Company Profile of Coca-Cola Company : The Coca-Cola Company (NYSE: KO) is a beverage retailer, manufacturer and marketer of non-alcoholic beverage concentrates and syrups. The company is best known for its flagship product Coca-Cola, invented by pharmacist John Stith Pemberton in 1886. The Coca-Cola formula and brand was bought in 1889 by Asa Candler who incorporated The Coca-Cola Company in 1892. Besides its namesake Coca-Cola beverage, Coca-Cola currently offers more than 500 brands in over 200 countries or territories and serves 1.6 billion servings each day.[3]
The company operates a franchised distribution system dating from 1889 where The Coca-Cola Company only produces syrup concentrate which is then sold to various bottlers throughout the world who hold an exclusive territory. The Coca-Cola Company owns its anchor bottler in North America, Coca-Cola Refreshments.
The Coca-Cola Company is headquartered in Atlanta, Georgia. Its stock is listed on the NYSE and is part of DJIA, S&P 500 Index, the Russell 1000 Index and the Russell 1000 Growth Stock Index. Its current chairman and CEO is Muhtar Kent.
NDUSTRY ANALYSIS Consumption: The sales volume for the functional drinks segment in Canada has reached $342.2 millions in 2004 for a volume of 125.9 million liters . This product segment has shown a steady growth since 1999: an increase of 13.5% over a period of 6 years (Appendix A). The consumption rate per capita in 2004 has reached4
3.94 liters, which represents a 4.0% increase compared to 1999 . The growth of this particular market is largely due to a slow shift in consumer trends. Trends: Through the early 1960s, soft drinks were synonymous with “colas” in the mind of consumers. In the 1980s and 1990s, however, other beverages (from bottled water to tea) became more popular. Coca-Cola and Pepsi responded by expanding their offerings through alliances (e.g. Coke & Nestea) and acquisitions (e.g. Coke & Minute Maid), but also by focusing efforts on portfolio diversification. Today, while the soft drink industry’s value has increased in 2004, the volume sales ofcarbonated soft drinks has declined due to a large proportion of consumers who are opting for the trend towards healthier alternatives in the functional drink segment (energy drinks, smoothies, milk & juice drinks, sports drinks) as well as bottled juices and water . Companies have been actively engaged in new product developments in order to counter the growing concerns about negative health impacts of high-fructose drinks, but also to increase the demand in a market where product offerings are quickly maturing . New flavor introductions and health-conscious formulations have been launched in an attempt to offset the decline in carbonated soft drink sales . The functional market is expected to show sustained growth and consumer interest in the future years as consumption shifts to trendier, healthier and more sophisticated products .
Target Market
Coca-Cola currently offers more than 500 brands in over 200 countries or territories and serves 1.6 billion servings each day. The target market of Coca Cola is not limited to age, area or gender, it is present globally and is serving people at offices, homes, parties, restaurants, bars and every place where one can be present. It usually represents itself as a market for youngsters but products are also being offered specifically for older people.
Industry Trends
Coca Cola has always been promoter of research and development, and time to time innovations in product formulas are visualized. It suitably follows the trend of health consciousness because of soft drinks and has acquired the fresh juice company Odwalla. Coca Cola has more than 59 percent of market share in beverages industry (McKay, 2009). Coca Cola’s global movement owes to its long history of acquisitions as it had acquired Minute Maid, Thumps Up, Barq’s, Odwalla, Smoothies and Bars and Fuze Beverages.
Goals
The goals of the company are very straight and specific, which includes;
• Maximum consumption of their product.
• Offering products at maximum outlets, more suitably to be present universally at each and every store in all part of the world.
• Brand association with reputed fast foods like McDonalds.
• To invest more on research, the estimated amount being $50 million.
• Safety and health of the customers by investing more on natural sweeteners.
• Providing the customers, an exact figure of what they are consuming in each of their serving.
• Low Caloric product fo4r5mation to meet the global needs.
Strategies
The key strategies of the company include;
• The main strategy and slogan of the company is availability, affordability and acceptability of the brand.
• Sustainable development of the company, keeping pace with the market to ensure its future presence.
• Periodic assessments of business plans, product response and planning.
• Training sessions of tools and planning to the associates, for the excellent and active performances at the ground.
