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Project Report: Marketing Strategies OF Coca-Cola
Project Report: Marketing Strategies OF Coca-Cola
MARKETING STRATEGIES
OF
COCA-COLA
SUBMITTED BY:
SANJANA DHYANI (16)
SHRUTI HEGDE
(20)
INTRODUCTION
Executive Summary
Coca-Cola was invented in May 1886 by Dr. John S. Pemberton in Atlanta, Georgia.
The name 'Coca-Cola' was suggested by Dr. Pemberton's bookkeeper, Frank Robinson.
He kept the name Coca-Cola in the flowing script that is famous today.
In 1891, Atlanta entrepreneur Asa G. Candler had acquired complete ownership of the
Coca-Cola business, whose marketing tactics led Coke to its dominance of the world soft
drink market throughout the 20th century. Within four years, his merchandising flair
helped expand consumption of Coca-Cola to every state and territory.
Under Robert W. Woodruff six decades of leadership , The Coca-Cola Company took
the business to unrivaled heights of commercial success, making Coca-Cola an institution
the world over.
The trademark "Coca-Cola" was registered with the U.S. Patent and Trademark Office in
1893, followed by "Coke" in 1945. The unique contour bottle, familiar to consumers
everywhere, was granted registration as a trademark by the U.S. Patent and Trademark
Office in 1977, an honor awarded very few packages.
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.
Vision
To achieve sustainable growth, we have established a vision with clear goals.
Profit: Maximizing return to shareowners while being mindful of our overall
responsibilities.
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 beverage brands that anticipate and
Satisfy peoples desires and needs.
Partners: Nurturing a winning network of partners and building mutual loyalty.
Planet: Being a responsible global citizen that makes a difference.
PRODUCT DESCRIPTION
The Rejuvenation division offers a range of drinks designed to improve how people feel
physically and mentally. Products include ready-to-drink coffees, teas and herbal beverages.
The Health & Nutrition division produces a range of products to promote health and well being.
In the US, its products encompass Minute Maid Premium 100% juices, Hi-C fruit drinks and
Minute Maid Coolers.
Replenishment division offers a range of water products around the world. The division also
produces a range of energy drinks, such as PowerAde .
Elsewhere in the world, the company has created other products designed to meet the needs of
local consumers and communities. For example, in Chile, it developed Bibo (Kapo) because
mothers wanted a healthy, noncarbonated drink for their children.
INDIAN BEVERAGE MARKET
Market
The market growth rate, which was around 2-3% in 80s, increased to 5-6% in the early 90s and is
presently 7-8% per annum.
Consumption
Per capita consumption in India is among the lowest in the world at 6 bottles per annum
compared to 80 bottles in Thailand and 800 bottles in USA.
Delhi market has highest per capita Consumption in the country with 50 bottles per annum.
Types
Non-alcoholic soft drinks beverage market can be divided into fruit drinks and carbonated water.
o Carbonated water can also be divided into cola products and non-cola products.
o Cola Products like Pepsi, Coca Cola, Thumbs Up, and Diet Coke, Diet Pepsi etc.
o Non-Cola products based on the types of flavours available can be divided into Orange,
Cloudy Lime, Clear Lime and Mango.
Bottling plants
o The Coca-cola has manufacturing units at 18 states.
o Among the units irrespective of the location 30 of them are certified ISO 14001, and 14
units are certified OHSAS 18001 standards.
o The Coca-cola owns 22Bottling Plants and Franchisee Owned Bottling Plants are 23.
SWOT ANALYSIS
Strength
Coke has been a complex part of world culture for a very long time. The
products image is loaded with over-romanticizing and fun, this is an image many people
have taken deeply to heart. Coke are the extremely recognizable brand, which is
the greatest strength of them. Additionally there Bottling system is one of their greatest
strengths. This allows them to the 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 product of these cola giant.
and Coca cola are having the largest distribution network in the world, which is
also there one of the greatest strength.
Weakness
Weaknesses for any business need to be both minimized and monitored in order to
effectively achieve productivity and efficiency in their business activities. Although the
international sales increases but there is getting a saturation evident through the
stability in cola drink in USA market and moreover all over the world the customer
preference for cola drink is shifting towards the healthy drink is taking place. Being
addictive of cola drink is also a health problem, because drinking of carbonated soft drink
daily has an effect on your body also.
Opportunities
Brand recognition is the significant factor affecting Coke competitive position.
and Coke brand is known well throughout 94% of world today. As in developing
countries the per head consumption of cola drink is very less which evident from taking
example of India. In India per head consumption is only 6 bottles as compare to 700 bottlesin
USA and in Indian market only 5% of the beverage come under packaging. So looking at these
data we can that for these two giant a lot of potential is there in developing market which is now
also untapped.
