Throughout this report, I will show how these two organizations use key marketing concepts to attract consumers to their products. Also, I will compare and contrast the way that PepsiCo and Coca-Cola use the Internet as a planning tool and as a communication medium for advertising and promotions.

The Websites: www.cocacola.com and www.pepsi.com

On first approach, one is struck with the obvious differences between the two companies’ web pages. Many companies follow the lead of their competitors and model their web pages after their rival’s. Coca-Cola and PepsiCo, however, did not follow this model. Their pages are very different in style, aesthetics, and content. When you arrive at Coca-Cola’s front page, you are greeted by three page links. These links connect to Coca-Cola company information, their worldwide site, and their U.S. site. By clicking the company information link, the user is transported to Coca-Cola’s official company website where one can find information for investors, job information, and a company history. The company information page is set out in an easy to navigate manner with “pull-down” menus for each of the links within the company page. The worldwide and the U.S. sites on www.cocacola.com are very similar in content. The worldwide site provides international users with a link to Coca-Cola’s country-specific sites that provides information on products and Coca-Cola themed games and downloads. The Coca-Cola in the U.S site provides many of the same marketing tools that the international sites provide. There are “pull-down” menus on the site for music downloads, product information, sports, message boards, as well as links to all Coca-Cola television advertisements.

Each of Coca-Cola’s web pages is easy to navigate. However, most of the pages are not aesthetically pleasing. With the exception of a few of the international sites (www.zambia.coca-cola.com), most Coca-Cola sites are mainly done in different shades of red and black. This provides a very dull experience for the user while searching the Coca-Cola website.

Coca-Cola’s website focuses on not only current customers, but it also focuses on building strong relationships with existing customers by providing large amounts of company and product information.

The Pepsi website (www.pepsi.com) offers users a very different experience than Coca-Cola’s website. The Pepsi site greets users with an animation and sounds of a glass being filled by ice and Pepsi, which is then paired with a food item such as onion rings or a fajita. There are four main links in Pepsi’s main page, two of which deal directly with Pepsi marketing campaigns. The first link is entitled “promotions.” By clicking this link, users of PepsiCo’s website are taken to a contest that involves consumers buying Pepsi and having a 1/3 chance of receiving a free music download courtesy of Apple’s iTunes. The second link, called “street motion” allows PepsiCo website users to enter a drawing where the winner will receive a free luxury automobile. The third link is for “Pepsi sports” where the NFL’s Rookie of the Year is named and consumers are reminded time and time again that Pepsi is the official drink sponsor of the NFL. This link also includes streaming video of every Pepsi Super Bowl ad. The final link is entitled “Pepsi music.” This link takes users to Pepsi’s website touting their sponsorship of a summer music tour that involves some of the biggest names in pop-music.

Pepsi’s sites are very easy to navigate if one is looking to find information about PepsiCo’s promotions or marketing campaigns. If a user is looking for company or product information, however, it can be difficult to find. At the bottom of the main page is a small link for company information. By clicking this link, users are taken to a different page called PepsiWorld.com. At PepsiWorld.com, users can find the company’s history, job information, and information on other brands that Pepsi owns such as Quaker Oats and Frito Lay.

Aesthetically, Pepsi’s websites are very nice. They use bright colors and large, animated links. The site can prove to be frustrating for those that are looking for company information, but for everyone else, they are very interactive and fun.

PepsiCo’s sites are geared much more towards customers that are already Pepsi drinkers and have an idea of PepsiCo’s marketing campaigns. The goal of PepsiCo’s sites are not to build new customers, rather they aim to reinforce current customers’ concepts of the organization.

Key Marketing Concepts and the Internet

Both Coca-Cola and PepsiCo use their company’s Internet webpage to promote some of the key marketing concepts that we have learned about in Environments of Business: Marketing.

The first of these key marketing concepts that both websites speak to is the concept of demographic data gathering. The idea of demographic data gathering is a tool that organizations use in order to find which specific consumer groups are using their products. These consumer groups can be divided and sub-divided based on such factors as age, sex, country of residence, ethnicity, and interests. Both Coca-Cola and PepsiCo’s websites offer ways for the two companies to gather demographic data. Both companies have e-mail based newsletters that customers can sign up for. When signing up for these newsletters, the user must enter their age group, sex, world location, interests (sports, music, etc.), type of company-specific product that they use (ex. PepsiCo: Mountain Dew, Diet Pepsi, etc. Coca-Cola: Diet Coke, Cherry Coke, etc.), and users also have the option of giving ethnic data. By filling out this survey before receiving the newsletter, Coca-Cola and PepsiCo are able to find out very important demographic data about their website users. This information will help the companies update their websites with information that is interesting to their consumers.

Another key marketing concept that both Coca-Cola and PepsiCo use with their websites is customer relationship management (CRM). Kotler and Armstrong ( pg. 16) define CRM as, “The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.” In other words, companies such as Coca-Cola and PepsiCo use the idea of CRM to build and maintain lasing relationships with customers by providing excellent customer service and keeping the customers satisfied with a high quality product. This will not only keep the customer base of the two businesses growing, but it will prove to be quite profitable for the companies. On their websites, both Coca-Cola and PepsiCo work hard to maintain high CRM standards. They both provide e-mail links and telephone numbers so that customers can contact the company with questions or complaints. Furthermore, both www.cocacola.com and www.pepsi.com provide FAQ (Frequently Asked Question) sections in which customers can find questions that are frequently asked about customer service issues. By providing these areas on the websites, both companies are working to create stronger, long-lasting relationships with their customers that will, inevitably, provide larger profits for the company in the future.

A third key concept that Coca-Cola and PepsiCo use on their websites is the idea of demand management. Demand management involves an organization taking steps to raise or lower the demand of its products. For Coca-Cola and PepsiCo, this generally involves creating more of a demand for their products. The two organizations go about this on the website by allowing users to customize the site once they register with the site. While customizing, the user can set which icons are seen on the site and which links are readily available. This process allows Coca-Cola and PepsiCo to market their products to specific groups, therefore increasing demand by those target markets. Also, PepsiCo’s website allows customers to download coupons for Pepsi products. Coca-Cola offers no such service.

A final marketing concept that both www.cocacola.com and www.pepsi.com present is product positioning. Kotler and Armstrong (pg. 259) define product positioning as, “The way the product is defined by consumers on important attributes-the place the product occupies in consumers’ minds relative to competing products.” The key phrase in this definition is defined by consumers. As Kotler and Armstrong point out, “To simplify the buying process, consumer organize products, services, and companies into categories and “position” them in their minds,” (pg. 259.) Coca-Cola and PepsiCo attempt to take advantage of this idea on their websites by working to promote the differences between their product and the other company’s product. By promoting the differences between the two companies’ products, and touting their products as superior, Coca-Cola and PepsiCo are working to position their products in consumers minds as being superior and, therefore, worth purchasing.

The Internet as a Planning Tool and Data Source

Both Coca-Cola and PepsiCo use the Internet in order to plan their marketing strategies and collect secondary data about their marketing campaigns and consumer information.

Coca-Cola and PepsiCo both use the Internet to plan marketing strategies using the information that they receive from web-based surveys, “hits” on certain products websites, and actual sales of their products. As an example, PepsiCo has a counter on the bottom of each product page that tells the user how many other users have been to the same page. By using these counters, PepsiCo can see which of their web-based marketing strategies work the best. Furthermore, by using online polls on the web pages, both companies can update their marketing strategies to suit their website users.

Both organizations are able to use the Internet in order to collect secondary data and use the data to formulate their web-marketing strategies. Kotler and Armstrong (pg. 148) define secondary data as, “Information that already exists somewhere, having been collected for another purpose.” An example of the use of secondary data can be found when the companies use online databases to search for customer and target market information. Furthermore, by using sales numbers, Coca-Cola and PepsiCo are able to feature high-selling products on their websites and in their online marketing campaigns.

