1
INDEX
1. Introduction 2. Major Products Of Coca-Cola 3. History 4. Market Analysis 5. SWOT Analysis 6. Competition 7. Path Towards Success 8. Vision & Mission 9. Marketing Objective 10. 4 P¶s Of Busiiness Marketing 11. Stratergy 12. Environmental Issues 13. Health Issues 14. India secret Formula Ban 15. Sponsership 16. The Coca-Cola Company Stock Quote 17. The Coca-Cola Company Income Statement 18. The Coca-Cola Company Balance Sheet 19. The Coca-Cola Company Cash Flow Statement 20. Market Summary 21. Recommedation 22. Bibliography
2
INTRODUCTION
The Coca-Cola Company begin in 1886, when an Atlanta pharmacist, Dr. John Pemberton, began to produce Coca-Cola syrup for sale in fountain drinks. However the bottling business began in 1899 . Coca-Cola is a soft drink sold in the stores, restaurants, and vending machines of more than 200 countries. The company produces concentrate, which is then sold to licensed Coca-Cola bottlers throughout the world. The bottlers, who hold the contracts with the company, produce finished product in cans and bottles from the concentrate in combination with filtered water and sweeteners.The bottlers then sell, distribute and merchandise Coca-Cola to retail stores and vending machines. The Coca-Cola Company also sells concentrate to major restaurants and foodservice distributors.
Type Manufacturer Founder (s) Country of Origin Introduced Area Served Color
Soft Drink (Cola) The Coca- Cola Company John S. Pemberton United States 1886 Over 200 countries Caramel E-150d
3
Flavors
Cola, Cola Green Tea, Cola Lemon, Cola Lemon Lime, Cola Lime, Cola Orange and Cola Raspberry.
Employees Servings per Day Website
92,400 1.6 Billion www.coca-cola.com
4
MAJOR PRODUCTS OF COCA-COLA
Product Name Image
Coke
Sprite
Fanta
Diet Coke
Minute Maid
Minute Maid Juices
Kinley Drinking Water
5
HISTORY
1886: - In the first year the company sold about 9 glasses of coca-cola a day . - The First Ever Adverisement for Coca-Cola appeared in Atlanta Journal. 1887: -To increase sales free drink coupons were distributed to the people. 1893: -The Coca-Cola trademark registered in the U.S patent Office. 1894: -Coca-Cola was put in Bottles. 1904: -The First Magazine Ads for Coca-Cola Appeared in National Consumer Publication. 1909: -The Bottles of Coca-Cola started to deliver by Horse-Drawn Carriage. 1919: -Coca-Cola got listed on New York Stork Exchange at $40/share. 1936: -Coca-Cola Celebrated its 50th anniversary.
6
1941-1959: -Coca-Cola is Enjoyed in 120 Countries Worldwide. 1961: -Sprite was Introduced. 1964: -Lift Top Cans Introduced. 1977: - Coca-Cola came in India. 1978: - Coca-Cola came in hina. 1982: -Diet Coke Introduced. 1985: -Coca-Cola became the First soft drink in Space when Astronauts Test the ³ COCA-COLA SPACE CAN ´ abord Space Shuttle Challenger. -The company introduced the ³NEW COKE ´. 1986: -100 Years of Coca-Cola.
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1990: -Coca-Cola came in East-Germany. 1991: -Coca-Cola introduced first bottle made partially with recycled plastic, an innovation for the industry. 1993: After 16 years of absence Coca-Cola returned in India. 1999: -Dasani, a bottled water product , joins the company line up of brands. 2005: -Coca-Cola Zero introduced. -The company extended its sponsorship of the Olympic Games through 2020. 2009: -Worlds largest bottle-to-bottle recycling plant was open. 2011: -The Coca-cola Celebrates its 125th Anniversary with innovation, cultural events and exclusive collaboration around the globe.
8
Market Analysis
The biggest company in the soft drink industry,Coca Cola enjoys the largest market share.This company controls about 59% of the world market. In 2002, the company grew their carbonated soft-drink business by nearly 250 million unit cases and generated record volumes. Because carbonated soft drinks are the largest growth segment within the nonalcoholic ready-to-drink beverage category measured by volume, that is why they are focusing more on this and they are continually increasing the pace because they know that accelerating this pace is crucial to their future success. In Asian population, which is the satisfied customer of Coca Cola, is approximately 4.2 billion and the average consumer enjoys close to four servings of our products each month. Through an intense focus on Coca-Cola, innovation and new beverages, the company has achieved volume growth of 22 percent in 2009. So the company is emphasizing more in this area and is trying to develop a strategy, which can increase the growth of the consumption of Coca Cola by the people of Asia. Among the countries of Asia, Japan has the highest percentage, which is about 29%. Among others, Pakistan, India and Bangladesh are those countries where the average consumption is increasing day by day. a) External Factors i) Customers: Customer satisfaction is considered as being the most important and vital things in Coca Cola¶s progress.
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The company to an extend has increase volume worldwide by 7 percent with strong international growth of 8.2 percent by 2010. It focuses on: y Customer Database y Getting new potential customers, side by side retaining old ones. y Giving customers more than just a soft drink. y Brand loyalty.
ii ) Competitor Analysis: MAJOR COMPETETOR: PEPSI CO.