Threats
Currently, the threat of new viable competitors in the carbonated soft drink industry is not
very substantial. The threat of Substitute, 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 Coke including tea, coffee, juice, milk and hot chocolate. Even
through the Coca cola control nearly 40% of the entire beverage market, the changing health
consciousness of the market could have a serious affect. Of course, coke has already diversified
into these markets, but still these Substitutes will remain threat to them. Consumer buying power
also represents a key threat to Coke.
SEGMENTATION OF MARKET
A market segment consists of a group of customers who share a similar set of needs and
wants. Rather than creating the segment the marketers task is to identify them and decide
which one to target. Leading soft drink companies Coca-Cola follows the similar
segmentation strategy for target marketing.
A. Mass marketing
However in some of its popular product both the companies follow the mass marketing
strategy. In this type of segmentation, companies target the whole market and not any
particular segment of the population.
B. Targeted marketing
Although the targeted group of the company is the whole population, they want to earn
more revenue from a segment than their other revenue generator sources. For this, they
recognize following bases for segmentation
1. GEOGRAPHICAL SEGMENTATION
i.
Region
Both companies treat hot countries such as Asia, Middle East and African differently in
comparison to cold countries. As in tropical countries, consumption of soft drinks is 70%
in summer and 30% in winter season while in EUROPEAN countries its consumption is
almost uniform. So soft drink companies prefer different marketing strategies in Asian and
European countries. In countries like India and Pakistan, these companies invest huge
resources in the season of summers, and their target area is domestic users, restaurants,
school and college canteens and even rural chaupals. While in winter season their target is
mainly party users and high-income group consumers.
ii.
Coca-Cola Company is one of the first global majors to have spotted the potential spin offsfrom
the countrys rural market. Population of Rural sector is more conscious more abou tthe price
whereas Population of Urban sector is more conscious about the quality and brand name of the
product. so Coca cola in Year 2002 brought the 200 ml bottle at Rs.5 specifically targeted at the
rural sector so that soft drink can take place of the local drink like lemon, sugarcane juice and
Tea etc. Thus Coca-Cola has adopted different marketing strategy for rural and urban areas.
2. DEMOGRAPHIC SEGMENTATION
i.
Age
India is considered to be a young country i.e. average age of Indian population is less 38
years. Thus targeting young generation can be a beneficial marketing strategy for soft drink
companies. In fact this is the case, coca cola, and thumps up, mainly target younger generation in
India. In Europe, as average population is older than Asian countries, Coca cola targeted the
older generation of the population.
ii.
Gender
Gender based segmentation is very important. As taste of male and female is different.
Lets take the example of coca cola, thumps up is promoted as masculine soft drinks while coca
cola and Fanta are having light taste and mainly targeted for loving birds, ladies, and children.
BENEFITS
This model has been utilized by coca cola to reach rural market. This system allows for larger
loads to travel long distances and smaller loads to travel short distances. Thus making the
mechanism cost effective.
PRODUCTS
PRICING
POSITIONING
PROMOTION
Available in the following flavors: Bitter Lemon Citrus Grapefruit, Citrus, Lemon and
Lemon Lime.
PRICING
Price is not just a number tag. Price comes in many forms and performs many functions. It
is one of the factors that affect the sales in a drastic ways.
There was a time (2002-2003) when Coca cola tried to appeal to the masses
through a 200ml bottle priced at Rs.5. It brought down the average price of its product to
Rs.5 thereby bridging the gap between soft drink and other local option like tea, milk, and
sugarcane juice or lemon water and it also make the price point of the soft drink within the
reach of high potential rural market.
Coca cola in the market place now start with the basic introductory pack, which
is a 200 ml returnable glass bottle priced at Rs.8 and is available across low income and
rural areas. The next pack size is 300 ml at Rs.10 and is focused on those willing to pay
more within the immediate consumption arena. Coca cola recently introduced an
on-the-go pack as research showed it that the next pack of 600ml (mobile) was too much to
consume on the go. The new on-the-go consumption pack is called the express pack and
doing well in channels such as travel, malls, so on, where people want a single serve and it
is priced at Rs.20. Can packing (250 ml) of Coca cola is Rs.15. The
company also introduced the party pack of 2 liter of the consumption in the party and is
priced at Rs.55. The average price of this packing is cheap than other packing as to
increase the consumption of soft drink in the market.
Coca cola also introduced its pulpy orange drink (Juice), Minute Maid, in India at Rs20 in the
500ml.
POSITIONING
Positioning is the act of designing the company offering and image to occupy a distinctive
place in the mind of the target market.
