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coka cola marketing mix

coka cola marketing mix

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There are different brands of the Coca Cola Company, which
are currently in use through out the world. This company not
only deals in the carbonated drinks but also other drinks.
While launching its product, the marketing team considers
the culture of the country.

Major brands of coca cola

y Coke

y Sprite

y Fanta

y Diet coke

y Coke classic

28

The over all volume of this company is as follows.

(Figure)

The commitment of the company is to devote resources to
water only in markets where it expects profitable growth.
This strategy has paid dividends. The company has
successfully applied it¶s approach to brands in several key
markets, including Ciel in Mexico, Mori No Mizudayori in
Japan, Bonaqua in Russia and Kinley in India. Backed by a
strong network of bottling partners through out the United
States, Dasani became the nation's fastest-growing water
brand. In Eurasia, the entire Turkuaz brand team worked
together to launch Turkey's first purified water brand. This
year, Coca-Cola Company also successfully energized a
major piece of its beverage strategy²water. By the end of
2009, it¶s bottled water volume exceeded 570 million unit
cases, making it the second biggest contributor to the growth
of the company after carbonated soft drinks. Three of the
water brands, Dasani, Ciel and Bonaqua each achieved
sales of over 100 million unit cases for the year.

29

In 2009and 2010, the company has also made good
progress in coffees and teas. Beverage Partners Worldwide,
the renewed and strengthened marketing partnership with
Nestlé S.A., began operations in 2001. This partnership
combines Nestlé's knowledge in life science, research and
development with the expertise of Coca Cola Company in
brand building and distribution.

At the same time, the company grew Georgia coffee in
Japan by 3 percent through award-winning marketing in a
category that was flat for the year. Also in Japan²where
The Coca-Cola Company is the leader in the total tea
category, the second-largest category in the non-alcoholic
ready-to-drink segment²it launched Marocha Green Tea.
With sales of 46 million unit cases for the year, Marocha
Green Tea is the fastest-growing product in the fastest-
growing category: green tea. The popularity of Marocha is
also recognized by the industry with a leading trade journal
naming Marocha the most popular new food and beverage
product of the year.

30

Know the most recognized word on
the planet after ³OK´!

Among the soft drinks Fanta and Sprite become successful
along with the major brand Coca Cola and Diet Coke. In
key markets, the company has created new packaging sizes
to satisfy consumer demands.

Increasingly, Mexican families have lunch together at home.
The average Mexican household drinks two-and-a-half liters
or more of soft drinks during that break, while a two-liter
bottle was the largest available package. So the company

31

introduced a convenient 2-½ liter bottle to select regions,
contributing to the sale of nearly 1.5 billion unit cases of
Coca-Cola in Mexico this year. This larger bottle will
complete its nationwide rollout in 2002. In China, Coca-Cola
is an integral part of holiday celebrations and the family get-
togethers that accompany such events. Through an intense
focus on Coca-Cola, innovation and new beverages, it has
achieved volume growth of 10 percent in 2001. In China,
sales of Coca-Cola increased by 6 percent. In the United
States, recognizing that consumers often enjoy their diet
Coke with a slice of lemon, the company "bottled" the
concept. The result²diet Coke with lemon²contributed to
volume growth of 4 percent for the number-one diet.

Soft drink in North America: diet Coke. The company
increased its two largest bottle sizes during the 2001
holidays, and festival packaging helped drive a 6 percent
volume increase for Coca-Cola. The packaging innovations
do not just involve resizing. The company has also
responded to consumers' changing fashion styles with new
bottles.

With brands such as Minute Maid, Hi-C, Simply Orange and
Disney juices and juice drinks in the United States, Qoo in
Asia, Kapo in Latin America and Bibo in Africa.

This year, the company re-launched its global sports-drink
business, investing in new products, packaging, positioning
and marketing. The results speak for themselves: it¶s global
sports drinks, led by Powerade and Aquarius, grew by 13
percent in 2010, nearly double the growth rate of the
worldwide sports-drink category. Revitalized in the United

32

States, the company introduced Powerade in nearly every
major Western European market, including Great Britain,
Germany and Spain, as well as in Mexico and Latin America.
The company launched 27 products in 2001.

