Post #2: The Importance of Environmental Scanning

So we return!

This week I’d like to discuss the significance of environmental scanning, the process marketers use to continually acquire information on events that occur outside of the organization so as to identify and interpret potential trends. Marketers follow five environmental forces that heavily influence these trends: Competitive, Regulatory, Economic, Social, and Technological, or CREST, as I like to remember them. Acronyms are an effective method used by professionals to evoke important phrases through memorable lingo. I became familiar with a few well-known acronyms this past summer within the marketing world through my internship in the Sales & Advertising department at Vermont’s own news station, WCAX. Here are just a few of the acronyms we used regularly:

·         POS = Point of Sale

·         ROI = Return on Investment

·         CTR = Click-Thru Rate

·         SEO = Search Engine Optimization

·         SEM = Search Engine Market

Now, to effectively market to the consumer, marketing specialists must carefully study these forces in order to explain past trends and predict future ones. Recently, Coca-Cola’s marketing analysts asked, “Why has the percentage of Coca-Cola drinkers slowly declined in the past five years?” One explanation for the decline existed in the fact that their competition, the alternative firms that can provide a product to satisfy a specific market’s needs, had risen to an all-time high. With more soft drinks in the market than ever before, the consumer had the highest breadth of beverages to choose from, thus reducing the amount of Coca-Cola consumers. In order to solve this problem, Coca-Cola’s marketing team has been hitting the global market hard with impressively new and innovative campaigns that have proven to be just as good as the “delicious crisp taste” of Diet Coke.

This past Super Bowl XLVIII, Coca-Cola played the ‘multicultural card’ to reach every demographic (describing a population according to selected characteristics such as age, gender, ethnicity, income, and occupation) of the market with its “America Is Beautiful” commercial. The company compiled various lines of the patriotic song sung in several different languages put to relatable images of Americans doing what they love, be that camping, dancing, surfing, or eating with family and friends. By appealing to the many ethnicities that make up our populace, Coca-Cola hoped to effectively entice everyone to buy into their product, connecting Americanism to their brand. The company almost guild-trips the consumer into buying their product, essentially stating that it is un-American to NOT buy Coca-Cola. This form of advertisement is known to marketers as multicultural marketing, or the combinations of the marketing mix that reflect the unique attitudes, ancestry, communication preferences, and lifestyles of different races. View this remarkable ad below:

If we put ourselves in the shoes of Coca-Cola’s marketing team upon realizing the decline in Coca-Cola sales, and we utilized the environmental scanning approach, we would recognize some benefits and detriments due to the environmental forces. First, the detriments: Competitive forces have infringed on Coke’s sales due to a record-high number of competitive soft drink companies. Regulatory forces, that being American’s increasingly health-conscious mindset have led consumers to purchase less soda. The benefits: the rising amount of global media consumption and use of social media as a dominant form of communication for consumers has proven highly valuable for marketers who can likewise communicate their company’s message to consumers. Lastly, and similarly, the Technological forces (smartphones, tablets, etc.) have allowed for increasingly effective means of advertising. In terms of generational cohorts, today’s widespread use of such technology by people from the baby boomer generations (born between 1946 to 1964) to today’s millennials (1994 to the present) has made marketers jobs much easier.

Consequently, after scanning the environment, the Coca-Cola marketing team developed a marketing breakthrough, a revolutionary idea to connect with the consumer, on a personal basis. This beautiful brainchild was none other than the ‘Share a Coke’ campaign this past summer. With over a 1000 names on their 20 ounce bottles of Classic Coca-Cola, Diet Coke, and Coke Zero, the company personally appealed to a majority of the American and United Kingdom populations, attracting soda drinkers and non-soda drinkers’ alike, readjusting Coke sales to a steady incline once again. 

Personally, as a Coca-Cola merchandiser, hence my insight on this campaign and Coca-Cola’s history, I witnessed people’s fascination and joy in stores across Vermont as they searched for their name, many times being asked, “Have you seen the name ___ today?” On certain occasions, I had just put that name in the cooler, and--much like a commercial--I would gladly pull out a cold bottle of Coke for the customer, the personal relationship between supplier and consumer that Coke hopes to portray to its target market.

To conclude this post, I want to stress the importance of Environmental Scanning within the business world. Coca-Cola exists as merely one example of a company which has effectively utilized it in order to strengthen their company’s consumer basis through the analysis of the environmental forces and following their corresponding trends. In order to reinforce their brand, they focused not on market segmentation, but instead, through the establishment of marketing strategies with goals of attracting every potential consumer, or demographic, within the market, regardless of age, ethnicity, gender, or social status. These all-encompassing campaigns are crucial for any marketer that hopes to achieve great success for his or her business. Therefore, as a marketer, one should focus on enthralling as many consumers as possible, whether that includes youth or the elderly (i.e. Facebook). Remember: so long as the customer is able and willing, a product or service for everyone is one that will succeed.

Thanks for taking the time to read my blog, I hope you enjoyed it. Now get out there and use what you’ve learned to promote your product, service, or idea!

Enjoy your week!

Adam Geffken