrating their victory. But Coca-Cola wasn’t looking for a song; it was looking for an anthem. A song was just something people sang, but an anthem was something people stood at attention for and performed. Coke’s intention was to create a FIFA World Cup song that was good enough to encourage stadiums of soccer fans to sing along. To reach this goal, Coke created an unusual partnership with singer-songwriter K’naan and his label, A&M/Octone Records, which changed how Coke worked with entertainment companies. The song became the musical focal point of Coca-Cola’s largest ever marketing campaign. A smaller effort at the 2006 FIFA World Cup in Germany had boosted, by an average of 6 per cent, sales of drinks in Coke’s largest markets. The recording was a rewrite from K’naan’s February 2009 album, Troubadour. Coca-Cola was attracted by the singer, his multinational upbringing, and “Wavin’ Flag”’s melody and chorus: “When I get older, I will be stronger. They’ll call me freedom, just like a wavin’ flag.” Because the original verses related K’naan’s personal struggles, the singer-songwriter offered to write a version that added Coke’s five-note melody and African chanting and drums. The new lyrics referred to “the beautiful game.” K’naan recorded other versions of the song with the Black Eyed Peas’, 28 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. Page 4 9B16A045 Japan’s AI, and Spain’s David Bisbal.12 Belliotti knew that K’naan and Coke coming together around “Wavin’ Flag” created value for both Coke and K’naan because the campaign brought to life both the idea of celebration for Coke and a platform for K’naan to distribute the song worldwide. Belliotti proudly exclaimed that Coca-Cola actually took K’naan and used the FIFA World Cup as a platform to put K’naan out into the world. Coca-Cola did not just put his song in a commercial. He travelled around the world, performing 88 shows for Coke. Coke put K’naan with the biggest stars. It was a partnership between CocaCola and K’naan. It looked like the 2010 campaign had been a success. “Wavin’ Flag” had attracted more than 80 million YouTube views and 500,000 Spotify streams, and had generated more than $2.5 million 13 in digital sales from 15 localized versions with 17 number-one hits on radio and iTunes and 24 top-20 hits. Coca-Cola coowned the rights to its celebration mix of “Wavin’ Flag” along with K’naan and his record company (Vivendi’s Universal Music Group). The record label helped finance some of the productions (e.g., the music video) but most had been underwritten by Coca-Cola markets booking K’naan. Profits from the sale of “Wavin’ Flag” downloads were directed to Coca-Cola’s six-year, $30 million Replenish Africa Initiative, which sought to provide clean water and improve sanitation. Africa was important to Coke’s long-term growth plans; however, water scarcity was a problem. On the marketing side, Coke was discovering a new way to co-brand with soccer to appeal to young consumers, which was a big part of Coca-Cola’s strategy. For details on the Coca-Cola players and the talent that contributed to the 2010 FIFA World Cup marketing strategy, see Exhibit 1. Before moving to thoughts of 2014, Belliotti and Ozaydinli reminisced one more time about 2010. Belliotti commented: The interesting plan of 2010 is that it was the first time we used music in the FIFA World Cup. The music was one of 42 things that we did that year. We had a whole campaign of things that we did and some of them were great and some of them were not. Music and the visual identity system were the two most used things in the campaign. I think it was successful because we created something really good in it and it resonated with consumers and our marketers wanted to use it. It is so flexible. It hits every touch point and I think other than that for the eyes, music for the ears is the only other thing that is that flexible because you can have the same piece of waving flag through your entire experience. So, someone sees the commercial on TV and they get the ring tone on their phone. They download it. They see the little video. They go into the store and it is playing over the speakers. They go to the game and they are chanting the five notes. Every time you go to an event on the World Cup Trophy tour, every sampling you experience, every time the brand is there present, you have the visuals and the sonic piece that are consistently threads throughout the campaign. I think that is one of the best things that happens with music. Ozaydinli agreed: Most people recognized the single as the official anthem of the World Cup. Thousands chanted the song in stadiums. It’s a much stronger association with the overall World Cup than any other activation. I think, it’s fair to say, this campaign was clear proof of power of music in marketing for Coca-Cola. Duane Stanford, “Coke’s World Cup Song Is a Marketing Winner, Bloomberg, July 15, 2010, accessed September 15, 2014, 13 All currency amounts are in U.S. dollars unless otherwise specified. 