PepsiCo is a world leader in convenient foods and beverages, with revenues of about $27 billion and over 143,000 employees. The company consists of the snack businesses of Frito-Lay North America and Frito-Lay International. Pepsi-Cola beverages are available in more than 190 countries and territories. In Asia, they selected Lahore to make their regional office. This was done in 1970. This regional office is monitoring all the operations carried out in South West Asia. Internal Factors: i) Company:
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The Coca Cola Company has always focused on portraying a simple yet strong brand image. Their motto was: Know the most recognized word on the planet after ³OK´!
In December 1991, a merger between Coca-Cola Enterprises and the Johnston Coca-Cola Bottling Group, Inc. (Johnston) created a larger, stronger Company, again helping accelerate bottler consolidation. As part of the merger, the senior management team of Johnston assumed responsibility for managing the Company, and began a dramatic, successful restructuring in 1992.Unit case sales had climbed to 1.4 billion, and total revenues were $5 billion.
11
SWOT Analysis
SWOT analysis is a technique much used in much general management as well as marketing scenarios. SWOT consists of examining the current activities of the organization- its Strengths and Weakness- and then using this and external research data to set out the Opportunities and Threats that exist. Strengths: Coca-Cola has been holding a large part of world culture for a very long time. Coca cola has focused on brand image and brand loyalty along with providing supreme taste and quality. Additionally, Coca-Cola's bottling system is one of their greatest strengths. It allows them to conduct business on a global scale while at the same time maintain a local approach. In India, people don¶t care before drinking that whether it is ³Pepsi´ or ³Coke´. They don¶t actually differentiate between these two brands in order to their tastes. Consumers basically drink what they get. They believe on ³WHATS COLD GETS SOLD´ For this reason Coca-Cola Intl has provided their coolers and freezers in the market. They have maximum number of coolers and freezers in the market. They provide this infrastructure free of cost just to provide chilled coke to their customer, which they want to be purchase.
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Weaknesses: Coca-Cola contains caffeine and caramel which can adverse effects on the teeth (if prolonged) which is an issue for health care. It also has got sugar by which continuous drinking of Coca-Cola may cause health problems. Being addicted to Coca-Cola also is a health problem, because drinking of Coca-Cola daily has an effect on your body after few years. Another weakness which may be considered regionally is its sugar content. Pepsi Co. makes its sales only because Pepsi is so far, having a larger market share only because it is more sugary and Asian people focus on sugary drinks. Opportunities: Brand recognition is an important factor in affecting Coke's competitive position. Coca-Cola's brand name is known well throughout the world today. The main concern of Coca Cola Marketing Strategies has been just to improvise its system and make it even more recognizable. The bottling system of Coca Cola allows the company to take advantage of its growth opportunities. Threats: The main threat is Price. A small increase in price, let¶s say just 1 rupee will have a drastic effect on sales. Only because people will go for the next available substitute i.e. Pepsi so price change is a major factor in affecting Sales of coca cola and in marginal profits. Coca Cola can face major losses if it goes for a sudden increase or decrease in price.
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Competition
The major competition faced by Coca Cola International is Pepsi Co. PepsiCo is a world leader in convenient foods and beverages, with revenues of more then $27 billion and over 143,000 employees. The company consists of the snack businesses of Frito-Lay North America and Frito-Lay International; the beverage businesses of Pepsi-Cola North America, Gatorade/Tropicana North America and PepsiCo Beverages International; and Quaker Foods North America, manufacturer and marketer of ready-to-eat cereals and other food products. PepsiCo brands are available in nearly 200 countries and territories.
Major Pepsi Co. products include: y Pepsi y Teem y Mirinda y Pepsi Max y Pepsi Lemon y Pepsi Blue y Mountain Dew y 7up
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PATH TOWARDS SUCCESS
Coca Cola marketing team focuses not only on the results but also on the following y They firmly believe if you want to establish a clear image in the minds of consumers, you first need a clear image in your own mind. y Since the major competitor is Pepsi Co. so Coca Cola Intl has focused on neutralizing the competition. y If Pepsi Co. launched Crystal Pepsi then Coca Cola Intl launched Diet Coke. y The Coca Cola marketing team maintained their focus strongly on the product itself. When they changed bottle shape, many people started buying bottles instead of the drink itself y The Coca Cola team learnt from everything. Even if a customer said ³no´, they focused on ³why´ did he say no and then found out ways on ³how´ to solve that issue. y Formula for positioning success : y They specified the criteria for each product offered because if you don¶t specify the criteria for choosing, consumers will develop their own, which is dangerous.
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VISION & MISSION
Our Vision The world is changing all around . To continue to thrive as a business over the next ten year. and beyond, it is necessary to look ahead, understand the trends and forces that will shape the business in the future and move swiftly to prepare for what's to come. Its must get ready for tomorrow today. That's what our 2020 Vision is all about. It creates a long-term destination for our business and provides us with a "Roadmap" for winning together with our bottling partners. Our Mission To Refresh the World...in body, mind, and spirit. To Inspire Moments of Optimism...through our brands and our actions. To Create Value and Make a Difference...everywhere we engage.
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Marketing Objectives
The ultimate objectives of our business strategy are: y To increase volume y Expand our share of worldwide nonalcoholic ready to drink beverages sale y Maximize our long-term cash flows The Coca Cola system has more than 16 million customers around the world that sells or serves our products directly to consumers. We keenly focus on enhancing value for these customers and helping them grow their beverage businesses. We strive to understand each customer¶s business and needs, whether that customer is a sophisticated retailer in a developed market a kiosk owner in an emerging market. Aims: People: Being a great place to work where people are inspired to be the best they can be. Portfolio: Bringing to the world a portfolio of quality beverage brands that anticipate and satisfy people's desires and needs. Partners: Nurturing a winning network of customers and suppliers, together we create mutual, enduring value. Planet: Being a responsible citizen that makes a difference by helping build and support sustainable communities. Profit: Maximizing long-term return to shareowners while being mindful of our overall responsibilities.
