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ACADEMIC YEAR 2011-2012

MARKETING RESEARCH WORK

TOPIC: MARKETING STRATEGIES ANALYSIS OF

Bachelor in Business Administration 3 (BBA3)

TEAM MEMBERS:
BAOTTO Yves-David
KARAMOKO Oumar
YEPIE Wilfried Emmanuel

TEACHER:
Mr. Canissuis DANHO

CONTENTS

INTRODUCTION ....................................................................................... 1
1.

Description of the soft drink industry ............................................. 1

2.

Description of Coca-Cola Company ............................................... 4

I-

LITTERATURE REVIEW ................................................................ 6


1.

Ansoffs product-market growth matrix ......................................... 6

2.

Marketing mix ................................................................................. 7

3.

Pricing penetration .......................................................................... 9

4.

Product range strategy ................................................................... 10

5.

Positioning ..................................................................................... 11

6.

Sponsoring ..................................................................................... 12

7.

Street marketing ............................................................................ 12

8.

Mobile marketing .......................................................................... 14

II-

MARKETING STRATEGIES ANALYSIS .................................... 14

1.

Business growth strategies ............................................................ 14

2.

Marketing mix ............................................................................... 16

RECOMMANDATION ............................................................................ 22
CONCLUSION ......................................................................................... 22
REFERENCES .......................................................................................... 24

INTRODUCTION

1. Description of the soft drink industry


A soft drink (also called soda) is a beverage composed by water, sugar or sugar
equivalent, usually a flavouring agent and sometimes caffeine, colourings and others
ingredients. These drinks are qualified soft because they contain no alcohol or small
amounts of alcohol (less 0.5% of the total volume). Widely sold soft drink flavours are
cola, root beer, lemon-lime, cherry, grape, orange, vanilla, fruit punch, ginger ale and
lemonade. The first marketed soft drinks in the Western world appeared in the 17th
century. They were made from water and lemon juice sweetened with honey. In 1676,
the Compagnie des Limonadiers of Paris was granted a monopoly for the sale of
lemonade soft drinks. Vendors carried tanks of lemonade on their backs and dispensed
cups of the soft drink to thirsty Parisians.
Carbonated water (also known soda water) that was created in 1767 by an
Englishman named Joseph Priestley by infusing water with carbon dioxide. More than
a century later, a variant of soda called phosphate soda appeared in USA and became
one of most popular soda fountain drinks. Then, association of lemon and orange to
phosphate became most basic and only some pharmacies served it in glass with iced
cube. However, due to problems in U.S. glass industry, bottled soda was introduced on
the market.
Today, soda fountains disappeared and bottled soda takes a great place in the
world. Market size, growth rate and overall profitability are three economic indicators
that can be used to evaluate the soft drink industry. The market size of this industry
has been changing. Soft drink consumption has a market share of 46.8% within the
non-alcoholic drink industry. Indeed, it had a market value of $307.2 billion in 2004
and its volume was 325,367.2 million litres according datamonitor (2005). The growth
rate has been recently criticized due to the U.S. market saturation of soft drinks.
Datamonitor (2005) stated, Looking ahead, despite solid growth in consumption, the
global soft drinks market is expected to slightly decelerate, reflecting stagnation of
market prices. The change is attributed to the other growing sectors of the nonalcoholic industry including tea and coffee (11.8%) and bottled water (9.3%). Sports
drinks and energy drinks are also expected to increase in growth as competitors start
adopting new product lines.

