Professional Documents
Culture Documents
Date:
To:
From:
Subject:
We are given pleasure to transmit this report, Strategic Analysis under
the unprejudiced conclusions of International Marketing Course, during
summer semester (4th) 2004 of MBIT program, IBIT department,
University of the Punjab.
We have arranged our superlative efforts in originating this undertaking.
We enormously enjoyed it. Working on this task was exceptionally erudite
for us.
Group Members
Signature
ACKNOWLEDGMENT
We are thankful to the ALLAH ALMIGHTY, by the assistance of HIM, we
have accomplished our Task. We would like to thank all of the people who
directly or indirectly helped us to achieve this Target.
Special Thanks to:
Mr. Matloob
Mr. Sahil
(Group
Members).
Our
conspirators
encouraging
ideas
and
ABSTRACT
The vibrant capability of Marketing Department in Coca-Cola career
planning
has
been
highly
accentuate.
This
department
has
been
METHODOLOGY
Aspect about international marketing has been pile up by means of
primary sources by interviewing marketing executive, in the production
unit & Head Office, Visiting to office of Human Resource managers in
Lahore. Human Resource administrator in Head Office was the part of that
information collecting activity.
Secondary information has been congregated through different marketing
books, internet sites of Coca-Cola Company, articles and generals related
to advertisement and promotion.
Our foremost endeavor was to compile and evaluate all relevant
information with reference to marketing strategies in the host country
(Pakistan) and to judge against this information with standard set by
international marketers.
TABLE OF CONTENTS
Executive Summary
06
Introduction
07
Brands
08
09
10
Coca-Cola IN Pakistan
12
Community Involvement
14
Marketing Involvement
14
Uncontrollable Elements
15
17
Customer Market
18
SWOT Analysis
19
22
IPR
22
PEST Analysis
24
BCG Matrix
27
EPRG Model
28
29
30
31
Cultural Borrowing
32
Problems
34
Recommendation
36
Bibliography
40
Appendix
41
EXECUTIVE SUMMARY
Role of Marketing Department in the improvement process continues to be
at the vanguard of strategy contest not only in this part of the world
(Pakistan) but also in other countries. Most of the specifics about
promoting
in the
INTRODUCTION
Coca-Cola (also known as Coke) is a popular carbonated soft drink sold
in stores, restaurants and vending machines in over two hundred
countries. It is produced by The Coca-Cola Company, which is also
occasionally referred to as Coca-Cola or Coke. It is one of the worlds
most recognizable and widely sold commercial brands. Coke's major rival
is Pepsi. Although Coke has been the target of urban legends decrying the
drink for its supposedly copious amounts of acid, or the "lifethreatening" effects of its carbonated water but still it is the most in-style
soft drink. About its safety and the ethics of the company that produces it,
it is widely accepted as the most dominant soft drink in the world today.
Originally intended as a patent medicine when it was invented in the late
19th century, Coca-Cola was bought out by shrewd businessman Asa
Griggs Candler, whose aggressive marketing tactics led Coke to its
dominance of the world soft drink market throughout the 20th century.
Although faced with accusations of perverse side-effects on the health of
consumers and monopolistic practices by its producing company, CocaCola has remained a popular soft drink well into the first decade of the
21st century.
BRANDS
Globally, the Coca-Cola Company owns or licenses nearly 450 brands in
the nonalcoholic beverage business. Many of those brands are considered
among the worlds most valuable. Some of these include:
- Carbonated soft drinks
Such as Coca-Cola, Diet Coke, Fanta, Sprite and Fresca
- Juices and juice drinks
Such as Minute Maid, Qoo, Fruitopia, Maaza and Bibo
- Sports drinks
Such as POWERade and Aquarius
- Water products
Such as Ciel, Dasani and Bonaqua
- Teas
Such as Sokenbicha and Marocha
- Coffee
Such as Georgia coffee, the best-selling noncarbonated beverage in
Japan.
11
COCA-COLA
IN
PAKISTAN
12
Introduction
The Coca-Cola Company is a global company with some of the world's
most widely recognized brands, the Coca-Cola business in Pakistan has
completed its 50 years of operation. The beverages are produced locally,
employing Pakistani citizens. And their product range and marketing
reflects Pakistani tastes and lifestyles, and they are deeply involved in the
life of the local communities in which they operate
History
The Coca-Cola Company began operating in Pakistan in 1953. Benjamin H.