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4 P¶s of Business Marketing Price, Promotion, Product, and Place a) Product: Businesses must think about products on three different levels, which are the core product, the actual product and the augmented product. The core product is what the consumer is actually buying and the benefits it gives. Coca Cola customers are buying a wide range of soft drinks. The actual product is the parts and features, which deliver the core product. Consumers will buy the coke product because of the high standards and high quality of the Coca Cola products. The augmented product is the extra consumer benefits and services provided to customers. Since soft drinks are a consumable good, the augmented level is very limited. b) Promotion Over the time Coca Cola has spent millions of dollars developing and promoting their brand name, resulting in worldwide recognition. 'Coca-Cola' is the most recognized trademark, recognized by 94% of the world's population and is the most widely recognized word after "OK". Coca Cola¶s red and white colors and special writing are all examples of world-wide trademarks. There are a number of branding strategies: Generic brand strategy Individual brand strategy Family brand strategy Manufacturer¶s brand strategy Private brand strategy Hybrid brand strategy
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Coca Cola utilizes the Individual brand strategy as Coca Cola¶s major products are given their own brand names e.g. Fanta, Sprite, Coca Cola etc although they may be presented as different lines they operate under the name of Coca Cola. c) Place: The Coca Cola Company has always focused wide scale distribution. This is the reason, 94% of the world¶s population knows about Coke. ³Coca Cola´ is the most recognized word after OK. Coca Cola sets its own distributions directly to stores. Stores include a wide variety of Supermarket, Marts, Convenience Stores, Retail Stores and Departmental Stores. The channel distribution of Coca Cola Intl is extremely large. Over time, they have produced many products and thus have increased number of warehouses for specific products. Coca Cola Intl has also improved services via setting up a national service network.
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d) Price Since Coca Cola Intl faces a major threat from its competitor Pepsi Co., so naturally the Pricing is done keeping in view the increasing rivalry with Pepsi. Pricing is basically standard for all over the world.
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Strategy
The strategy for the future of the company is very straightforward. The marketing strategy for the year 2011 is as follows: Accelerate carbonated soft-drink growth, led by Coca-Cola. Selectively broaden the family of beverage brands to drive profitable growth. Grow system profitability and capability together with our bottling partners. Serve customers with creativity and consistency to generate growth across all channels. Direct investments to highest potential areas across markets. Drive efficiency and cost-effectiveness everywhere.
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Health effects
Acidity and tooth decay Numerous court cases have been filed against the Coca-Cola Company since the 1940s alleging that the acidity of the drink is dangerous. In some of these cases, evidence has been presented showing Coca-Cola is no more harmful than comparable soft drinks or acidic fruit juices. Frequent exposure of teeth to acidic drinks increases the risk of tooth damage through dental erosion. This form of tooth decay is unrelated to dental caries.
India secret formula ban
Coca-Cola was India's leading soft drink until 1977 when it left India after a new government ordered the company to turn over its secret formula for Coca-Cola and dilute its stake in its Indian unit as required by the Foreign Exchange Regulation Act (FERA). In 1993, the company (along with PepsiCo) returned after the introduction of India's Liberalization policy.
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Sponsorship
Sports Coca-Cola sponsored the English Football League from the beginning of the 200405 season (beginning August 2004) to the start of 2010/11 season, when the Football League found a new sponsor in NPower. Other major sponsorships include NASCAR, the NBA, the PGA Tour, NCAA Championships, the Olympic Games, the NRL, the FIFA World Cups and the UEFA Euro. In the Philippines, it has a team in the Philippine Basketball Association, the Powerade Tigers. Television The company sponsors the hit Fox singing-competition series American Idol. Coca-Cola is a sponsor of the nightly talk show on PBS, Charlie Rose in the US.
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The Coca-Cola Company Stock Quote (NYSE: KO)
Latest 06/20/11 12:20:50 EST $66.11 0.490 0.750 $66.12 $65.37 Change ($) Change (%) High Low
Quotes delayed 15 minutes for NASDAQ, 20 minues for NYSE and AMEX.Market Data provided by Interactive Data.Powered and Implemented by Interactive Data Manage Solutions.
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The Coca-Cola Company Income Statement
Dec 10 Revenue Cost of Goods Sold Gross Profit Gross Profit Margin SG&A Expense Depreciation & Amortization Operating Income Operating Margin Nonoperating Income Nonoperating Expenses Income Before Taxes Income Taxes Net Income After Taxes Continuing Operations Discontinued Operations 35,119.0 12,693.0 22,426.0 63.9% 13,158.0 1,443.0 8,449.0 24.1% 6,210.0 (416.0) 14,243.0 2,384.0 11,859.0 11,809.0 -Dec 09 30,990.0 11,088.0 19,902.0 64.2% 11,358.0 1,236.0 8,231.0 26.6% 821.0 (106.0) 8,946.0 2,040.0 6,906.0 6,824.0 -Dec 08 31,944.0 11,374.0 20,570.0 64.4% 11,774.0 1,228.0 8,446.0 26.4% (902.0) (105.0) 7,439.0 1,632.0 5,807.0 5,807.0 --
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Total Operations Total Net Income Net Profit Margin Diluted EPS from Total Net Income Dividends per Share
11,809.0 11,809.0 33.6%
6,824.0 6,824.0 22%
5,807.0 5,807.0 18.2%
5.06
2.93
2.49
1.76
1.64
1.52
All amounts in millions of US Dollars except per share amounts.