Competitors

Because Coca-Cola and PepsiCo is each others main rival, I have chosen to look at the number three soft drink manufacturer in the United States, Cadbury plc (www.cadbury.com), in order to compare the effectiveness of the web pages. The Plano, Texas based Cadbury plc manufactures such drinks as Dr. Pepper, 7-Up, Motts Apple Juice, and Snapple Iced Tea. Cadbury plc web page is not flashy, and is very straight forward. The website is full of company information, as well as brand information. However, unlike Coca-Cola and PepsiCo, Cadbury plc is not using their website as a marketing tool. They offer no downloads, newsletters, or online games to their site users. Rather, they use the site as and information center where users can receive company financial information and view employment opportunities.

Recommendations/Conclusion

There is no doubt that Coca-Cola and PepsiCo have nearly perfected the use of an Internet website as a marketing tool. Both organizations’ sites have been both innovative and have proven to be an example to many companies that want to use the Internet as a marketing tool. After viewing the website for Cadbury plc, there is no doubt that Coca-Cola and PepsiCo will be the number one and two soft-drink companies in the United States for a very long time. The way that the two organizations have used market research, demographic data, secondary data, and customer relationship management has put them far beyond the reach of most organizations. There are very few recommendations that can be given to Coca-Cola and PepsiCo based on their Internet websites. Both do an excellent job of marketing to specific target audiences as well as integrating their products into other forms of entertainment such as sports and music. Furthermore, they are able to do this in an entertaining, sometimes flashy manner.

By completing this project, I have had the opportunity to see the way that a relatively new technology, the Internet, is able to reach new and existing markets in such a way that the Internet can now be used as a major, and sometimes exclusive, marketing tool.

Works Used

1. Kotler, Philip and Armstrong, Gary. Principles of Marketing, 10th edition. Prentice-Hall. United States of America.
2. The Coca-Cola Company. Official Website: www.cocacola.com.
3. The Pepsi Cola Company. Official Website: www.pepsi.com.
4. Cadbury plc. Official Website: www.cadbury.com.

Related

• Export Marketing Plan for Henkell Corporation
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In the United States, Public Relations dates back to the Revolutionary War. The strategies and tactics used to swell the ranks of patriots dedicated to the Revolutionary cause and staging of the Boston Tea Party are examples of early public relations. President Thomas Jefferson first used the term “public relations” in 1807. In his “Seventh Address to the Congress,” he replaced the words “state of thought” with “public relations.”

Unfortunately, the perception of public relations has not always been positive. In the 1800s, P.T. Barnum became a master publicist by generating article after article for his traveling circus. His “public be damned” philosophy and the use of exploitative publicity methods, however; have contributed to criticism of the profession.

Another significant component to the profession’s development came from the Creel Committee during World War I. A member of the committee, Edward L. Bernays, later considered by many to be the father of public relations, was part of a massive verbal and written communications effort to gain support of the war. According to Bernays, “this was the first time in our history that information was used as a weapon of war.”

There were other key people and events, which were very influential in promoting the growth of the public relations industry such as:

• “Public be informed era”, Ivy Lee – “father of PR”
• WWII – the Office of War Information
• “Counseling era” – Edward Bernays taught the first PR course at NYU in 1923
• Bernays wife, Doris Fleischman, was influential in paving the way for women in the industry. Together, they created Edward L. Bernays, Counsel on Public Relations, which became a top agency.

Some of the top PR practitioners in the 20th Century, according to PRWeek, are Harold Burson, Edward Bernays, Arthur Page, Larry Foster and Ivy Lee.

Major Practices of Public Relations

One thing that is not commonly known about the Public Relations industry is that it is a very complex business that involves many different elements and areas of expertise. Counseling, Research, Media Relations, Publicity, Employee/Member Relations, Community Relations, Public Affairs, Government Affairs, Issues Management, Financial Relations, Industry Relations, Development/Fund Raising, Minority Relations/Multicultural Affairs, Crisis Management, Special Events and Public Participation and Marketing Communications are all elements of Public Relations according to the PRSA Foundation.

Media Relations deals with communicating the organization’s messages to selected reporters and editors and then, following up to see if the message is reported accurately. Evaluation is an important and often overlooked part of this process. Public Affairs has to deal with developing effective involvement in public policy and helping an organization adapt to public expectations. Also, it is also a term used by military services and some governmental agencies to describe their public relations activities. Issues Management is identifying and addressing issues of public concern in which an organization is, or should be, concerned. Industry Relations is dealing with other firms in the industry of an organization, and with the trade associations related with that organization. Marketing Communications is a combination of activities designed to sell a product, service or idea, including advertising, collateral material, publicity, promotion, packaging, point-of-sale display, trade shows and special events.

An organization of today cannot operate in a vacuum. Many audiences are listening and watching. When something negative happens, there are groups that will use it to attack the organization. The best crisis plan is PREVENTIVE, not reactive. Identifying the possible things that could go wrong that would have a negative impact on the organization is a key step in the crisis management process. Prioritize them as to likelihood and degree of negative impact. Then address each by asking “what are we doing now to prevent this from happening?” A Crisis Plan should include responses to the list of possible problems and who’s responsible, what to say and what NOT to say during a crisis.

Maintaining a favorable relationship with the communities in which the organization has an interest is also crucial. Community Relations is continuing, planned and active participation with and within a community. Before beginning a Public Relations plan, the client must be made aware of how they stand in the eyes of their publics. The best way to do this is to run a Communication Audit. Communication Audits are strategic, research-based processes of evaluating an organization’s communications (and sometimes, marketing) program by using interviews of key audiences, focus groups, surveys, evaluations of an organization’s communications vehicles. The end result is a report that includes the research as well as recommendations on how the organization can improve its communications.

On top of the different major practices of Public Relations, there are also different areas of expertise. Corporate PR, Entertainment PR, Government PR, Technology PR, Finance PR, Health PR and Sports PR are all different areas of the business. Each of these areas is self-explanatory, but are not limited to only practicing in one area. For example, if you work for a famous athlete, one would need to exercise Sports PR and Entertainment PR. Consequently, there are many different areas of Public Relations in which to apply all the major practice areas. One of these areas is Media Relations.

Media Relations

Media relations personnel have many responsibilities as public relations practitioners in the various fields that make up the profession. They are the direct link between the media and the organization, whether it is a sports team, a corporation or a non-profit. Media kits, press releases, setting up interviews and releasing their organizations information are all responsibilities of media relations personnel. Journalists and media outlets receive the vast majority of their information about organizations for news stories through the work of media relations personnel. They are the gatekeepers of information about the organization they work for. An example of these responsibilities can be explained by exploring the duties of a sports information director (SID), otherwise known as the media relations person, for a college athletic department.

In the off-season, the sports information director is responsible for updating the team roster, preparing the team media guide, which includes player/coach profiles, player/team statistics, and team history such as titles won, awards, etc. During the season the SID is responsible for updating player and team statistics after every game so they are readily available to be dispersed to the media and to the coaching staff. This information is also prepared in order to be uploaded to the team website so that the information is easily accessible. The SID is also in charge of making sure the media have parking passes and media passes reserved so that they have access to the game events. The sports information director also attends team practices to set up interviews with coaches and players for the media. The SID also does this on game days. Game day activities also include making media guides, statistics, team schedules, lineups, and any other relevant information accessible to the media. During the game, the SID records the statistics and must be sure to give the media updated statistics that change during the coarse of the game. The SID must also issue the final box score to the media at the end of the game. Post game responsibilities include faxing the final box scores and statistics to all the local newspapers and television stations. Because the University of Texas is covered extensively throughout the nation, these statistics and box scores must also be faxed to ESPN, Sportsticker, and the Associated Press. After the game, the SID is also in charge of writing the press release and sending it to the Associated Press. All of this must be done in a timely fashion because of deadlines for journalists.

Meeting deadlines is just one of the guidelines a media relations person must remember to do when assisting reporters. A media relations person must also remember to always be available to the media, to be truthful, to treat every reporter as equal as the next, to be accurate when issuing out information, and to politely correct mistakes made by journalists. These are all important qualities for a media relations professional to uphold.

