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76 Seiten, Note: 2,1
List of figures
List of tables
1.1 Aim of the paper
1.2 Relevance of the topic
1.3 Disposition of the paper
2. Concepts of marketing
2.1 Defining essential terms
2.1.5 Brand equity
2.1.6 International Marketing
2.2 Theoretical models on marketing
2.2.2 Ansoff’s Product-Market-Matrix
2.2.3 4 P's of Marketing
2.3 Practical successful marketing-applic ation
3. Theoretical views on celebrity marketing
3.1 Model of celebrity marketing
3.3 Former approaches
4. Coca Cola Company
4.1 Coca Cola’s perception on brand
4.2 Cam paign “Hör’ auf dein Herz”
5. Empirical study
5.1 Data collection
5.2 Empirical findings
5.3 Survey drifts
6. Critical analysis and recommendations
7. Conclusion and Outlook
Fig. 1 BCG-Matrix
Fig. 2 The Ans off-Matrix
Fig. 3 The 4 Ps of marketing
Fig. 4 Revenues and share of revenues for ec o-groceries in Germany by distribution channels
Fig. 5 Model of image transfer conc erning celebrity endorsem ent
Fig. 6 selection criterions for c elebrity endorsers
Fig. 7 Heart quiz on Coca Cola light’s web page
Fig. 8 Individual result of the s urvey
Fig. 9 Age spread am ong the participants
Fig. 10 Distribution of education levels
Fig. 11 Income levels among the participants
Fig. 12 Coca Cola drinking behavior
Fig. 13 local preferences distinguis hed by age
Fig. 14 Im age perception of Coc a Cola distinguished by gender
Fig. 15 Knowing of the campaign
Fig. 16 Knowing about the c ampaign’s target by gender
Fig. 17 Criticism of the campaign distinguished by gender
Fig. 18 Evaluation of Coca Cola’s marketing
Fig. 19 Perception of Heidi Klum as the fam ous representative of the campaign
Fig. 20 Exem plary function of Heidi Klum
Fig. 21 Perception of celebrity marketing distinguished by age
Fig, 22 Coca Cola light’s Facebook page - s ub point “Hör’ auf dein Herz”
Table 1 Norm strategies derived from the BCG-Matrix
Table 2 Satisfaction with Coca Cola by c ategories
The aim of this Bachelor thesis is to work out how celebrity marketing ideally works to make customers internaliz e the marketing objective. Strengthen the company’s image and brands, bonding c ustomers and at least making profit. Among a lot of different m arketing tools, celebrity marketing seems to be the m ost popular and promising one for companies to pres ent their products excellently. Consequently, this paper answers the question, how especially celebrity marketing has to be developed in cas e of having a competitive advantage to competitors and the best effect on the custom er. This paper focus es on a current exam ple to explain how celebrity marketing is successfully applied in general and concerning to Coc a Cola light’s activities.
Before pointing out how to create effective celebrity marketing, this thesis presents the trends in marketing tools generally. The s econd problem statem ent is, if marketing is still promising in times of every com pany doing it.
Purpose of this thesis is then to analyze Coc a Cola light’s campaign concerning success potential and develop a future outlook to outline the developm ent of celebrity m arketing as a form of modern communic ation between com pany and customer and discuss Coca Cola light’s position in celebrity marketi ng referring to the latest campaign.
Nowadays, due to ongoing globalization and consequently the increasing fierce competition between the global operating companies, rem aining competitive is getting harder. To establish a sustainable competitive advantage, many com panies use a popular testimonial to advertise their product. Especially leading brands and companies wanting to strengthen their brand equity, benefit from this type of marketing. By the successful image transfer the brand is getting an added value as well as an improved band image and a strengthen customer loyalty. But celebrity marketing has dis advantages on the other side, too. This is proved in latest studies showing that celebrity marketing’s success have decreased recently. Often, credibility of the brand suffers as a res ult of a celebrity having more than one advertising c ontract for different products.