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The Coca-Cola Company Balance Sheet
Assets Dec 10 Dec 09 Dec 08
Current Assets Cash Net Receivables Inventories Other Current Assets Total Current Assets Net Fixed Assets Other Noncurrent Assets Total Assets Liabilities 8,517.0 4,430.0 2,650.0 5,982.0 21,579.0 14,727.0 36,615.0 72,921.0 Dec 10 7,021.0 3,758.0 2,354.0 4,418.0 17,551.0 9,561.0 21,559.0 48,671.0 Dec 09 4,701.0 3,090.0 2,187.0 2,198.0 12,176.0 8,326.0 20,017.0 40,519.0 Dec 08
Current Liabilities Accounts Payable Short-Term Debt Other Current Liabilities Total Current Liabilities 1,887.0 9,376.0 7,245.0 18,508.0 1,410.0 6,800.0 5,511.0 13,721.0 1,370.0 6,531.0 5,087.0 12,988.0
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Long-Term Debt Other Noncurrent Liabilities Total Liabilities
14,041.0 9,369.0 41,918.0
5,059.0 5,092.0 23,872.0
2,781.0 4,278.0 20,047.0
Shareholder's Equity Preferred Stock Equity Common Stock Equity Total Equity -31,003.0 31,003.0 -24,799.0 24,799.0 -20,472.0 20,472.0 2,313,555.3
Shares Outstanding (thou.) 2,292,000.0 2,303,000.0
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The Coca-Cola Company Cash Flow Statement
Dec 10 Net Operating Cash Flow Net Investing Cash Flow Net Financing Cash Flow Net Change in Cash Depreciation & Amortization Capital Expenditures Cash Dividends Paid 9,532
Dec 09 8,186
Dec 08 7,571 (2,363.0) (3,985.0) 608.0 1,228.0 (1,968.0) (3,521.0)
(4,405.0) (4,149.0) (3,465.0) (2,293.0) 1,496.0 1,443.0 2,320.0 1,236.0
(2,215.0) (1,993.0) (4,068.0) (3,800.0)
All amounts in millions of US Dollars except per share amounts
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Market Summary a) Market Growth: According to the 2005 Annual Report, the company sells beverage products in more than 200 countries. The report further states that of the more than 50 billion beverage servings of all types consumed worldwide every day, beverages bearing the trademarks owned by or licensed to Coca-Cola account for approximately 1.5 billion. Of these, beverages bearing the trademark "Coca-Cola" or "Coke" accounted for approximately 78% of the Company's total gallon sales. Also according to the 2007 Annual Report, Coca-Cola had gallon sales distributed as follows:
37% in the United States 43% in Mexico, Brazil, Japan and the People's Republic of China 20% spread throughout the rest of the world
In 2010 it was announced that Coca-Cola had become the first brand to top £1 billion in annual UK grocery sales.
b) Psychographics Segmentation & Market Trends: Coke segments different income levels by packaging. Like for people with a low level of income, it has small returnable glass bottle, for the mediocre class it has non returnable bottle (NRT) and for people with a high level of income it has Coke tin.
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Sometimes, for the promotion strategy of coke, the Coke Company introduces prizes on the top cover. So they segment people by benefit sought, i.e. by giving them prizes. Coke will always show activities, where people get together to enjoy moments of togetherness with our brand. Research analysis indicates that youngsters love to get together, and it is when they are enjoying themselves, that will consume coke. For Pakistani youth, socializing with friends and family is µcore¶ behavior in their lives. Coke¶s brand personality is all about togetherness. At times, Coca Cola Intl seeks to promote itself through sponsoring events. Since many years, Basanat festival has somewhat become ³Coke Festival´. c) Market Needs: In coke marketing, main idea is to serve it cold, so we can say that, they focus more on hot areas of the world, i.e. middle east etc and there sale increase in summer. The market needs vary with time and Coke Intl. introduces its products over time e.g. Coke Cherry etc. d) Market Behavior: The behavior of Indian market has always been orientated on ³WHATS COLD GETS SOLD´. People normally focus on buying anything that is cold either Pepsi or Coke. The market behavior in India has not changed a lot as people are not entirely health conscious but over a few years due to increasing awareness of obesity, people have adopted an alienated behavior to soft drinks, which is why Coca Cola Intl. has provided them with the perfect solution i.e. provide a product exactly when it is needed.
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Recommendations
After completing our project we have come up with following recommendations for the Coca Cola Company, which are following: y Currently in India there is more demand of Coke, the company can extend their portfolio by introducing new flavors. y It is observed that people in India like less sweet cola drink. So the CocaCola Company should think about bringing innovations in their products for example new diet flavors or maybe more juices so as to fulfill the need of local market. y Marketing team should try to increase the availability of Coke in rural areas.
