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1.0 Executive Summary

Giant soft drink company Coca Cola has come under intense scrutiny by investors due to its inability to effectively carry out its marketing program. Consequently it is seeking the help of Polianitis Marketing Company Pty Ltd to develop a professional marketing plan which will

help the business achieve it‟s objectives more effectively and efficiently, and inevitably

regain there iron fist reign on the soft drink industry.

When establishing a re-birthed marketing plan every aspect of the marketing plan must be critically examined and thoroughly researched. This consists of examining market research, auditing business and current situation (situation analysis) and carefully scrutinising the soft drink industry and possibilities for Coca Cola in the market. Once Coca Cola have carefully analysed the internal and external business environment and critically examined the industry in general the most suitable marketing strategies will be selected and these strategies will be administered by effectively and continually monitoring external threats and opportunities and revising internal efficiency procedures.

1.0 Executive Summary Giant soft drink company Coca Cola has come under intense scrutiny by investors

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2.0

Situation Analysis

The founders of Coca Cola have developed their marketing plan using the following format.

  • 2.1 Market Summary

The market analysis investigates both the internal and external business environment. It is vital that Coca cola carefully monitor both the internal and external aspects regarding it‟s business as both the internal and external environment and their respective influences will be decisive traits in relation to Coke‟s success and survival in the soft drink industry.

Internal Business Environment

The internal business environment and its influence is that which is to some extent within

the business‟s control. The main attributes in the internal environment include efficiency in the production process, through management skills and effective communication channels. To effectively control and monitor the internal business environment, Coke must conduct continual appraisals of the business‟s operations and readily act upon any factors, which cause inefficiencies in any phase of the production and consumer process.

External Business Environment

The External business environment and its influences are usually powerful forces that can affect a whole industry and, in fact, a whole economy. Changes in the external environment will create opportunities or threats in the market place Coca cola must be aware off. Fluctuations in the economy, changing customer attitudes and values, and

demographic

Target Market

The target market for Coca cola is very wide as it satisfies the needs for many different consumers, ranging from the healthy diet consciousness through Diet Coke to the average human through its best selling drink regular Coke. Most Coke products satisfy all age groups as it is proven that most people of different age groups consume the Coca Cola product. This market is relatively large and is open to both genders, thereby allowing greater product diversification. 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.

2.0 Situation Analysis The founders of Coca Cola have developed their marketing plan using the following

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2.1.1 Market Demographics

Coca Cola Company is the world‟s leading manufacturer, marketer, and distributor of soft beverages. Coca Cola uses "Multisegment" targeting strategy which means that the company has more than single, well- defined, market segment. It develops a marketing mix for each of the segments. Coca Cola has more than 400 different products line, total of 3,500 product mix.

Geographic Segmentation:

Internationally: Coke segments its products country wise and region wise.

  • The most important things is the taste and quality.

  • It varies according to the taste and income level of the people in that country.

  • I.e.: third world countries are given low quality and taste.

Climatic: In coke marketing, main idea is to serve it cold, so we that they focus on hot areas

of the world.i.e.: middle east etc and their sale increase in summer. Localy: In pakistan the coke segments more in urban and suburban areas as compare to rural areas.

Demographic:

Age:. Coke segments the small children introducing tastes like vanilla, lime and cherry. They focus children from 4-12.

  • Coke specifically target more young than older.

Family type:. Coke introduces its economy pack and that‟s how the focus family and groups.

Income:. Coke segments different income levels by packing.

  • For small income people it has small returnable glass bottle.

  • For middle people it has small non-returnable bottle.

  • For higher income people it has Coke Tin.

Psychographic:

  • All psychographics variables the social class, lifestyle, occupation, level of education and personality Coke segments everyone.

  • But again it‟s there packaging which is different for different consumers.

Behavioral:

Occasion:. Coca-Cola segments different occasions which are celebrated in the country.

  • Basant has become an international event identity of the culture of pakistan.

  • The crdit for making celebrations available for almost everyone largely goes to Coca- Cola Company.