• Keep balance of relations regarding goodwill and strategies with anchor bottlers and franchises to keep the process running.
• Enhancements of necessary culture and capabilities.
• Engaging other partners in progress through a leadership team.
Yearly Marketing Budget
Total revenue of the company by year 2010 was U.S $ 35.119 billion, with operating income of $8.449 billion and net income of U.S $11.809 billion. Total assets of the company account for U.S $72.921 billion. With the perfect strategy and high revenue, the UK grocery sales were topped by Coca Cola as it topped £1 billion of sales in 2010 (Stephen, 2001).
Marketing Mix of Coca Cola
Product
The Company is hosting a wide range of beverage products to ensure customers wide choice.
• Over 35,000 beverages are produced by the company.
• The bench mark of the company is coke and the major products include Coca-Cola, Sprite, Fanta, Barq’s Root Beer, and Coke Zero.
• Diet beverages are also manufactured by the company since 2001.
• Other beverages include pure fruit juices and fruit drinks, teas, coffees, soya drinks and much more.
• Aquafina is the mineral water branded in the name of coca cola.
• The products of the company are syrups and concentrates which are provided to the bottlers for dilution, packaging and transport to the outlets. The principle bottlers of the company include Coca-Cola Enterprises (CCE), Coca Cola Femsa S.A.B. de C.V. (KOF), and Coca-Cola Hellenic Bottling Company (CCH) (Umpierre, Hill, and Anderson, 1985).
• Fountain syrups are the only raw form which is processed by the company itself, packed in tins and bottles, and dispatched to the markets.
• Energy drinks of coca cola are very popular in spots persons.
Price
Price ranges of coca cola are suitable for all type of its customers. As there is a very large variety of products, so there is also huge price range offered in that perspective.
Placement
Coca Cola is a globally recognized company. Its most of the products are available around the globe, except few.
Promotion
• Sports like cricket are thoroughly sponsored and brand name is enhanced
• Print media has special inclusions of coke and its products
• T.V commercials of maximum duration take immediate attention of customers and are memorable for long time.
Competitors
• Largest competitor of the company is PepsiCo. A Coca Cola company relies on its nonalcoholic beverages for its revenue in U.S specially but PepsiCo relies almost fifty percent on its snack production.
• Dr Pepper Snapple Group (DPS) is also Coke competitor as it has huge sales comparable to Coca Cola.
Strengths
• It is biggest beverage Seller Company in the World.
• Its franchise is available in more than 200 countries.
• The brand name is trust worthy for the customers.
• It is most recognizable trademark in the World.
• There is no gender issue regarding employees induction.
• Coco Cola has been branding its name in Universal sports like Cricket.
Weaknesses
• Coca cola is implying all its research and development on beverage section and is not putting efforts on snacks whereas its major competitor PepsiCo is earning 42% from beverages and other snacks.
• Political lobbying often imposes pressure on the manufacturing section so company should refrain itself from political scenario.
Monthly Tactics
Every season is pre-caught and promotional videos are launched on T.V channels for new products and seasonal inductions. Every month almost 20 new products are launched. New flavors are introduced in existing beverages.
Situation Analysis
Market Analysis:
The market analysis investigates both the internal and external business environment. It is vital that Coca cola carefully monitor both the internal and external aspects regarding it’s business as both the internal and external environment and their respective influences will be decisive traits in relation to Coke’s success and survival in the soft drink industry.
Internal Business Environment
The internal business environment and its influence is that which is to some extent within the business’s control. The main attributes in the internal environment include efficiency in the production process, through management skills and effective communication channels. To effectively control and monitor the internal business environment, Coke must conduct continual appraisals of the business’s operations and readily act upon any factors, which cause inefficiencies in any phase of the production and consumer process.
External Business Environment
The External business environment and its influences are usually powerful forces that can affect a whole industry and, in fact, a whole economy. Changes in the external environment will create opportunities or threats in the market place Coca cola must be aware off. Fluctuations in the economy, changing customer attitudes and values, and demographic patterns heavily influence the success of Coka Cola’s products on the market and the reception they receive from the consumers.