Celebrity marketing can be more than just endorsing the company’s product. It has the c hance to become the c onnecting link between the com pany - and the brand it stands for - and the customer by creating emotionality and interest. The question is, if there is a key to m ake marketing with famous testim onials effective again? What do customers expect of marketing nowa days and can celebrity advertisem ents fulfill that? How important is celebrity marketing still for companies? Coca Cola light tries a different approach instead of classical advertisem ents. It is to exam ine if their cam paign can reverse the trend. 2005, Coca Cola was the most valuable brand worldwide meas ured by the companies value in US $.1
2011, it was still the sixth valuable brand worldwide2, which justifies a clos er examination of the brand Coca Cola. Its value of success is - since the establis hment in 1886- its total availability and the brand’s omnipresence instead of trying to hit the current trends.
This success among the whole global market is shown in Germany, too, where Coca Cola light itself reaches every seventh Germ an household with its products.3
Trying to answer the above-mentioned questions, the paper is divided into two parts. It begins by describing general concepts of marketing as well as models of celebrity marketing and its former practical approaches. The developm ent of celebrity-m arketing is shown as well as the reasons for the decline of celebritymarketing’s popularity in public.
Part two will be about Coc a Cola as a brand and the current marketing campaign of its subsidiary Coc a Cola light. The curr ent marketing activities are exam ined to find out if they c an be m ore s uccessful. This application of celebrity-m arketing will be analyzed by a self-developed survey am ong the main target group of Coca Cola light, mainly women from the age of 25 up.4
It foc used on the perceived image of the brand Coca Cola as well as its marketing activities.
This survey was perform ed on the social network Facebook and was send as a public questionnaire am ong FOM students in their Studienbuch. The results of this empirical study show the effect of c elebrity marketing on the customer and the brand equity.
Afterwards, a critic al analysis is made to develop recomm endations for further celebrity m arketing cam paigns and give an outlook to further trends and developments, based on the results of previous chapters.
This paper closes with summarizing how to increase the success of marketing for companies nowadays es pecially regarding c elebrity appearance.
In order to understand how marketing as a part of corporate strategy works and further m ore is put to practic e, essential terms have to be defined that will occur in course of this thesis as well as basic theories of m arketing.
Afterwards, practic al examples of m arketing approaches will be portrayed.
Finally, there are future marketing trends pointed out to show what future challenges and their solutions in marketing might be.
In marketing theory, there are a lot of terms used frequently to explain c onnections or differentiate. Terms of larger importanc e for the topic will be defined in the following.
A brand is defined as labeling of products or servic es to distinguish it from the competitor’s offers. Brands can consist of words, pictures, letters, num bers, melodies, packaging or other pres entations such as colors.5
Brands can be entered in the “brand register” to give its owner the right to use this brand, advertise with it and sell the c ompany’s products with this trademark.6
From the custom er’s point of view, brands manage to create safety for them by perceiving labeled products as qualitative. Besides that, brands serve as a fencingoff of others and help showing own values outwards. The whole experience o f the product can be influenced by a brand, too, partic ularly using our example Coca Cola. Through the internalized im age of this brand, Coca Cola tastes better to most customers when they know that it is Coca Cola.7
The lower the difference between the transferred im age of a brand and the customer’s own pers onality is, the more probable is the preference for one product and consequently, brand loyalty.8
For com panies, brands can - besides the functions mentioned above - enable the company a price range as well as lead to increase the c ompany’s value if the brand is strong and successful enough.9
There are further more four possibilities of cons umers perceiving brands and forming their buying decisions: Attitude model, image model, m odel of experienc ed risk and model of cognitive dissonance. All of them were developed by J. Mazanec in 1978 in course of his examination of the human buying behavior.10
The attitude m odel explains the buying process by evaluating the products benefits and features. The consum er distinguishes brands by objective product characteristics, especially usual for products like PCs, TVs, cars or B2B products.11
The im age model occurs if a consum er has either less interest or less product knowledge to decide for one product or brand on an objective basis. Because of thes e missing perceived differences between the products, the custom er builds an image of the brands for himself based on emotions and popularity of the brand. In this way, im ages make the buying decision easier since the custom er avoids a neutral product evaluation. For com panies producing exchangeable products, this subjective positive brand im age can be the only advantage to position and benefit against competitors.12
The third theory, the m odel of experienced risk, describes c onsum er behavior by their need to minimiz e their buying ris k. The customer builds preferences for the product that seems to have the lowest ris k for him by using strategies like brand loyalty or inform ation search.
