The Coca Cola Company - Document Transcript

1. The Coca-Cola Company MKT300 October 8, 2008

2. A. Introduction The Coca-Cola Company is the world's largest beverage
company, operating in over 200 countries with a product line that includes
over 2,800 diverse items. The company's primary responsibility is to develop
concentrates, beverage bases and syrups, which are sold to bottling companies
that comprise the world's largest beverage distribution system. In addition to
product development, the Coca-Cola Company is responsible for product
marketing. Their mission is to refresh the world, inspire moments of optimism,
and to create value and make a difference. B. External Environment Socio-
Cultural Factors Coca-Cola is recognized as the world's most valuable brand.
The company has been extremely successful in global marketing, and experts
indicate that this success is largely based on product variation and adaptation
(Lamb, Hair & McDaniels, p. 114). Since the Coca-Cola Company extends to
over 200 countries (with headquarters located in Atlanta, Georgia), they have
an immense need to diversify their products and create a marketing plan that
meets the socio-cultural interests of all their customers (vendors) and
consumers (drinkers) around the world. The Coca- Cola trademark is
recognized worldwide, no matter what language is printed on the bottle.
However, the Coca-Cola Company must continue to tailor their marketing
plan and product development to respect each consumer's unique values,
beliefs and cultures. An example of the Coca-Cola Company adapting to the
external socio-cultural environment is in 2007, the Coca-Cola Company
received a silver award at the Iberoamerican Advertising Festival for their
quot;Levate la Manoquot; (Raise Your Hand) commercial that was aired in
Latin America (2007 Annual Report: Marketing Highlights). Coca-Cola has
also created a unique formulation for Sprite sold in Japan to meet the cultural
preferences (p. 114). Social factors have been carefully considered in the
company's marketing plan. The Coca-Cola Company has successfully
developed products to please the 21st century's health-conscious consumer
with brands like Coca-Cola Zero (their best selling brand in over 25 years),
sports drinks, and bottled water. Coca-Cola must continue to adapt to the
external environmental threat of the healthy lifestyle movement through
product development and marketing of healthy options available
3. in the product line. Economic Factors The United States is currently
experiencing an economic recession. This period of negative growth includes
higher unemployment, inflation, and cost of living expenses while consumers
are experiencing lower disposable income and purchasing power (p. 641). The
Coca-Cola Company contracts with numerous bottling companies around the
world to create and distribute their beverages. The weakened economy could
have a negative impact on any of the bottling companies, which would
threaten the stability of the Coca-Cola Company due to the dependent
relationship. The Coca-Cola Company must be profitable in order to sustain
their investment in communities around the world. Furthermore, small
communities depend on large businesses like the Coca-Cola Company to
strengthen their own economy and help create social and environmental
programs. The Coca-Cola Company has been very successful in helping other
nations grow and become economically stable by investing millions of dollars
back into the countries in which they are operating. Legal Factors Legal
 factors that could pose an environmental threat to the Coca-Cola Company
include new legislation or regulation of food and beverage products. Activists
are trying to push for more government involvement in product advertising
and labeling. While many laws have already been passed in this regard,
expanded or new laws could threaten the company by creating more overhead
expenses and decreasing the profit margin. Technological Factors In today's
marketplace, technology is a key player in helping a business stay profitable.
Large businesses, like the Coca-Cola Company, must invest in technological
research to find ways to become more efficient, and ultimately better
competitors. The Coca-Cola Company should address external technological
threats by investing directly in applied research to improve recording and
monitoring of the sales, production and delivery process between the Coca-
Cola Company and the bottling companies (p. 90). Competitive Factors
Consumer tastes and needs are ever changing. With the new focus on health
and nutrition and
4. concerns with obesity, many consumers are changing their behaviors and
products choices. Tea products, bottled water and energy drinks have become
favored as opposed to the typical soft drink. This is an external threat to the
Coca-Cola Company, as these changes in preferences have increased the
number of competitors in the industry. The Coca-Cola Company is not only in
competition with soft drink companies, like PepsiCo, Inc., but with other
unassuming companies like Unilever, Kraft Foods, and Nestle. The Coca-Cola
Company must continue aggressive efforts in responsible marketing,
community investment and product development to hold the No. 1 place in
sales of juice, ready-to-drink coffees, and teas. Surprisingly, Coca-Cola is
ranked No. 3 in soft drinks, but their No. 1 ranking in juices, teas and coffee
products indicate that they are in touch with their consumer's interests, and
that they understand that soft drinks cannot be their sole products in order to
sustain business. C. Target Market The primary target market of the Coca-
Cola Company is all consumers of all nations that have a thirst for a high-
quality beverage from a reputable brand that cares about small communities
and saving the environment. The Coca-Cola Company is well known for
advertising to persons of all ages, genders, incomes, ethnicity and lifestyles.