SWOT Analysis:
SWOT stands for Strengths Weakness Opportunities Threats. SWOT analysis is a technique much used in many general management as well as marketing scenarios. SWOT consists of examining the current activities of the organisation- 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 a complex part of world culture for a very long time. The product's image is loaded with over-romanticizing, and this is an image many people have taken deeply to heart. The Coca-Cola image is displayed on T-shirts, hats, and collectible memorabilia. This extremely recognizable branding is one of Coca-Cola's greatest strengths. "Enjoyed more than 685 million times a day around the world Coca-Cola stands as a simple, yet powerful symbol of quality and enjoyment" (Allen, 1995).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. The bottling companies are locally owned and operated by independent business people who are authorized to sell products of the Coca-Cola Company. Because Coke does not have outright ownership of its bottling network, its main source of revenue is the sale of concentrate to its bottlers.
Weaknesses:
Weaknesses for any business need to be both minimised and monitored in order to effectively achieve productivity and efficiency in their business’s activities, Coke is no exception. Although domestic business as well as many international markets are thriving (volumes in Latin America were up 12%), Coca-Cola has recently reported some "declines in unit case volumes in Indonesia and Thailand due to reduced consumer purchasing power." According to an article in Fortune magazine, "In Japan, unit case sales fell 3% in the second quarter [of 1998]...scary because while Japan generates around 5% of worldwide volume, it contributes three times as much to profits. Latin America, Southeast Asia, and Japan account for about 35% of Coke's volume and none of these markets are performing to expectation.Coca-Cola on the other side has effects on the teeth 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.
Opportunities:
Brand recognition is the significant factor affecting Coke's competitive position. Coca-Cola's brand name is known well throughout 94% of the world today. The primary concern over the past few years has been to get this name brand to be even better known. Packaging changes have also affected sales and industry positioning, but in general, the public has tended not to be affected by new products. Coca-Cola's bottling system also allows the company to take advantage of infinite growth opportunities around the world. This strategy gives Coke the opportunity to service a large geographic, diverse area.
Threats:
Currently, the threat of new viable competitors in the carbonated soft drink industry is not very substantial. The threat of substitutes, however, is a very real threat. The soft drink industry is very strong, but consumers are not necessarily married to it. Possible substitutes that continuously put pressure on both Pepsi and Coke include tea, coffee, juices, milk, and hot chocolate. Even though Coca-Cola and Pepsi control nearly 40% of the entire beverage market, the changing health-consciousness of the market could have a serious affect. Of course, both Coke and Pepsi have already diversified into these markets, allowing them to have further significant market shares and offset any losses incurred due to fluctuations in the market. Consumer buying power also represents a key threat in the industry. The rivalry between Pepsi and Coke has produce a very slow moving industry in which management must continuously respond to the changing attitudes and demands of their consumers or face losing market share to the competition. Furthermore, consumers can easily switch to other beverages with little cost or consequence.
Promotional strategyExplanation of promotional strategy
AdvertisingThe Coca-Cola Company uses advertising as its main source of increasing consumer awareness. It mainly uses the television. There are many television advertisements on Coca-Cola products. This source allows the company's products to reach a large audience.The latest television advertisement for Coca-Cola soft drinks was the 'You know you want it' advertisement. One of the older one are ' If you drink it, you get better of life' The company also uses the radio as another source of advertisement. This is a cheaper source of approach compared to the television.Recently, the company benefited from its involvement in the world's celebrated games such as the Olympics and the FIFA World Cup. Where millions were watching these games, the business had substantial advertising and promotions of the company's brands.The cost of advertising over the past 3 years is shown in Fig. (11).Cost ($ mil) YearFig. (11) The Coca-Cola Company's advertising costs
Personal sellingEvery year, The Coca-Cola Company has a highly trained sales team, which acts as a representative of the company to the retailers. This strategy helps to maintain service and product loyalty. It has been demonstrated by the business to be highly effective.
Publicity In February 2003, Vanilla Coke was released to the media as a news brief outlining the huge profit achieved by the business (from the Sydney Morning Herald 14th February 2003). This helped The Coca-Cola Company to strengthen the image of the business's products.
Place of distribution
The Coca-Cola Company sells its products to bottling and canning operations, distributors, fountain wholesalers and some fountain retailers. These then distributes them to retail outlets, milk bar and corner stores, restaurants, petrol stations and newsagents. This is shown in Fig. (12).