At least, Mazanec developed the model of cognitive dissonance with which consumers look for all kinds of confirmation for their carried out purchase. This leads further to the After-Sales-Service in general, better known as Customer Relationship Management (CRM). By paying intensive attention to the customer’s needs beyond the actual purchase, the c ustomer retention can be increased, especially because of their accelerated interest in the company’s advertising activities.13
As customers in many cases buy products of brands they know, the communic ation and marketing approaches of these brands have to be outstanding in comparis on to competing brands by creating em otional preferences, especially when it com es to exc hangeable products, whic h is c ommon nowadays. Beside the adaption to current trends and local structures, the core of the brand has to remain. That is what makes a brand s uccessful.14
When the market is saturated, like it is the case with soft drinks in general, it is difficult for companies to create an objective product benefit in comparis on to the competitors. Therefore, often a UAP is used then, which means Unique Advertising Proposition. In contrast to the Unique Selling Proposition, an advertising uniqueness is created to increase the customer’s emotional binding with the br and. The mostly m issing neutral product advantage is the reason for obtaining this advantage through excelling advertis ement to avoid the product being subjective exchangeable for the custom er.15
Testim onial advertisement will be the c entral conc ept in this paper. It is defined as a “special presentation of the advertis ement content”.16
It means presentation of the product by real customers or other people, who tested it and tell the addressee about their experiences with it. Famous people can be used as testim onials, too, for example actors, sportsman or models, like used at Coca Cola.
Im portant for bringing in such pres enters being famous is to notice the celebrity’s sympathy is decisive for the advertisements success and acceptance.17
Using testimonials in general can create a higher attention for the product and an increased disposition to buy for custom ers when they s ee other people recommending it. Celebrities, in special, can raise the advertising effect by either be perceived as an expert in this specific branch where the product is offered in or is transferring his or her own im age to the product. The latter aims to an em otional binding of the target group by taking the product as a way to reach their famous role model.18
As a part of a graduated product structure, a “prototype is a product that represents a product category the best”19, for example Coca Cola is known as the prototype of carbonated lemonade. For the brand itself it is much advantageous because competitive brands will be c ompared to them. Moreover, the products distribution can rise by custom er’s thinking of Coc a Cola at first as the best representative for its product category.20
In this connection, a “graduated product structure is a ranking of produc ts to s how how good they represent a product c ategory”.21
Brand equity gets more and m ore essential for com panies as about 67% of company’s value is estimated as the brand value in 2006.22
The brand value describes the whole set of benefits and negative emotions brought in connection with the brand and can increase or decrease the products benefit for the custom ers.23
If a company is active beyond the own country borders, m arketing has to be internationalized. This is a complex process in case of paying attention to the different cultures and languages, currency risks, foreign politics and laws and different competitors. A company has to decide which strategy to implem ent in the international markets:
Either sam e product/ s ame communication, same product/ different communication, different product and communication or different product/ same communication. Coca Cola follows the first strategy as it is successful all over the world.24
Three marketing theories will be focused on now to show different strategies for companies to approach to their target group.
The BCG-Matrix, also known as the portfolio analys is, was developed in the 1960’s by the Boston Cons ulting Group25 and evaluates products by their relation between the market growth and the relative market share. Market growth means the total external market growth for one product category, relative market share is the internal m arket s hare in comparis on to the market leader. Every product is weighted then and classified to a certain quadrant. Different s izes of the markings can indicate the revenue- or the profit distribution.
Every quadrant m arks a different stage the products are in named Stars, Cas h Cows, Poor Dogs and question marks.26
illustration not visible in this excerpt
Figure 1: The BCG Matrix
Source: http://www. bcg.de/bcg_deutschland/geschichte/klassiker/portfoliomatrix.aspx , 27th February 2013
As figure 1 shows, through their high market share and high market growth, stars earn high revenues. Cash c ows are distinguished for a high market share by simultaneously having a low market growth. This leads to a stagnating market for the product, revenues were brought in nonetheless.27 These c an be us ed to finance upcoming investments.28 The poor dogs have a low value in both quantities. That is why the profit is low as well.29 At least, the question marks have a low m arket share, but a high market growth, therefore are these products leading to be the future stars of the company portfolio.