2.1.1 Market Demographics Coca Cola Company is the world‟s leading manufacturer, marketer, and distributor of soft

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Table.1.0 Target Market Forecast

 

Market Forecast

 
 

2014

2015

2016

2017

2018

Activity

Number

Reve

Number

Reve

Number

Reve

Number

Reve

Number

Reven

+

nue

nue

nue

nue

ue

++

1.Training of

7,500 at

11.5

8,000 at

15

8,500 at

18.5

9,000 at

22.5

9,500 at

30

individuals

$ 10,000

$

$ 10,000

$ 10,500

$ 11,000

10,000

2.Consultancy

100 at $

3.5

150 at $

5.5

190 at $

 
  • 6.5 310 at $

240 at $

8.5

 

10.5

60,000

60,000

70,000

80,000

90,000

3.Web-based

-

-

-

-

190 at

 
  • 0.5 700 at

500 at

0.7

 

0.9

learning

3,000

3,000

3,000

program

Total

7,600

15

8,150

20.5

8,880

25.5

9,740

31.7

10,510

41.4

+ In mandays ++$ million

Table 1.0 provide target market forecast both in terms of number and revenue for the major activities envisaged for 2014-18

  • 2.1.2 Market Needs

In coke marketing, main idea is to serve it cold, so we can say that, they focus more on hot areas of the world, i.e. middle east etc and there sale increase in summer. The market needs vary with time and Coke Intl. introduces its products over time e.g. Coke Cherry etc.

  • 2.1.3 Market Trends

Coke will always show activities, where people get together to enjoy moments of togetherness with our brand. Research analysis indicates that youngsters love to get together, and it is when they are enjoying themselves, that will consume coke. For Pakistani youth, socializing with friends and family is „core‟ behaviour in their lives. Coke‟s brand personality is all about togetherness. At times, Coca Cola Intl seeks to promote itself through sponsoring events. Since many years, Basanat festival has somewhat become “Coke Festival”.

  • 2.1.4 Market Growth

Coca Cola Company can also identify its expansion through the ANSOFF approach.

Table.1.0 Target Market Forecast Market Forecast 2014 2015 2016 2017 2018 Activity Number Reve Number Reve
Table.1.0 Target Market Forecast Market Forecast 2014 2015 2016 2017 2018 Activity Number Reve Number Reve

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Coca Cola in Pakistan is doing market penetration through the selling its products to the business buyer, who are huge multinational organizations like McDonalds, Subway, Dunkin Donuts & many more & they are also keeping the local market in focus. Fri Chicks, AFC etc are examples of the buyers in the local market. They are selling the Coca Cola as the only beverage in their restaurants. Market Development is exploring new markets for the products you are already selling. Many flavors of coca cola are not being sold in Pakistan. Coca cola can develop a new market if they introduce those flavors in Pakistan.

  • 2.2 SWOT Analysis

The flowing SWOT Analysis captures the key strengths and weaknesses of Coca Cola and identifies the opportunity and threats.

  • 2.2.1 Strengths

  • The best global brand in the world in terms of value. According to Interbrand, The Coca Cola Company is the most valued ($77,839 billion) brand in the world.

  • World‟s largest market share in beverage. Coca Cola holds the largest beverage market share in the world (about 40%).

  • Strong marketing and advertising. Coca Cola‟ advertising expenses accounted for more than $3 billion in 2012 and increased firm‟s sales and brand recognition.

  • Most extensive beverage distribution channel. Coca Cola serves more than 200 countries and more than 1.7 billion servings a day.

  • Customer loyalty. The firm enjoys having one of the most loyal consumer groups.

  • Bargaining power over suppliers. The Coca Cola Company is the largest beverage producer in the world and exerts significant power over its suppliers to receive the lowest price available from them.

  • Corporate Social Responsibility (CSR). Coca Cola is increasingly focusing on CSR programs, such as recycling/packaging, energy conservation/climate change, active healthy living, water stewardship and many others, which boosts company‟s social image and result in competitive advantage over competitors.

  • 2.2.2 Weaknesses

  • Significant focus on carbonated drinks. The business is still focusing on selling Coke, Fanta, Sprite and other carbonated drinks. This strategy works in short term as consumption of carbonated drinks will grow in emerging economies but it will prove weak as the world is fighting obesity and is moving towards consuming healthier food and drinks.