The Coca-Cola Company
Wholesalers/distributors
Retail/corner stores
Restaurants, petrol stations
Consumers
Fig. (12) The Coca-Cola Company's distribution channel
Place strategies
Place strategiesExplanation of place strategy
Indirect distributionThe Coca-Cola Company uses intermediaries in its distribution. That is, the company does not sell its products directly to its consumers.
Intensive distributionThe Coca-Cola Company uses the intensive distribution strategy. The business's products are sold in almost every outlet including: ·retail outlets ·small shops ·restaurants ·petrol stations ·newsagents ·schools ·sports and entertainment venues·from vending machines
The objectives of the marketing plan are strategically centered around 3 criteria: to create a strong consumer awareness towards a completely new bubble tea product from Coca- Cola, to establish a wide brand recognition through the capture of market shares in the functional drinks segment, and to become the top market leader in that particular segment within the forecasted sales figures. PRODUCT STRATEGY The core o Bubble Tea beverage in a pre-bottled, ready-to-drink format. The actual product o Packaging and labeling: see figure below o Branding: colorful, aspect of play, round shaped, prominent Bubble Buzz logo written in modern font, catchphrases such as “Think outside the Bubble” and “Get Your Buzz”. o Trade name: Bubble Buzz™, a Coca-Cola product o Brand personality: energy, funky, cool, functional, original, funny, healthy, etc. o Brand equity: Coca-Cola provides a quality, consistent, innovative and accessible soft drink reputation. Augmented product o Nutritional information, Status (social drink), Features promoting the website, Health benefit of a green tea base (ref.17) Marketing considerations o Product life cycle: Bubble Buzz is a low-learning product. With a strong marketing campaign, “sales [will] begin immediately and the benefits of the purchase are readily understood” (ref.11, p.301). Since Bubble Buzz is prone to product imitation, Coca-Cola’s strategy is to broaden distribution quickly, which is currently feasible thanks to the company’s high manufacturing capacity. o Product class: Food & beverage Soft Drinks Functional Drinks (refer to Appendix D2 for a break-down of the functional drinks market). o Bubble Buzz follows the practice of product modification (ref.11, p.304): Coca-Cola is introducing an existing beverage (bubble tea) but redefines the drink with a new, more convenient package. Bubble Tea will now become a widely available drink in multiple retailing (distribution) channels.
Major brands of coca cola •Coke
•Sprite
•Fanta
•Diet coke
•Coke classic
The company operates a franchised distribution system dating from 1889 where The Coca-Cola Company only produces syrup concentrate which is then sold to various bottlers throughout the world who hold an exclusive territory. The Coca-Cola Company owns its anchor bottler in North America, Coca-Cola Refreshments.
The Coca-Cola Company is headquartered in Atlanta, Georgia. Its stock is listed on the NYSE and is part of DJIA, S&P 500 Index, the Russell 1000 Index and the Russell 1000 Growth Stock Index. Its current chairman and CEO is Muhtar Kent.
NDUSTRY ANALYSIS Consumption: The sales volume for the functional drinks segment in Canada has reached $342.2 millions in 2004 for a volume of 125.9 million liters . This product segment has shown a steady growth since 1999: an increase of 13.5% over a period of 6 years (Appendix A). The consumption rate per capita in 2004 has reached4
3.94 liters, which represents a 4.0% increase compared to 1999 . The growth of this particular market is largely due to a slow shift in consumer trends. Trends: Through the early 1960s, soft drinks were synonymous with “colas” in the mind of consumers. In the 1980s and 1990s, however, other beverages (from bottled water to tea) became more popular. Coca-Cola and Pepsi responded by expanding their offerings through alliances (e.g. Coke & Nestea) and acquisitions (e.g. Coke & Minute Maid), but also by focusing efforts on portfolio diversification. Today, while the soft drink industry’s value has increased in 2004, the volume sales ofcarbonated soft drinks has declined due to a large proportion of consumers who are opting for the trend towards healthier alternatives in the functional drink segment (energy drinks, smoothies, milk & juice drinks, sports drinks) as well as bottled juices and water . Companies have been actively engaged in new product developments in order to counter the growing concerns about negative health impacts of high-fructose drinks, but also to increase the demand in a market where product offerings are quickly maturing . New flavor introductions and health-conscious formulations have been launched in an attempt to offset the decline in carbonated soft drink sales . The functional market is expected to show sustained growth and consumer interest in the future years as consumption shifts to trendier, healthier and more sophisticated products .