Derived from that, there are norm strategies to follow to administer the company’s portfolio as best as possible.30
Table 1: Norm strategies derived from the BCG-Matrix
illustration not visible in this excerpt
Source: own illustration, adapted from: Geml, R., Lauer, H. (2008), p.253
The BCG-matrix is comparable to the classical product lifecycle, beginning with the question m arks, secondly the stars, cash c ows and poor dogs at least.31
Weaknesses of this model have also been discussed yet. Not every product can be seen as totally independent from the others, sometim es one business unit can help the others to gain profit or market share so that it can be unprofitable for the company to follow the norm strategies. Moreover, there are a lot more factors to consider when determining a company’s position in the m arket than just the mentioned two.
However, the importance of this matrix is still given by every diversified company needing to have a view of its product portfolio and having a balanced one as well. This portfolio helps companies m aking further strategic decisions to increase the own market share by concurrent keeping the portfolio in constant balance. It should be seen as a model to determine a snapshot of the company’s situation in the competition.32
In course of the ongoing globalization and interna tionaliz ation of the world, especially big companies have to develop new markets to remain competitive internationally or even all over the world.
To show different possibilities to be successful in distinct markets, Ans off developed his product-m arket m atrix with four growth strategies for companies.33
illustration not visible in this excerpt
Figure 2: The Ansoff-Matrix
Source: Perlitz, M. (2004), p. 36
The market penetration strategy tries to increase the product’s market s hare in existing markets. This is possible by us ing price strategies, advertising or an aggressive marketing campaign to elim inate competitors.34 It is the least risky strategy becaus e it uses the already existing resources of the company. Still, if a market is saturated, market penetration gets to its limits and another strategy has to find applic ation.35
Market developm ent stakes companies to develop one or more new markets for their existing products. That includes expanding in new geographical regions, different price strategies and developing new distribution ways. Product development is almost the same strategy, developing new products in the existing markets. Organizations can leverage their c ore competences and develop them further to launch a new product for their target c ustomers. This strategy is especially necessary to remain com petitive in course of m ature m arkets.36
The diversification strategy is the most risky one, because it includes a new product and a new market the cooperation tries to get a foothold in, but the chance of getting a high return in this new industry c an reduce the risk.37
The above explained theories are classified as belonging to the strategic marketing. Concerning operative m arketing, there is a m odel called marketing-mix or the 4Ps of Marketing. It was developed by Neil Borden in the 1960’s and includes the factors Product, Place, Prom otion and Pric e. The 4 Ps represent the internal controllable c omponents in designing m arketing, cons idering the com pany and its products itself.38
illustration not visible in this excerpt
Figure 3: The 4 P's of marketing
Source: own illustration, adapted from Meffert, H., Burmann, C., Kirchgeorg, M. (2012), p. 22
“Product” includes all the physical elements concerning the product design, packaging, quality, warranty and brand name, of c ourse. Thes e elem ents are - beside the price - the first, customers notice and internalize.
“Price” then describes the factors influencing the com pany’s price planning, for example pric e strategy, discounts and retail prices. It is a very im portant factor for customers espec ially if new unknown products or brands enter the market, so this important c omponent of designing the marketing-m ix should not be underestimated.
The third P is named “Place”, means including all distribution channels, how the product gets to the customer. Problems like market coverage and logistics were also looked at as well as transportation. The last factor is probably the most important nowadays - “Prom otion”.
This includes almost all types of company communication, like advertisement, public relations or sales promotion. The significance of this last stage of the marketing mix comes first from the ongoing flood of products es pecially in the consumer goods industry and sec ond from their simultaneously increasing interchangeability. Besides brands, that already ac hieve higher discernability and make up a decision aid for cons umers, prom otion activities are essential for companies to bind and retain costumers to their product as well as communicating the corporate identity outward.