Coca cola try to position itself as the happiness bringing drink and drink for every
community.
Thumps up of coca-cola are targeted to the adventurous and energetic people that are interested
in adventure and love taking risk to succeed.
Minute Maid of Coca cola is specially targeted to health conscious customers and who want
health drink having natural energy in it.
Fanta, this drink is specially launched for the lady sector of the population and these drinks
are positioned in that way only.
Tab of coca cola ,initially flopped as diet cola because consumer could not tell the
difference between tab with one calorie and diet Pepsi, which then had 100, as coke was
not able to position it correctly in mind of the customer. Then coke figured out that it could
position the tab or dramatized the difference by surrounding the bathing beauty with 100
empty tab bottles. Armed with that insight, coke flooded the try screen with ads and backed
them up in stores with display, signs and samples and after that it was a tremendous
success.
So until you are not able to correctly position your product in consumer mind it is
impossible to get the success.
PROMOTION
Coca cola follows Push Strategy to advertise and sell their product in the market. Coca cola
usually giving higher discount to the retailer fills their selves space with their product and
when the consumer see only coca cola in the market they are forced to buy there product
only.
Celebrity endorsers are used to promote the product. In the year 2002, Aamir Khan was
appointed as the brand ambassador of coca-cola until now, when Imran Khan replaced him.
Coca cola try to position itself as the happiness bringing drink and drink for every
community as visible in its advertisement. As this is well judged by their
advertisement and their slogans. Their are different advertisement, which depicts thats
coca cola, is the need for party or coca cola brings more joy and taste to the party. Coca
cola had roped in Gautam Gambir as brand ambassador for the company new coca cola
open happiness campaign ahead of IPL seasons. While the single ad campaign works
wonders, giving the difference in consumption patterns in the south, the coca cola majors
had customized their advertisement for the four southern states. Coca cola, on the other
hand identified the southern market as a great testing ground for its new brands, so much
so that both its pulpy orange drink, minute maid and Fanta apple were first launched,
marketed and advertised them before a pan India roll-out and a national campaign.
Throughout the years, slogans for Coca-Cola have always been memorable. Here are some
highlights:
2000 - Coca-Cola Enjoy
1993 - Always Coca-Cola
1990 - Can t Beat the Real Thing
1989 - Can t Beat the Feeling
1986 - Red, White and You
1982 - Coke Is It
1976 - Coke Adds Life
1971 - I d Like to Buy the World a Coke
1969 - It s the Real Thing
1963 - Things Go Better with Coke
1959- Be Really Refreshed
1944- Global High Sign
1942- It s the Real Thing
1936- It s the Refreshing Thing To Do
1929 - The Pause That Refreshes
INNOVATIVE PRACTICES
The air-tight bottle concept is given by coca-cola which revolutionized the bottling and
packaging industry. The Cola giant also introduced the different size of returnable glass
bottle like 200ml, 300ml and non-returnable plastic bottle like 600 ml, 1.5 litre, 2 litre
according to the need of the targeted customer. They also pioneer in bringing Cans and
Frosted bottles in the market. Packing helps the brand to capture the desire target like
600ml packing is launched, as express pack so this is targeted to touring population and
this segment need non-returnable bottles.
Coca cola is innovative in design of bottle like Fanta, Aquafina (500ml & 1 litre) having
curve shaped bottle that are easy to hold.
Symbolically significant name: Name plays a very important part, here is an example and
innovation coca-cola did to survive in china. When it was introduced in china in the
1920, coca cola sounded like kou-kekou-la which means a thirsty mouth and a mouth
of candle wax. The company changed the phonetic translation to ke-kou-ke-le which
means a joyful taste & happiness thirsty Chinese consumers responded in drove to the
more felicitous meaning.
Communication strategy: Looking the changing environment the coca cola calibrated its
communication strategy in a very innovative way.
Imagery work for carbonated soft drinks, while functionality work for other category
For instance, to entrench the imagery that thumps up is the brand for youthfulness and
adventure; the company introduced the taste the thunder commercial with the Akshay
Kumars attitude, self-belief and can-do spirit.
In contrast, minute-maid commercial needs to tell consumers the function of the product
and its benefits and natural content pulpy orange.
Innovation in advertisement methods:
Investment is going into out of home advertising, point-of-sale promotion and
emerging media like radio and Internet.
o sub-minimal effect advertisement: Understanding the concept that increase in sale of
complementary good helps in increasing the sale of the product. Coca cola starts
advertising in movie- theaters and giving advertisement drink coke and eat popcorn.