Media relations is an important part of any organization. An organization that has a strong media relations department has a significant advantage over an organization without productive media relations personnel. Media relations personnel are the link to the media, which decides whether to cover a story on an organization or not. This is why a strong media relations department can be such an asset to an organization; the media relations department can be the determinant as to whether their organization’s news gets coverage. The more positive news coverage an organization receives, the more the public is aware of the organization overall. Keeping an organization in the eye of the public and being viewed in a positive light is what makes media relations such a necessity in an era where news is so easily accessible by the general population.

Ethics in Public Relations

Ethics has various meanings as it is applied to public relations and the individuals working within that field. In the past, terms such as “cover-up” and “spin” have given public relations a negative image because they imply that PR work is somewhat unethical or underhanded. Today, many corporations are covering up their dealings with others, using deception and half-truths that shake the credibility of the institution. However, positive qualities such as honesty and sharing news with the public also have some companies stressing the need for ethical dealings in the marketplace. Ethics and credibility are slowly re-emerging in the field of public relations, pressuring an attitude change.

Despite preconceived and stereotypical notions about the practice of public relations, it is crucial that people in the industry set high ethical standards. In fact, the public relations worker should be the ethical voice within the corporation. This position of responsibility requires public relations professionals to advise their clients in ethical decision making, advising them towards the truth and away from deception.

Leadership is a quality that should resonate in all active public relations professionals, especially when implementing ethical practices. Public Relations Society of America (PRSA) has developed a code of ethics to help its members develop leadership qualities. The six core values of PRSA suggest ideal behavior for public relations practitioners. Advocacy, honesty, expertise, independence, loyalty, and fairness comprise attributes of the Public Relations Society of America’s ethical code.

An organization’s social responsibility also relates to the code of ethics of an organization. The social organization is responsible for establishing norms that control and define the actions and mistakes of its members. Being socially responsible includes every department of an organization. Examples of social responsibility categories are: marketing practices, corporate philanthropy, environmental activities, external relations, employment diversity in retaining and promoting minorities and women. Today, social responsibility is integrated into most departments of an organization.

Corporate codes of conduct are another aspect of corporate social responsibility, ensuring that every person within the company implements ethics. After Enron’s scandal, many codes of conduct have been implemented, but the companies do not all share the same motivation for using the codes. Corporate codes of conduct help improve internal operations, respond to transgressions, increase public confidence, and stem the tide of outside regulation. The most important form of conduct that all corporations should follow is to always tell the truth.

The public relations industry is at a turning point that depends on how public relations practitioners react ethically to situations. Credibility is essential for ensuring continued value of the public relations profession. Most importantly, ethical practices are crucial to demonstrate that corporations can be honest. Such ethical practices will require constant dedication by public relations professionals to project the image of the public relations field as one of credibility and truth.

Public Relations Firms

Ruder Finn

Mission:
To create impactful visual communications for clients through branding, collateral and information design. Our mission is to ensure that both the strategy and messaging are as elegant as the visual execution. Our design staff is as global as our largest clients, so that we can provide solutions that cross borders and audiences with ease and grace.

Practices:
Healthcare, Technology, Corporate, Consumer, Arts/Culture, Public Affairs/Global Issues, and Travel/Tourism.

Porter Novelli

Mission:
Porter Novelli’s agency partners and employees encompass the research, experience, expertise and fresh thinking that demonstrate the agency’s breadth and depth of intellectual capital in a variety of fields. Using white papers, research studies and PN IQ – Insights Quarterly – the agency’s own journal of key learnings and best practices, Porter Novelli has created vehicles for continuous improvement in our key practice areas and in disciplines important to our clients.

Practices:
Consumer, Public Affairs, Corporate Affairs, Healthcare and Technology

Ogilvy Public Relations Worldwide

Mission:
Our clients all live in competitive worlds. To compete successfully, they need access to high quality information, strategic advice and specialist communications skills. With leading practitioners in all key marketing disciplines, WPP companies are happy to work as single suppliers or in partnership with each other.

Practices:
Advertising, Media Investment Management, Information, Consulting, Public Affairs, Branding, Healthcare, and Specialized Communications.

Cohn and Wolfe began in Georgia in 1970. Today the company has several female leaders. Of the 11 managing directors, nine are women. The leader of Cohn and Wolfe worldwide is another woman, Donna Imperato. Cohn and Wolfe is best known for its connection to the Olympics. In 1980, Coke put C&W in charge of all their Olympic public relations activities. C&W has been involved in every Olympics since then, with a variety of products. For example, in the 1996 summer games in hot and stifling Atlanta, C&W worked for York air conditioners to make their contributions of cool air known at the games. Currently C&W is headquartered out of London. IN 1984 they were bought by Y&R. Then when Y&R was bought by WPP in 2000, C&W became part of the WPP family. Locally, they just acquired Springbock Tech. – Texas’s largest PR firm specializing in technology PR.

Manning, Selvage and Lee is an international PR firm based out of London. They have 28 owned offices and 70 affiliates. Their key areas of work are consumer marketing, corporate communications and finance/ investor relations. Some of their exciting clients include GMAC Financial Services, Proctor and Gamble and X-Box. They are also award winners. In 2003 they were voted a Holmes Report Agency of the Year. In 2004 they won a PRSA Silver Anvil award for the Heart of Diabetes Campaign.

Edelman is a large firm. They have 1800 employees in 40 offices. This makes Edelman one of the largest remaining independents. Their mission is to provide public relations counsel and strategic communications services that enable their clients to build strong relationships and to influence attitudes and behaviors in a complex world. Worldwide, they have a broad international network but they struggle with poor leadership in Europe. In Asia, Edelman has watched steady growth, up by 20 percent last year.

Edelman’s main practices include corporate, crisis management, financial relations, entertainment, food, government, marketing, public affairs, sports, travel and design. To accomplish all this, Edelman is made up of four specialty firms. Blue is the advertising firm, First and 42^nd is a management consulting firm, StrategyOne is their research firm and BioScience Communications works with medical education and publishing.

As part of the Interpublic Group, Golin Harris has a wide reach throughout the world. Their reach extends to 27000 employees in 100 countries. They have a variety of key areas of expertise. They work in corporate communications and utilize CrossMedia which works to produce broadcast PR. They also work with investors and have a capable Investor Relations department. They also work in the areas of marketing and branding. As the world of technology expands Golin Harris continues to be a leader in technology related public relations.

Corporate Public Relations

In the wake of corporate scandals and rocky economic pitfalls large corporations have taken into special consideration the importance of their organization’s image. Thus, the growth and development of the PR department has begun to play a pivotal role in the corporate world. By examining the structure of PR departments and its role, we hope to grasp a basic knowledge PR in the corporate world.

The majority of PR professionals are employed by the corporate world rather than in agencies. It’s also helpful to note that many corporations are now referring their PR departments as Corporate Communications or Public Affairs. Yet, just because a corporation has its own PR department does not rule out the option of using an agency, or multiple agencies for that matter, to gain specialization or outside help for the corporation. It is common for corporations to seek the expertise of an agency to aid them in crisis management, host a special event or for a fresh perspective. Another outside However, the PR department within the corporation has the unique advantage of knowing the inner atmosphere of the company.

Each corporation will vary in the structure of its PR department depending on the industry and needs of the company. The department can range from one person to many hundreds within the corporation. For example, Exxon Mobil has a substantially sized department with international offices and countless staff members. While there is no one set way to organize a PR department, the most successful ones are those who have direct access to top-level executives. Direct interaction with the CEO is important to know exactly what to communicate, what publics need attention, and any important issues that may affect the company.

One of the primary functions of the PR department include ensuring that relations with stakeholders such as employees, investors, and the public are in check by keeping open communication. To ensure good employee relations departments must ensure that the staff are readily informed with what is happening within the company. Internal publications, memos, pamphlets or intranet access are often used as a clear channel to communicate with employees. Often times for investors and stockholders, the PR department will inform them with company updates via newsletters or special events.

