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Coca Cola’s International Marketing Strategy

Syed Hassan Raza

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Abstract

This paper covers the global marketing strategies of Coca Cola Company, It provides

information how different strategies of coke failed and how coke learned to customize it

strategies and creating a blend of two strategies which help coke gain its market share

back from its long term rival Pepsi.

The introduction gives understanding about what global marketing is and what are two

main strategies used in global marketing. Then it main body follows it by telling us how

and when coke used different strategies. Finally, conclusion tells how global marketing

strategies can’t be rigid and how coke is still same even with different marketing mix in

different countries.

Introduction

When domestic markets become mature many companies start to expand their operations

to other countries to achieve growth. New technologies, better ways of communication

and faster transport has turned this world into a global village, making international

markets more accessible, and businesses pursuing a global position get the benefits of

increase in brand awareness and cost effectiveness. All these developments created a new

concept global marketing (Mughal, 2005). Global marketing cover two main strategies

for promoting products across country,

Standardization

Companies using standardization strategy use centralized management system, they use

same marketing mix plan which they are using in home country. This leads to achieve
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greater economies of scale by discounts through bulk purchases and by sharing some

functions like product development and marketing.

Adoption

In this strategy a customized marketing mix is created for every country and region.

Following this strategy may cost more then standardization but it gives the benefit of

consumer diversity.

Coca Cola’s Global Marketing Strategy

Coca cola, being the world’s largest manufacturer of non-alcoholic beverages, is certainly

well aware of global marketing. It operates in 200 countries and is one of the most

recognizable brands throughout whole world. Coca cola has changed it global marketing

strategy from times to times in last 15 years. In 1996 coke adopted standardization

strategy and was very rigid about it. The company wanted to take same flavour of coke to

all countiers across the world while keeping all elements of marketing mix same, as

coke’s CEO that time, Roberto Goizueta said, “The labels ‘international’ and

‘domestic’…no longer apply.”(Press realese, 1996). In those times coke’s strategy was

represented by tagline “think global, act global.” Goizueta’s strategy proved successful

for the time being as coke earned 67% of its total revenues and 77% of its total profit

outside North America.

But soon due to currency crisis in asian countries led this strategy to failure and when

Daft took charge of the company in the end of 1999, its stock had gone down to one third

of its value. After facing the loss of around $70 dollors Daft decided to change strategy in
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completely opposite way. He said that, “no on drink globally. Local people get thirsty

and they but a local made cola(Press realese, 1999)

But unfoutunately for coca cola this strategy didn’t proved much successful. After 2 years

of repeating mantra of “think local, act local”, marketing was once again took over by

head office in Atlanta in 2002.

In 2002 coca cola adopted a unique strategy, in this new strategy local marketers were

guided by the marketers form head office. This new strategy was a less rigid and

customized form of standardzation strategy. Under this strategy coke made little changes

in market mix for every country like in some countries it used sugar and in some

countries it used corn syrup, it aslo droped its universal tag line “life tastes good” in

many countries and replaced it with more local tag lines. This strategy is still in use by

coke and is proving to much more successful then previous strategies. It kept coke’s

branding but allowed others elements product, price, placement and promotion customize

according to the local market.

Conclusion:

When serving in global market global efficiency should be achived by integrating and

cooridinating operations across the world, but at the same time remaining responsive to

the local market. That’s exactly what coca cola is doing since 2002. Its different in every

country but its still the same old coke you are used to. Its brand is recognized through the

whole world with same favor.

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References

1. Saif Mughal, (2005) Marketing Insight. Kings University Publications

2. Pankag Ghemawat. (2003). A Fogotten Strategy. Harvard Business rivew

3. Roberto Goizueta (in press) Business Times

4. Patti Summerfeild. (2002). Global Advertising isn't Always the Best Strategy.

Strategy Magzine

5. George S. Yip (1995) Total Global Strategy: Managing for Worldwide

Competitive Advantage, Englewood Cliffs: Prentice-Hall; Susan P. Douglas and

C. Samuel Craig (1995) Global Marketing Strategy, New York: McGraw-Hill.