Oehlert Junior, former senior vice president of The Coca-Cola Company,
served as United States Ambassador to Pakistan from 1967 to 1969.
Brands
Coca-Cola, Fanta, Sprite
Bottling Information
The Coca-Cola System in Pakistan operates through twelve bottlers, 10 of
which are owned by Coca-Cola Beverages Pakistan Limited, out of these
twelve plants now eight are operating. The CCBPL plants are in Karachi,
Hyderabad, Lahore, Gujrawala, Faisalabad, Rahimyar Khan, Multan and
Sialkot. The remaining two plants, independently owned, are in Rawalpindi
and Peshawar. The Coca-Cola in Pakistan serves 70,000 customers retail
outlets.
Employment/Economic Impact
In Pakistan it employs 1,800 people. In Pakistan it has invested over $130
million (U.S.).
13
Community Involvement
In 2000, when Eastern Pakistan suffered its worst droughts, The CocaCola System initiated a famine-relief program to help victims and was the
first private-sector company to assist.
It initiated a voluntary Haj program that allows one employee from each
plant, selected through a draw, to be sent on the Holy Pilgrimage to Mecca
at the Company's expense.
Sponsorships
The Coca-Cola Company sponsors the Basant Festival in Lahore, a festival
that marks the beginning of spring and attracts visitors from all over the
world. Part of the festival is the Coca-Cola Kite Flying Championship.
The Company sponsors Pakistan's leading pop group and organizes
concerts throughout the country for teenagers and underprivileged
children.
It sponsors Pakistan's No. 1 solo artist, who will participate in concerts
and charity events organized by The Coca-Cola Company in Pakistan. The
Company has signed a sponsorship agreement with eight of Pakistan's
national cricket players for promotional and advertising use.
The Coca-Cola System in Pakistan is the exclusive supplier for Pakistan
Railways, serving soft drinks in stations, platforms and on trains. The
Company will be undertaking a beautification program of stations and
platforms.
Marketing Involvement
Coca-Cola Corporation is a multinational organization. And it is indulged in
the international marketing .The brands and basic strategies are made in
the home country but the local strategies are defined in the host
countries. Also the 4Ps are made according to the demographics and
taste of the people of the host country.
In Pakistan the Coca-Cola Company maps the strategies and the brands
by looking into the environment in which it is working. The brands are
produced locally. And the product, price promotion and placement are
planned with respect to the controllable variables and uncontrollable
variables.
14
Uncontrollable Elements
Whenever any business start operating in two or more than two countries,
it come across some of the problems which are beyond the control of
business , like legal restraints, government controls, weather, consumer
behavior, economic conditions of the host country, social and cultural
factors, geography & infrastructure, channel of distribution available, level
of technology and competitive forces. These problems are different in all
the countries in which business starts its operations. So business has to
design a separate framework for each country to overcome these
problems.
Coke is one of the oldest companies which are in international business;
they have a vast experience of controlling these elements. They heavily
rely on research to overcome these problems.
accordingly.
They
design
their
products,
prices,
place,
competition with some local and international brands. Coke Combat this
problem with their quality commitment and continuously providing its
customers with quality product, services and entertainment.
16
management
implies
some
thing
quite
different
from
individualized functioning.
Coca Cola company is doing its business allover the world they hire locals
wherever they do business and take their suggestions in designing their
strategies. Because company is very much well aware of the fact that local
know their social culture very well and help company to design effective
and efficient strategies.
17
Target Market:
o
Promoting new age music and hiring pop stars into their promotion
Compaign.
CUSTOMER MARKET
Demographic Factors
People of all ages and gender use Coca-Cola. Educated people belonging
to upper and middle-income groups also commonly use Coca-Cola. Major
emphasis of Coca-Cola is to attract teenagers.
18
SWOT
ANALYSIS
19
STRENGTHS
Coca-Cola has been a complex part of Pakistani culture for over a half
century. Being a strongly recognized brand the product's image is loaded
with coolness and refreshment, and this is an image many people have
taken deeply to heart. The Coca-Cola image is displayed on T-shirts, hats,
and collectible memorabilia. This extremely recognizable branding is one
of Coca-Cola's greatest strengths. "Enjoyed more than 685 million times a
day around the world Coca-Cola stands as a simple, yet powerful symbol
of quality and enjoyment".
