OVERVIEW & FINDING

History

Coca Cola International

Type of the company: Public

Website: http://www.cocacola.com

Employees: 92800 (2010)

The Coca-Cola Company traces it’s beginning to 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 when two Chattanooga businessmen, Benjamin F. Thomas and Joseph B.
Whitehead, secured the exclusive rights to bottle and sell Coca-Cola for most of the United States
from The Coca-Cola Company. (LONNIE, 2003)

The Coca-Cola bottling system continued to operate as independent, local businesses until the
early 1980s when bottling franchises began to consolidate. In 1986, The Coca-Cola Company
merged some of its company-owned operations with two large ownership groups that were for sale,
the John T. Lupton franchises and BCI Holding Corporation's bottling holdings, to form Coca-Cola
Enterprises Inc. The Company offered its stock to the public on November 21, 1986, at a split-
adjusted price of $5.50 a share. On an annual basis, total unit case sales were 880,000 in 1986.
(LONNIE, 2003)

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.(LONNIE, 2003)
Pepsi International

Type of the company: Public

Website: http://www.pepsi.com

Employees: 203,000 (2010)

Caleb Bradham knew that to keep people returning to his pharmacy, he would have to turn it
into a gathering place. Like many pharmacists at the turn of the century, he had a soda fountain in
his drugstore, where he served his customers refreshing drinks that he created himself. His most
popular creation was a unique mixture of carbonated water, kola nuts, vanilla and rare oils, named
“Brad’s Drink” by his customers. Caleb decided to rename it “Pepsi-Cola,” and advertised his new
soft drink to enthusiastic customers. Sales of Pepsi-Cola started to grow, convincing him to form a
company and market the new beverage. In 1902, he launched the Pepsi-Cola Company in the back
room of his pharmacy, and applied to the U.S. Patent Office for a trademark. An official patent was
awarded on June 16, 1903. At first, he mixed the syrup himself and sold it exclusively through soda
fountains. But soon Caleb recognized that a greater opportunity existed—to bottle Pepsi-Cola so that
people everywhere could enjoy it. (Harvey, 1980)

Target Market
Coke’s commercials basically based on young generations, So, the young generation is the
target market of Coke because they want to represent Coke with the youth and energy but they also
consider about the old people they take then as a co-target market. (RONALD,2007)

Brand Differentiation
Now different companies have got different brand names. So, people can distinguish between
brands. Two major brands “Coke” and “Pepsi” also have brand names.
 Coca Cola’s Brand
Coca cola is “US” brand. Because they believe in the togetherness, being people together and
friends are being together. Coca Cola strongly believes that Pakistani temperament is “US” not
“ME” . Now the consumers know the Name of Coke, because Coke is the name, which is the most
popular after the word “ok”. So people can better differentiate brands with each other.
 Pepsi’s Brand
Pepsi’s brand is basically is basically “ME” branded. They use the temperament of “ME”. In
contrast to Coke they believe on individual struggle.

Major Competitors
Consumers firstly decide that they are going to have a soft drink. Then they compete brands with
each other. Like they compete Coke with Pepsi and Sprite with 7up and team .So the major
competitor of Coke is Pepsi.

When they motivate to any other brand or on Coke it’s in instinct basically that based on
messages derive certain feelings.

But Coca Cola thinks in a different way, they believe that RC Cola, new coming AMRAT Cola,
and all juices, even they take water and tea as their competitors. (WARREN, 2008)

SWOT Analysis
Opportunity
For Coke and Pepsi have more opportunity to introduce new brands in different taste. These
both brand Coke and Pepsi have very strong brand. Consumers have interest in both brands, and
each new brand have market value very strong then other.Coke and Pepsi have almost world culture
and some new strategy they can easily capture the market.