Five Competitive Forces for Coca-Cola Company


The soft drink industry is very competitive for all corporations involved, with
the greatest competition being that from rival sellers within the industry. All soft drink
companies have to 7 think about the pressures; that from rival sellers within the
industry, new entrants to the industry, substitute products, suppliers, and buyers.
The competitive pressure from rival sellers is the greatest competition that
Coca-Cola faces in the soft drink industry. Coca-Cola, Pepsi Co., and Cadbury
Schweppes are the largest competitors in this industry, and they are all globally
established which creates a great amount of competition. Though Coca-Cola owns four
of the top five soft drink brands (Coca-Cola, Diet Coke, Fanta, and Sprite), it had
lower sales in 2005 than did PepsiCo (Murray, 2006c). However, Coca-Cola has
higher sales in the global market than PepsiCo. In 2004, PepsiCo dominated North
America with sales of $22 billion, whereas Coca-Cola only had about $6.6 billion,
with more of their sales coming from overseas. PepsiCo is the main competitor for
Coca-Cola and these two brands have been in a power struggle for years (Murray,
2006c).
Brand name loyalty is another competitive pressure. The Brand Keys Customer
Loyalty Leaders Survey (2004) shows the brands with the greatest customer loyalty in
all industries. Diet Pepsi ranked 17th and Diet Coke ranked 36th as having the most
loyal customers to their brands. The new competition between rival sellers is to create
new varieties of soft drinks, such as vanilla and cherry, in order to keep increasing
sales and enticing new customers (Murray, 2006c).
New entrants are not a strong competitive pressure for the soft drink industry.
Coca-Cola and Pepsi Co dominate the industry with their strong brand name and great
distribution channels. In addition, the soft-drink industry is fully saturated and growth
is small. This makes it very difficult for new, unknown entrants to start competing
against the existing firms. Another barrier to entry is the high fixed costs for
warehouses, trucks, and labour, and economies of scale. New entrants cannot compete
in price without economies of scale. These high capital requirements and market
saturation make it extremely difficult for companies to enter the soft drink industry;
therefore new entrants are not a strong competitive force (Murray, 2006c).
Substitute products are those competitors that are not in the soft drink industry.
Such substitutes for Coca-Cola products are bottled water, sports drinks, coffee, and
tea. Bottled water and sports drinks are increasingly popular with the trend to be a
more health conscious consumer. There are progressively more varieties in the water
and sports drinks that appeal to different consumers tastes, but also appear healthier

than soft drinks. In addition, coffee and tea are competitive substitutes because they
provide caffeine. The consumers who purchase a lot of soft drinks may substitute
coffee if they want to keep the caffeine and lose the sugar and carbonation. Specialty
blend coffees are also becoming more popular with the increasing number of
Starbucks stores that offer many different flavours to appeal to all consumer markets.
It is also very cheap for consumers to switch to these substitutes making the threat of
substitute products very strong (Datamonitor, 2005).
Suppliers for the soft drink industry do not hold much competitive pressure.
Suppliers to Coca-Cola are bottling equipment manufacturers and secondary
packaging suppliers. Although Coca-Cola does not do any bottling, the company owns
about 36% of Coca-Cola Enterprises which is the largest Coke bottler in the world
(Murray, 2006a). Since Coca-Cola owns the majority of the bottler, that particular
supplier does not hold much bargaining power. In terms of equipment manufacturers,
the suppliers are generally providing the same products. The number of equipment
suppliers is not in short supply, so it is fairly easy for a company to switch suppliers.
This takes away much of suppliers bargaining power.
The buyers of the Coca-Cola and other soft drinks are mainly large grocers,
discount stores, and restaurants. The soft drink companies distribute the beverages to
these stores, for resale to the consumer. The bargaining power of the buyers is very
evident and strong. Large grocers and discount stores buy large volumes of the soft
drinks, allowing them to buy at lower prices. Restaurants have less bargaining power
because they do not order a large volume. However, with the number of people are
drinking less soft drinks, the bargaining power of buyers could start increasing due to
decreasing buyer demand (Murray, 2006a).
Porters Five Forces Model identifies the five forces of competition for any
company. The recognition of the strength of these forces helps to see where Coca-Cola
stands in the industry. Of the five forces, rivalry within the soft drink industry,
especially from PepsiCo, is the greatest source of competition for Coca-Cola.

2. Description of Coca-Cola Company


2.1.