  • Undiversified product portfolio. Unlike most company‟s competitors, Coca Cola is still focusing only on selling beverage, which puts the firm at disadvantage. The

Coca Cola in Pakistan is doing market penetration through the selling its products to the business

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overall consumption of soft drinks is stagnating and Coca Cola Company will find it hard to penetrate to other markets (selling food or snacks) when it will have to sustain current level of growth.

  • High debt level due to acquisitions. Nearly $8 billion of debt acquired from CCE‟s acquisition significantly increased Coca Cola's debt level, interest rates and borrowing costs.

  • Negative publicity. The firm is often criticized for high water consumption in water scarce regions and using harmful ingredients to produce its drinks.

  • Brand failures or many brands with insignificant amount of revenues. Coca Cola currently sells more than 500 brands but only few of the brands result in more than $1 billion sales. Plus, the firm‟s success of introducing new drinks is weak. Many of its introduction result in failures, for example, C2 drink.

  • 2.2.3 Opportunities

  • Bottled water consumption growth. Consumption of bottled water is expected to grow both in US and the rest of the world.

  • Increasing demand for healthy food and beverages. Due to many programs to fight obesity, demand for healthy food and beverages has increased drastically. The Coca Cola Company has an opportunity to further expand its product range with drinks that have low amount of sugar and calories.

  • Growing beverages consumption in emerging markets. Consumption of soft drinks is still significantly growing in emerging markets, especially BRIC countries, where Coca Cola could increase and maintain its beverages market share.

  • Growth through acquisitions. Coca Cola will find it hard to keep current growth levels and will find it hard to penetrate new markets with its existing product portfolio. All this can be done more easily through acquiring other companies.

  • 2.2.4 Threats

  • Changes in consumer tastes. Consumers around the world become more health conscious and reduce their consumption of carbonated drinks, drinks that have large amounts of sugar, calories and fat. This is the most serious threat as Coca Cola is mainly serving carbonated drinks.

  • Water scarcity. Water is becoming scarcer around the world and increases both in cost and criticism for Coca Cola over the large amounts of water used in production.

  • Strong dollar. More than 60% of The Coca Cola Company income is from outside US. Due to strong dollar performance against other currencies firm‟s overall income may fall.

  • Legal requirements to disclose negative information on product labels. Some Coca Cola‟s carbonated drinks have adverse health consequences. For this reason, many governments consider to pass legislation that requires disclosing such information on product labels. Products containing such information may be perceived negatively and lose its customers.

overall consumption of soft drinks is stagnating and Coca Cola Company will find it hard to

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  • Decreasing gross profit and net profit margins. Coca Cola‟s gross profit and net profit margin was decreasing over the past few years and may continue to decrease due to higher water and other raw material costs.

  • Competition from PepsiCo. PepsiCo is fiercely competing with Coca Cola over market share in BRIC countries, especially India.

  • Saturated carbonated drinks market. The business significantly relies on the carbonated drinks sales, which is a threat for the Coca Cola as the market of carbonated drinks is not growing or even declining in the world.

  • 2.3 Competition

The major competition faced by Coca Cola International is Pepsi Co. 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.

Major Pepsi Co. products include:

Pepsi

Teem

Mirinda

Pepsi Max

Pepsi Lemon

Pepsi Blue

Mountain Dew

7up

 Decreasing gross profit and net profit margins. Coca Cola‟s gross profit and n et profit
  • 2.4 Product/ Service Offering

Regulars:

Coke Classic Vanilla Coke Cherry Coke Caffeine free Coke Fanta Sprite Sprite Ice Sprite Duo Coca Cola Black

 Decreasing gross profit and net profit margins. Coca Cola‟s gross profit and n et profit

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Limca

Caffeine free Diet Coke

Diet Cherry Coke

Diet Coke with Lemon

Diet Vanilla Coke

Sports Drinks:

PowerAde

Nestea

Aquarius

Vitamin Energy

Juices/Water:

Minute Maid

Maaza

Kinley

Energy Drinks:

Full Throttle

Barq‟s

Tab

Burn

  • 2.5 Key Success Factors

Coca Cola marketing team focuses not only on the results as well as the tasks assigned.