The commitment of the company to packaging innovation
also resulted in new initiatives for our fountain business, a
channel through which many consumers enjoy Coca-Cola. In
the United States, the company developed Fountain, a total
beverage dispensing system that is more flexible and more
reliable. Two years of research resulted in a dispensing
system that provides exceptional beverage quality, easy to
upgrade technology, brand and graphic customization and
improved reliability.

33

MARKETING MIX OF COCA-COLA

34

MARKETING MIX OF COCA-COLA

Firstly, we will look at how Coca-Cola has used their
marketing mix. The marketing mix is divided up into 4 parts;
product, price, promotions and place.

1. Product:

The product (Coca-Cola soft drink) includes not just the
liquid inside but also the packaging. On the product-
service continuum we see that a soft drink provides little
service, apart from the convenience. Soft drinks satisfy
the need of thirst. However, people are always
different, some want more and others want less.
Therefore Coca-Cola has made allowances for that by
providing many sizes. We also have particular tastes,
and again they have provided several options. So,
although thirst is what is needed to be satisfied and that
is the core benefit, we are receiving other benefits in the
taste and size. Coca-Cola has developed several
different flavours and sizes as mentioned above, but
also several brands such as Sprite, Lift, Fanta and Diet
Coke which increase the product line length, thus
making full use of the market to maximize sales.

The product is convenient, that is - bought frequently,
immediately, and with a minimum of comparison and
buying effort.The appearance of the product is eye
catching with the bright red colour. It has a uniquely

35

designed bottle shape that fits in your hand better, and
creates a nicer & more futuristic look.

The quality of the soft drink is needed to be regularly
high. Sealed caps ensure that none of the "fizz" is lost.
The bottles are light, with flexible packaging, so they
won't crack or leak, and are not too heavy to casually
walk around with. The cans are also light and safe.

The product range of Coca-Cola includes:

y

Coca-Cola,

y Coca-Cola classic,

y caffeine free Coca-Cola,

y diet Coke

y caffeine free diet Coke,

y diet Coke with lemon

y Vanilla Coke,

y diet Vanilla Coke,

y Cherry Coke,

y diet Cherry Coke,

y Fanta brand soft drinks,

y Sprite,

y diet Sprite

y Sprite Remix

36

37

Product Lifecycle of Coke:

Product life cycle has four phases
1. Introduction
2. Growth
3. Maturity
4. Decline.

The markets where Coke is a dominant player are United
States of America, Europe and Asia, Africa. There is a vast
difference in terms of above given phases for example, in
U.S.A & Europe it has reached maturity stage where it can¶t
expand its market more but if we consider Asia, it is still in
the growth phase.

Coca-Cola is currently going through the maturity stage in
Western countires. This maturity stage lasts longer than all
other stages. Management has to pay special attention to
products during this stage of the product life-cycle. During
the maturity stage, products usually go through a slowdown
in sales growth. According to Coca-Cola's 2001 annual
report, sales have increased by 1.02% compared to last
year. This percentage has no comparison to the high level of
growth Coca-Cola enjoyed during its growth stage. To add a
little variation Coca-Cola took the Coca-Cola Classic and
added variations to it, including Cherry Coke, Vanilla Coke
and Diet Coke. Also Coca-Cola went from 6-oz. glass bottles
to 8-oz. cans to plastic liter bottles, all helping increase
consumption.

38

2. Price:

Like any company who has successfully endured a
century of existence, Coca- Cola has had to remain
tremendously fluent with their pricing strategy. They
have had the privilege of a worthy competitor constantly
driving them to be smarter, faster, and better. A quote
from Pepsi Co's CEO "The more successful they are,
the sharper we have to be. If the Coca-Cola Company
didn't exist, we'd pray for someone to invent them."
states it simply. The relationship between Coca-Cola &
Pepsi is a healthy one that each corporation has learned

COCA-COLA

39

to appreciate.