When it’s time for a new product or service rollout, it’s the PR department that organizes the press conference, which may include writing speeches for the CEO and putting together press kits. A press kit is a foundation for what the press needs to know about why there is a press conference in the first place. It will include bios of the CEO or other main people involved with the event, pictures, background information, contact information, a press release, and maybe even a CD-ROM. One of the most important communications the PR department provides is organizing the company’s annual report, which includes a financial overview, a letter from the CEO, salary changes, etc. It basically touches on the ins and outs of the company. A company, for instance McDonald’s, will often put its annual report on the internet which is a great tool the PR department uses to give up-to-date information on the company.

The Public Relations department is also responsible for ensuring the company’s image by promoting good relations with the community in which the company and its subsidiaries are located. Philanthropy is important to that image and by organizing or sponsoring events that provide services to the community, or nationally, to support things such as education and diversity. In addition, the opinions of the various publics a company has is very important to know how best to communicate and formulate the company’s image. Research is vital to doing so and can be done by the PR department by gathering the information themselves or going through a research company.

Overall, Corporate Public Relations does everything an agency does, except with a few more “in-housecleaning” demands. The department has more knowledge of the internal organization of the company. The only difference may be bias due to the fact that the PR department is a part of the internal politics of the company. Nevertheless, Corporate Public Relations is a strong arm in the PR Industry and will continue to be so.

Non-Profit Organizations

The structure of a non-profit organization is easily simplified. The organization will base its communication efforts on their mission, objective, and goals. The mission is the basic purpose of the organization including what it is trying to accomplish. For example, “The mission of Mothers Against Drunk Driving is to stop drunk driving, support the victims of this violent crime, and prevent underage drinking.”-MADD

Objectives simply communicate the general direction the organization is taking, and goals form the specific actions—such as time, budget,etc.—needed to accomplish the mission. Goals are specific and measurable so the organization has the opportunity to evaluate its progress. After determining its goals, publics, competition, and so forth, the organization can form a marketing strategy. The organization can then implement and eventually evaluate its communication efforts.

Three examples of organizations using very different marketing techniques are MADD, the Lance Armstrong Foundation, and Austin Lyric Opera (ALO). MADD is an organization benefiting society. It is one of the most successful grass roots campaigns in history.

MADD utilizes its members by sending them as speakers to schools, and legislation. Hearing a mother’s first hand account at the slow death of her daughter has an enormous impact of her audience. The Lance Armstrong Foundation does well with media coverage. Their news coverage and article placements have made their name well known. They began the rubber wristband craze and use Lance Armstrong as a celebrity spokesperson.

Austin Lyric Opera deals with several different types of public relations. There is a community relation with the company’s patrons and for the children and parents attending the ALO music school. There are also investor relations with season ticket holders and people who regularly give large donations. This usually includes large special events and fundraisers throughout the year. ALO also combines several techniques including PSAs, commercials, brochures, direct mail, fundraising, and special events. Despite all the different missions of non-profit organizations, they are all similar in their structures and limited resources. By using small public relations departments to do several functions, they have been able to experience a wide range of communication tools.

Public Relations Organizations

Professional PR Organizations

The Public Relations Society of America (PRSA), chartered in 1947 is the world’s largest organization for public relations professionals. PRSA’s vision is to unify, strengthen, and advance the profession of public relations. It has established itself as the organization, which builds value, demand, and global understanding for public relations.

PRSA has nearly 20,000 members, in 114 chapters, the world’s largest organization for public relations professionals. These members represent a variety of categories such as technology, government, associations, and nonprofit organizations, to name a few.

According to the PRSA website, “their primary objectives are to advance the standards of the public relations profession and to provide members with professional development opportunities through continuing education programs, information exchange forums, and research projects conducted on the national and local levels.”

The three core areas of focus are 1) advancing the profession, 2) strengthening the society, and 3) establishing global leadership.

Membership in PRSA is on an individual, not organizational basis. There are two categories of membership: member and Associate member. Each category has specific eligibility requirements. One specific requirement for all members however is adherence to the PRSA Code of Ethics.

The PRSA Code of Ethics is an important document to the Public Relations Industry and focuses on 6 specific areas, advocacy, honesty, fairness, expertise, independence, and loyalty. This code was last updated in October 2000. Two quotes from the preamble illustrate how strongly the PRSA Board of Directors feels about the ethical conduct of its members. It begins with “The Code of Ethics is designed to be a guide for members as they carry our their ethical responsibilities” and concludes with the following statement “Ethical practice is the most important obligation of a PRSA member.”

As a member of PRSA, a person has access to many resources for personal and professional development. The Professional Resource Center provides access to award-winning public relations campaign profiles, timely information on industry trends, and helpful campaign development resources. A member is eligible to secure low group cost insurance for members and their employees. PRSA members are also eligible for online product discounts with Office Depot, free subscriptions to Public Relations Tactics and The Strategist, as well as discounts on other publications through the PRSA store.

One other very important resource for members and non-members is the PRSA website, which is user friendly and provides a great amount of information. Here you can find job opportunities, access a calendar for PRSA events, and find out information about the various awards, including The Silver Anvil Award. There are also directories and publications listed. These are useful resources to locate other PRSA members or use as reference materials to keep up with current trends in the industry.

The Texas Public Relations Association (TPRA) began in 1953 in San Antonio and has since expanded into a statewide organization that serves PR practitioners all over Texas. It established a “Code of Ethics” that sets the standard for the Texas PR industry. The Code focuses on high expectations of honesty, integrity, fairness, respect, accuracy, truth and many other characteristics. Members are encouraged to abide by these Codes for the betterment of the public and the PR industry.

There are many benefits in having a membership in TPRA. TPRA holds conferences and seminars throughout the year to further the education of PR practitioners. Practitioners gather to discuss emerging trends and issues, successes and problems, and the new skills needed to survive in this rapidly evolving industry. Guest speakers are brought in to offer help and advice on how to respond to the ever changing demands of the typical PR job.

TPRA members also have a chance at winning statewide recognition at the only Texas PR awards program. The Best of Texas Awards honor the best in specific public relations activities, and the Silver Spur Awards recognize outstanding public relations programs. Individuals who contribute to TPRA and the profession can also receive the Golden Spur, Outstanding PR Practitioner, Rising Star, and New Member Achievement awards.

TPRA members are given valuable networking tools, such as being listed in the “Who’s Who in Texas Public Relations” directory and building relationships with peers across the state. The directory is also a source of information to public relations agencies and executive research and media firms.

The TPRA website also posts job and internship opportunities for those PR professionals looking for new experiences or work. The website also features reference sources, news sources, and professional sites involving the PR industry.

TPRA and its foundation, the Public Relations Foundation of Texas (PRFT), sponsor student awards programs and provide multiple resources to help further the education of future PR practitioners.

TPRA has recently been promoting their group membership fees. Now, the Group Membership Plan allows for registration fees and dues to be reduced when four or more people from the same employer join. This allows companies to sponsor more memberships for their employees and for TPRA to continue its growth.

Though once dominated by white men, the field of Public Relations is becoming more diverse.

PR Publications and Job Opportunities

Public Relations Publications

In the Public Relations arena, there are many different but important publications that serve to inform professionals, individual clients and businesses. Most of these are of the “trade publication” genre, containing industry information for differing publics. For the purposes of this report, the publications will be differentiated by whether they are produced and sponsored by PRSA or individually.

PRSA distributes two major publications, Public Relations Tactics, the monthly tabloid, and The Strategist, the quarterly magazine for the leaders in the industry. There catch phrase is that they continue to provide members with timely sources of what’s new and what’s news in public relations, and by way of trade publications they are two of the most successful for the public relations industry. Public Relations Tactics and The Strategist are generally included in a PRSA membership for some small additional fee and according to PRSA’s Website; they have the highest value rankings for all benefits offered to the PRSA membership. Tactics is an easier-to-read tabloid full of practical how-to articles with information and practices for professionals to put into action immediately. The Strategist addresses executive-level public relations practitioners with debates and commentary concerning PR issues of today and is mailed quarterly.

