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5 C’s of Marketing

5 C’s of Marketing – Customers

Customers are potential buyers who are identified by the needs the company aims to fulfill. The company does so by designing its offering. The two categories that companies may fall into are B2B and B2C.

A value proposition must necessarily be created for target customers by an organization. The worth of an offering is reflected by creating customer value. Customer value can be psychological, monetary, and functional.

Example – Starbucks

Starbucks – Loyal Customer Base

‘Starbucks Rewards’, one of the most popular loyalty programs offered by Starbucks, provides discounts and freebies to its members. This gives the customers a reason to choose Starbucks over other brands. A significant part of the coffee chain’s recent monetary growth is represented by ‘Starbucks Rewards’.

Starbucks has been recognized as a leader in restaurant technology for a long time, and an increase in its revenue has been reported during the pandemic from its loyalty program members.

According to a regulatory filing in the United States, 44% of sales in the quarter ended March 29th was said to have come from Starbucks Rewards members and so was 48% of the sales in the last week of May. There were 19.4 million US members who were a part of this program as of March 29, 2020.

5C's of Marketing

5 C’s of Marketing – Company

The organization managing the offering is the company. In the case of a company’s portfolio is diverse, the company is considered to be the strategic business unit that offers the product.

EXAMPLE – Facebook

  • More than 80 companies have been acquired by Facebook in order to maintain business growth and keep its portfolio diverse.
  • A few notable product-centric acquisitions while continuing the primary pattern of talent acquisitions was the $2 billion Oculus VR acquisition and the $19 billion WhatsApp acquisition.

5 C’s of Marketing – Collaborators

5 C’s of Marketing – Collaborators

The entities that create value for target customers while working with the company are called collaborators. The suppliers, distributors, manufacturers, dealers, research and development agency, retailers, advertising agencies, external sales force and market research companies are collaborators.

They create cost-effectiveness, effectiveness, flexibility, cost efficiency, and speed in the delivery of services and goods. Collaborations can be implicit or explicit, horizontal or vertical.

Example – McDonalds

McDonald - Franchise Model

A heavily franchised business model is adopted by McDonald’s. 93% of McDonald’s restaurants worldwide are represented by franchised restaurants as of December 31st, 2019.

The company is able to generate cash flow streams along with stable and predictable revenue with the help of its current mix of franchise stores and company-owned restaurants.

Example – McDonalds

Example – Apple

Apple - Revenue from Indirect Distribution

Products are sold, and third-party products are resold by Apple in the majority of its markets, directly to consumers, mid-sized and small businesses, education, government customers, and enterprises. This direct selling happens through its online stores, retail stores, and direct sales force.

The company also hires many types of indirect distribution channels, such as retailers, wholesalers, third-party cellular network carriers, and resellers. In 2019, the company’s net sales through its direct distribution channel accounted for 31% while indirect distribution channels accounted for 69% of total net sales.

5 C’s of Marketing – Competitors

5 C’s of Marketing – Competitors

The organizations that compete with the same set of consumers to fulfill the consumer’s needs are competitors. Competition can both be in different industries and the same industry.

Example – Competition

Example – Competition

5 C’s of Marketing – Context

The surroundings in which the company operates is called the context. It can be the economic, physical, or political environment. Context relates to money, inflation, supply, economic growth, interest rates, deflation, change in market structure, information access ability, and balance of power.

It also refers to a technological environment such as cultural trends, diffusion of existing technologies, and market-specific beliefs. The regulatory environment also falls under context, for example, import-export tariff, specifications, product, taxes, pricing and advertising policies, trademark protection, and patent. Natural resources, health conditions, climate are physical environments that also fall under context.

Example – IKEA

Example – IKEA

By 2030, the Swedish furniture giant IKEA has aimed to become a circular business. It plans to manufacture all its products by 2030 according to circular principles which means that they can be recycled, refurbished, and reused. Only recycled or renewable materials will be used across its entire range.

Launched in June 2018, the strategy is called People and Planet positive. The head of sustainability at IKEA, Lena Pripp-Kovac is responsible for this whole transformation being executed.