Target Market
Coca-Cola currently offers more than 500 brands in over 200 countries or territories and serves 1.6 billion servings each day. The target market of Coca Cola is not limited to age, area or gender, it is present globally and is serving people at offices, homes, parties, restaurants, bars and every place where one can be present. It usually represents itself as a market for youngsters but products are also being offered specifically for older people.
Industry Trends
Coca Cola has always been promoter of research and development, and time to time innovations in product formulas are visualized. It suitably follows the trend of health consciousness because of soft drinks and has acquired the fresh juice company Odwalla. Coca Cola has more than 59 percent of market share in beverages industry (McKay, 2009). Coca Cola’s global movement owes to its long history of acquisitions as it had acquired Minute Maid, Thumps Up, Barq’s, Odwalla, Smoothies and Bars and Fuze Beverages.
Goals
The goals of the company are very straight and specific, which includes;
• Maximum consumption of their product.
• Offering products at maximum outlets, more suitably to be present universally at each and every store in all part of the world.
• Brand association with reputed fast foods like McDonalds.
• To invest more on research, the estimated amount being $50 million.
• Safety and health of the customers by investing more on natural sweeteners.
• Providing the customers, an exact figure of what they are consuming in each of their serving.
• Low Caloric product fo4r5mation to meet the global needs.
Strategies
The key strategies of the company include;
• The main strategy and slogan of the company is availability, affordability and acceptability of the brand.
• Sustainable development of the company, keeping pace with the market to ensure its future presence.
• Periodic assessments of business plans, product response and planning.
• Training sessions of tools and planning to the associates, for the excellent and active performances at the ground.
• Keep balance of relations regarding goodwill and strategies with anchor bottlers and franchises to keep the process running.
• Enhancements of necessary culture and capabilities.
• Engaging other partners in progress through a leadership team.
Yearly Marketing Budget
Total revenue of the company by year 2010 was U.S $ 35.119 billion, with operating income of $8.449 billion and net income of U.S $11.809 billion. Total assets of the company account for U.S $72.921 billion. With the perfect strategy and high revenue, the UK grocery sales were topped by Coca Cola as it topped £1 billion of sales in 2010 (Stephen, 2001).
Marketing Mix of Coca Cola
Product
The Company is hosting a wide range of beverage products to ensure customers wide choice.
• Over 35,000 beverages are produced by the company.
• The bench mark of the company is coke and the major products include Coca-Cola, Sprite, Fanta, Barq’s Root Beer, and Coke Zero.
• Diet beverages are also manufactured by the company since 2001.
• Other beverages include pure fruit juices and fruit drinks, teas, coffees, soya drinks and much more.
• Aquafina is the mineral water branded in the name of coca cola.
• The products of the company are syrups and concentrates which are provided to the bottlers for dilution, packaging and transport to the outlets. The principle bottlers of the company include Coca-Cola Enterprises (CCE), Coca Cola Femsa S.A.B. de C.V. (KOF), and Coca-Cola Hellenic Bottling Company (CCH) (Umpierre, Hill, and Anderson, 1985).
• Fountain syrups are the only raw form which is processed by the company itself, packed in tins and bottles, and dispatched to the markets.
• Energy drinks of coca cola are very popular in spots persons.
Price
Price ranges of coca cola are suitable for all type of its customers. As there is a very large variety of products, so there is also huge price range offered in that perspective.
Placement
Coca Cola is a globally recognized company. Its most of the products are available around the globe, except few.
Promotion
• Sports like cricket are thoroughly sponsored and brand name is enhanced
• Print media has special inclusions of coke and its products
• T.V commercials of maximum duration take immediate attention of customers and are memorable for long time.
Competitors
• Largest competitor of the company is PepsiCo. A Coca Cola company relies on its nonalcoholic beverages for its revenue in U.S specially but PepsiCo relies almost fifty percent on its snack production.
• Dr Pepper Snapple Group (DPS) is also Coke competitor as it has huge sales comparable to Coca Cola.
Strengths
• It is biggest beverage Seller Company in the World.