History of Coca-Cola Company

The story of Coca-Cola began on the afternoon of 8th May 1886 in Atlanta, a
city of USA. John Pemberton, a pharmacist, was inspired by simple curiosity. He
stirred up a fragrant, caramel-coloured liquid and, when it was done, he carried it a few
doors down to Jacobs' Pharmacy. Here, the mixture was combined with carbonated
water and sampled by customers who all agreed, this new drink was something
special. So Jacobs' Pharmacy put it on sale for five cents a glass. Pemberton's
bookkeeper, Frank Robinson, named the mixture Coca-Cola, and wrote it out in his
distinct script. To this day, Coca-Cola is written the same way. In the first year,
Pemberton sold just 9 glasses of Coca-Cola a day. Unfortunately for Pemberton, he
died in 1888, and over the next three years, Atlanta businessman Asa Griggs Candler
secured rights to the business for a total of about $2,300. Candler would become the
Company's first president, and the first to bring real vision to the business and the
brand. In 1894, a Mississippi businessman named Joseph Biedenharn became the first
to put Coca-Cola in bottles. He sent 12 of them to Candler, who responded without
enthusiasm. Five years later, two Chattanooga lawyers, Benjamin F. Thomas and
Joseph B. Whitehead, secured exclusive rights from Candler to bottle and sell the
beverage for the sum of only one dollar. In 1923, four years after his father Ernest
purchased the Company from Asa Candler, Robert Woodruff became the Company
president. He led the expansion of Coca-Cola overseas and in 1928 introduced CocaCola to the Olympic Games for the first time when Coca-Cola travelled with the U.S.
team to the 1928 Amsterdam Olympics. Woodruff pushed development and
distribution of the six-pack, the open top cooler, and many other innovations that made
it easier for people to drink Coca-Cola at home or away. During the World War II,
Woodruff ordered that "every man in uniform gets a bottle of Coca-Cola for 5 cents,
wherever he is, and whatever it costs the Company." During the war, many people
enjoyed their first taste of the beverage, and when peace finally came, the foundations
were laid for Coca-Cola to do business overseas. After 70 years of success with one
brand, Coca-Cola, the Company decided to expand with new flavours: Fanta originally
developed in the 1940s and introduced in the 1950s; Sprite followed in 1961, with
TAB in 1963 and Fresca in 1966. In 1960, The Coca-Cola Company acquired The
Minute Maid Company, adding an entirely new line of business juices to the
Company. In 1981, Roberto C. Goizueta became chairman of The Board of Directors
and CEO of The Coca-Cola Company. He led the introduction of diet Coke, the very
first extension of the Coca-Cola trademark; within two years, it had become the top
low-calorie drink in the world, second in success only to Coca-Cola. In 1985, he

released a new taste for Coca-Cola, the first change in formulation in 99 years.
However, critics called it the biggest marketing blunder ever, the Company listened,
and the original formula was returned to the market as Coca-Cola classic, and the
product began to increase its lead over the competition until this day. During, the
1990s, new beverages joined the Company's line-up, including Powerade sports drink,
Qoo children's fruit drink and Dasani bottled water. The Company's family of brands
further expanded through acquisitions, including Limca, Maaza and Thums Up in
India, Barq's root beer in the U.S., Inca Kola in Peru, and Cadbury Schweppes'
beverage brands in more than 120 countries around the world. Today, with its current
CEO and chairman Muhtar Kent, it is enjoyed in more than 200 countries worldwide.
From the early beginnings when just nine drinks a day were served, Coca-Cola has
grown to the worlds most ubiquitous brand, with more than 1.7 billion beverage
servings sold each day. When people choose to reach for one of The Coca-Cola
Company brands, the Company wants that choice to be exciting and satisfying, every
single time.

2.2.

Brands of Coca-Cola Company

This is a list of common brands owned by Coca-Cola Company:


-

Coca-Cola Classic
Fanta
Dasani
Coca-Cola Zero
Coca-Cola Light
Sprite
Powerade
Diet Coke
Oasis
Dr. Pepper
Youki

I-

LITTERATURE REVIEW
1. Ansoffs product-market growth matrix
Igor Ansoff was a Russian American, applied mathematician and business manager. In order

to plot generic strategies for growing a business, he put in relationship product and
market. With this relationship, he elaborated a matrix that links new and existing
product and new and existing market: its the Ansoffs matrix. This matrix allowed to
emit four growth strategies as we can see below:

From: http://www.tutor2u.net/business/strategy/ansoff_matrix.htm, December, 13th 2012.

Market penetration: Existing products on existing markets. Here company seeks


to make more profit by selling more products to the same people. To reach this
objective, it can make more advertising about the product, increase their sales
force activities, launch price of the product, or buy a competitor company.
Product development: New products on existing markets. Company sells
different products to the same people. In this case, it can extend the product by
introducing different variants or packages, develop new related products.
Market development: Existing products on new markets. Company seeks to
expand their sales volume by selling the same product to different people. Here,
company can target different geographical markets, use different sales channels,
or target different group of people.

Diversification: New products on new markets. This strategy consists in selling


different products to different people. There two types of diversification, related
diversification and unrelated diversification. Related diversification is a kind of
diversification inside the same industry. Unrelated diversification is a
diversification inside another industry.
While Ansoff analysis helps in mapping the strategic options for companies, it
is important to note that like all models, it has some limitations. By itself, the matrix
can tell one part of the strategy story but it is imperative to look at other strategic
models like SWOT analysis and PESTLE in order to view how the strategy of an
organisation is formulating and might change in the course of its future. For example,
the Ansoff analysis of Virgin Cola shows that the brand has been launched in the UK
and USA using a market penetration strategy, which essentially reflects that
the brand needs to increase its brand recognition (Vignali, 2001). The SWOT analysis
conducted by Vignali (2001) showed an opportunity that Virgin Cola could explore
diversification into new ranges of Virgin Cola products. PESTLE analysis
of Virgin Cola showed that there was need to constantly evaluate the soft drinks
industry in all countries, in order to reflect customer trends, thereby allowing the brand
to gain market share and also predict trends faster than the competition. Therefore, the
steps to be taken while conducting a strategic analysis of an organisation
include SWOT analysis, PESTLE and Ansoff matrix as fundamental models of
analyses, which should be used in conjunction and not in isolation, to view the
complete strategic scenario. Also, recommendations made on the basis on only one of
the models are not concrete and lack in depth.