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BIBLIOGRAPHY
ALL SECONDARY SOURCE OF INFORMATION ARE TAKEN FROM SOME OF THE WEBSITES MENTIONED BELOW:
www.wikipedia.co www.cocacola.com www.thecocacolacompany.com www.fotosearch.com
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doc_792352617.docx
INDEX
1. Introduction 2. Major Products Of Coca-Cola 3. History 4. Market Analysis 5. SWOT Analysis 6. Competition 7. Path Towards Success 8. Vision & Mission 9. Marketing Objective 10. 4 P¶s Of Busiiness Marketing 11. Stratergy 12. Environmental Issues 13. Health Issues 14. India secret Formula Ban 15. Sponsership 16. The Coca-Cola Company Stock Quote 17. The Coca-Cola Company Income Statement 18. The Coca-Cola Company Balance Sheet 19. The Coca-Cola Company Cash Flow Statement 20. Market Summary 21. Recommedation 22. Bibliography
2
INTRODUCTION
The Coca-Cola Company begin in 1886, when an Atlanta pharmacist, Dr. John Pemberton, began to produce Coca-Cola syrup for sale in fountain drinks. However the bottling business began in 1899 . Coca-Cola is a soft drink sold in the stores, restaurants, and vending machines of more than 200 countries. The company produces concentrate, which is then sold to licensed Coca-Cola bottlers throughout the world. The bottlers, who hold the contracts with the company, produce finished product in cans and bottles from the concentrate in combination with filtered water and sweeteners.The bottlers then sell, distribute and merchandise Coca-Cola to retail stores and vending machines. The Coca-Cola Company also sells concentrate to major restaurants and foodservice distributors.
Type Manufacturer Founder (s) Country of Origin Introduced Area Served Color
Soft Drink (Cola) The Coca- Cola Company John S. Pemberton United States 1886 Over 200 countries Caramel E-150d
3
Flavors
Cola, Cola Green Tea, Cola Lemon, Cola Lemon Lime, Cola Lime, Cola Orange and Cola Raspberry.
Employees Servings per Day Website
92,400 1.6 Billion www.coca-cola.com
4
MAJOR PRODUCTS OF COCA-COLA
Product Name Image
Coke
Sprite
Fanta
Diet Coke
Minute Maid
Minute Maid Juices
Kinley Drinking Water
5
HISTORY
1886: - In the first year the company sold about 9 glasses of coca-cola a day . - The First Ever Adverisement for Coca-Cola appeared in Atlanta Journal. 1887: -To increase sales free drink coupons were distributed to the people. 1893: -The Coca-Cola trademark registered in the U.S patent Office. 1894: -Coca-Cola was put in Bottles. 1904: -The First Magazine Ads for Coca-Cola Appeared in National Consumer Publication. 1909: -The Bottles of Coca-Cola started to deliver by Horse-Drawn Carriage. 1919: -Coca-Cola got listed on New York Stork Exchange at $40/share. 1936: -Coca-Cola Celebrated its 50th anniversary.
6
1941-1959: -Coca-Cola is Enjoyed in 120 Countries Worldwide. 1961: -Sprite was Introduced. 1964: -Lift Top Cans Introduced. 1977: - Coca-Cola came in India. 1978: - Coca-Cola came in hina. 1982: -Diet Coke Introduced. 1985: -Coca-Cola became the First soft drink in Space when Astronauts Test the ³ COCA-COLA SPACE CAN ´ abord Space Shuttle Challenger. -The company introduced the ³NEW COKE ´. 1986: -100 Years of Coca-Cola.
7
1990: -Coca-Cola came in East-Germany. 1991: -Coca-Cola introduced first bottle made partially with recycled plastic, an innovation for the industry. 1993: After 16 years of absence Coca-Cola returned in India. 1999: -Dasani, a bottled water product , joins the company line up of brands. 2005: -Coca-Cola Zero introduced. -The company extended its sponsorship of the Olympic Games through 2020. 2009: -Worlds largest bottle-to-bottle recycling plant was open. 2011: -The Coca-cola Celebrates its 125th Anniversary with innovation, cultural events and exclusive collaboration around the globe.
8
Market Analysis
The biggest company in the soft drink industry,Coca Cola enjoys the largest market share.This company controls about 59% of the world market. In 2002, the company grew their carbonated soft-drink business by nearly 250 million unit cases and generated record volumes. Because carbonated soft drinks are the largest growth segment within the nonalcoholic ready-to-drink beverage category measured by volume, that is why they are focusing more on this and they are continually increasing the pace because they know that accelerating this pace is crucial to their future success. In Asian population, which is the satisfied customer of Coca Cola, is approximately 4.2 billion and the average consumer enjoys close to four servings of our products each month. Through an intense focus on Coca-Cola, innovation and new beverages, the company has achieved volume growth of 22 percent in 2009. So the company is emphasizing more in this area and is trying to develop a strategy, which can increase the growth of the consumption of Coca Cola by the people of Asia. Among the countries of Asia, Japan has the highest percentage, which is about 29%. Among others, Pakistan, India and Bangladesh are those countries where the average consumption is increasing day by day. a) External Factors i) Customers: Customer satisfaction is considered as being the most important and vital things in Coca Cola¶s progress.
9
The company to an extend has increase volume worldwide by 7 percent with strong international growth of 8.2 percent by 2010. It focuses on: y Customer Database y Getting new potential customers, side by side retaining old ones. y Giving customers more than just a soft drink. y Brand loyalty.
ii ) Competitor Analysis: MAJOR COMPETETOR: PEPSI CO.