They firmly believe if you want to establish a clear image in the minds of

consumers, you first need a clear image in your own mind. Since the major competitor is Pepsi Co. so Coca Cola Intl has focused on

neutralizing the competition.

Kill the category: If Pepsi Co. launched Crystal Pepsi then Coca Cola Intl launched Diet Coke.

The Coca Cola marketing team maintained their focus strongly on the product itself. When they changed bottle shape, many people started buying bottles instead of the drink itself

The Coca Cola team learnt from everything. Even if a customer said “no”, they focused on “why” did he say no and then found out ways on “how” to solve that

issue.

Formula for positioning success :

  • Define

  • Over deliver

  • Claim

  • Succeed

They specified the criteria for each product offered because if you don‟t specify the criteria for choosing, consumers will develop their own, which is dangerous.

 Limca  Caffeine free Diet Coke  Diet Cherry Coke  Diet Coke with Lemon

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  • 2.6 Critical Issues

A common criticism of Coke based on its allegedly toxic acidity levels has been found to be baseless by researchers; lawsuits based on these notions have been dismissed by several American courts for this reason. Although numerous court cases have been filed against The Coca-Cola Company since the 1920s, alleging that the acidity of the drink is dangerous, no evidence corroborating this claim has been found. Under normal conditions, scientific evidence indicates Coca-Cola's acidity causes no immediate harm. Coca-Cola has been criticized for alleged adverse health effects, its aggressive marketing to children exploitative labor practices, high levels of pesticides in its products, building plants in Nazi Germany which employed slave labor, environmental destruction, monopolistic business practices, and hiring paramilitary units to murder trade union leaders. In October 2009, in an effort to improve their image, Coca-Cola partnered with the American Academy of Family Physicians, providing a $500,000 grant to help promote healthy-lifestyle education; the partnership spawned sharp criticism of both Coca-Cola and the AAFP by physicians and nutritionists.

2.6 Critical Issues A common criticism of Coke based on its allegedly toxic acidity levels has

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  • 3.0 Marketing Strategy

Our local marketing strategy enables Coke to listen to all the voices around the world asking for beverages that can span the entire spectrum of tastes and occasions. What people want in a beverage is a reflection of who they are, where they live, how they work and play, and how they relax and recharge. Whether you're a student in the United States enjoying a refreshing Coca-Cola, a woman in Italy taking a tea break, a child in Peru asking for a juice drink, or a couple in Korea buying bottled water after a run together, we're there for you. We are determined not only to make great drinks, but also to contribute to communities around the world through our commitments to education, health, wellness, and diversity. Coke strives to be a good neighbor, consistently shaping our business decisions to improve the quality of life in the communities in which we do business. It's a special thing to have billions of friends around the world, and we never forget it.

3.1 Mission
3.1
Mission

“Our mission statement is to maximize shareowner value over time”

In order to achieve this mission, they must create value for all the constraints they serve, including their consumers, their customers, their bottlers, and thir communities. The Coca Cola Company creates value by executing comprehensive business strategy guided by six key beliefs:

  • 1. Consumer demand drives everything they do.

  • 2. Brand Coca Cola is the core of their business

  • 3. They will serve consumers a broad selection of the nonalcoholic ready-todrink beverages they want to drink throughout the day.

  • 4. They will be the best marketers in the world.

  • 5. They will think and act locally.

  • 6. They will lead as a model corporate citizen.

Everything we do is inspired by their enduring 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.

  • 3.2 Marketing Objectives

The objective is the starting point of the marketing plan. Objectives should seek to answer the

question „Where do we want to go?‟. The purposes of objectives include:

  • to enable a company to control its marketing plan.

  • to help to motivate individuals and teams to reach a common goal.

  • to provide an agreed, consistent focus for all functions of an organization.

All objectives should be SMART i.e. Specific, Measurable, Achievable, Realistic, and Timed.

3.0 Marketing Strategy Our local marketing strategy enables Coke to listen to all the voices around

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Specific Be precise about what you are going to achieve Measurable Quantify you objectives Achievable Are you attempting too much?