2. Marketing mix
The marketing mix is often referred to as the '4 Ps', i.e. product, price, place and
promotion. To meet customers' needs a business must develop products to satisfy
them, charge the right price, get the goods to the right place, and it must make the
existence of the product known through promotion.

1.1.

Products or services

Must meet customer requirements whatever these might be. For example, an
important aspect is function - products should do what they say they can do and what
they are expected to do. For example, Audi cars are popular because of their high

performance. Appearance is also important. This is why for example, consumers are
prepared to pay premium prices for some of Gillette's razors.

2.2.

Place

Roughly one fifth of the cost of a product is spent getting it to consumers. Of


course, the actual figure varies widely from product to product but generally
distribution is a very important element in the marketing mix. Different organisations
use different approaches to reaching their customers. For example, McDonald's uses a
franchising system enabling it to operate in a wide variety of geographical locations,
and Amway distributes through Independent Business Owners worldwide.

2.3.

Promotion

Is the process of communicating with customers? For marketing purposes,


communication of products and services contributes to the persuasion process to
encourage consumers to avail themselves of whatever is on offer. The key processes
involved in promotion, include:
branding - creating a distinctive image and character to an organisation/and or
its products and services
advertising - to inform and persuade the public
packaging - presenting the product in a desirable and appropriate way
public relations activities and other forms of publicity
sponsorship
special promotions - e.g. buy one get one free.

2.4.

Price

It needs to be relevant to the product/service and the market. For example, BIC
the manufacturer of razors, pens and lighters seeks to provide the world's markets with
products at affordable prices. A firm's pricing decision is often aimed at attracting a
particular market segment. For example, if it wants to sell at the top end of the market
it will charge a high price, at the bottom a low price, and so on.
(Web page of THE TIMES 100 business case studies)

3. Pricing penetration
Penetration pricing is most commonly associated with a marketing objective of
increasing market share or sales volume. In the short term, penetration pricing is
likely to result in lower profits than would be the case if price were set higher.
However, there are some significant benefits to long-term profitability of having a
higher market share, so the pricing strategy can often be justified.
Penetration pricing is often used to support the launch of a new product, and
works best when a product enters a market with relatively little product differentiation
and where demand is price elastic so a lower price than rival products is a
competitive weapon.
Amongst the advantages claimed for penetration pricing include:
-

Catching the competition off-guard / by surprise


Encouraging word-of-mouth recommendation for the product because of the
attractive pricing (making promotion more effective)
It forces the business to focus on minimising unit costs right from the start
(productivity and efficiency are important)
The low price can act as a barrier to entry to other potential competitors
considering a similar strategy
Sales volumes should be high, so distribution may be easier to obtain

Penetration pricing strategies do have some drawbacks, however:


The low initial price can create an expectation of permanently low prices
amongst customers who switch. It is always harder to increase prices than to
lower them
Penetration pricing may simply attract customers who are looking for a bargain,
rather than customers who will become loyal to the business and its brand
(repeat business)
The strategy is likely to result in retaliation from established competitors, who
will try to maintain their market share
(Author: Jim Riley Last updated: Sunday 23 September, 2012 web page)

4. Product range strategy


A product range strategy comprises all the elements a company must take into
account when it is developing a new product line. These elements involve nearly all
the different divisions of a business from marketing to engineering and even the sales
department. Each division brings a different piece of information to the overall product
range strategy. A team effort is needed to ensure the plan is implemented effectively.

4.1.

Market Analysis

A product range strategy often requires in-depth market analysis to determine


consumer needs. This analysis may be further broken down into consumer needs by
gender, age group and even economic status. Analyzing these factors can help a
company determine what products in a given range should be targeted to which
consumer groups. Effectively targeting products can maximize chances for success
and profitability within a product range and encourage the company to continue
developing the product line for other market areas and buyer groups.

4.2.

Pricing and Design

Market analysis contributes to product design by informing company engineers


and artists of how competing products in the market are built and how they are
performing in terms of sales. The company then shapes its product design to improve
on models currently existing in the market while also attempting to create something
totally different from what is currently available. The materials used in construction of
the product greatly affect its price. The cost of a product range can also be a useful
marketing tool in that a company may wish to create higher end versions of a product
for wealthy consumers as well as lower cost models for consumers on a budget.