Throughout the years Coca-Cola has made many
pricing decisions but one might say that their ultimate
goal has always been to maximize shareholder value.
As cola consumption has decreased in the US colas
have come to realize the untapped international market.
In 2003 both Coke and Pepsi had a solid presence in
India and had each introduced a 300mL bottle. In order
to grab market share Pepsi began to drop prices (even
with summer approaching, which was contrary to policy
in America). Shortly thereafter, Coca-Cola decided to
drop their prices slightly, but focused on the reduced
price point of their 200mL container. Coca- Cola
planned to use the lower price point to penetrate new
cities that were especially price sensitive. The
carbonated soft drink market in India is nearly 37% of
the total beverage market there.

This low price strategy was not unfamiliar to Coca-Cola.
Both Coke & Pepsi utilized a low price strategy in the
early 1990s. After annihilating the low price store
brands, Coke chose to reposition itself as a "Premium"
brand and then raise prices.

Coca-Cola products would appear, on the shelf, to have
the most expensive range of soft drinks common to
supermarkets, at almost double the cost of no name
brands. This can be for several reasons apart from just
to cover the extra costs of promotions, for which no
name brands do without. It creates consumer
perceptions and values. When people buy Coca-Cola

40

they are not just buying the beverage but also the image
that goes with it, therefore to have the price higher
reiterates the fact that the product is of a better quality
than the rest and that the consumer is not cheap. This
is known as value-based pricing and is used by many
other industries in attracting consumers.

In India, the average income of a rural worker is Rs.500
a month. Coca Cola launched a 200 ml bottle for just
Rs.5, an affordable amount on the pockets of the rural
audience.

3. Place:

Coca-Cola entered foreign markets in various ways. The
most common modes of entry are direct exporting,
licensing and franchising.

Besides beverages and their special syrups, Coca-Cola
also directly exports its merchandise to overseas
distributors and companies. Other than exporting, the
company markets internationally by licensing bottlers
around the world and supplying them with the syrup
needed to produce the product.

41

There are different types of franchising. The type that is
used by Coca-Cola Company is manufacturer-
sponsored wholesaler franchise system. It is very
comparable to licensing but the only difference is that
the finished products are sold to the retailers in local
market.

Coca Cola has managed their company¶s marketing and
sales strategy within channels. Have you ever
considered the significance of the Coke vending
machine to the success and profitability of the Coca
Cola company? This channel is direct to consumer and
vending machines often have little to no competition and
no trade or price promotions.

The Coke Company operates three primary delivery
systems for its business channels:

y Bulk delivery for the channels of large

Supermarkets, Mass Merchandisers and Club
stores;

y For smaller channels Coke does advanced sale

delivery for convenience stores, drug stores, small
supermarkets and on-premise fountain accounts.

y Full service delivery for its full service vending

customers.

Key Channel Listing

y Supermarkets

y Convenience Stores

y Fast Food

42

y Petroleum Retailers

y Chain Drug Stores

y Hotels/Motels/Resorts

y Mass Merchan-disers

y U.S. DOD Military Resale retail commands:

AAFES, NAVRESSO and DECA

y Vending

In 2006, the Company began changing its delivery
method for its route delivery system. Historically, the
Company loaded its trucks at a warehouse with
products the route delivery employee would deliver. The
delivery employee was responsible for pulling the
required products off a side load truck at each customer
location to fill the customer's order. Coke began using a
new CooLift® delivery system in 2006 in a portion of the
Company's territory which involves pre-building orders
in the warehouse on a small pallet the delivery
employee can roll off a truck directly into the customer's
location. The CooLift® delivery system involves the use
of a rear loading truck rather than a conventional side
loading truck. Coke will continue to rollout this program
over the next several years since they expect such
significant savings and more efficient deliverys. This is a
huge investment for Coke.

