Identification of Relevant and Irrelevant Cost - Coca Cola Flavored Essay

Identification of Relevant and Irrelevant Cost - Coca Cola Flavored Milk - Essay Example In the mid of 2007, the company underwent some serious planning regarding the extension of current product lines. Carbonated drinks, mineral water, fruit juices and other non-alcoholic beverages were already there in company’s product portfolio, yet the company realized the importance of adding a new product in the form of flavored milks. The launch of this new product under the name of Coca-Cola’s brand name is one of the most challenging tasks for the product managers as well as the project managers of the company. The research and development department of the company undertook rigorous workings on the proposed launch of flavored milk. The whole research process followed the different stages including planning, development of the new product, testing, commercial viability, branding, initial launch of the new product and many other activities. Each of these activities had its own cost estimates which are considered as either relevant or non-relevant. Planning Stage Th e planning stage is the general stage for all those products that are intended to be launched. The costs arising due to this activity are always considered as irrelevant because the planning process always keeps going on irrespective of the fact whether a new product is launched or not in the current timeframe. The general expenditure of Coca-Cola on account of its planning activity amounts to around $1 million annually. However, this cost is the general expense of the company and cannot be allocated to the product cost of flavored milk. Development Stage Once a basic formula is identified for one or more products, then development stage is commenced in order to create a better product. However, this activity is carried out for every product that can be produced by the company irrespective of the fact whether it would be launched by the company or not. As a result, the expenditures pertaining to this particular stage are considered to be irrelevant and assumed to be accounted for as the general research and development expenditures of the company. The rough estimates of Coca-Cola under this activity, ranges between $1 and $3 million depending upon the level of estimates. Testing Stage After the products are developed, there comes the next stage in which the products are gone through rigorous testing activities such that the products are tested in a real environment and timeframe. The taste, quality, odor, and other characteristics of the product are tested by the consumers as how they rate those products as per their own taste preferences. Since this process also occurs on uniform basis for every developed product, therefore the cost pertaining to testing is considered as irrelevant. Roughly estimates of this cost ranges around $0.5 million to$2 million a year and is expensed out on general basis. Commercial Viability Testing stage leads to the stage where the products are checked for their viability as to whether a particular product would be liked and accept ed by the consumers, concerns of distributers regarding the effective transportation of the product as the product is at its birth stage and with many other issues. This cost is the piercing cost among the relevant and irrelevant cost. It depends upon the policy of the company whether to account for this cost as a relevant or irrelevant cost. Branding After it is decided as to which product is going to be launched in the market, effective marketing strategies are formulated

Social Networking Marketing Essay Example | Topics and Well Written Essays - 3750 words

Social Networking Marketing - Essay Example Marketing on social networking or social media platforms has its own advantages because of the uniqueness offered by the internet (Keller and Berry, 2003). It is much easier to judge the effectiveness of a marketing campaign as well as ensure its reach to a very high population. Hence, marketing through the social media and social networks has become very important. However, as this method of marketing is becoming increasingly popular, various scholars and researchers have had concerns around ethical implications. Many marketers also feel very sceptical about the way in which it is difficult to preserve ethics followed in conventional form of marketing, when it comes to social networking marketing (Li, 2008). In this research, the attempt is to find out what are the ethical implications of social networking marketing and how it impacts the ‘4Ps’ – product price, promotion and place of marketing. The study would explore how this new age marketing has ethical implications on the traditional methods of marketing. Marketing and its Changing Dimensions Many scholars have tried to understand and define marketing as well as its changing connotations in the light of technology driven approach. American Marketing Association has defined marketing as a key set of process that is necessary for creating, delivering and communicating value to customers as well as maintaining and growing relationships with the aim of growing the organization, its user base as well as its stockholders. (American Marketing Association, n.d). Here, the tenets of marketing centre on the concept of ‘value’. This definition provides a good overview because it also talks about customer and organizational growth. With social networking marketing, there are high chances that the meaning of ‘value’ may undergo a change because of the high scope of strategies like bulk marketing and privacy violation. According to Kotler, marketing can be defined as a social process through which individuals and groups can get what they want and need by creat ing as well as exchanging the products and value with the others (Kotler, 1997). The important aspect to note here is how marketing is considered to be a ‘social’ process. However, in recent times, marketing has a more business related approach, rather than exchanging. In fact, the activities of a marketer are centred on how to improve brand image as well as profitability with the help of value creation. This definition becomes very narrow in today’s sense because marketing is no longer about exchanging products or services, but in fact it has a higher focus on customers as well as profitability. However, this high focus on brand image and profitability has often resulted in compromises in terms of ethics in social media. According to the definition provided by the Chartered Institute of Marketing, marketing is the management process that is crucial in identifying, anticipating as well as satisfying the requirements of the customers in a manner that is profitable for the organization (The Chartered Institute of Marketing, n.d). In this definition, this focus is given on customers and the agenda of marketing revolves around the needs and the satisfaction of the customers. In addition, while this is a good approach to adopt, presently, focus is much higher on the profitability of the company, which can be illustrated by the increasing violation of ethics in social networking marketing. Hence, it is clear that the definition of marketing, its operations and the way in which it is perceived has undergone a considerable amount of change over the years. The