Although this concept of the 4 Ps is simple, it is not useless anyway. It still has a strong importance throughout the market participants and remains a very helpful tool to align the c ompany with their target costumers.39
In the following, Red Bull is chosen to be examined regarding their marketing strategies. Background of this explanation is the reference to other brands in the same branc h of Coc a Cola, cons umer goods industry, especially non -alc oholic drinks.
Red Bull is the most popular brand in Austria with a brand equity of 14 billion euros according to the European brand institute. 2011, Red Bull made profit at a height of 311 million euros in the extrem e sport segm ent and invested 1,4 billion euros in marketing, just 200 million euros in form ula one sponsoring and events.
In 1987, the first cans were s old in Austria and a portrait of a former Ferrari-pilot in TV drinking Red Bull was broadcasted. Since then, the brand stands for extreme and sports, for example form ula one.40
Red Bulls om nipres ence in sports sponsoring reac hed its peak in October 2012 at the fam ous Felix Baumgartner jump which Red Bull had sponsored and financ ed with 50 million euros. The hoped advertising effect did not fail to appear. This coup was the biggest for the brand up to now as it is part of their content marketing strategy, which is mainly practiced instead of classical advertisem ent.41
Felix Baumgartner and his jump fit perfect to Red Bulls strategy. Being the brand for adrenalin junkies and als o personifying their slogan: “Red Bull gives you wings”.
This event attracted global attention am ong social media, newspapers and TV. Still, Red Bull took a high risk when supporting him because of a possible tragedy that could have s ustainable dam aged the com pany’s image.42
Altogether, Red Bull spends more money for commercialization than for the original production of the energy-drink. Latter even does not take place at Red Bull, but is outs ourced to a third party, nam ely the beverage-producer Rauch. Therefore, Red Bull as a brand does not actually produce, but carries on marketing campaigns in a big way.
In a coarse comparison to Coca Cola, Red Bull spends m ore budget in marketing, about thirty perc ent of their revenues. Moreover, Red Bull does not commit testimonials to endorse their product, but just doing sponsoring in one specific discipline, extreme s ports.
However, Red Bull is a unique brand without serious competitors and without own production. Coca Cola compared with that repres ents a whole different image of itself that makes it necessary to follow another marketing strategy and having other distribution of expens es, so that a strict comparison of these two brands is not expedient.
Red Bull is an exclusive brand with high pric es in relation to other providers and with distributing only one product. Ris ky, but provable successful.43
Future m arketing challenges will be m ore customer-oriented than before because of the growing mec hanization and knowledgeability of the people. News and scandals spread in a matter of minutes and lead to more informed and cautious consumers. Companies have to gear their marketing activities to reach a higher costumer bonding instead of being fully focused on their own profit targets. Companies have to be more responsible today in order to have a good reputation and rem ain com petitive in thes e times of changes.
In the following, two of the most important trends will be examined closely.
Social Media platforms like Fac ebook, YouTube and Xing are now more popular than ever. Internet is not by a long way used as a m edium of inform ation rather for building up and caring for social contacts, description of ones elf and entertainment. Especially young people use the Internet actively to be part of its development instead of only passively accessing the inform ation the Internet provides.
On the one hand, operators of websites profit from this new development of the Internet, because the active us er partic ipation leads to m ore valuable, m ore influential and more custom er-oriented contents. Costum ers on the other hand, have the possibility to make their attitudes known and achieve social recognition.44
Referring to com pany’s success, this developm ent opens chances to reach m ore target custom ers worldwide and present the own cooperation as up -to-date if social media marketing is practiced.
Concretely, social media platforms as a form of communication for both the company and their costum ers has to be taken seriously, since strategies have to be formulated with activities in social media to avoid dis advantageous effects on the company.
There are a few important basic rules to ens ure an optimal company representation. One of the most im portant one is the well-directed usage of feedback. Us ers are rewarding for the possibility of communicating directly to cooperations, giving their feedback to products or customer services online. It is up to the companies to react adequate on the criticism - positive or negative - and using it for improving themselves for protecting the company’s position in the competition or even enhance it. That requires a clear and transparent communication as well.