This resulted in 2% sales increase of coca cola and 10% sales increase of popcorn. The
choice of movie theater is because in movie theaters there are very less thing to distract
mind of the person. This is know as Sub-minimal effect in which consumer does not get
the idea how advertisement is influencing them.
o personal promotion: According to a survey people in Asia are more inclined to them and
feel happy when some gives them personal recognition. So in china coca cola started
advertising through mobile phone. This advertisement strategy gives the touch of
personal feeling. The sales of coca-cola increased through this advertisement strategy.
o ambush marketing: New advertisement methods are going in todays scenario in which
company does not take the direct sponsorship but do advertisement outside the main
sponsorship area. For instance, not taking the sponsorship of a cricket match instead
going for advertisements outside the stadium. This has shown quite positive results , as
well as it is cost effective.
Innovation in distribution system: Coca-cola launched two new distribution methods in the
initial years of the new millennium. These were the chilled DSD system and the hybrid
system.
o Chilled DSD system:The chilled DSD system was a relatively small distribution method,
created for items, which required continuous refrigeration. This was primarily created for
the fruit juices product line as they can spoil quickly if not given the required condition
and care so chilled DSD system ensures that continuous refrigeration helps in preventing
the products from spoiling.
o The hybrid system:In this system the company makes the collaboration with other
company of complementary good so that their distribution channel is also used for the
sales of its product. As taking the practical example of the collaboration of Coca cola and
McDonald. Through this collaboration the distribution channel of the Coca cola
increases, as at ever McDonald the Coca cola will be there. So increase the distribution
channel through collaboration with other company is know as hybrid system. This system
is actually benefited by the synergy created by collaboration of two companies.
SUGGESTIONS
If coca cola used strong marketing it may raise barriers to entry, thus decreasing the
threat of new entrants to the industry.
Aggressive promotion is required to promote the new launches and also for the products
already in market but not very known to people.
Coca-cola can even introduce new flavors of soft drinks and teas, like, cranberry, mint,
cardamom, etc.
BIBLIOGRAPHY
http://www.agriculture-industry-india.com/agricultural-commodities/softdrinks.html
http://www.coca-colacompany.com/presscenter/viewpoints_india_situation.html
http://www.coca-colaindia.com/brands/brands_home.aspx
http://www.coca-colaindia.com/health_wellness/health_wellness_home.aspx
http://www.coca-colaindia.com/careers/careers_life_values.aspx
http://www.thecoca-colacompany.com/presscenter/nr
20090721corporate_second_qtr_earnings.html
FINANCIALS OF COCA-COLA
Analysis of Financial Condition and Results of Operations and consolidated financial
statements and notes thereto contained in Financial Statements and Supplementary Data of
this report. Year Ended December 31,
(In millions except per share data)
2009
2008
2007
2005
2004
SUMMARY OF OPERATIONS
Net operating revenues
$ 28,857
$ 24,088
$ 23,104
$ 21,742
$ 20,857
10,406
8,164
8,195
7,674
7,776
Gross profit
18,451
15,924
14,909
14,068
13,081
10,945
9,431
8,739
7,890
7,287
254
185
85
480
573
Operating income
7,252
6,308
6,085
5,698
5,221
Interest income
236
193
235
157
176
Interest expense
456
220
240
196
178
equity incomenet
668
102
680
621
406
173
195
(93)
(82)
(138)
23
24
7,873
6,578
6,690
6,222
5,495
Income taxes
1,892
1,498
1,818
1,375
1,148
Net income
$ 5,981
$ 5,080
$ 4,872
$ 4,847
$ 4,347
2,313
2,348
2,392
2,426
2,459
2,331
2,350
2,393
2,429
2,462
$ 2.00
$ 1.77
Selling, general
expenses
and
administrative
$ 2.59
$ 2.16
$ 2.04
2.57
2.16
2.04
2.00
1.77
Cash dividends
1.36
1.24
1.12
1.00
0.88
Closing market
price
on
December 31
61.37
48.25
40.31
41.64
50.75
TOTAL
MARKET
VALUE
OF
COMMON
STOCK
$ 142,289
$
111,857
$ 95,504
$ 100,325
$ 123,908
Diluted
income
net
$ 4,308
$ 2,590
$ 4,767
$ 6,768
$ 3,482
Property, plant
and equipment
net
8,493
6,903
5,831
6,091
6,097
Depreciation
958
763
752
715
667
Capital
expenditures
1,648
1,407
899
755
812
Total assets
43,269
29,963
29,427
31,441
27,410
Long-term debt
3,277
1,314
1,154
1,157
2,517
Shareowners
equity
21,744
16,920
16,355
15,935
14,090
NET
CASH
PROVIDED
BY
OPERATING
ACTIVITIES
$ 7,150
$ 5,957
$ 6,423
$ 5,968
$ 5,456