Independent publications include PRWeek, O’Dwyer’s, PR Watch, Buzz Magazine, PR Newswire and an online magazine called PR & Marketing. All of these publications have Websites which offer fairly extensive information regarding their services freely to the public. With the exception of Buzz Magazine, which is specifically a career-based magazine for PR professionals looking for job advances in the field, these magazines all consider themselves a resource for individuals at all stages of their PR careers and serve the public with supplemental education on the industry to help increase knowledge and love for the field.

PR Job Opportunities

A simple bachelor’s degree in public relations is no longer enough to acquire a job. To enter the world of public relations, one must have hands on experience in the field. To get this experience, the first step in a public relations career is an internship. An internship is essential for someone wanting to enter the field through an agency. After an internship, an entry-level position within an agency is account coordinator. A non-agency entry-level public relations position may be public relations coordinator or communications coordinator. These positions often require one to two years of work experience and a bachelor’s degree. The average pay for such positions is $30K a year. After about two to three years of experience, one can become an account executive or a public relations specialist. This position on average pays $38K a year. After this stage in a typical public relations career path, the next position up is an account manager, a public relations manager, or a public relations director. These jobs usually require an advanced degree and at least five years of work experience. The median salary for this stage is $54.5K a year. Beyond this level, a public relations professional might grow to be an executive of the corporation (VP Public Relations), or start his or her own public relations firm. At this point, the salary can be well into the six figures.

According to the Bureau of Labor Statistics, between 2000 and 2010, wage and salary jobs in the management and public relations services industry are expected to grow by 42 percent. This figure is nearly triple the 16 percent growth anticipated for all other industries together, making public relations amid the most rapidly growing industries. Due to the growth of the public relations field, public relations practitioners tend to be well paid, although the range of compensation tends to be broad. Wages depend on such aspects as the individuals’ qualifications and experience, responsibilities of the position, financial strength of the organization, and the general state of the economy. Recent college graduates who are members of the Public Relations Student Society of America and have had some experience can expect a higher than average salary.

Public relations professionals do not have typical days at work. Every day is different and filled with a work schedule that is irregular and often interrupted. Thus, the nine-to-five schedules of other professions do not apply here. A public relations office is normally under high pressure conditions because everyone is working hard to meet the tight deadlines. With their busy days, a public relations practitioner is not tied down to his or her own desk. They are busy doing things like searching for details for a press release, community functions, briefing their management, among many other tasks.

To find such a job, a recent college graduate has many choices when it comes to beginning their job hunt. The Communication Career Services is a good place to start. Also, if he or she is a member of PRSA, their job bank has excellent resources. Other notable places to search for a job are the Council of Public Relations Firms (prfirms.org) and AboutPublicRelations.net. These job services provide a good way to find a job in the public relations field. But just remember, when it comes to landing that first real job, experience is everything.

Future of Public Relations

The practice of public relations is continually evolving and re-formatting itself to include a broad array of functions. Though once viewed with a traditionally print-oriented emphasis, PR has now shifted to that of a multi-faceted marketing discipline. The future of PR proves itself to be limitless. As technology advances, so do the requirements of the public relations practitioner.

The emergence of the Internet and the World Wide Web has created a new and valuable resource for PR professionals. As the nation’s most used resource for information, the Internet connects and provides communication to millions of American consumers every day. This provides for a simple and low cost medium for PR practitioners to convey their desired message to the public. By creating and implementing a comprehensive online campaign, companies can save time and money on distribution costs and materials such as paper, yet still successfully get their message out to their desired publics via the Internet. Advances in technology have also allowed for specially designed software to be created for the use of PR departments and agencies. Software like Bacon’s Media Map can be purchased by PR professionals to provide immediate and updated contact information for reporters and editorial contacts worldwide. Information about each publication, such as distribution size and preferred ways of contact, are included.

Along with advanced software, the Internet has also supplied practitioners with a new insight into public opinion. The emergence of blogs, or online web journals, enable PR departments to immediately retrieve information on public opinion that may have otherwise been unknown or inaccessible to them. Many political websites in particular use online blogs to communicate to and receive immediate comments from their constituents.

Another topic to consider when examining the future of public relations is professional billing. Instead of the traditional hourly billing used among most public relations firms to date, many UK public relations firms are now beginning to implement a one-time pay scale, due to the recent inflated need for PR. Instead of billing a client per hour, the client is now presented with a price upfront, and can separate payments to pay for various functions. For example, a client may be billed $200 dollars for a press release, $500 for a press conference, or $1,000 for an hour-long consultation. This system is slowly beginning to emerge in many newly formed US PR firms, and may soon replace the traditional form of billing.

Along with implementing financial changes, many are now also fighting for the practice of licensing PR professionals. One famous PR practitioner in particular, who felt strongly on the issue, was Edward Bernays. His definition of a Public Relations council was that it is “an applied social scientist who advises a client on the social attitudes and actions he or she must take in order to appeal to the public on which it is dependent. The practitioner ascertains, through research, the adjustment or maladjustment of the client with the public, then advises what changes in attitude and action are demanded to reach the highest point of adjustment to meet social goals.” Bernays understood that anyone one could call themselves a PR professional regardless of the amount of education they had on the subject. Before he died, Bernays wrote bills to address this issue. Although none were passed, the controversy over licensing PR professionals still exists.

The realization by many corporations that PR is a necessity in the business world has created a new role for PR – in the global marketplace. More than ever, PR professionals will be called upon to support world wide relations and campaigns, on issues such as prescription drugs, healthcare, and US military initiatives. An example of this is found in the rapid financial expansion of China and India. Within a few years, both could possibly be leaders in global health care. China’s economy for example is growing at an annual rate of 9 percent (the US economy growth is currently 3 percent). India’s economy is also high with an annual growth of 6 percent. In these fast growing countries, PR campaigns can be used “to map out ways to reach audiences with segmented health messages, develop strategies to communicate with patients and caregivers about disease conditions and benefits of therapies, and enhance or protect companies’ reputations.” With the rapid speed of communications, PR departments worldwide will be put in charge of maintaining both national and global communications in the years to come.

Public relations will continue to evolve as technology and the world at large continues to evolve. Corporations are currently realizing the importance of public relations within their business practices, and that importance will only increase as the field itself continues to incorporate itself into the business arena as a necessary management tool.

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Rosie the Riveter is just one of the many examples. Rosie the Riveter appeared during World War II as a picture of a woman with her sleeve rolled up showing her muscle and saying “We can do it!” with a red handkerchief tied into a bow around her head. At the time, women were stay-at-home mom’s taking care of the children and the home while their husbands were away on the front lines. As more and more soldiers left the country to serve overseas, manufacturing jobs were left with no workers. America suddenly convinced its women that they could handle a man’s job building military equipment and riveting aircraft cowls, and soon enough women were not only joining the “Rosies” in the factories, they were joining their husbands in the wars also. “With some ten million men at war and the rest at work, America needed it’s women to go to work to build the planes, tanks, and ships needed to fight Hitler… so the government teamed up with industry, the media, and women’s organizations in an effort to urge [women] to join the labor force by telling them it was their ‘patriotic duty’ to go to work… slogans such as ‘Victory is in Your Hands,’ and ‘Women, the War Needs You!’ were all used to convince women that their country’s needs were more important than their individual comfort.” In order to respond to its extreme need for women in the labor force, America released propaganda advertisements which changed the female role forever. Since the time of Rosie the Riveter, less and less women have been choosing the now “old-fashioned” female job of being a housewife.

While Rosie the Riveter paved the way for an increasing female labor force, today’s advertisements seek to change women’s appearances. Every day we are attacked with numerous advertisements for weight loss, especially for women. Women on television are portrayed as thin, long-legged super models wearing a size six. What a drastic change since the earlier female beauty queen, Marilyn Monroe (size fourteen). Due to this advertisement pressure on women to be skinny, more and more females are going to health clubs, changing their diets, and doing literally anything they can to fight off those “excess” pounds. According to Naomi Wolf, “contemporary standards of feminine beauty have devolved to a point that can only be described as anorexic, and America’s young women are paying the price through a near-epidemic of bulimia and anorexia.” Wolf believes that today’s standards for female beauty are just a myth created by the media to control women by forcing them to be obsessed with their bodies.