Additionally, Coca-Cola's bottling system is one of their greatest strengths.
It allows them to conduct business on a global scale while at the same
time maintain a local approach. The bottling companies are locally owned
and operated by independent business people who are authorized to sell
products of the Coca-Cola Company. Because Coke does not have outright
ownership of its bottling network, its main source of revenue is the sale of
concentrate to its bottlers.
The Coca-Cola Company in Pakistan has the mover advantage, as it was
the first to introduced soft drink. There are 8 plants working in Peshawar,
Karachi, Lahore, Gujrawala, Rawalpindi, Faisalabad, Raheem Yar khan, and
Multan. These big plants have employed more than 1800 employees.
Duopoly of two main beverage companies in Pakistan including Coca-Cola
has been diffused into the local markets.
WEAKNESSES
Although domestic businesses as well as many international markets are
thriving, Coca-Cola has recently reported some "declines in unit case
volumes due to reduced consumer purchasing power
Coca-Cola on the other side has effects on the teeth's which is an issue for
health care. It also has got sugar by which continuous drinking of CocaCola may cause health problems. Being addicted to Coca-Cola also is a
health problem, because drinking of Coca-Cola daily has an effect on your
body after few years (International report of Coca-cola).
20
Out of twelve plants, eight are the operational plants while two are
franchised with other group of companies, which is a drawback for cocacola in Pakistan as in these two plants the involvement of Coca-Cola
International is not present which effects the overall image of these plants
in the local market about the quality and international standards.
OPPORTUNITIES
Brand recognition is the significant factor affecting Coke's competitive
position. Coca-Cola's brand name is known well throughout 94% of the
world today. In Pakistan it is the well-known brand among the people of
all ages specially the children are more attracted towards the coke.
As Coca-Cola is in business of soft drinks and has more than 450 brands
allover the world, but in Pakistan they have only four brands, so there is a
potential in Pakistani market for other brands too. Pakistani weather is hot
and humid. This causes a tremendous growth in the sales during the
summer season.
Packaging changes have also affected sales and industry positioning, but
in general, the public has tended not to be affected by new products.
Coca-Cola's bottling system also allows the company to take advantage of
infinite growth opportunities around the world. This strategy gives Coke
the opportunity to service a large geographic, diverse, area.
The unique formula (concentrate) is being imported from U.S.A and it is
then processed in the local plants, this resists the copying of formula and
formation of fake formula thus keeping the taste of pure and real CocaCola revitalizing and tempting.
THREATS
Currently, the threat of new viable competitors in the carbonated soft
drink industry is not very substantial. The threat of substitutes, however,
is a very real threat. The soft drink industry is very strong, but consumers
are not necessarily married to it. Possible substitutes that continuously
put pressure on both Pepsi and Coke include tea, coffee, juices, milk, and
hot chocolate ("Cola Wars", 1991).
21
the price of original bottles which could be harm full for the health of
consumers. Coca Cola Company could create a check and balance to meet
the need of time, which in turn could help to increase its market share. It
already had made several steps to prevent fake bottling and production of
fake coke but due to mushrooming industry the laws and management of
the corporation is failed to stop this industry from flourishing. The
government is also not of great help to the company in solving this main
issue.
23
PEST
ANALYSIS
24
POLITICAL FACTORS
The political environment of Pakistan affects the coca-cola beverages and
Coca-Cola Export Corporation, to some extent. For instance, the political
instability in Pakistan causes trade and import policies to change rapidly
as the government changes which causes many problems in the import of
raw materials. Trade barriers such as tariffs and duties on the import of
syrup (concentrate) from USA increases the operational cost. A relaxation
has been given by the current government. So the situation for the
beverage industry is getting better day by day for the last couple of years.
Also the policies have been more or less constant and also the emaciation
of free trade zones by the government will help the Coca-cola to flourish
more effectively in Pakistan.
ECONOMIC FACTORS
The economic condition of Pakistan has not been stable for a long time but
The recent economic indicators suggest that the economy is growing and
macroeconomic issues are getting sold but at the same time there has not
any marked increase in the consumer buying power (inflation). When the
recession occurs the price of bottles are dropped down to increase the
sales and to achieve the targets of the company. So overall economy of
Pakistan directly affects the cost and price of the Coca-Cola Company.