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4.3.

Selling the Product Range

Deciding where to sell items in a product range can have a great affect on how
well these items perform in the market in terms of sales. A business must carefully
consider which methods of sale offer the greatest viability for the company's products
and which methods of sale most frequently connect the products with the target
customer base. For example, a business creating a line of low-cost tables may not
choose to sell these products with a high end furniture store because it does not place
the product range with consumers likely to purchase them.

4.4.

Profit Goals

An effective product range strategy should also include targets for profits
generated from the sale of items within the range. Expected profit numbers are created
by examining the level of sales currently existing in the market along with the success
of the predicting company's profits with other products. Often a successful company is
able to use the sales figures and popularity of other products to gauge likely sales of
new product lines. Profit goals then help the company determine the overall success of
the product range.
(Jonathan Lister, eHow.com Contributor)

5. Positioning
Positioning is the use of marketing tools to make a firm's offering stand out
from the competition. A well-positioned brand occupies a unique niche in the minds of
consumers. This niche is created and sustained by the marketing strategy, particularly
through tactical choices involving product design promotional messages, price and
distribution.
(Amy Handlin, eHow Contributor, eHow.com)

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6. Sponsoring
Corporate sponsorship can take many forms, but generally involves a company
or organization attaching its name to a charity, event, or other promotion in exchange
for providing funds or paying a sponsorship fee. Corporate sponsorship is an effective
means of advertising for many organizations, because it promotes goodwill.
Companies are more likely to spend large amounts of money sponsoring highly
publicized events due to the amount of publicity that can be generated and the
opportunity to be affiliated with a good cause or popular event.
(By Angela Stringfellow, marketing communications/corporate education and
training consultant. eHow Contributor)

7. Street marketing
Street marketing is sometimes called guerrilla marketing and marketers turn to
street marketing to differentiate a product in the marketplace or create awareness of a
product among a distinct consumer audience. There are a number of tactics of street
marketing but central to their implementation is the need for teams of field staff to
implement street promotions.

New Product Introduction


Street marketing is very useful to develop so-called street credo for products
with cutting-edge benefits or that might appeal to urbanites. Sneaker companies have
painted urban streets with footprints and their logo to create awareness. Samples of a
new product can be distributed on the street. These types of events, when done on a
large-scale basis, can be quite effective as a publicity tactic garnering coverage by
news media.

New Image for Mature Product


Mature products have used street marketing to help refresh their image. Miller
Brewing used semi trucks customized to transform into a mobile stage. The trucks
rolled into towns across the nation, then toured parks and local communities with
concerts by famous bands and artists. Miller was viewed as an old man's brew before
putting on a new hit face via its street presence.

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New Consumer Segment Outreach


When a new product or service is desirous of cultivating new customers, a street
marketing program may be used to go directly to consumers in venues where they are
likely to congregate. The Greek yogurt Chobani gave away full-size samples of its
product at weight loss centres and local workout locations to gain awareness in the
U.S. Pharmaceutical companies set up health check-up stations at neighbourhood
parades and local community centres. These companies give quick blood pressure tests
and hand out state information brochures that happen to also mention their high blood
pressure medications.

New Store Opening


A store's grand opening is a great time to do street marketing. Outdoor banners,
flags and balloons can all be employed to bring attention to the new store. Store
personnel can hand out coupons or samples to passersby, encouraging them to enter
the store and thereby establishing an initial customer base.

Red Carpet Event


A red carpet event is another street marketing idea. The opening of a new
restaurant, nightclub or movie is red carpet events worthy of velvet ropes and
searchlights flashing across the night sky. During Christmas on New York's Fifth
Avenue, a number of the country's most exclusive retailers shine lights and seasonal
images on their building facades. Of course, silver bells are heard and sung to pique
the interest of the throngs of shoppers filling the streets to see the tree at Rockefeller
Centre.
(By Marla Currie, masters degree in advertising. eHow Contributor)

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8. Mobile marketing
Mobile marketing is marketing on or with a mobile device, such as a cell phone.
One definition comes from marketing professor Andreas Kaplan who defines mobile
marketing as "any marketing activity conducted through a ubiquitous network to
which consumers are constantly connected using a personal mobile device". Within
this definition, Kaplan uses two variables, i.e. the degree of consumer knowledge and
the trigger of communication, to differentiate between four types of mobile marketing
applications: Strangers, Victims, Groupies, and Patrons.
Mobile marketing can also be defined as the use of the mobile medium as a
means of marketing communication, the distribution of any kind of promotional or
advertising messages to customer through wireless networks. More specific definition
is the following: using interactive wireless media to provide customers with time and
location sensitive, personalized information that promotes goods, services and ideas,
thereby generating value for all...