Men are faced with the same kind of media pressure. Like women, men are also striving to shape their bodies according to the media’s standards. Men also run to the gym after work to pump iron and some are even removing their chest and leg hair and visiting tanning salons in an effort to become the California dream guy with big shiny muscles, a dark tan, and light hair. After the U.S. defeat in Vietnam, movies like Death Wish, First Blood, and The Hunt for Red October caused many American men to feel “unmanned” and powerless. “Millions of American men,” as James Gibson puts it, “began to dream, to fantasize about the powers and features of another kind of man who could retake and reorder the world.” Now men struggle to prove their manhood through muscles and mass.

As the media continues to represent men in advertisements more than women, our society continues to respect and represent men more than women in every aspect of our daily lives. Women continue to be paid less at certain jobs, and experience more discrimination than men. According to Robert Bartsch, this is linked to the fact that men are more present in television commercials than women and he believes “these trends are one measure of how society views women and men.” His studies show that “male voice-overs occur approximately 90% of the time,” and “the consensus of these studies is that there is unequal gender representation in commercials.” Going back to the household cleaning materials and beer, Bartsch also states that “there is a greater use of female product representatives for domestic products and… male product representatives for nondomestic products.”

The media definitely has a huge affect on the socialization of gender and can affect people’s attitudes and behaviors toward the opposite sex. I am Serbian, formerly known as Yugoslavian though we never quite referred to ourselves as Yugoslavian in the first place. Everyone has heard about the war in the Balkans since it has been an ongoing issue since the early 90′s. Though the war has been over for quite some time now, Serbian men are experiencing an intense amount of prejudice in the United States. Serbs are referred to as “rapists,” “savage,” and “killers.” Though this may be true for certain soldiers who fought in the war, it is not true for all Serbian soldiers and it is certainly not true for all Serbian men. I predominantly blame the American media for this impolite and ignorant behavior on the part of the Americans. Surely, rape and murder are not one sided in a war. The Muslims raped Serbian women and they killed Serbian children too, but the media hasn’t addressed this issue. During the war with the Croatians, Croat soldiers cut the fingers of Serbian men and women and wore them around their necks on a piece of string as a necklace. They took Serbian babies and jabbed them onto pitchforks. The media hasn’t addressed these issues. But CNN has exaggerated the Serbian offenses so much that Americans are convinced all Serbs are evil. This has caused many American women to fear dating men of Serbian descent, and American men to feel as if they need to be on defense-mode when being approached by the big bad Serb. And if tomorrow the news pronounced my country to be heroic and announced that Serbs are the best people in the world, the Americans would then praise my existence and they would be more than friendly. This is further evidence for Robert Bartsch that the media does in fact affect people’s behavior and attitudes. How sad it is that we, as the most intelligent being on earth, can so easily be lead by our television sets and our radios.

I don’t watch TV too often because I’m usually busy doing other things, but I find that whenever I flip through the channels there is always a lady on the Home Shopping Network selling jewelry or clothing or some unnecessary kitchen appliance people see and think they can’t live without. In the contemporary American society, shopping is the lady’s sport. Women like to “shop ‘til they drop” as many advertisements have said. But there is something even deeper than this. Since the media distinguishes between specific male and female roles by using only males for male roles and only females for female roles, we tend to find it disturbing when a man does something considered to be a woman’s task, or a woman does something we are familiar with seeing men do. Often, when we see a man hosting the Home Shopping Network, for example, we question his sexuality. I have personally witnessed this happen many times, and in fact, I find myself making this judgment more and more often. Remember Richard Simmons and his funny work out videos? I don’t know one person who doesn’t think Richard Simmons is homosexual. And those big, beefy, muscular women that compete in body building championships, how do people comment about them?

As these images become increasingly prevalent in the media, men become afraid of Richard Simmons workouts and his short shorts, and women become afraid of bodybuilding and continue to starve themselves to fit Wolf’s “Beauty Myth.” More than ever, people in America are coming out while others are doing everything they can to prove they are heterosexual. So, is the media trying to tell us it’s okay to be gay and paving the way for the homosexuality boom that is taking place, or is this just an attempt to finally loosen us up and help us realize that men don’t have to be Rambo and women don’t have to be supermodels? We have yet to find out through further advertisements.

Related

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Henkell is a Hungarian wine making company that wants to export its products to The Netherlands. In previous years they have exported wine to the UK and Germany. These exports were done without previous planning or conducting marketing research. In this plan, Henkell will correct previous methods of marketing analysis and will find all the pertinent information about the Dutch wine market and the European Agricultural policy to better enhance its sales.

The Netherlands, although perceived as being prone to the wine market, has faced a slightly decreasing demand in wine over the last few years due to high sales of French, Italian and Spanish wines. Nevertheless, most Dutch people are beginning to drink more and more wine instead of beer. The major problem for Henkell is that the Dutch don’t like the strong Hungarian flavor. Henkell must adapt the flavor, which will cost the company money which has not been budgeted for. The advantage of Henkell is that the company can produce much cheaper wines than their competitors. The company must gain a market share with their low producing prices, which will allow them to sell quality wine at a very low price. With the money earned on the Dutch market, the company can expand their marketing and sales team and focus heavily on advertising their wines.

Another subject in the plan is the agricultural policy of the European Union. This policy takes care for the EU wine makers. These wine makers are protected by regulations and procedures such as the import bans. The EU can also impose barriers on products from outside the EU.

Within some years Hungary will become a member of the EU and the problems of the barriers will be resolved. Henkell must then cope with EU’s regulations about healthy and quality norms. The company must improve their machines and that will cost money. The advantage for Henkell will be that the EU will support the company financially. The EU will also support Hungary, so that the economy of the country will substantially improve.

The major problem for the company is that they don’t have enough money to advertise and to improve their wines and machines. This problem can be solved when the company cooperates with a Dutch company. This Dutch company can support the company financially. The companies can also exchange knowledge about wine making. They can also exchange information about their home wine markets.
When Henkell can’t find a suitable partner, then they must use agents, who know the market also very well.

The Dutch market can be a good market for Henkell, but they must investigate the market first. They will also need a joint venture with a Dutch company to get money and information about the Dutch wine market and European marketing policy’s.

Plan of approach

Problem definition and goals

Henkell is a Hungarian wine making company. The company exists since 1959. The Hungarian wine market is declining the last years. This is caused by the free market policy. It is very difficult for a country to become a free economy from a plan economy. There are many Hungarian companies who couldn’t deal with this and these companies are bankrupt now. The only reason Henkell isn’t bankrupt yet, is because of the great marketing decisions the managing director has made. But they need a stable currency to invest and they also need a market that is still growing. These markets are only available in the west of Europe. Henkell doesn’t know anything about the Dutch wine markets. So these markets must be examined.
The goals of the plan are:

• Is the Dutch wine market still growing?
• What is the wine consumption and distribution in the EU and especially for The Netherlands
• What kind of flavor do the wine drinkers like?
• What about the EU restrictions?
• SWOT-analysis for Henkell.
• Which entry strategy Henkell must use?
• What about the marketing policy?
• Sales contract.

This report will give Henkell good information about the Dutch wine market.
The strategies and recommendation concerning the exportation of wine to The Netherlands could be very useful.

Cultural Analysis- The Consumption and retailing of wine in Europe

All kind off people drinks wine: from young adults up to the elderly and from the upper class to the lower class. People nowadays drink wine because they find it social or just because they like to drink wine at dinner or at social events. A small part is drinking wine because it is part of an exuberant way of living.

A lot of people are drinking wine because wine has got many varieties and different brands and that is why wine drinking can be a new experience over and over again. Off course the must people drink wine because the simply enjoy it. Most of the wine is drunk at home or by family or friends. Another important place where people drink wine is in a restaurant or bar.