PepsiCo is a world leader in convenient foods and beverages, with revenues of about $27 billion and over 143,000 employees. The company consists of the snack businesses of Frito-Lay North America and Frito-Lay International. Pepsi-Cola beverages are available in more than 190 countries and territories. In Asia, they selected Lahore to make their regional office. This was done in 1970. This regional office is monitoring all the operations carried out in South West Asia. Internal Factors: i) Company:
10
The Coca Cola Company has always focused on portraying a simple yet strong brand image. Their motto was: Know the most recognized word on the planet after ³OK´!
In December 1991, a merger between Coca-Cola Enterprises and the Johnston Coca-Cola Bottling Group, Inc. (Johnston) created a larger, stronger Company, again helping accelerate bottler consolidation. As part of the merger, the senior management team of Johnston assumed responsibility for managing the Company, and began a dramatic, successful restructuring in 1992.Unit case sales had climbed to 1.4 billion, and total revenues were $5 billion.
11
SWOT Analysis
SWOT analysis is a technique much used in much general management as well as marketing scenarios. SWOT consists of examining the current activities of the organization- its Strengths and Weakness- and then using this and external research data to set out the Opportunities and Threats that exist. Strengths: Coca-Cola has been holding a large part of world culture for a very long time. Coca cola has focused on brand image and brand loyalty along with providing supreme taste and quality. Additionally, Coca-Cola's bottling system is one of their greatest strengths. It allows them to conduct business on a global scale while at the same time maintain a local approach. In India, people don¶t care before drinking that whether it is ³Pepsi´ or ³Coke´. They don¶t actually differentiate between these two brands in order to their tastes. Consumers basically drink what they get. They believe on ³WHATS COLD GETS SOLD´ For this reason Coca-Cola Intl has provided their coolers and freezers in the market. They have maximum number of coolers and freezers in the market. They provide this infrastructure free of cost just to provide chilled coke to their customer, which they want to be purchase.
12
Weaknesses: Coca-Cola contains caffeine and caramel which can adverse effects on the teeth (if prolonged) which is an issue for health care. It also has got sugar by which continuous drinking of Coca-Cola may cause health problems. Being addicted to Coca-Cola also is a health problem, because drinking of Coca-Cola daily has an effect on your body after few years. Another weakness which may be considered regionally is its sugar content. Pepsi Co. makes its sales only because Pepsi is so far, having a larger market share only because it is more sugary and Asian people focus on sugary drinks. Opportunities: Brand recognition is an important factor in affecting Coke's competitive position. Coca-Cola's brand name is known well throughout the world today. The main concern of Coca Cola Marketing Strategies has been just to improvise its system and make it even more recognizable. The bottling system of Coca Cola allows the company to take advantage of its growth opportunities. Threats: The main threat is Price. A small increase in price, let¶s say just 1 rupee will have a drastic effect on sales. Only because people will go for the next available substitute i.e. Pepsi so price change is a major factor in affecting Sales of coca cola and in marginal profits. Coca Cola can face major losses if it goes for a sudden increase or decrease in price.
13
Competition
The major competition faced by Coca Cola International is Pepsi Co. PepsiCo is a world leader in convenient foods and beverages, with revenues of more then $27 billion and over 143,000 employees. The company consists of the snack businesses of Frito-Lay North America and Frito-Lay International; the beverage businesses of Pepsi-Cola North America, Gatorade/Tropicana North America and PepsiCo Beverages International; and Quaker Foods North America, manufacturer and marketer of ready-to-eat cereals and other food products. PepsiCo brands are available in nearly 200 countries and territories.
Major Pepsi Co. products include: y Pepsi y Teem y Mirinda y Pepsi Max y Pepsi Lemon y Pepsi Blue y Mountain Dew y 7up
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PATH TOWARDS SUCCESS
Coca Cola marketing team focuses not only on the results but also on the following y They firmly believe if you want to establish a clear image in the minds of consumers, you first need a clear image in your own mind. y Since the major competitor is Pepsi Co. so Coca Cola Intl has focused on neutralizing the competition. y If Pepsi Co. launched Crystal Pepsi then Coca Cola Intl launched Diet Coke. y The Coca Cola marketing team maintained their focus strongly on the product itself. When they changed bottle shape, many people started buying bottles instead of the drink itself y The Coca Cola team learnt from everything. Even if a customer said ³no´, they focused on ³why´ did he say no and then found out ways on ³how´ to solve that issue. y Formula for positioning success : y They specified the criteria for each product offered because if you don¶t specify the criteria for choosing, consumers will develop their own, which is dangerous.
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VISION & MISSION
Our Vision The world is changing all around . To continue to thrive as a business over the next ten year. and beyond, it is necessary to look ahead, understand the trends and forces that will shape the business in the future and move swiftly to prepare for what's to come. Its must get ready for tomorrow today. That's what our 2020 Vision is all about. It creates a long-term destination for our business and provides us with a "Roadmap" for winning together with our bottling partners. Our Mission To Refresh the World...in body, mind, and spirit. To Inspire Moments of Optimism...through our brands and our actions. To Create Value and Make a Difference...everywhere we engage.
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Marketing Objectives
The ultimate objectives of our business strategy are: y To increase volume y Expand our share of worldwide nonalcoholic ready to drink beverages sale y Maximize our long-term cash flows The Coca Cola system has more than 16 million customers around the world that sells or serves our products directly to consumers. We keenly focus on enhancing value for these customers and helping them grow their beverage businesses. We strive to understand each customer¶s business and needs, whether that customer is a sophisticated retailer in a developed market a kiosk owner in an emerging market. Aims: People: Being a great place to work where people are inspired to be the best they can be. Portfolio: Bringing to the world a portfolio of quality beverage brands that anticipate and satisfy people's desires and needs. Partners: Nurturing a winning network of customers and suppliers, together we create mutual, enduring value. Planet: Being a responsible citizen that makes a difference by helping build and support sustainable communities. Profit: Maximizing long-term return to shareowners while being mindful of our overall responsibilities.