II-

MARKETING STRATEGIES ANALYSIS


1. Business growth strategies
1.2.

Product development strategy (case of Coca-Cola Zero)

During the last 20 years sum of brands and variants were developed and
introduced on the market, such as Coca-Cola Vanilla, Coca-Cola Zero, Coca-Cola
Light, etc. Developing a new product is a team effort that goes through many stages of
development until the product is finalized and ready to be distributed to the potential
consumers. First, Coca-Cola concluded many different ideas the one that pass the
screening was the Coca-Cola zero. The new product targets young males (ages 25-35)
and has no sugar and no calories. Then, Coca-cola does thorough research of the
market, competition and the projected revenue before putting a new product on the
market, the company does not publicly display this research but it is understood that
by holding many surveys it becomes easy to project the demand for the product. CocaColas main interest when developing a prototype is the taste of their product without
losing its texture and colour, and also that the product will relate to the company and
still maintain a certain uniqueness, when coca-cola develop a prototype they supply

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samples to their projected target market in order to understand what to change and
improve in the product this is known as the test marketing stage. After passing all the
stages it is then decided to start the production, build inventories and building the
infrastructure of sales and distribution.
The result of this strategy is that Coca-Cola Zero known a great success in
USA, then France and now over the world. Some variants of the product are even
developed and introduced. About that, we can say that Coca-Cola Company used
efficiently and effectively product development from Ansoffs matrix by developing
new related product.

1.2.

Market penetration

Coca-Cola use many methods of advertisement and the company spends a


significant amount of money in order to be seen on billboards, magazines, television
and on the internet. Through their commercials on the television and other sources of
media coca-cola focuses on product advertising, the company targets a wide range of
market, coca-cola advertises all around the world, in different countries the
advertisements will be in the languages spoken in those countries and that is one way
of enhancing the targeted market. The good example of market penetration strategy is
the advertising linked to Coca-Cola Classic. Indeed, new commercials are developed
every year, for every big event and introduced them over the world. These
commercials are adapted to the marketplace and to event that it sponsored. For
instance, in 2006 for the FIFA World Cup, Coca-Cola designed a commercial where
antagonists were reconciled by a football goal. Apart advertising, Coca-Cola Company
also acquires some brands from their competitors. Its the case of Kvass, a Russian soft
drink that it acquired on 2007.
All these advertisings and acquisition were developed Coca-Cola to sell more
the same products to the same people. And the expected results were reached as we
can see Coca-Cola Classic is still consumed despite it was created 125 years ago. So,
Coca-Cola follows well the market penetration strategy.

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2. Marketing mix
2.1.

Product
2.1.1) Product range

The products of Coca-Cola are variable and diversified. They are grouped in
product range:
Fizzy drink: Coca-Cola, Fanta, sprite
Fruit juice: Minute Maid
Tea: Nestea
Sport drink: Powerade
The goal of the diversification of the product range is to satisfy the need of
customers and facing competition. A lot of companies use this strategy to maintain
their position of leader. In the years 2000 the product Coca-Cola is the leader, the
company try to find another product in order to increase the product range. So the
company launched FANTA in France. In 2000, the Fanta sales increased by 15.1%.
The sales reached 24.9% in 2003, since this year the sales are still increasing with a
stable rate.

2.1.2) The target and Positioning


Target

The product Coca-Cola classic target criterion is not the age. Everybody,
whatever the age, is supposed to drink the product Coca-Cola. This make the product
unique .However some product like Fanta target the youth. So we can notice that the
advertisement of the company vary according the target of each product.
Also The Coca-Cola Company created different kind of Coca-Cola to vary the
pleasure and savour. In Order to answer to the specific need of each segment in the
target. For example Coca-Cola Light has been created for youth woman with the age
range of 15 to 35 to avoid calories.

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There is also Coca-Cola black it is made with more caffeine than the classic
one. Its made for youth adults working people.
All those creation show the will of Coca-Cola to change the Coca-Cola classic
and reach a bigger part of the population.