SOCIAL FACTORS
Being a foreign based company Coca-cola faces opposition by Muslim
activists. The main social issues are:
It faced scandal of humiliating Muslims religion that when the inverted
image of Coca-Cola brand name is being viewed on the mirror it disgraces
the name of Holy city Makkah and Hazrat Muhammad (P.B.U.H). This was
a wrong conception as there was no reality in it and this scandal was
flopped after a short span.
One of the greatest social barriers to coca-cola Lahore is the restriction of
coke in the campus premises. Jamiats strike to coke affects the sales and
overall image of coke as a larger number of students from all over the
25
Pakistan are studying in the University of The Punjab. But on the contrary
in the all parts of the country coke is viewed as the partner in the major
events like Basant and promoter of music thereby making a place in the
hearts of young generation of the society.
TECHNOLOGICAL FACTORS
The making of Coke, Fanta, Diet coke and sprite involves "mixing and
blending, filling and capping ". For this process, concentrate or syrup is
imported from USA and is then mixed in the local plants .Machinery for
the local plants was also imported but now the coca-cola company follows
Local content law as most of the spare parts are locally made. The system
is automated and equipment is fully operational and up-to-dated. In
technology Coca-cola company is far ahead than the several other local
beverage brands of Pakistan. It is a Highly Technical 10 Steps Process.
Which are all done in the local plants using local content law.
26
BCG MATRIX
High
Growth
Of
Market
Low
Cash
Cow
High
Dog
Low
Relative share
27
EPRG MODEL
Coca cola has a geocentric policy regarding their human resource and
policy making for host countries. They design their 4 Ps and management
policies according to the environment and atmosphere of the host country.
And they hire employees on merit regarding their qualifications and
knowledge without any discrimination between the countries and races.
As for as Pakistan is concerned here Coca cola is being lead by a
Pakistani head, Mr. Asadullah Sherazi (GM CCBPL). 4 Ps are designed by
management of the host country, as BASANT is being celebrated by Coca
cola in Pakistan, which is a very important event celebrated by the main
target market of the company.
28
C
CO
INTRODUCTORY
A
OL
C
A
GROWTH
MATURITY
DECLINE
29
of
dealing
with
different
governments
and
different
organizations allover the world. When ever they enter into some country
they made a thorough research work. They analyze the political
restrictions, rules and regulations of doing business, political parties which
can affect policies and policy making authorities. They respect the laws of
host country and design their framework according to the rules and
regulations of the host country.
through arbitration and they mention this clause in contract that if any
dispute arises, they will go for arbitration but if arbitration does not solve
the problem then they refer their dispute to litigation. They prefer
arbitration because litigation is very expensive and lengthy process; there
is fear of poor image and damaging public relations, fear of unfair
treatment in host country and fear of loss of confidentiality.
As far as Pakistan is concerned up till now no such dispute has arisen in
which they need to go for arbitration. But they go for litigation against
those firms which are involved in using their brand name for fake bottling.
30
political
governments
are
very
conscious
about
foreign
not
getting
any
kind
of
help
regarding
financial
problems,
management problems from Coca Cola International. But now most of the
plants are under the control of Company itself and Coke International is
also very keen to raise its market share in Pakistan so they are fully
31
supporting
Coca
Cola
Beverages
Pakistan
and
Coca
Cola
Exports
Corporation Pakistan.
In Pakistan there main focus is on standardized products as Coca Cola,
Sprite, Fanta, and they are going to launch some of new products in next
2 or 3 years.
Company
business
customs
includes
imperatives
and
33
Distribution
Coca-Cola Company is facing a problem of distribution, as distributors are
expecting more from coco cola to provide an extra distribution channels
which could help them to spread their products at large .Coca-cola
products are some where not available in rural area due to inefficient
distribution system.
Investment
Coca-Cola Company is now facing a problem regarding investment, like
investment in distribution system, to make it efficient. They need
investment to encourage retailers to provide space to their products, in
the form of providing coolers. Company is not in a situation to provide it
to all its retailing stores while its competitor PEPSI COLA provides it to its
distributors to promote his products in the market which is their
competitive edge to increase it s share in the market. It creates an
attraction to its distributors to take its products more to take incentives of
special discounts provided by the company to its distributors, wholesaler,
and retailers. This is a relatively a long term process to penetrate in the
market and gain market share.