Realistic Do you have the resource to make the objective happen (men, money, machines, materials, minutes)? Timed State when you will achieve the objective (within a month? By February 2010?) 1.Market Share Objectives:

To gain 60% of the market for soft drink industry by September 2007. 2.Profitability Objectives:

To achieve a 20% return on capital employed by August 2007

  • 3. Promotional Objectives

To increase awareness of the product on the market.

  • 4. Objectives for Survival

To survive the current market war between competitors.

  • 5. Objectives for Growth

To increase the size of the worldwide Coca Cola enterprise by 10% .

  • 3.3 Financial Objectives

All Coca Cola Intl. plants setup their own goal to achieve the objective. The company goal is:

“To increase sales volume and gain market leadership in Lahore.” The company aims to achieve sales level of $45,000,000,00 by the end of year 2013. The sales level for year 2012 was $39,944,000,00.

  • 3.4 Target Market

Once the situation analysis is complete, and the marketing objectives determined, attention

turns to the target market. The soft drink market is very large, and the business cannot be “all

things to all people”, so it must choose which market segments have the greatest potential. The target market is the group of customers on whom the business focuses attention. The target market is where Coca Cola focuses its marketing efforts as it feels this is where it will

be most productive and successful. The target market for Coca cola is very wide as it satisfy‟s the needs for many different consumers, ranging from the healthy diet consciousness through Diet Coke to the average human through its best selling drink regular Coke. Most Coke products satisfy all age groups as it is proven that most people of different age groups consume the Coca Cola product. This market is relatively large and is open to both genders, thereby allowing greater product diversification. There are four broad ways which Coca Cola can segment its market:

Specific – Be precise about what you are going to achieve Measurable – Quantify you objectives
  • Mass marketing

  • Concentrated marketing

  • Differentiated marketing

  • Niche marketing

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The most apparent method used by Coca Cola is with no doubt the differentiated marketing

method as Coke satisfy‟s a range of different markets. Diet coke satisfy‟s the weight

consciousness, regular coke, sprite, fanta the average human, coffee, iced tea etc. Each group of beverages satisfy a particular group of people but majority the average human.

  • 3.5 Positioning

Coca Cola Position its products as refreshing and thirst quenching. The product are said to bring joy, as apparent from Coca Cola's latest tagline - Little drops of Joy. The products are associated with having a good time with friends and family and enjoying everyday life. The products are also marketed as consistent and of high quality.

  • 3.6 Strategies

The strategy for the future of the company is very straightforward. The marketing strategy for the year 2010 is as follows:

  • Accelerate carbonated soft-drink growth, led by Coca-Cola.

  • Selectively broaden the family of beverage brands to drive profitable growth.

  • Grow system profitability and capability together with our bottling partners.

  • Serve customers with creativity and consistency to generate growth across all channels.

  • Direct investments to highest potential areas across markets.

  • Drive efficiency and cost-effectiveness everywhere.

  • 3.7 Marketing Program

Coca Cola's marketing Program or Mix is comprised of these following approaches to pricing, distribution, advertising and promotion, and customer service. Pricing. Coca Cola's pricing scheme is that the product cost is 45% of the total retail price. Distribution. Coca Cola's food should be distributed through a take out model where customers can call in their order plus come to the restaurant to pick it up, come into any restaurant free coke campaign will enable the , place the take out order as well as wait for it to be completed, or come in and dine at the restaurant. Advertising and Promotion. The most successful advertising should be banner ads and inserts in the Register Guard as well as a PR campaign of informational articles plus reviews in addition inside the Register Guard. Customer Service. Obsessive customer attention is the mantra. Coca Cola's philosophy is that whatever needs to be done to make the customer happy have to occur, even at the expense of short-term profits. In the long term, this investment should pay off by means of a fiercely loyal customer base that is extremely vocal to their friends by means of referrals.