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4 P¶s of Business Marketing Price, Promotion, Product, and Place a) Product: Businesses must think about products on three different levels, which are the core product, the actual product and the augmented product. The core product is what the consumer is actually buying and the benefits it gives. Coca Cola customers are buying a wide range of soft drinks. The actual product is the parts and features, which deliver the core product. Consumers will buy the coke product because of the high standards and high quality of the Coca Cola products. The augmented product is the extra consumer benefits and services provided to customers. Since soft drinks are a consumable good, the augmented level is very limited. b) Promotion Over the time Coca Cola has spent millions of dollars developing and promoting their brand name, resulting in worldwide recognition. 'Coca-Cola' is the most recognized trademark, recognized by 94% of the world's population and is the most widely recognized word after "OK". Coca Cola¶s red and white colors and special writing are all examples of world-wide trademarks. There are a number of branding strategies: Generic brand strategy Individual brand strategy Family brand strategy Manufacturer¶s brand strategy Private brand strategy Hybrid brand strategy
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Coca Cola utilizes the Individual brand strategy as Coca Cola¶s major products are given their own brand names e.g. Fanta, Sprite, Coca Cola etc although they may be presented as different lines they operate under the name of Coca Cola. c) Place: The Coca Cola Company has always focused wide scale distribution. This is the reason, 94% of the world¶s population knows about Coke. ³Coca Cola´ is the most recognized word after OK. Coca Cola sets its own distributions directly to stores. Stores include a wide variety of Supermarket, Marts, Convenience Stores, Retail Stores and Departmental Stores. The channel distribution of Coca Cola Intl is extremely large. Over time, they have produced many products and thus have increased number of warehouses for specific products. Coca Cola Intl has also improved services via setting up a national service network.
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d) Price Since Coca Cola Intl faces a major threat from its competitor Pepsi Co., so naturally the Pricing is done keeping in view the increasing rivalry with Pepsi. Pricing is basically standard for all over the world.
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Strategy
The strategy for the future of the company is very straightforward. The marketing strategy for the year 2011 is as follows: Accelerate carbonated soft-drink growth, led by Coca-Cola. Selectively broaden the family of beverage brands to drive profitable growth. Grow system profitability and capability together with our bottling partners. Serve customers with creativity and consistency to generate growth across all channels. Direct investments to highest potential areas across markets. Drive efficiency and cost-effectiveness everywhere.
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Health effects
Acidity and tooth decay Numerous court cases have been filed against the Coca-Cola Company since the 1940s alleging that the acidity of the drink is dangerous. In some of these cases, evidence has been presented showing Coca-Cola is no more harmful than comparable soft drinks or acidic fruit juices. Frequent exposure of teeth to acidic drinks increases the risk of tooth damage through dental erosion. This form of tooth decay is unrelated to dental caries.
India secret formula ban
Coca-Cola was India's leading soft drink until 1977 when it left India after a new government ordered the company to turn over its secret formula for Coca-Cola and dilute its stake in its Indian unit as required by the Foreign Exchange Regulation Act (FERA). In 1993, the company (along with PepsiCo) returned after the introduction of India's Liberalization policy.
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Sponsorship
Sports Coca-Cola sponsored the English Football League from the beginning of the 200405 season (beginning August 2004) to the start of 2010/11 season, when the Football League found a new sponsor in NPower. Other major sponsorships include NASCAR, the NBA, the PGA Tour, NCAA Championships, the Olympic Games, the NRL, the FIFA World Cups and the UEFA Euro. In the Philippines, it has a team in the Philippine Basketball Association, the Powerade Tigers. Television The company sponsors the hit Fox singing-competition series American Idol. Coca-Cola is a sponsor of the nightly talk show on PBS, Charlie Rose in the US.
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The Coca-Cola Company Stock Quote (NYSE: KO)
Latest 06/20/11 12:20:50 EST $66.11 0.490 0.750 $66.12 $65.37 Change ($) Change (%) High Low
Quotes delayed 15 minutes for NASDAQ, 20 minues for NYSE and AMEX.Market Data provided by Interactive Data.Powered and Implemented by Interactive Data Manage Solutions.
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The Coca-Cola Company Income Statement
Dec 10 Revenue Cost of Goods Sold Gross Profit Gross Profit Margin SG&A Expense Depreciation & Amortization Operating Income Operating Margin Nonoperating Income Nonoperating Expenses Income Before Taxes Income Taxes Net Income After Taxes Continuing Operations Discontinued Operations 35,119.0 12,693.0 22,426.0 63.9% 13,158.0 1,443.0 8,449.0 24.1% 6,210.0 (416.0) 14,243.0 2,384.0 11,859.0 11,809.0 -Dec 09 30,990.0 11,088.0 19,902.0 64.2% 11,358.0 1,236.0 8,231.0 26.6% 821.0 (106.0) 8,946.0 2,040.0 6,906.0 6,824.0 -Dec 08 31,944.0 11,374.0 20,570.0 64.4% 11,774.0 1,228.0 8,446.0 26.4% (902.0) (105.0) 7,439.0 1,632.0 5,807.0 5,807.0 --
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Total Operations Total Net Income Net Profit Margin Diluted EPS from Total Net Income Dividends per Share
11,809.0 11,809.0 33.6%
6,824.0 6,824.0 22%
5,807.0 5,807.0 18.2%
5.06
2.93
2.49
1.76
1.64
1.52
All amounts in millions of US Dollars except per share amounts.