1 Cp.: Exler, A. (2006), p.13
2 Cp.: http://www.spiegel.de/wirtschaft/unternehmen/wert vollste-marke-der-welt -apple- ueberholt-google-a-761366.html, 15th February 2013
3 Cp.: http://www.dgesgm.de/images/Die_Initiative.pdf, p. 3, 15th February 2013
4 Cp.: http://www.hoeraufdeinherz.com/partner.html, 20th February 2013
5 Cp.: MarkenG (2011): §3 Abs. 1
6 Cp.: Geml, R., Lauer, H. (2008), p. 192
7 Cp.: Schweiger, G., Schrattenecker, G. (2009 ), p.82
8 Cp.: Schweiger, G., Schrattenecker, G. (2009 ), p.85
9 Cp.: Schweiger, G., Schrattenecker, G. (2009 ), p.83
10 Cp.: Schnettler, J., Wendt, G. (2011), p.323
11 Cp.: Schnettler, J., Wendt, G. (2011), p. 324
12 Cp.: Schnettler, J., Wendt, G. (2011), p. 324-325
13 Cp.: Schnettler, J., Wendt, G. (2011), p. 327
14 Cp.: Schnettler, J., Wendt, G. (2011), p. 328-329
15 Cp.: Schmidt, S. J. (2004), p.56
16 Cp.: Schmidt, S. J. (2004), p. 99
17 Cp.: Schmidt, S. J. (2004), p. 99
18 Cp.: Schmidt, S. J. (2004), p. 100
19 Cp.: Noel, H. (2010), p. 113
20 Cp.: Noel, H. (2010), p. 112
21 Noel, H. (2010), p. 112
22 Cp.: Menninger, J., Robers, D. (2006), p. 245
23 Cp.: Schweiger, G., Schrattenecker, G. (2009): p. 81
24 Cp.: Geml, R., Lauer, H. (2008), p. 143-144
25 Cp.: Hutzschenreuter, T. (2009), p. 368
26 Cp.: Geml, R., Lauer, H. (2008), p. 252
27 Cp.: Geml, R., Lauer, H. (2008), p. 252
28 Cp.: http://www.bcg.de/bcg_deutschland/ geschichte/klassiker/portfoliomatrix.aspx , 27th February 2013
29 Cp.: Geml, R., Lauer, H. (2008), p. 252
30 Cp.: Geml, R., Lauer, H. (2008), p. 253
31 Cp.: Geml, R., Lauer, H. (2008), p. 253
32 Cp.: Johnson, G., Scholes, K., Whittington, R. (2011), p. 347
33 Cp.: Breitschuh, J., Wöller, T. (2007), p. 16
34 Cp.: Breitschuh, J., Wöller, T. (2007), p. 17
35 Cp.: http://www.quickmba.com/strategy/matrix/ansoff/, 3rd March 2013
36 Cp.: Kreutzer, R. (2010), p. 162
37 Cp.: http://www.quickmba.com/strategy/matrix/ansoff/, 3rd March 2013
38 Cp.: http://www.netmba.com/marketing/mix/, 3rd March 2013
39 Paragraph cp.: http://www.netmba.com/marketing/mix/, 10th March 2013
40 Cp.: http://www.sueddeutsche.de/wirtschaft/marketing-von-red-bull-die-extremsportler-unter- den-marketing-strategen-1.1496509-2, 10th March 2013
41 Cp.: http://www. faz.net/aktuell/ wirtschaft/unternehmen/content -marketing-lass-uns -freunde- werden-12054886.html, 15th March 2013
42 Cp.: http://www.wuv. de/marketing/ wie_die_mondlandung_der_marketingcoup_von_red_bull , 15th March 2013
43 Paragraph cp.: http://www.sueddeutsche.de/wirtschaft/marketing-von-red-bull-die- extremsportler-unter-den-marketing-strat egen-1.1496509-2, 15th March 2013
44 Cp.: http://wirtschaftslexikon.gabler.de/Definition/web-2-0.html, 15th March 2013
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