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CASE1: MAKE EVERY DROP MATTER

QUESTION 1:
Based on the case, briefly summarize the initiatives of Coca Cola? Why is it
necessary for a marketer like Coca Cola to take such kind of initiatives?

Answer: Coca-Cola is one of the most recognizable brands in the world with
a range of products, from water to juices and of course carbonated drinks, to
suit the non-alcoholic drinking needs of everyone. Among the many
initiatives that the company takes, one of the most important is that of social
responsibility; it must act in a sustainable manner so that people, partners
and the planet all benefit.

Water is a critical resource; it is not only an essential and important


ingredient in all beverages and a fast growing product in its own right, it is
also used for cleaning, rinsing and cooling at bottling plants. Thus, one of the
important initiatives that the Coca-Cola Company has taken up is that of
water management. For the driest inhabited continent on earth (Australia)
this is a significant factor.

The Global Water Stewardship Initiative is a formal program developed by


Coca-Cola which attempts to achieve the following key objectives

1. Becoming best-in-class at water-use efficiency and wastewater


management
2. Helping to ensure access to clean drinking water in underserved
communities
3. Supporting the protection of watersheds in water-stressed communities
4. Helping to mobilise the international community to drive global
awareness and action around water challenges.

The initiatives taken are summarized below;


1. Increasing operational efficiency in the usage of water
a. in order to carry this out successfully, the bottling company,
Amatil, first carried out an audit of how much water is used in
several plants. This was used to set water reduction targets that
were achieved in many plants through a variety of programs.
b. Strict compliance targets for effective wastewater treatment and
conservation of water have been set.
c. Practical steps taken include fixing leaks, replacing water with
synthetic lubricants and harvesting rainwater.

2. Maintaining the sustainability of water resources


a. The Coca-Cola Company undertakes rigorous monitoring of its
water usage and reports to local officials regarding the water
levels.
b. It also carries out environmental studies to ensure that its water
use is carried out in a sustainable manner.
c. It also trains local people and bottlers to understand and manage
these water issues in a better manner.

3. Developing partnerships
a. The Coca-Cola Company has developed partnerships with not-for-
profit organisations, industry peers, governments and
international agencies to pursue its environmental commitments.
This includes USAID with which it began the Global Community-
Watershed Partnership in 2005 and the Global Environment and
Technology Foundation. The company also helped form the
Global Water Challenge

Coca-Cola is a brand name that has positive connotations in the minds of


consumers and in order to retain its place in the consumers minds it needs
to take initiatives that reflect positively on the brand. Since it is such a huge,
global brand simply selling the product or marketing the core attributes of
the product is not sufficient. Coca-Cola needs to differentiate itself from its
competitors in a positive manner. The company also needs to improve its
image continuously so that consumers always keep it in the topmost position
in their minds.

Therefore, it is necessary for a company like Coca-Cola to take initiatives that


allow consumers to create strong associations with the brand. One way of
achieving this is by taking corporate social responsibility seriously and acting
in a sustainable manner where all stakeholders benefit from the process. This
can give the company the following benefits;
1. Associate the brand with positive imagery such as water management
2. Ensure a steady and sustainable water supply for the company
3. Create long term value for the firm
4. Develop partnerships with important stakeholders such as the
government and local community leaders.
5. Show consumers that their well-being is one of the important factors
and thus build trust and confidence in the company.
QUESTION 2
Based on the case, do you think that the initiatives taken by Coca Cola as
part of creating positive customer based brand equity will affect the brand
knowledge of the target customers to create a positive attitude for Coca
Cola? If so, how?

Answer:

The initiatives that Coca-Cola has taken to carry out its corporate social
responsibility through effective water management is likely to affect the
brand image of the company by creating strong, favourable and unique
associations with the brand. This in turn should affect the brand knowledge
of the target customers and result in positive brand equity for the brand. The
method through which this occurs is outlined below;

The customer based brand equity model, commonly known as the CBBE
model, states that brand knowledge is an essential and important part of
creating brand equity. In fact brand equity is defined as the differential effect
that brand knowledge has on consumer response to the marketing of that
brand.

In an associative network memory model, brand knowledge is made up


of two essential components, brand awareness and brand image, and these
are connected to the brand via a network of nodes and links. These
associations are based on the perception of customers regarding the brand
and define the brand itself.

Brand awareness is related to the strength of the node in the mind of the
consumer and can be measured by the customers ability to identify the
brand under different conditions. This is an essential part of creating brand
equity but is not sufficient alone.

If we look at the Coca-Cola Company, the brand is one that is extremely well-
known and therefore at the forefront of consumers minds. The brand
awareness is already extremely high and so there is not much scope to
increase it. Thus, the company focuses on retaining current levels of
awareness and improving its brand image through various initiatives.

Brand image is consumers perceptions regarding a brand and is reflected


in the brand associations held in the consumers memory. Coca-Colas brand
image is one of refreshment, taste, availability, affordability and accessibility.
However, as the company has grown, so have the brand associations it
wishes to be allied with.

Coca-Cola uses its various marketing strategies to link strong, favourable and
unique associations to the brand. In this case, the company has taken
various initiatives which should succeed in affecting the brand knowledge of
consumers regarding the brand by improving its overall image in each of the
aforementioned 3 dimensions;

Strength of brand association: this depends on the relevance of the


initiatives to the lives of consumers and the consistency of these actions. As
water is a scarce and precious resource in arid Australia, conservation of
water use by any individual or industry will be seen by the general
population as relevant to their lives. The more water that Coca-Cola saves,
the more water is available for personal consumption. The fact that this is a
long term initiative will allow for more consistent recall and allow consumers
to think about the issue more intensely.

Favourability of Brand Associations: Coca-Colas brand image is already


extremely favourable but there is always room for improvement. Thus, the
company can choose to associate itself with factors that are desirable to its
target customers. One of these likely factors is water management, due to,
as mentioned before, the scarcity of the resource for the customers. Coca-
Colas association with this campaign is likely to create an even more
favourable brand image in the consumers minds.

Uniqueness of Brand Associations: There are many cola flavoured


carbonated drinks in the market, of which Coke and Pepsi are the runaway
leaders. However, Coca-Colas rivalry with Pepsico in almost every product
category, as well as the many other existing competitors means that Coca-
Cola needs to create unique associations with its brand in order to occupy a
unique position in the minds of the consumer. As such, the various water
management initiatives taken by Coca-Cola are likely to add an association
with the brand that other competitors lack and which may be a source of
competitive advantage.

Thus, Coca-Colas brand image should improve with the strong, favourable
and unique associations created through this water management program.
This in turn, will have a positive effect on the consumers brand knowledge
and result in positive brand equity for the firm. The attitude of the Australian
customers to the social responsibility that Coca-Cola shows through these
varied initiatives should be positive and reflect the constructiveness of the
activities that the company is carrying out. Overall, the program should
create a more positive attitude for Coca-Cola.

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