• Its franchise is available in more than 200 countries.
• The brand name is trust worthy for the customers.
• It is most recognizable trademark in the World.
• There is no gender issue regarding employees induction.
• Coco Cola has been branding its name in Universal sports like Cricket.
Weaknesses
• Coca cola is implying all its research and development on beverage section and is not putting efforts on snacks whereas its major competitor PepsiCo is earning 42% from beverages and other snacks.
• Political lobbying often imposes pressure on the manufacturing section so company should refrain itself from political scenario.
Monthly Tactics
Every season is pre-caught and promotional videos are launched on T.V channels for new products and seasonal inductions. Every month almost 20 new products are launched. New flavors are introduced in existing beverages.
Situation Analysis
Market Analysis:
The market analysis investigates both the internal and external business environment. It is vital that Coca cola carefully monitor both the internal and external aspects regarding it’s business as both the internal and external environment and their respective influences will be decisive traits in relation to Coke’s success and survival in the soft drink industry.
Internal Business Environment
The internal business environment and its influence is that which is to some extent within the business’s control. The main attributes in the internal environment include efficiency in the production process, through management skills and effective communication channels. To effectively control and monitor the internal business environment, Coke must conduct continual appraisals of the business’s operations and readily act upon any factors, which cause inefficiencies in any phase of the production and consumer process.
External Business Environment
The External business environment and its influences are usually powerful forces that can affect a whole industry and, in fact, a whole economy. Changes in the external environment will create opportunities or threats in the market place Coca cola must be aware off. Fluctuations in the economy, changing customer attitudes and values, and demographic patterns heavily influence the success of Coka Cola’s products on the market and the reception they receive from the consumers.
SWOT Analysis:
SWOT stands for Strengths Weakness Opportunities Threats. SWOT analysis is a technique much used in many general management as well as marketing scenarios. SWOT consists of examining the current activities of the organisation- 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 a complex part of world culture for a very long time. The product's image is loaded with over-romanticizing, and this is an image many people have taken deeply to heart. The Coca-Cola image is displayed on T-shirts, hats, and collectible memorabilia. This extremely recognizable branding is one of Coca-Cola's greatest strengths. "Enjoyed more than 685 million times a day around the world Coca-Cola stands as a simple, yet powerful symbol of quality and enjoyment" (Allen, 1995).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. The bottling companies are locally owned and operated by independent business people who are authorized to sell products of the Coca-Cola Company. Because Coke does not have outright ownership of its bottling network, its main source of revenue is the sale of concentrate to its bottlers.
Weaknesses:
Weaknesses for any business need to be both minimised and monitored in order to effectively achieve productivity and efficiency in their business’s activities, Coke is no exception. Although domestic business as well as many international markets are thriving (volumes in Latin America were up 12%), Coca-Cola has recently reported some "declines in unit case volumes in Indonesia and Thailand due to reduced consumer purchasing power." According to an article in Fortune magazine, "In Japan, unit case sales fell 3% in the second quarter [of 1998]...scary because while Japan generates around 5% of worldwide volume, it contributes three times as much to profits. Latin America, Southeast Asia, and Japan account for about 35% of Coke's volume and none of these markets are performing to expectation.Coca-Cola on the other side has effects on the teeth 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.
Opportunities:
Brand recognition is the significant factor affecting Coke's competitive position. Coca-Cola's brand name is known well throughout 94% of the world today. The primary concern over the past few years has been to get this name brand to be even better known. Packaging changes have also affected sales and industry positioning, but in general, the public has tended not to be affected by new products. Coca-Cola's bottling system also allows the company to take advantage of infinite growth opportunities around the world. This strategy gives Coke the opportunity to service a large geographic, diverse area.
Threats:
Currently, the threat of new viable competitors in the carbonated soft drink industry is not very substantial. The threat of substitutes, however, is a very real threat. The soft drink industry is very strong, but consumers are not necessarily married to it. Possible substitutes that continuously put pressure on both Pepsi and Coke include tea, coffee, juices, milk, and hot chocolate. Even though Coca-Cola and Pepsi control nearly 40% of the entire beverage market, the changing health-consciousness of the market could have a serious affect. Of course, both Coke and Pepsi have already diversified into these markets, allowing them to have further significant market shares and offset any losses incurred due to fluctuations in the market. Consumer buying power also represents a key threat in the industry. The rivalry between Pepsi and Coke has produce a very slow moving industry in which management must continuously respond to the changing attitudes and demands of their consumers or face losing market share to the competition. Furthermore, consumers can easily switch to other beverages with little cost or consequence.