Positioning
When a new product gets in to a market it has to be distinct from the other.
Positioning is the process by which marketers try to create an image or identity in the
minds of their target market for its product, brand, or organization. Coca-Cola is
positioned as an universal drink with a unique taste, refreshing the body and the spirit
associated to party moment and emotion. Since its creation this is what drives the
brand . This aspect is also seen in the Coca-Cola company slogans:
1886: Drink Coca-Cola
1904 : Delicious and refreshing
1905 : Coca-Cola revives and sustains
1906 : Great National Temperance Beverage
1908 : Good To The Last Drop
1917 : Three Million a Day
1920 : Drink Coca-Cola With Soda, The hit That Saves The Day

2.2.

The price

In general the price of Coca-Cola is the market price. In this war the tools that
companies use the most is the promotion and not the pricing. But the company CocaCola use the price penetration strategy to attack some new market to increase its
market share. We can take the case of Africa and the ex-communist bloc. They try also
to make each china habitant buy 5 litres of Coca-Cola products a day and each Indian
1 litre a day.

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The Coca-Cola Company also use this strategy to make their competitor go
bankrupt. In Belgium in the years 1980 Pepsi owned 20% of the market share and
Coca-Cola 70%. So Coca-Cola owing a powerful financial force decided to broke its
price by 40%. Unable to resist Pepsi decided to close. Today Coca-Cola Company is in
a monopole situation in this country. So they raised the price in Belgium. This price is
20% more than the price in France .Coca-Cola has used this (Italia and Germany) and
got the monopole and enough financial power to compete in Spain, England and
Portugal where the fight is tighter.

2.3.

Distribution

Coca Colas distribution channels include vending machines, retail


outlets, fountain retailers and wholesalers, and other distribution channels that
supplies home and immediate consumptions. In fact, 32% of the US gallon sales in
2003 are accounted to fountain retailers such as restaurants and to approximately 640
fountain wholesalers in 2008. To be able to efficiently distribute their products, CocaCola employs a strategy. Coca-Cola obligates its bottlers to sign a separate contract,
the Bottlers Agreements, that subjects the bottlers to specific terms and
conditions which include the allowance to purchase entire requirements of the
designated concentrates and syrups from the Coca-Cola Company and its
authorized suppliers.
This eases the distribution procedure of Coca Cola by providing the
bottlers the ability to manufacture Coca products Cola (of course meeting the
standards of the company) on their own by allowing faster production and distribution
to the local sites all around the 200 countries. Simply put, anyone can avail of CocaCola products on their local at whim because the production and distribution
processes are decentralized as opposed to a centralized process where the main plant
distributes every Coca-Cola products all around the globe .
Coca-Cola Bottlers developed a number of innovative ways to sell and
distribute its products. It has evolved from the usual retail store to putting up CocaCola kiosks in universities, marketplace, and other public places to developing sturdy
transport bicycles, mobile mini kiosks, and mobile coolers for street vending. CocaCola has placed selling depots and integrated kiosks in convenient stores and
groceries and generally in areas where market can easily avail of them without
the hassle of queuing up in order to saturate the market with the product. This

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signifies that the distribution and the logistics of the company are so designed to meet
the large market it serves.

2.4.

Communication
2.4.1) The message

At this stage Coca-Cola dont have a specific target to which they


communicate. They communicate everyone. Especially for some specific product like
Fanta or Coca-Cola black They communicate to a specific target. The slogans of
Coca-Cola for it advertisement have change through the years. But the most important
was the promotion of the main drink values: its a drink, its refresh, its good and it
makes fell good. And they tried to adapt their message to the situation of people.
From its creation to the year 1920 Coca-Cola try to define the product through
those slogans:

1886 : Drink Coca-Cola


1905: Coca-Cola revives and sustains
1906 : The great national temperance Beverage
1908 : Good to the last Drop

From the year 1922 to the beginning of the Second World War. After all
damages and with the problem raised by the war Coca-Cola tried to make people to
still desire to drink Coca-Cola. So they try to make Coca-Cola drink as a solution for
people problem. The slogans were:

1922 : Thirst dont Knows no season


1924 : Pause and Refresh Yourself
1926 : Stop At The Red Sign
1929 : The pause that refreshes
1932 : Ice cold sunshine 1937 : Stop For A Pause...Go Refreshed
1938 : Anytime Is The Right Time To Pause and Refresh, Pure As Sunlight

From 1940 to 1948: familial values. The Second World War led Coca-Cola to a
redefinition of the product. The idea was that a member of a family arrives and the
family welcome him. And after difficult year of war this person recovers his family.

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The slogans were:


1940 : The Package That Gets a Welcome At Home
1941 : A Stop That Belongs On Your Daily Timetable
After the years of war Coca-Cola return to the basic values of the product
(Refreshing , Good taste )
1956 : Feel the difference, makes good things taste better enjoy that refreshing
new feeling

2.4.2) The support of communication


Coca-Cola use different marketing communication techniques to reach its
target: mass media (Radio, television, internet, etc.), sponsoring and also mobile
marketing. Lets talk about Sponsoring, street marketing and Mobile marketing.