In The Netherlands the wine consumption increased from 17.4 liters per person in 1997 to 18.8 liters per person in 2000. People who are between the age of 25 and 64 years drink wine the most. In The Netherlands the “baby boom” (50+) generation is the most important group of wine consumption. This group wants quality and follows trends.
The largest part of wine drinkers is women. The segment of the elderly people who drink wine is increasing, as the other segments are stable or even decrease. The growing of the wine drinkers in the oldest segment can be declared easy. Older people are getting a bigger part of the total population, so the amount of wine drinkers in this segment will also increase.

Table 1: Wine Consumption In the Netherlands

The amount of consumption of wine will increase in the next years. This is caused by the supermarkets and beverage stores. They sell every year more varieties and brands of wine from all over the world. You can get wine from all over the world such as the France, Spain, Germany, Italy, USA, South Africa, Chile and Hungary.

The popularity of “new” wine countries is increasing regarding to traditional wine countries as France, Germany and Spain. “New” wine countries are among others: USA, Australia, and maybe Hungary in the next years.
Market share per country in the Netherlands in 1999

EU Country Market share

• French: 46%
• Spain: 13%
• Germany: 8%
• Italy: 7%
• Portugal: 4%
• Others: 5%

Third Country (not EU member) Market share

• USA: 6%
• South-Africa: 5%
• Chilli: 2%
• Australia: 1.50%
• Hungary: 0.50%
• Others: 2%

The European and Dutch wine policy

European Union

The European Union policy has a duty to protect and stimulate the internal market. Why are they doing this? They are doing this to imposing barriers on products that are produced outside the EU. The reason they are doing this is because it is often a lot cheaper to produce the products from countries outside the EU. So when they imposing barriers it is more difficult for a company as Henkell to introduce their wines on the European market. A main goal of market protection is to make sure that the farmers will have a normal income.

Within the EU policy there is another goal, to have free trade in the Union. This goal is a great advantage for the companies in the EU since they don’t have to pay tariffs when they want to sell products in another country. So the competition in EU becomes equal, because everybody must pay the same tariffs on his products. Also a big advantage is the free transportation of goods within the EU, the transports don’t have to wait at the borders and they don’t need all kind of permissions any more when they want tot reach a country. By this goal they save a lot of money and time.

The European Union is also compensating the producers of agricultural products when their income is to low. Earlier the Union took care over the prices, but now they are focused on compensating the income of the farmers. The regulation of the wine markets is also an aim of the European Union. They are hoping the wine market becomes competitive and healthy when they don’t support the prices anymore. After a while the bad companies will go bankrupt or they will be taken over by other producers. After a while only healthy and good companies are left over and these must become competitive with foreign producers.

Hungary and the EU

In 1991 the Hungarian government has signed an agreement with the declaration that they want to become a member of the European Union. In 2004 the Hungary and the EU will become a trade free zone. This is a great opportunity for all the companies in Hungary who want to export to other countries. Then they can import their wine without huge trade tariffs and other barriers. When there aren’t any barriers anymore, then the price of the wine will be lower and then they will be more competitive. The transport will also be cheaper because they don’t have to wait at the borders anymore. The Hungarian wine farmers will also be supported with money from the EU. So that they can modernize their farm and machines and when their income is low, then they will be supported by the EU. So it is easier for the Hungarian wine farmers and exporters to survive when Hungary becomes a member of the EU.

There are also some disadvantages for the wine farmers when Hungary becomes a member of the EU. They will have to meet the healthy and quality standard, which are restricted in the EU. The companies will be controlled on this. The companies will have to adapt their machines, buildings, bottles and labels. Not every company will have enough money to do this.

Another big disadvantage is that the Hungarian market will be opened for foreign competitors such as the French and Spain wine farmers. The taste of theirs wines is often better and they can advertise more, because they have more money to spend.

Dutch wine policy

About the regulation of the Dutch wine market isn’t much to say. The regulation of the wine market is equal to the European policy, because The Netherlands is a member of the European Union.

There are several restrictions where all Dutch wine traders have to deal with.
If Henkell wants to open an office in The Netherlands and import and sell the wine them self, they have to know the following restrictions.
Which authorities are important for the import of wine from third countries to the Netherlands?

Chamber of commerce
For the registration at the trade register. Dutch commodity board for wine
For registration at the register for Dutch wine traders.

Customs house
To receive an excise permission.

Charge from the commodity board for wine
For the finance of the activities of the commodity board there is a charge on wine that is put on the Dutch market.

Excise and import duty
Wine is an excise product, which means that you will have to pay for the wine that has been put on the market. Because Hungarian is a third country import duty also have to be paid.

Here are excise and import duty prices:
Wine from third countries with an alcohol percentage less than 13%.
Excise: approx 48.85 English pounds per hectoliter
Import duty: approx 13.10 if the import is less than or 2 hectoliter.
Approximately 9.90 if the import is more than 2 hectoliter.

Permits and documents

Excise permit
The importer of the wine must have an excise permit before the wine is ordered. If not, he has to apply for a permit at the customs house.

If you want to import wine from third countries an import certificate is required.
For the certificate you must apply at the commodity board for wine. A certificate is only required if the batch of wine is more than 30 hectoliter.

Management Requirements

Report on the Central Bureau of Statistics.

Every importer of wine must keep accounts of the imported wine, bottling or the sale of wine.

Economic Analysis

SWOT Analysis on Henkell

Here, the strengths and the weaknesses of the Henkell company itself are analyzed. The opportunities and threats where the company has no influence at are also analyzed. At the end of the analysis there are given some recommendations and advises for improving the export policy of the Henkell company.

Strengths

• The company can produce cheaper then companies in the rest of Europe. The wages and machine cost are relative low. The costs of other raw materials are also lower.
• They have recently invested in their winemaking facilities, so that they can make a wine that meets the standards of other winemaking countries such as France, South Africa and Spain.
• They are producing wine since 1959, so they have a lot of experience in the making of wine.
• The company has got his own vineyards. There is some influence on the grapes they use. Red or white grapes. This is import because white wine is drunk the most in The Netherlands.
• They are trying to make wine that meets the flavor that people from West Europe like. People in West Europe don’t like the strong wines from East Europe.
• The have a good director, who has helped the company surviving when the wine market in Hungary and Russia collapsed at the end of the eighties.

Weaknesses

• The next problem is the lack of money that can be invested in the company or in advertising campaigns. Foreign competitors don’t have this problem and they can invest in advertising and the quality of their wines.

• It will be a big problem when the director leaves the company. Henkell is dependent from one single person and that’s not good
• The company has not enough experience with the European way of selling products.
• They don’t know how to handle with advertisements and price actions.
• There is no export plan.
• The language spoken in The Netherlands can be a problem. When the people of the company don’t speak English of Dutch beside the Hungarian language. Then it will be major problem to communicate with companies who want to sell the Hungarian wines.
• They have no reputation on the West European wine market, so they have to prove that they make good wines.

Opportunities

• When Hungary joins the European Union the possibilities to export wines and other products will be much simpler, because they don’t have to deal with regulations and import barriers. Other members of the EU can’t impose barriers on the Henkell wines anymore. When there aren’t barriers anymore it will be possible to sell the wines for a lower price and the wines will be more competitive. It will also be possible to sell the wines in all the countries of the EU without problems at the border of these countries.
• The will also support the Hungarian government. Hungary will receive money to improve the infrastructure and their economy. When the economy improves the income that the people have to spend will increase. he people on their home market will also be able to buy more wine.
• The EU will also support the company with money. They will give the company money to modernize their buildings and machines.
• People in West Europe are trying more and more flavors of wines from all over the world, because there are more and more brands of wines in the supermarkets. The number of people who drink wine is still increasing.