Coke and Pepsi have focus on customer segmentation, for each segment they can easily
serve.They can easily search new segment for their products. Franchise system is the best way to
search new segmentation, which have very strong segment? And how can they serve in those
segments. Segmentation proved very easily approach for their targeted customers.
a. Coca Cola

Coca-Cola has been aggressively adopting the inorganic growth path. During 2008, its
acquisitions included Kerry Beverages, (KBL), which was subsequently, reappointed Coca-Cola
China Industries (CCCIL). Coca-Cola acquired a controlling shareholding in KBL, its bottling
joint venture with the Kerry Group, in Hong Kong. The acquisition extended Coca-Cola’s
control over manufacturing and distribution joint ventures in nine Chinese provinces. In
Germany the company acquired Apollinaris which sells sparkling and still mineral water in
Germany. Coca-Cola has also acquired a 100% interest in TJC Holdings, a bottling company in
South Africa. Coca-Cola also made acquisitions in Australia and New Zealand during 2008.
These acquisitions strengthened Coca-Cola’s international operations. These also give Coca-
Cola an opportunity for growth, through new product launch or greater penetration of existing
markets.

Stronger international operations increase the company’s capacity to penetrate

international markets and also gives it an opportunity to diversity its revenue stream.
Growing bottled water market

Bottled water is one of the fastest-growing segments in the world’s food and beverage
market owing to increasing health concerns. The market for bottled water in the US generated
revenues of about $15.6 billion in 2008. Market consumption volumes were estimated to be 30
billion liters in 2008. The market's consumption volume is expected to rise to 38.6 billion units
by the end of 2010. This represents a CAGR of 6.9% during 2005-2010. In terms of value, the
bottled water market is forecast to reach $19.3 billion by the end of 2010. In the bottled water
market, the revenue of flavored water (water-based, slightly sweetened refreshment drink)
segment is growing by about $10 billion annually. The company’s Dasani brand water is the
third best-selling bottled water in the US.

Coca-Cola could leverage its strong position in the bottled water segment to take
advantage of growing demand for flavored water.
 Growing Hispanic population in US

Hispanics are growing rapidly both in number and economic power. As a result, they
have become more important to marketers than ever before. In 2006, about 11.6 million US
households were estimated to be Hispanic. This translates into a Hispanic population of about 42
million. The US Census estimates that by 2020, the Hispanic population will reach 60 million or
almost 18% of the total US population. The economic influence of Hispanics is growing even
faster than their population. Nielsen Media Research estimates that the buying power of
Hispanics will exceed $1 trillion by 2008- a 55% increase over 2003 levels. Coca-Cola has
extensive operations and an extensive product portfolio in the US.

The company can benefit from an expanding Hispanic population in the US, which would
translate into higher consumption of Coca-Cola products and higher revenues for the company.

b. Pepsi Co

PepsiCo is seeking to address one of its potential weaknesses; dependency on US markets

by acquiring Russia’s leading Juice Company, Lebedyansky, and V Wwater in the United
Kingdom. It continues to broaden its product base by introducing TrueNorth Nut Snacks and
increasing its Lipton Tea venture with Unilever. These recent initiatives will enable PepsiCo to
adjust to the changing lifestyles of its consumers.

PepsiCo invest $1, 000 million in China, and a $500 million in India. Both initiatives are
part of its expansion into international markets and a lessening of its dependence on US sales. In
addition they plans on major capital initiatives in Brazil and Mexico.

PepsiCo is positioned well to capitalize on the growing bottle water market which is
projected to be worth over $24 million by 2012. Products such as Aquafina, and Propel are well
established products and in a position to ride the upward crest.PepsiCo products such as, Doritos
tortilla chips, Cheetos cheese flavored snacks, Tostitos tortilla chips, Fritos corn chips, Ruffles
potato chips, Sun Chips multigrain snacks, Rold Gold pretzels, Santitas are also benefiting from
a growing savory snack market which is projected to grow as much as 27% by 2013,
representing an increase of $28 million.

Recommendations
After completing our project we have concluded some recommendation for the coca cola
company, which are following.

- Coca Cola Company should try to emphasis more on providing their infrastructure in the
market to facilitate their customers.
- According to the survey, conducted by the international firm some people like little bit
sweeter cola drink. So for this coca cola company should produce their product according
to the local demand.
- Marketing team should try to increase the availability of Coke in rural areas.
- They should also focus the old people.
- Now young generation has a trend to drink a coke 2 regular bottles at same time, so
providing more satisfaction to them company should introduce ½ liter disposable bottle.