The company works through independent bottlers of
Coke. They work in coordination with the Coke company
which produces the 'secret formula concentrate' and

43

ships to the distributors and bottlers for final processing
and packaging prior to shipment to the stores.

Coca-Cola floods all possible retailing stores in
satisfying the third part, place. In supermarkets and
convenient stores, Coca-Cola products are always easy
to identify, and usually make up the greater proportion
of options to buy. This increases their market exposure
through effective use of the retailers. For a FMCG it is
important that they can be found and purchased easily.
With many automatic Can machines located in many
sports stadiums and shopping malls, you don't even
need to go to a store to buy a drink. This greatly
enhances the speed of purchase.

The company produces concentrate, which is then sold
to various licensed Coca-Cola bottlers throughout the
world. The bottlers, who hold territorially exclusive
contracts with the company, produce finished product in
cans and bottles from the concentrate in combination
with filtered water and sweeteners. The bottlers then
sell, distribute and merchandise Coca-Cola in cans and
bottles to retail stores and vending machines. Such
bottlers include Coca-Cola Enterprises, which is the
largest single Coca-Cola bottler in North America and
Western Europe and food service distributors.

44

The Coca-Cola Company only produces a syrup
concentrate, which it sells to various bottlers throughout
the world who hold Coca-Cola franchises for one or
more geographical areas. The bottlers produce the final
drink by mixing the syrup with filtered water and sugar
(or artificial sweeteners) and then carbonate it before
filling it into cans and bottles, which the bottlers then sell
and distribute to retail stores, vending machines,
restaurants and food service distributors.

The Coca-Cola Company owns minority shares in some
of its largest franchises, like Coca-Cola Enterprises,
Coca-Cola Amatil, Coca-Cola Hellenic Bottling
Company (CCHBC) and Coca-Cola FEMSA, but fully
independent bottlers produce almost half of the volume
sold in the world. Since independent bottlers add sugar
and sweeteners, the sweetness of the drink differs in
various parts of the world, to cater for local tastes.

45

STRATEGIC PLANNING

In the year 2002, the company had a great success, as the
strategy worked which resulted in making Coca Cola
Company the world¶s leading company. In 2001, company
accomplished the crust of it¶s strategy as

y Worldwide volume increased by 4 percent with strong

international growth of 5 percent and clear signs that our

North American business is growing solidly and

predictable.

y Earnings per share grew by 82 percent, as we delivered

on our commitment to create volume growth while

aggressively

y Return on common equity grew from 23 percent in 2000

to 38 percent this year.

y Return on capital increased from 16 percent in 2000 to

27 percent in 2001.

y The company has generated free cash flow of $3.1

billion, up from $2.8 billion in 2000, a clear indication of

its underlying financial strength.

The strategy for the future of the company is very
straightforward. The marketing strategy for the year 2002
is as follows,

46

y Accelerate carbonated soft-drink growth, led by Coca-

Cola.

y Selectively broaden the family of beverage brands to

drive profitable growth.

y Grow system profitability and capability together with

our bottling partners.

y Serve customers with creativity and consistency to

generate growth across all channels.

y Direct investments to highest potential areas across

markets.

y Drive efficiency and cost-effectiveness everywhere.

47

MAJOR COMPETITOR

PEPSI INTERNATIONAL

HISTORY

PepsiCo is a world leader in convenient foods and
beverages, with revenues of about $27 billion and over
143,000 employees. The company consists of the snack
businesses of Frito-Lay North America and Frito-Lay
International; the beverage businesses of Pepsi-Cola North
America, Gatorade/Tropicana North America and PepsiCo
Beverages International; and Quaker Foods North America,
manufacturer and marketer of ready-to-eat cereals and other
food products. PepsiCo brands are available in nearly 200
countries and territories.