Threats

• There are problems with the exchange of the Hungarian value. Companies in Europe don’t want to accept the Hungarian currency, because this currency is devaluating more and more.
• They company can also expect problems with foreign companies producing wines. All these companies are already having a share of the wine market. Henkell must try to get a share of the market. They can do this with their low price. Competitive wines are Bordeaux, Languedoc and the Dutch House wines. Wines from countries outside the EU such as South African wines are also an increasing problem.
• Problems with European taxes for wines from outside the EU, this problem will be solved when Hungary joins the EU.
• When Hungary joins the European Union, then the Henkell company will have to deal with European regulations. They will have to adapt their wine quality and healthy norms to European standards. This might cost a lot of money and this money isn’t available for Henkell. Maybe will the European Union support the company when they want to improve their standards?
• The company can get problems with the image of products of East Europe. Most of the people think that these products are having the same quality as 10 years ago under the communism. It is important for Henkell to prove that the company has a good wine quality.

Entry Strategy

We think that the best way for Henkell to enter the Dutch wine market is to cooperate with a Dutch trading agent. Agents know the market very well . They know companies who could be very interested in Henkell wine. They know the Dutch language and they know the regulations of the EU as well as regulations of the Dutch government. Because agents know the Dutch market Henkell itself won’t have to contact Dutch wine traders. That is positive because Henkell does not know the Dutch wine market very well.

If Henkell sells their wine to a trading agent they won’t have to spend a lot of money for a market research, because that is the work of the trading agent. If Henkell sells their wine to a trading agent they won’t have to worry about the promotion of their products.

Another advantage to cooperate with a trading agent is that the trading agent knows how to introduce the wine on the Dutch market.
There is only one contact person and one purchaser and that is a big advantage. Henkell had to contact several companies and retailers to sell their wine if they wanted to introduce the wine on the Dutch market themselves. If the cooperate with an agent they only have to find one trading agent who is interested in their wine and that saves a lot of money and time.

If Henkell sells their products to one trading agent then their work is done.
The trading agent has to sell our wine to different Dutch wholesalers or maybe even retailers.

Because there is only one purchaser its possible to sell a lot of products at once and to deliver the products at one address. The disadvantage of cooperating with a trading agent is that Henkell wont get a view on the Dutch wine market.. If the wine turns in to the a big success in The Netherlands and Henkell wants to sell their wine themselves or even want to open a establishment in Holland that is maybe not possible because they have a contract with the trading agent.

Because of that it is very important that Henkell comes to agreement with the trading agent about the contract both parties will sign to cooperate with each other. A disadvantage of cooperating with a trading agent is that you don’t have any view what is happening with the products once you have sold them to the agent.
Another disadvantage is that agents are very expensive.

Even tough a trading agent is very expensive we still think that is the best way to get our wine on the Dutch Market. That is simply because Henkell has no experience with the Dutch wine market and it would cost a lot of money and time to get a good view on that market.

If it turns out that the Dutch consumers are not interested in the wine Henkell can pull back from the market more easily because it only had one purchaser of the wine, namely the trading agent.

The marketing mix

This chapter describes the marketing mix. Henkell must decide where the wine is sold, which wine they must sell and what the image off the wine must be. Other important things of the marketing mix are the promotion activities and the price of the product.

Product

The most important thing for Henkell is to get a piece of the market share on the Dutch wine market. Henkell makes white en red wine. The wine is bottled in simple bottles.

The bottleling of the wine is done in Hungary. It could be from great importance that appearance of the bottle is from a high quality. That is possible if Henkell for example labels the bottles with three different labels. That way the wine is more likely to be noticed by the Dutch wine consumers.

The EU has strict labeling demands regarding to wine from third countries (such as Hungary).

The EU makes a difference between wine with a geographic indication and wine without that indication. Both demands are very important for Henkell.

Price

The price is very important. That is because it puts the wine in a certain segment.
The Henkell wine will cost around 4 Euro (consumer price).

This is a model of an export price build up for the Henkell red and white wine:
As you can see the wine will cost around 400 Euros that is not very expensive for a quality wine such as the Henkell wine. The next schedule shows us a survey about the Dutch consumer profiles. The Henkell wine belongs in the premium Quality/Price-range because the consumer price is about 400 Euros. This price-range is growing and the basic price-range is stagnant.

We think that we can come with this price on the Dutch market, because 65% of the Dutch wine consumers buy their wine in a supermarket. We expect that we get a share of the market with this price.

Promotion

The best place to promote the wine is in the store. You can do this by price actions. These actions must be hold in corporation with owners of the stores that they get interested and want to sell more of the Henkell wine. Other promotion actions are for example to invite reporters to write something about Henkell and being present at fairs. When the company has earned the first money, then it is possible to advertise in newspapers, at the Internet or in magazines.

Place

The wine should be sold in supermarkets and in beverages stores. The people must see the bottles immediately. This is possible by putting the wine at the head of the helves or in the middle of the footpaths. Special actions must attract the buyers.

Article 1 Wine

The product that Henkell will sell to DC-products will be wine. The wine must be bottled and the bottles must contain labels that meet the European restrictions. Henkell must sell red and white wine.

Article 2 Quantity

DC-products must buy at least 15.000 bottles of white wine and 30.000 bottles of red wine each year. When DC-products don’t buy this quantity, then they must pay Henkell the money that Henkell should have received for the total amount of 15.000 bottles.

Article 3 Price

The price of the red wine will be 2 to10 Euro’s bottle and the price for the white wine will be approximately 1 to 90 Euros per bottle. When DC-products buys more then 40.000 bottles of red wine then the price pro bottle will be reduced to approximately 1,90 Euros per bottle. The price of white wine will be reduced to € 1,70 when DC-products buys more then 22.500 bottles of white wine.

Article 4 Quality

The quality of the wine must be of medium class. The flavor of the wine must meet the flavor that the European wine drinkers prefer. So the wines cannot be too strong of taste. The wine must be made under the healthy constructions from the EU and The Netherlands. Henkell must adept the machines that don’t meet these restrictions.

Article 5 Supply conditions

Henkell must supply DC-products of wine when they ask for this. When Henkell can’t supply the wine in time, then they have to pay a fine. Henkell must also take care for the transport. Damage to the bottles that exists during the transport must be paid by Henkell and they have to replace the broken bottles also.

Article 6 Guarantee

Henkell is responsible for the wine from producing till the consumers drinks the wine. Henkell must replace inferior bottles and bottles broken during the transport of the wine. Henkell must also pay fines laid up by the EU when the wine or the production doesn’t meet the EU restrictions.

Article 7 Jurisdiction

The jurisdiction that both parties use is the EU jurisdiction. The EU jurisdiction will be used for problems in The Netherlands. Problems in Hungary will be solved with the Hungarian jurisdiction. The EU jurisdiction will be used for all the problems in both countries when Hungary joins the EU.

The Dutch wine market is still growing especially since more young people are drinking wine instead of beer. Most of the Dutch wine drinkers prefer red wine, so Henkell can best sell red wine. The Hungarian white wine of Henkell will also sell good in The Netherlands because of the unique flavor. The combination of red wine that sells well and the less selling white wine with a better taste is ideal. There are some competitors from countries like France and Spain. Beer producing companies can become competitors too.

Henkell must also cope with the agricultural policy of the EU. They protect countries inside the EU by imposing barriers on products from outside the EU. In some years Hungary will also join the EU. The problem of the barriers is then solved, but then they must cope with restrictions from the EU. The advantage of the EU is that they can support the company financial.

Marketing Policy/ Market Entry

The Dutch market can be entered the best when they sell to a Dutch importer. Henkell just sells his products to the importer. He sells the products to the Dutch customers. This way Henkell uses the knowledge of the importer by letting him choose where to sell their wine.

The importer that we chose is DC-products. This company imports Hungarian products and has the knowledge of pricing and distribution within The Netherlands.

The bottles are luxurious. There are three labels on and are sent in a nice box. This way they can attract the eye of the customers. The price of the wine also indicates that is a wine of class and taste.

Conclusion

When the company prepares itself better for exporting their wine, then it will be possible to gain a market share in The Netherlands. The combination of selling the good selling red wine and the tasty white wine makes the Dutch market a good market to export to. The company we chose for Henkell to export to is a large company with a lot of knowledge of the Dutch market. This market is still increasing so there are enough of opportunities for Henkell to gain a great market share. Another problem is the foreign currency. But this problem will resolve when Hungary joins the EU and also uses the Euro.

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