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Coca-Cola Proves the Value of Social Media With the Return of SURGE

Thanks to social media, consumers have many outlets to express their thoughts, ideas, needs and wants for almost anyone to see. We all know that there is an abundance of information that is available online, but the real challenge is turning that information into value. With the reintroduction of the citrus flavoured soft drink called SURGE, Coca-Cola just showed everyone how to do exactly that.

The resurgence of the citrus flavoured soft drink, pun intended, is a textbook example of successful marketing in the digital age. Coca-Cola’s decision to bring SURGE back demonstrates the value that social media can provide to a company. More specifically though this is the result of successful social media monitoring, which is only one part of the social media equation. Social media monitoring is essentially just as it sounds – it entails observing social media channels for anything relevant to your company, product or cause, and trying to leverage it for your benefit. This can be anything from a mention, a product review, a customer service issue, or in this case, a devoted Facebook Fan Page about a discontinued product. The Facebook page called “SURGE Movement” is a fan community where brand loyalists can revel in 90’s nostalgia and share their love for the product. After what I assume was countless hours of brainstorming search terms, perusing twitter and browsing webpages, Coke’s social media team stumbled upon the Facebook page. To the average person, this would have just looked like an ordinary fan page, but luckily Coke’s social media team saw this as an opportunity. They were able to realize that this online niche acted as an organic form of crowdsourcing and there was actually significant demand for the product. Fast-forwarding past months of internal conversations and meetings, the product of social media monitoring has turned into the reintroduction of a discontinued product.

In addition to utilizing social media monitoring, Coke is further exemplifying successful marketing in the digital age through their distribution of SURGE. It is evident that Coke is going full steam ahead in the digital realm by choosing to distribute SURGE exclusively through Amazon. This is a huge deviation from the norm in beverage distribution, but in this case I think that this is a very smart decision. Since the demand for this product comes from a niche market it doesn’t make financial sense to invest in widespread distribution through the normal channels like grocery stores. Additionally, distributing through Amazon appeals to SURGE’s original drinkers who are men in their 20’s and 30’s. It is likely that they have purchased items through the website in the past and will be comfortable using Amazon to purchase SURGE. In fact, this distribution choice was proven when Amazon sold out of SURGE twice in first day.

Finally, I’d like to touch on the business implications of re-releasing SURGE. While it may seem like a company fulfilling the needs of the customer it is important to look at how this impacts Coca-Cola’s financials. In my opinion, this move by Coke is all about capturing incremental revenue and market share in a declining market. The soft drink category continues to shrink as consumers become more health conscious and move away from the sugary drinks. Companies know this and have released numerous waters, juices, teas and smoothies to match the changing consumer preferences. However Coca-Cola is not a water or juice company. The core business of Coke is sparkling drinks and they will do anything to maintain their position in the market. Coke makes the majority of their money from soft drinks, in contrast to Pepsi who relies on Gatorade to stay afloat. The return of SURGE signals Coke’s intention to increase their share of the ever-shrinking sparkling beverage pie and continue to stay a highly profitable company.

Nevertheless, I think that what Coke did here should be used as an example for other companies. When we learn about social media, we continue to hear about how powerful it can be and how it can disrupt industries. We’re taught about the importance of monitoring social channels and acting on opportunities, but up until recently its all been theoretical. The return of SURGE signals the change from theoretical to practical. It is a textbook example of how to execute social media monitoring and how to turn that into a business gain. I think that this has really disrupted the industry and that we can expect to see more cases like this in the near future.

-AK

Sources:

http://mashable.com/2014/09/15/surge-is-back/

http://www.businessweek.com/articles/2014-09-15/how-a-facebook-group-convinced-coca-cola-to-re-release-surge

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Amazon Prime Air – A highly sustainable delivery system

Last class we focused on Distribution and how it is related to sustainability. The goal of most businesses is to reduce the ecological footprint of their distribution networks and simultaneously create huge cost savings. For most companies this means switching from Air to Sea, Road to Rail, sharing truck space with other companies, using more efficient vehicles, relocating warehouses and so on. However, Amazon is taking the idea of a sustainable distribution network to another level by revealing their R+D baby called Prime Air.

Amazon Prime Air is a system which utilizes drones to deliver packages from a warehouse to a person’s home or business. This “last mile home” delivery system eliminates the need for delivery trucks and significantly reduces carbon emissions in a highly efficient way. The main consumer benefit that Amazon says Prime Air will provide is product delivery in 30 minutes or less, which is absolutely unheard of. Want to see how it would work?

 

I’ve always been curious to learn about ordering online and it’s impact on sustainability. Sure ordering online is much more convenient, faster and cheaper than going to the store but what about it’s environmental costs? Ordering online means that maybe one or two items would have to be packed up, shipped, put onto a delivery truck and delivered to your house. If you extrapolate that to a city, thats hundreds or thousands of products that are being individually delivered to people’s doorsteps. Even if you use a route optimizer, I can imagine that this door to door delivery system is very inefficient and uses an insane amount of fuel. I’ve always thought that this process has a much higher impact on the environment than filling up a truck with like items only to have one or two stops at larger stores. But I also know that you must consider the impact of people driving to and from stores, the store’s carbon footprint, etc. So from my limited knowledge, I am not sure if I am able to say if one method is better than the other. However, I can say that Amazon’s Prime Air is definitely better than the status quo.

Using the drones will revolutionize delivery systems because there is no need for any trucks, cars, bikes or any other vehicle and it will take a fraction of the time to deliver. it will significantly reduce Amazon’s environmental footprint because they are eliminating carbon emissions on “the last mile” which is arguably the most inefficient and consumes the most fuel on a per product level, when compared to long distance shipping.

While the Prime Air still needs to undergo thorough testing, address security concerns and adhere to soon to be announced FAA regulations, I think that this is a ground breaking innovation and will change the game from a consumer convenience standpoint, as well as a corporate sustainability one.

Amazon expects Prime Air to be operational sometime in 2015.

What are your thoughts?

 

-AK

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