12 29 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. Page 5 Page 6 9B16A045 By the time Coca-Cola started working on the 2014 FIFA World Cup marketing strategy, the expectations were high and the goal was again clear: to capture the spirit of Brazil in the same way as Coca-Cola had captured that spirit of Africa with its marketing strategy at the 2010 FIFA World Cup. Belliotti thought: How do we bring that spirit of Brazil to the rest of the world? How do [we do] it in a way that is authentic and meaningful but still is mainstream—that can resonate with a teenager in the world spirit of Brazil in Thailand or UK or the US? And that was the thing because what we also found was that made the Brazilian people are extremely happy when Brazilian culture is represented in a cool way outside the world. Belliotti knew Brazilians actually hated it when the portrayal of Brazilian culture was stereotypical because they didn’t want to be just the beach, the bikini, and the samba thing. They didn’t want to be portrayed by those stereotypical images, but if you could represent them in a cool way, they would love it, they would embrace it. So he now needed to take the music of Brazil to the world and to do so in a way that gave this song back to Brazil for the FIFA World Cup. He needed to take a song, start it in Brazil, take it around the world, and then bring it back to Brazil. That was the foundation of Coca-Cola’s strategy for 2014. Belliotti continued to contemplate: When you are looking for marketing challenges, one of the challenges you have in a campaign like this, one of the game changers for us for the FIFA World Cup in 2010, was the capability of K’naan to be able to travel all around the world. If you got one of the bigger artists from Brazil, and we debated a lot about it, we came to the realization that they won’t actually be able to actually work with us. It would be very expensive for us. Our solution was to create our own. It literally began with a beat Belliotti remembered: We started with drum group called Monobloco. They are sort of an iconic percussion group from Brazil. When our people play drums on this, they better freaking know the rhythm. Any nuance, like for me, I wouldn’t know but Brazilians they would know. So then we had to find someone who could translate Brazilian music to an international audience. So we got Mario Caldato, a Brazilian—who had produced some of the biggest artists in Brazil, as well as albums for The Beastie Boys, Jack Johnson, Beck—to join us. He was our musical translator. He started recording the Brazilian beats and percussion and he ended up taking sort of a samba beat. He kind of combined a few different rhythms, which was great. Then we had started layering on top of his song, “The World Is Ours.” Once the music had been decided on, Coca-Cola needed an artist. It ultimately chose David Correy, a Brazilian, to sing “The World Is Ours.” Correy had been born into poverty and was adopted when he was only a year and a half old. His new American parents raised him in Maryland, supporting his early interests in singing and theatre. Correy received a full scholarship to the Berklee College of Music, but a sudden case of polyps took his voice, interrupting his studies during his sophomore year. Remaining positive and motivated, he continued to write songs and slowly regained his singing ability. A further setback occurred when a serious car accident led to a fractured hip, a broken leg, and a year in rehabilitation, as he learned to walk again. Correy’s big break came in 2012, when he appeared on The X-Factor television show. During his audition, he explained that, through the show, he was hoping to reunite with his birth mother. That hope was made reality by a Brazilian newspaper that arranged for Correy’s final performance on the show to be taped in Recife, Brazil, watched by both his birth family and his adoptive family. During an interview with 30 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. FIFA WORLD CUP 2014 9B16A045 Billboard, Correy described the experience as “the ultimate high.”14 Correy was eliminated in the finals of The X-Factor, but in April 2013, he received an unexpected email from Coca-Cola. Just one week later, he flew to Rio, met Belliotti and then hit the studio with Monobloco and Caldato Jr. to record the rhythm tracks for “The World Is Ours.” Rock Mafia then crafted the lyrics and melody. Correy’s vocals were the final part. According to Correy, the first time he heard the track, he couldn’t stop smiling: The first two lines—“Run like you’re born to fly/Live like you’ll never die”—speak 100 percent to who I am and all the things I’ve overcome. . . . All of my struggles pour out of me when I sing this song. And I feel like everyone will feel what I’ve been through . . . the pain and also the joy of being and loving who you are.15 Belliotti explained why Correy was an obvious choice: When we bring music into our sports properties like FIFA and the Olympics, we want to find genuinely talented artists who embody the optimism and positivity of Coke. We knew David’s story and his connection to Brazil would resonate with people around the world. The World Is Ours”— which fused Correy’s soaring pop vocals with samba, baile funk and technobraga rhythms—will expose football and music fans around the world to the signature sounds of the host nation. Most people outside Brazil, especially young people, haven’t really experienced Brazilian music before because it hadn’t been mainstream in decades.16 The results were impressive in spite of the competition.17 “Wavin’ Flag” topped iTunes charts in 17 countries with 24 versions and hit the top 20 in 24 countries, selling more than 2.5 million downloads. “The World Is Ours” had 32 versions. The Brazilian version, “Todo Mundo,” became Brazil’s number-one song during the FIFA World Cup game. Various versions could be heard as the FIFA World Cup Trophy Tour, also sponsored by Coca-Cola, progressed. For Coca-Cola, the 2014 FIFA World Cup represented its largest campaign ever, as it was adopted by 175 markets, or 85 per cent of its 207 markets.18 For details on the Coca-Cola