Many of PepsiCo's brand names are over 100-years-old, but
the corporation is relatively young. PepsiCo was founded in
1965 through the merger of Pepsi-Cola and Frito-Lay.
Tropicana was acquired in 1998 and PepsiCo merged with
The Quaker Oats Company, including Gatorade, in
2001.would entertain the listener with the latest musical
selections rendered by violin or piano or both. The new
name, ³Pepsi Cola´, is derived from the two of the principle
ingredients, Pepsin and Kola Nuts. It was first used on the
August 28. At that time, Bradham¶s advertising praises his
drink as ³Exhilarating, invigorating, aids digestion´.

1990-2002

48

The advertisement of the Pepsi changes to, ³You got the
right one baby, Uh-Huh!´.With the extensive usage of the
stars in the adds, the popularity of Pepsi increase. In 1992
Pepsi-Cola formed a partnership with Thomas J. Lipton Co.
Today Lipton is the biggest selling ready-to-drink tea brand
in the United States. Outside the United States, Pepsi-Cola
Company's soft drink operations include the business of
Seven-Up International. Pepsi-Cola beverages are available
in more than 190 countries and territories.
In Asia, they selected Lahore to make their regional office.
This was done in 1970. This regional office is monitoring all
the operations carried out in South West Asia. As in
Pakistan, they only entered beverage industry. They have
eleven bottlers covering whole Pakistan. The plant operating
here is Riaz Bottlers (Pvt) LTD. This plant was established at
Lahore in 1974. The total capacity of the plant is 30,000
cases per day. They have four filling lines in the plant
operating on the three shift bases. Each shift is of eight
hours. They have permanent work force of 750 people and
they employee approximately 1000 people more on
temporary basis during summer season.

21st century
On February 7, 2005, the Coca-Cola Company announced
that in the second quarter of 2005 they planned to launch a
Diet Coke product sweetened with the artificial sweetener
sucralose, the same sweetener currently used in Pepsi
One.[22][23] On March 21, 2005, it announced another diet
product, Coca-Cola Zero, sweetened partly with a blend of
aspartame and acesulfame potassium.[24] In 2007, Coca-
Cola began to sell a new "healthy soda": Diet Coke with

49

vitamins B6, B12, magnesium, niacin, and zinc, marketed as
"Diet Coke Plus."
On July 5, 2005, it was revealed that Coca-Cola would
resume operations in Iraq for the first time since the Arab
League boycotted the company in 1968.[25]
In April 2007, in Canada, the name "Coca-Cola Classic" was
changed back to "Coca-Cola." The word "Classic" was
truncated because "New Coke" was no longer in production,
eliminating the need to differentiate between the two.[26]
The formula remained unchanged.
In January 2009, Coca-Cola stopped printing the word
"Classic" on the labels of 16-ounce bottles sold in parts of
the southeastern United States.[27] The change is part of a
larger strategy to rejuvenate the product's image.[27]
In November 2009, due to a dispute over wholesale prices of
Coca-Cola products, Costco stopped restocking its shelves
with Coke and Diet

50

Pepsi¶s Products

y Pepsi

y Teem

y Mirinda

y Pepsi Max

y Pepsi Lemon

y Pepsi Blue

y Mountain Dew

y 7up

51

COCA COLA PAKISTAN

The Coca-Cola Company began operating in Pakistan in
1953. Coca-Cola, Fanta and Sprite are the brands in
Pakistan. The Coca-Cola System in Pakistan operates
through eight bottlers, four of which are majority-owned by
Coca-Cola Beverages Pakistan Limited (CCBPL). The
CCBPL plants are in Karachi, Hyderabad, Sialkot,
Gujranwala, Faisalabad, Rahimyar Khan, Multan and
Lahore. The remaining two plants, independently owned, are
in Rawalpindi and Peshawar. The Coca-Cola System in
Pakistan serves 70,000 customers/retail outlets. The Coca-
Cola System in Pakistan employs 1,800 people. During the
last two years, The Coca-Cola System in Pakistan has
invested over $130 million (U.S.)