Brand Awareness
Having low promotional strategies that most of their customers are
unaware of their brands mostly they mix their brands with Pepsi, they feel
that Sprit and Fanta are the brands of Pepsi but in actual these are the
brands of Coca-Cola Company they are facing these problems due to
having low promotional strategy so that the unaware of its brands.
34
Fake Bottling
Fake bottling in Pakistan is one of the major problems being faced by the
company. This problem not only affects the sale volume and profit
margins but also brand value and loyalty of the customers. The
profitability which company gain, ultimately that part of gain goes to fake
bottle producers, who running their business in the name of company
35
RECOMMENDATIONS
Distribution
Products of the company must be physically transported from its
warehouse where the products are needed. Company must add value to
its products that eventually bought by individuals in order to create a
viable value chain model to create a relationship of distribution
management and select other facilitating organizations as a member of
value chain .so the distributors within a marketing mix is getting the
product to its target Market .the most important activity in getting the
coco cola company products to the target market is arranging for its sales
and transfer of a product to its final customer by assuming its financial
risks. for ultimate selling company try to carry out the functions in
exchange for the order and payment from the customer by providing more
easily available products at a required place. Company try to carry out the
functions in exchange for the order and payment form the customer by
providing more easily available products at required places.
Companies try to hire Agent middle man who works as their own to
distribute its products at various locations.
As the middle man could not be disinter mediate from the process
although some of unnecessary or redundant functions which cause the
lost of financial resources. Company create assortment and storing
products can be shifted from one party to another in order to increase
efficiency.
Market Segmentation
With different wants, buying preferences or product use behavior
relatively minor and benefits sought by the customer can be satisfied with
36
Identify the current and potential wants that exist within a market
Determine the size of segment and how well they are being satisfied
Screening of ideas
Business analysis
Prototype development
Market test.
Commercialization.
Promotional Programs
Promotion, in some where it takes, is an attempt to influence so the
company could hold a defined marketing promotional mix so that the
consumer could be aware of its brand at large. They adopt the strategy by
the following methods:
Personal selling.
Advertising.
37
Sale promotion.
Public relations.
on
their
website
.The
information
ranges
from
product
to
product
operation
instruction
and
information
about
contracting sale personnel. So the coco Cola Company must be create its
website that the ultimate customer could know about the product
available in the market .They must create a web sit which could fall in the
categories of
Links
Contact point
the
various
activities
comprising
the
overall
promotional
program .One method that the coco cola company use to extend their
budget cooperative corporative ads which is a joint effort two or more
firms intended to benefit each of the participant. So the company could
use any of the two strategies of corporative ads i.e. vertical and
horizontal. In vertical corporative ads Coco cola Company could share the
38
39
BIBLIOGRAPHY
Reference Books
Reference Sites
www.coca-cola.com
www.cocacola.co.in
www.coca-cola.co.uk
www.cokebuddy.co.au
www.cocacola.co.jp
www.cokecce.com
www.woccatlanta.com
40
APPENDIX
41
QUESTIONIARE
1. Information about:
Companys History
Line of business
Number of Employees
Information about Host Country Analysis
2. How do you adjust the controllable variables with the uncontrollable
variables? Like:
Economic climate
Structure of Distribution
Competitive Forces
Political and legal Forces
Cultural Forces
Geography and Infrastructure
Domestic Environment
3. What are Barriers faced by the company to operate (Tariff and non
Tariff)?
4. What are Duties and Taxes applied?
5. Culture and its impact, any resistance if any like boycott of foreign
brands nowadays
6. Cultural borrowing, if any like in promotion strategies?
7. What are Imperatives, Adiaphorous and Exclusives followed by the
company?
8. What are Strategies adopted to reduce political, operational and
administrative vulnerabilities?
9. What are Laws abided by and methods of conflict resolution? (Both
internal and external) Like:
Conciliation
Arbitration
Litigation
10. Any issues related to Intellectual propriety rights, Fake Coke, How you
deal with this problem.
11. What are the current strategies regarding International Operations in
Pakistan?
Like Standardization vs. Adoption.
12. Localization Issues:
42
43