Mobile Marketing
In 2000 Coca-Cola decided to communicate to its target through mobile phone.
It Consist in presenting new offers of Coca-Cola through people mobile phone.
Therefore the information is received by the customer at any moment and everywhere.
Coca-Cola is one of the first companies that use this technique. Today, 4 marketing
campaigns over 5 of Coca-Cola use mobile phone marketing as a technique of
communication.

The street marketing

Coca-Cola put advertisement posters in public place like bus shelter, escalators,
and distributors machine in school or some big poster with the bottle image on some
apartment block.
This strategy aims to:

Reach the youth and win the loyalty of youth


Make some word of mouth
With the slogans associate the drink to the pleasure
Addressed directly to the customers without any intermediaries

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The sponsoring

Coca-Cola is the sponsor of a lot of event of the Olympic Games, FIFA World
Cup football (soccer), Rugby World Cup and the National Basketball Association.
And this last decade this sponsoring has been reinforced.
Coca-Cola is one of the top global sponsors of sport. The rationale for sponsoring
international and local sporting events is that it is "a natural fit". By matching the
brand with world standard events Coca-Cola benefits from the exposure and the
associations made between it and the event being sponsored. Equally by ensuring that
local events are sponsored the brand is exposed exclusively to a local market and will
thus be seen as a local brand. By devising innovative and tailored marketing
programmes based on local consumer insights, sales can be increased in the ready-todrink non-alcoholic beverage market. Local offices around the world ensure that the
company participates and supports local communities. Coca-Cola is aware of what is
relevant in the lives of its target market such as sport, music and fashion. Life
experiences are created around these interests. By getting involved in these daily
experiences Coca-Cola meets its sponsorship objectives:
o To connect with teens in an interesting and fun way.
o To create unforgettable teen moments linked to Coca-Cola.
o To ensure Coca-Cola is viewed as making everyday life more interesting and
fun.
o To communicate the dynamic and leading attributes of the brand.
To be seen as a national sponsor at a local level and global sponsor on an international
level.

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RECOMMENDATIONS

Looking towards the future, the most important recommendation to Coca-Cola


is continuing product innovation and expansion of their product line. The soft-drinks
industry is fully saturated with competitors. Also, the industry is no longer expanding,
and market share is actually decreasing as more consumers are looking to healthier
options. By continually introducing new products, Coca-Cola will be able to increase
their profits and allow the company to continue to grow. Also, having a diverse
product line will make the corporation very stable, which is appealing to investors and
creditors.
A second recommendation would be to sustain or increase the global market
share. Coca-Cola is very well-established globally, and is the global soft-drinks leader.
This is very important to sustain because it is the source of the majority of their profits.
If they lose global market share, their profits will decline dramatically.
A final recommendation for Coca-Cola is to maintain and try to increase their
brand loyalty. Diet Coke has the second highest brand loyalty of all the soft-drink
competitors brands, and solid advertising campaigns will help maintain the brand
loyalty. They can also strive to obtain higher brand loyalty in all other brands, not
solely Diet Coke. The brand loyalty is important because it will allow Coca-Cola to
sustain profits and maintain their market share.

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CONCLUSION
All in all we can notice that coca cola company is the leader of its market . Its
growth strategy and its marketing mix allowed us to understand this success. However
there is still some effort to do have this sustain performance . It can be achieve by
increasing the brand loyality , continue product innovation and the expansion of the
brand line , and Increasing the global market share.

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REFERENCES

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zeigler_paper.pdf retrieved December, 13th 2012 from


http://www.csbsju.edu/documents/libraries/zeigler_paper.pdf

Coca-Cola Company. The Coca-Cola Company Heritage Timeline retrieved


December, 6th 2012 from
http://heritage.coca-cola.com/

Wikipedia, the free encyclopedia. List of all brands owned by The Coca-Cola
Company. Retrieved December, 14th 2012 from
http://en.wikipedia.org/wiki/List_of_Coca-Cola_brands

Mind Tools. How to use the tool retrieved December, 13th 2012 from
http://www.mindtools.com/pages/article/newTMC_90.htm

Coca-Cola Blog. Chapter 11- Developing and managing products retrieved December,
14th 2012 from
http://deutch4macys.blogspot.com/2011/04/chapter-11-developing-and-managing.html
Papers4you. What is Ansoff Analysis retrieved Decemder, 15th 2012 from
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