52

PROMISE OF COKE

The basic proposition of our business is simple, solid and
timeless. When we bring refreshment, value, joy and fun to
our stakeholders, then we successfully nurture and protect
our brands, particularly Coca-Cola. That is the key to fulfilling
our ultimate obligation to provide consistently attractive
returns

to

the

owners

of

our

business.

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.

MAJOR SEGMENTS

Major segments are basically those people who take this
drink daily and those areas where the demands is higher
then the other areas. There are so many people who take
this drink daily and those people who take weekly and those
who take less often are always there as well. So, their basic
segments are those people who take this drink regularly.

53

FACTORS EFFECTING SALES

There are so many factors, which affects the sale of coke.
Here we are discussing three major factors which effects
coke.

y Per capita income

y Competitors

y Weather

Per Capita Income

First we will discuss about ³ Per capita income´. This is
major factor that affects the sale of this soft drink. Because
which every passing year budgets are becoming very strict
and tight in order to purchase things. So the disposable
incomes of the people are coming down. They spend heavily
on rents, utilities, and education and basic necessities and
after that when they get extra money they think about this
soft drink .So the decreasing per capita income effects badly
in selling and production of this soft drink.

54

And to get through with this difficulty there is need to
increase the level of per capita income of Pakistan because
it is much lesser than the rest of the countries.

Competitors

Coke¶s major competitor is ³PEPSI´ and there is no
hesitation to say this because every one knows that and all
the other cold drinks and water, coffee, tea are the
competitors.

Weather

Weather is the third major factor in effecting the Coke¶s
selling. This is underdeveloped market so the coke¶s
consumption in summers is 60% and in winters is 40%.

MAJOR CUSTOMERS NEED

First of all the majority don¶t care that what they are going to
have. In other words, they don¶t care before drinking that
whether it is ³Pepsi´ or ³coke´. They don¶t actually
differentiate between these two brands in order to their
tastes.
Consumers basically drink what they get.
They believe on ³WHAT COLD THEY SOLD´
Consumer¶s availability in brands is basically works like:
Push availability

55

Pull consumer¶s demand.

For this reason Coca-Cola have provided their coolers and
freezers in the market. They have maximum number of
coolers and freezers in the market. They provide this
infrastructure free of cost just to provide child coke to their
customer, which they want to be purchase.
Their salesman and mechanics regularly visit all the shops
where coke has its infrastructure to check that either it is in
proper condition or not, if not then they immediately change
or repair it.

56

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.

STRATEGIES OF QUALITY

After Micro and macro analysis Brand ³coke´ is primarily role

1. Enhance competition moments

2. When people watch cricket

3. Through commercialization

4. Fun time

Though these strategies there could be better understanding
and better connection with the public. These are the ³key
consumption´.

THREATS FROM COMPETITORS

Threats are well planned. Price is the major threat. When
price goes certain beyond the exact price whether come
down or go higher its effects the consumption of soft drink.
Because when the price go higher people go for the
substitute of ³coke´ i.e. Pepsi.

57

And when price goes down they think that there is must be
some thing wrong in it.
In short it all depends on customer¶s perception.

TARGETS THAT WOULD LIKE TO ATTAIN

Every organization runs on the bases of profit maximization
so Coke is also looking for a high profit margin.

There are three major ways of making money

y Over night profit

y Windfall profit

y Ethical and un-ethical ways

58

Over Night Profits

They could be over night profit that is for the number 1 brand

for the year. This could be got my increasing sales volume

Windfall Profit

Can be windfall profit. They are the extras profit. When the
consumption the consumption is on boom. So, there is
different kind of profits.

Ethical And Unethical Ways

Profit can also get through ethical and unethical ways. They
believe on this quote
³ Every thing is fare in love and war´.

Some profits stays for some time like ³over night profits´ and
some just come and go like ³wind fall profits´. And they can
also get profit through different approaches.

EXPANDING TARGET MARKET

In last 2 years Coke has come back in aggressive manner.

y Consumer has choice

y Attractive brand name

y Brand differentiating

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