Nevertheless, more specifically, over the last decade the Coca-Cola Company
has focused on a secondary target market, based on specific psycho-graphic
characteristics, of consumers that are health conscious and interested in buying
products to support their overall wellness. The Coca-Cola Company has
reached this market through many product lines, and has customized their
website to provide healthy resources and marketing of products that are
considered smart choices. D. Product Coca-Cola is the number one selling
sparkling beverage in North America. Coca-Cola is primarily a business
product. As a business product, Coke is sold to grocery stores, convenience
stores, gas stations, vending companies and restaurants. Coke could also be
considered a convenience product as it is a relatively inexpensive item that
merits little shopping (Lamb, Hair, McDaniel, pg. 308). It is can found almost
everywhere, from schools, hotel, theme parks, airports, places of
5. business and even rest stops on the highways. Coca-cola was packaged solely
as soda fountain drink when it was introduced in 1886. In 1894, a candy
storeowner started placing the drink in bottles and approached the owner of
the Coca-Cola Company, Asa Griggs Candler, about bottling the drink.
 Candler declined. Then in 1899, Candler sold the rights to bottle the drink and
over the next 10 years, 400 bottling plants would be born. The packaging of
red and white Coca-Cola products is a world recognized. There are three main
functions of packaging (Lamb, Hair and McDaniel, pg. 320): 1. Contain and
protect the product 2. Promote the product 3. Facilitate storage, use and
convenience The Coca-Cola bottling plants have continued to develop new
packaging to meet these three functions, while also adding the ability to
recycle and produce a product that is no longer seen as waste, but as a valuable
resource for the future (www.coca-cola.com). This recycling initiative adds to
Coca-Colas position in the consumer market. The products that Coca-Cola
offers have many strong competitors and it is important for the brand to be
recognized everywhere as a leader in all aspects, from taste and price to
contributions and recycling. E. Price The Coca-Cola Company uses status quo
pricing. It is important for Coca-Cola to stay competitive in price with its
leading competitors. This type of pricing is also known as meeting the
competition. Most prices are set by the retailers of the product, but in general,
these prices are based on the growing rate. It almost seems as if Coca-Cola
and its competitors have a cooperative agreement when pricing – one week
Coca-Cola is on sale and the next it is Pepsi. However, this is not set by the
cola companies, but that of the grocery stores to maximize sales. F. Place
Coca-Cola is distributed to more than 200 countries, with more than 450
brands consisting of 2800 beverage products. Each of these products is
packaged and formulated to meet the consumer needs and preferences of its
region or country. Coca-cola produces the product, but relies on its
6. distribution channel to get the product to the consumer, by working with
bottling companies and retailers. Coca-cola does not have control over the
entire distribution channel, but has strong governing principles for all of its
suppliers to ensure they adhere to Coca-Colas guidelines. G. Promotion How
does Coke use marketing communication to reach customers? By making
relationships with not only consumers but also everyone who comes in contact
with Coke products, Coca Cola is able to market to a diverse amount of
people. According to Muhtar Kent, President and Chief Operating Officer of
The Coca-Cola Company, “Building cross-cultural relationships, in particular,
is why we are the largest beverage company in the world…and why nearly 80
percent of our revenue and profits come from outside North America.” (Kent
2007) Overall, good business ethics play a major role in how Coca Cola
handles the business. What does their promotional mix include? Coca Cola’s
promotional mix includes product, price, place, and promotion. Coke’s
product, all 2800 of them, varies from soft drinks all the way to just water and,
depending on the product, the price can vary quite much. Just Coca-Cola alone
is found all over the world. How is that for placement? Coke’s promotional
efforts, of course, span worldwide. According to the Coca Cola website, the
per capita consumption of Coke products as increased from 1987 to 2007 in
Africa, Eurasia, European Union, Latin America, North America, and the
Pacific. (www.thecoca- colacompany.com) What promotional strategies do
they use? One of the promotional strategies that Coke advertises comes right
from the website. It uses phrases like, “Satisfying your needs” and “The
choice is yours…” to let consumers know that they are being taken care of and
have control over what they consume. (www.thecoca- colacompany.com) In
 addition, Coke also offers links on their website to help the consumer learn
about hydration, sweeteners and taste. H. Overall Marketing Mix
7. How do the “4 P’s” work together to bring a cohesive ‘package’ to the
consumer? Because Coca Cola has an enormous amount of diverse consumers
from diverse locations around the world, Coca Cola can easily adjust just one
thing like price or all four components to cater to the diverse needs of Coke’s
consumers, and still make a profit. How does one marketing mix strategy
affect another? Depending on the market segmentation, the proximity of other
segments and the current marketing mixes being implemented will make the
difference on how well the marketing mix does in each of those areas. After
the market segmentation is selected, a more exact description of consumer
needs and wants can be determined. Next, marketing objectives that are more
accurate, followed by improved resource allocation, can be planned. Putting
all the elements together will lead to better marketing results. According to
Charles W. Lamb, Jr., Joseph F. Hair, Jr., and Carl McDaniel, authors of
Marketing, “Before 1960, for example, the Coca-Cola Company produced
only one beverage and aimed it at the entire soft drink market. Today, Coca-
Cola offers over a dozen different products to market segments based on
diverse consumer preferences for flavors and calorie and caffeine content.