players and the talent that contributed to the 2014 FIFA World Cup marketing strategy, see Exhibit 2. While Coca-Cola was in the process of evaluating both the 2010 and 2014 FIFA World Cup campaigns (see Exhibit 3), Belliotti was already looking toward 2018 in Russia: You got to keep elevating . . . see another day. What is the new story we want to do next time and for us music is an enabler of our overall class. End of the day, it means everything we do with music Judy Cantor-Navis, “David Correy’s ‘The World Is Ours’ Is Coca-Cola’s 2014 World Cup Anthem,” Billboard, September 11, 2013, accessed August 15, 2016, 15 Jay Moye, “Born to Fly: Meet David Correy, the Brazilian-American Singer behind Coke’s 2014 FIFA World Cup Anthem,” Coca-Cola, September 16, 2013, accessed August 8, 2014, 16 Ibid. 17 See, for example, PepsiCo, “Pepsi Hails Heroes On and Off the Pitch,” press release, April 2, 2014, accessed May 12, 2016,; Sony Music Entertainment, “FIFA and Sony Music Entertainment Select ‘We Are One (Ole Ola)’ by Global Music Sensation Pitbull Featuring International Superstar Jennifer Lopez and Brazil’s Own Claudia Leitte as FIFA World Cup 2014 Official Song,” press release, January 23, 2014, accessed May 12, 2015, 18 Natalie Zmuda, “How Cola-Cola Made 32 Local Anthems from One Global World Cup Theme ‘The World Is Ours’ Has Already Hit Top Ten Charts in 40 Countries,” Advertising Age, June 4, 2014, accessed August 8, 2014, 14 31 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. Page 7 9B16A045 as long as music is helping the team. Therefore, music becomes the key part to all of this. It is an enabler. It is not the end destination for us. Now the way that we are activating it, we have, I would say, we have tweaked the model of 2010 for 2014. What is the next is 2018. Belliotti and Coca-Cola now needed to make a decision regarding the company’s marketing strategy for the 2018 FIFA World Cup in Russia: follow the model from the 2010 and 2014, or try something new. Times and locations had changed. Coca-Cola now faced more competition in the music space, especially from Pepsi and FIFA, and Russia would be a very different venue from both Africa and Brazil. Politically, Russia and the United States had been at odds recently, both domestically and globally. Practically, Russian music artists did not enjoy the same freedoms as artists in other parts of the world. While there had been political issues to deal with in the past, Russia would present new challenges as Coca-Cola tried once again to marry music and sports. 32 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. Page 8 Page 9 9B16A045 • • • Umut Ozaydinli, group director of Global Music Marketing, The Coca-Cola Company (until December 2009). Led the creation of Coca-Cola’s 2010 FIFA World Cup campaign and signed K’naan. Joe Belliotti, group director of Global Music Marketing, The Coca-Cola Company (from February 2010). Led the Coca-Cola music work for the brand’s 2010 FIFA World Cup campaign. Brand Asset Group (Joe Belliotti/Chris Lighty), agency partner, although Deviant Ventures was the lead agency. Brand Asset Group handled mostly touring logistics and related details. Judith Snyder, Global Brand Public Relations, The Coca-Cola Company, PR and media relations lead. Emmanuel Seuge, global football director, The Coca-Cola Company, football marketing lead and head of CocaCola’s worldwide sports & entertainment Talent: • • • K’naan – artist; Sol Guy – band manager K’naan, Bruno Mars, Philip Lawrence, Jean Daval – writers Bruno Mars & The Smeezingtons – producers Dozens of local artists Note: PR = public relations Source: Company files. EXHIBIT 2: THE 2014 FIFA WORLD CUP COCA-COLA PLAYERS • • Joe Belliotti, group director of Global Music Marketing, The Coca-Cola Company Umut Ozaydinli, Deviant Ventures Dom Hodge, Frukt Alison Brubaker, senior manager, Global Brand Public Relations, The Coca-Cola Company Public Relations Arnab Roy, global football director, The Coca-Cola Company, football marketing lead Simon Fuller, Kappamakki, the agency partner in Brazil Mario Caldato, Jr., producer of “Todo Mundo / The World Is Ours,” referred to as Coca-Cola’s Brazilian music “jedi master” Tim James and Antonina Armato, Rock Mafia, writers and co-producers of “The World Is Ours” Talent: David Correy and dozens of local artists Monobloco Gaby Amarantos Aloe Blacc Source: Company files. 33 For use only in the course Summer 2017 Introduction to Marketing - at Saint Mary's University taught by Heidi Weigand from May 08, 2017 to June 30, 2017. Use outside these parameters is a copyright violation. EXHIBIT 1: THE 2010 FIFA WORLD CUP COCA-COLA PLAYERS Page 10 9B16A045 METRICS Markets with localized versions Markets with number-one hits (radio/iTunes) Markets with top-20 hits (radio/iTunes) YouTube views Spotify streams Digital sales Revenue 2010 15 17 24 80 million+
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Case Study on Coca-Cola, Popular Music, and the FIFA World Cup
The Coca-Cola Company is a world class company whose profile is at the top and highly
rated. It is the brand that taught the world on how to sing. When it came to music marketing, it
was considered to be the leader. Since Coca-Cola did music marketing, the 2010 and 2014 FIFA
provided ideal support to making Coca-Cola achieve task. The company used similar marketing
strategies in both of matches but at the end of it all, the results were different (Wang, Mingxia).
In 2016, Coca-Cola faced a lot of challenges and more especially from Pepsi and FIFA a...

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