Promotional strategyExplanation of promotional strategy
AdvertisingThe Coca-Cola Company uses advertising as its main source of increasing consumer awareness. It mainly uses the television. There are many television advertisements on Coca-Cola products. This source allows the company's products to reach a large audience.The latest television advertisement for Coca-Cola soft drinks was the 'You know you want it' advertisement. One of the older one are ' If you drink it, you get better of life' The company also uses the radio as another source of advertisement. This is a cheaper source of approach compared to the television.Recently, the company benefited from its involvement in the world's celebrated games such as the Olympics and the FIFA World Cup. Where millions were watching these games, the business had substantial advertising and promotions of the company's brands.The cost of advertising over the past 3 years is shown in Fig. (11).Cost ($ mil) YearFig. (11) The Coca-Cola Company's advertising costs
Personal sellingEvery year, The Coca-Cola Company has a highly trained sales team, which acts as a representative of the company to the retailers. This strategy helps to maintain service and product loyalty. It has been demonstrated by the business to be highly effective.
Publicity In February 2003, Vanilla Coke was released to the media as a news brief outlining the huge profit achieved by the business (from the Sydney Morning Herald 14th February 2003). This helped The Coca-Cola Company to strengthen the image of the business's products.
Place of distribution
The Coca-Cola Company sells its products to bottling and canning operations, distributors, fountain wholesalers and some fountain retailers. These then distributes them to retail outlets, milk bar and corner stores, restaurants, petrol stations and newsagents. This is shown in Fig. (12).
The Coca-Cola Company
Wholesalers/distributors
Retail/corner stores
Restaurants, petrol stations
Consumers
Fig. (12) The Coca-Cola Company's distribution channel
Place strategies
Place strategiesExplanation of place strategy
Indirect distributionThe Coca-Cola Company uses intermediaries in its distribution. That is, the company does not sell its products directly to its consumers.
Intensive distributionThe Coca-Cola Company uses the intensive distribution strategy. The business's products are sold in almost every outlet including: ·retail outlets ·small shops ·restaurants ·petrol stations ·newsagents ·schools ·sports and entertainment venues·from vending machines
The objectives of the marketing plan are strategically centered around 3 criteria: to create a strong consumer awareness towards a completely new bubble tea product from Coca- Cola, to establish a wide brand recognition through the capture of market shares in the functional drinks segment, and to become the top market leader in that particular segment within the forecasted sales figures. PRODUCT STRATEGY The core o Bubble Tea beverage in a pre-bottled, ready-to-drink format. The actual product o Packaging and labeling: see figure below o Branding: colorful, aspect of play, round shaped, prominent Bubble Buzz logo written in modern font, catchphrases such as “Think outside the Bubble” and “Get Your Buzz”. o Trade name: Bubble Buzz™, a Coca-Cola product o Brand personality: energy, funky, cool, functional, original, funny, healthy, etc. o Brand equity: Coca-Cola provides a quality, consistent, innovative and accessible soft drink reputation. Augmented product o Nutritional information, Status (social drink), Features promoting the website, Health benefit of a green tea base (ref.17) Marketing considerations o Product life cycle: Bubble Buzz is a low-learning product. With a strong marketing campaign, “sales [will] begin immediately and the benefits of the purchase are readily understood” (ref.11, p.301). Since Bubble Buzz is prone to product imitation, Coca-Cola’s strategy is to broaden distribution quickly, which is currently feasible thanks to the company’s high manufacturing capacity. o Product class: Food & beverage Soft Drinks Functional Drinks (refer to Appendix D2 for a break-down of the functional drinks market). o Bubble Buzz follows the practice of product modification (ref.11, p.304): Coca-Cola is introducing an existing beverage (bubble tea) but redefines the drink with a new, more convenient package. Bubble Tea will now become a widely available drink in multiple retailing (distribution) channels.
Major brands of coca cola •Coke
•Sprite
•Fanta
•Diet coke
•Coke classic
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