Coca-Cola offers traditional soft drinks, energy drinks (such as Powerade),
flavored teas, fruit drinks (Fruitopia), and water Dasani).” (Lamb, Hair, and
McDaniel 2006) One can see the many dimensions of Coca Cola’s product
line and how specific the marketing mixes have to be to stay competitive
among other businesses. Are there limitations to the marketing mix? Yes. For
example, if a can of Coke sold for a penny here in America and there was
advertising everywhere about Coca-Cola products, people might question the
quality of the soda; the coke might not sell very well. On the other hand, a
Coke machine out on the top of a mountain or a $25 can of Fresca probably
will not appeal to many people; also will not profit. The main point of
marketing mix is the mix; it has to be just right to provide the desired results.
What are the disadvantages or pitfalls to the strategies used by this company?
Because Coca-Cola uses advertising props such as billboards, painted
buildings and sings, this could affect the buying habits of an ever-growing
group of people, environmentalists. The kind of
8. paint used on the building could be toxic, the signs could end up littering land,
and depending on how well the billboards are maintained, they could be a
possible pollutant as well. (www.aidg.org) I. CRM How does this company
keep momentum? Coca-Cola keeps their momentum by following changes in
the consumer environment and responding with new products. According to
Erich Joachimsthaler, author of Is Coke Zero a Tonic for What Ails Coca-
Cola?, “Coke Zero gives the Coca-Cola company much needed momentum.”
(Joachimsthaler 2007) Coke Zero is an attempt at luring men to “diet” drinks
because it sounds less feminine. How do they maintain a relationship with
their customers? In order to maintain a relationship with their customers,
Coca-Cola offers Coke Solutions on their website to appeal to the retailers that
sell Coke products. There are links such as better beverage marketing, crew
programs and innovations and insights. Have they lost touch? Will they lose
touch in the future? Coca-Cola has not lost touch because they have been able
to change with the times after evaluating feedback and listening to their
customers. Coke knows that people and trends change and they should be able
 to adjust to future demands. J. Conclusion The Coca-Cola Company is well
ahead of the game with their marketing efforts, which has allowed them to
sustain profitability for over 100 years. Their conviction that Coca-Cola is the
absolute best beverage company is passionately communicated throughout the
world. The Comany is not only interested in advertising and marketing
beverages, but making a difference in every corner of the world in which they
operate. The Coca-Cola Company strives to go beyond simple marketing and
reach into the hearts and lives of consumers.
9. Bibliography Lamb, Hair & McDaniels. Marketing. 8th ed. Thomson
Southwestern Publishing, Mason: Ohio The Coca-Cola Company. Home page.
07 Oct 2008. www.thecoca-colacompany.com quot;Product List.quot; The
Coca Cola Company. 2008. The Coca Cola Company. 8 Oct 2008
<http://www.thecoca-colacompany.com/brands/brandlist.html>. quot;Per
Capita Consumption.quot; The Coca Cola Company. 2008. The Coca Cola
Company. 8 Oct 2008 <http://www.thecoca-
colacompany.com/ourcompany/ar/percapitaconsumption.html>.
quot;Satisfying Your Needs.quot; The Coca Cola Company. 2008. The Coca
Cola Company. 8 Oct 2008 <http://www.thecoca-
colacompany.com/brands/index.html>. Fuchs, Miriam. quot;Coca Cola
Marketing in Developing Countries.quot; AIDG. 11 Jul 2007. Appropriate
Infrastructure Development Group. 8 Oct 2008
<http://www.aidg.org/component/option,com_jd- wp/Itemid,34/p,535/>.
Joachimsthaler , Eric. quot;Is Coke Zero a Tonic for What Ails Coca-
Cola?.quot; Conversation Starter. 19 Apr 2007. Harvard Business Publishing.
8 Oct 2008
<http://conversationstarter.hbsp.com/2007/04/is_coke_zero_a_tonic_for_what.
html>.

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