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The Coca-Cola Company Balance Sheet
Assets Dec 10 Dec 09 Dec 08
Current Assets Cash Net Receivables Inventories Other Current Assets Total Current Assets Net Fixed Assets Other Noncurrent Assets Total Assets Liabilities 8,517.0 4,430.0 2,650.0 5,982.0 21,579.0 14,727.0 36,615.0 72,921.0 Dec 10 7,021.0 3,758.0 2,354.0 4,418.0 17,551.0 9,561.0 21,559.0 48,671.0 Dec 09 4,701.0 3,090.0 2,187.0 2,198.0 12,176.0 8,326.0 20,017.0 40,519.0 Dec 08
Current Liabilities Accounts Payable Short-Term Debt Other Current Liabilities Total Current Liabilities 1,887.0 9,376.0 7,245.0 18,508.0 1,410.0 6,800.0 5,511.0 13,721.0 1,370.0 6,531.0 5,087.0 12,988.0
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Long-Term Debt Other Noncurrent Liabilities Total Liabilities
14,041.0 9,369.0 41,918.0
5,059.0 5,092.0 23,872.0
2,781.0 4,278.0 20,047.0
Shareholder's Equity Preferred Stock Equity Common Stock Equity Total Equity -31,003.0 31,003.0 -24,799.0 24,799.0 -20,472.0 20,472.0 2,313,555.3
Shares Outstanding (thou.) 2,292,000.0 2,303,000.0
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The Coca-Cola Company Cash Flow Statement
Dec 10 Net Operating Cash Flow Net Investing Cash Flow Net Financing Cash Flow Net Change in Cash Depreciation & Amortization Capital Expenditures Cash Dividends Paid 9,532
Dec 09 8,186
Dec 08 7,571 (2,363.0) (3,985.0) 608.0 1,228.0 (1,968.0) (3,521.0)
(4,405.0) (4,149.0) (3,465.0) (2,293.0) 1,496.0 1,443.0 2,320.0 1,236.0
(2,215.0) (1,993.0) (4,068.0) (3,800.0)
All amounts in millions of US Dollars except per share amounts
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Market Summary a) Market Growth: According to the 2005 Annual Report, the company sells beverage products in more than 200 countries. The report further states that of the more than 50 billion beverage servings of all types consumed worldwide every day, beverages bearing the trademarks owned by or licensed to Coca-Cola account for approximately 1.5 billion. Of these, beverages bearing the trademark "Coca-Cola" or "Coke" accounted for approximately 78% of the Company's total gallon sales. Also according to the 2007 Annual Report, Coca-Cola had gallon sales distributed as follows:
37% in the United States 43% in Mexico, Brazil, Japan and the People's Republic of China 20% spread throughout the rest of the world
In 2010 it was announced that Coca-Cola had become the first brand to top £1 billion in annual UK grocery sales.
b) Psychographics Segmentation & Market Trends: Coke segments different income levels by packaging. Like for people with a low level of income, it has small returnable glass bottle, for the mediocre class it has non returnable bottle (NRT) and for people with a high level of income it has Coke tin.
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Sometimes, for the promotion strategy of coke, the Coke Company introduces prizes on the top cover. So they segment people by benefit sought, i.e. by giving them prizes. Coke will always show activities, where people get together to enjoy moments of togetherness with our brand. Research analysis indicates that youngsters love to get together, and it is when they are enjoying themselves, that will consume coke. For Pakistani youth, socializing with friends and family is µcore¶ behavior in their lives. Coke¶s brand personality is all about togetherness. At times, Coca Cola Intl seeks to promote itself through sponsoring events. Since many years, Basanat festival has somewhat become ³Coke Festival´. c) Market Needs: In coke marketing, main idea is to serve it cold, so we can say that, they focus more on hot areas of the world, i.e. middle east etc and there sale increase in summer. The market needs vary with time and Coke Intl. introduces its products over time e.g. Coke Cherry etc. d) Market Behavior: The behavior of Indian market has always been orientated on ³WHATS COLD GETS SOLD´. People normally focus on buying anything that is cold either Pepsi or Coke. The market behavior in India has not changed a lot as people are not entirely health conscious but over a few years due to increasing awareness of obesity, people have adopted an alienated behavior to soft drinks, which is why Coca Cola Intl. has provided them with the perfect solution i.e. provide a product exactly when it is needed.
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Recommendations
After completing our project we have come up with following recommendations for the Coca Cola Company, which are following: y Currently in India there is more demand of Coke, the company can extend their portfolio by introducing new flavors. y It is observed that people in India like less sweet cola drink. So the CocaCola Company should think about bringing innovations in their products for example new diet flavors or maybe more juices so as to fulfill the need of local market. y Marketing team should try to increase the availability of Coke in rural areas.
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BIBLIOGRAPHY
ALL SECONDARY SOURCE OF INFORMATION ARE TAKEN FROM SOME OF THE WEBSITES MENTIONED BELOW:
www.wikipedia.co www.cocacola.com www.thecocacolacompany.com www.fotosearch.com
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