The most apparent method used by Coca Cola is with no doubt the differentiated marketing method

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3.8 Marketing Research

During the initial phases of the marketing plan development, several focus groups were held to gain insight into a variety of patrons of drinks. These focus groups provided useful insight into the decisions, as well as decision making processes, of consumers. An additional source of souk research that is dynamic is a feedback mechanism based on a suggestion card system. The suggestion card system has several statements that patrons are asked to rate in terms of a given scale. There are in addition several open ended questions that allow the customer to freely offer constructive criticism or praise. Coca Cola's should work hard to implement reasonable suggestions in order to improve their service offerings as well as show their commitment to the customer that their suggestions are valued. The last source of souk research is competitive analysis/appreciation. Coca Cola's should continually patronize local drinks for two reasons. The first is for competitive analysis, providing Coca Cola's by means of timely information regarding other drink's service offering. The second reason is that local trade owners particularly drink owners, are often part of an informal fraternal organization where they support each other's trade.

3.8 Marketing Research During the initial phases of the marketing plan development, several focus groups were

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  • 4.0 Financials

This section should offer a financial overview of Coca Cola's as it relates to the marketing activities.

Table 1.2

Income and Operating Forecast ( In million Dollar )

 
 

Year

 

Description

 

2014

2015

2016

2017

2018

 

1.0

Income

 

15.0

 

20.5

   
  • 25.5 41.4

31.7

     

2.0

Operating Expense

                     

2.1

Salary and wages

 
  • 08.0 11.0

       
  • 13.0 19.0

16.0

       

2.2

Library and others

 
  • 03.0 04.0

       
  • 05.0 07.0

05.5

       

facilities

2.3

Utility, transport,

 
  • 01.0 01.5

       

02.5

  • 02.0 04.0

       

etc.

Sub- total

   

12.0

 

16.5

   
  • 20.0 30.0

24.0

     

Operating Profit

   

03.0

 

04.0

   
  • 05.5 11.4

7.7

     

Coca Cola plans to invest about $30 million in loan, building furnishing, and other

accessories. This will be funded equally through promoters‟ contribute and loan from two

bank. Initial working capital of $ 1.0 million will be also be provided by the promoters. It will be registered as a section 25 company. The income and operating expense expenses forecast is provided in Table 1.2 The operating margin will help in paying the interest and instalment on the loan with a very small surplus left after depreciation in the initial two year. The founders retain the flexible to

reduce the salary and wages burden, as almost 70% of the budgeted for them.

4.0 Financials This section should offer a financial overview of Coca Cola's as it relates to

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  • 5.0 Controls

Coca Cola Intl. has controlled sales via:

Geographic Market Organization

Opening plant in various countries (in Pakistan they have 10 plants) so as to reduce

taxes. They have invested $5.6 million in their R&D facility to maintain Product Quality

Control. Their primary concern right now is penetrating into the Pakistani market via strong

attacking techniques whereby maintaining defense strategy against Pepsi Co. The overall strategic control is implemented in all plants and factories throughout the 200 countries which Coca Cola proudly serves.

  • 5.1 Implementation

Currently, Coca Cola Intl. issuing the following techniques to increase shareholders wealth, maximize customer satisfaction and satisfy the market:

Value Positioning Value Pricing Promotional Pricing Differentiation Image Product Channel Personnel

o

o

o

Market Strategy Niche Marketing Mass Marketing

o

o

  • 5.2 Marketing Organization

Kevin Lewis, the owner, is primarily responsible for marketing activities. This is in addition to his other responsibilities, plus does depend on some outside resources for graphic design work, and creativity.

  • 5.3 Contingency Planning

Difficulties and risks:

Problems generating visibility. Overly aggressive as well as debilitating actions by competitors. An entry into the Eugene souk of an already existing, company.

Worst case risks might include:

Determining that the trade cannot support itself on an ongoing basis. Having to liquidate equipment or intellectual property to cover liabilities. The concept and product image of Coca Cola should attract 3 dissimilar customer profiles;

5.0 Controls Coca Cola Intl. has controlled sales via:  Geographic Market Organization  Opening plant

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The student -- further and further young people have developed healthy eating and fizzy drinking habits. Some in addition go through a "health food phase" while in college. The health conscious person of any age or sex -- this includes anyone on a restricted or prescribed diet or those who have committed to a healthy diet. Curious and open-minded -- "if one tries it, one should like it." Through marketing, publicity, plus word-of-mouth, people should seek out a novel experience and learn that nutritious food can be tasty, fun, convenient, as well as inexpensive.

The student -- further and further young people have developed healthy eating and fizzy drinking habits.

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