UNIVERSITY OF NAIROBI

COLLEGE OF EDUCATION AND EXTERNAL STUDIES

SCHOOL OF OPEN AND DISTANCE LEARNING

DEPARTMENT OF EXTRA MURAL STUDIES

COURSE: MASTER OF ARTS IN PROJECT PLANNING AND MANAGEMENT

COURSE UNIT: LDP 607: PROJECT TOTAL QUALITY MANAGEMENT

INDIVIDUAL ASSIGNMENT

NAME: ALUDAH CYNTHIA ANZEMO

REG NO: L50/10019/2018

MOBILE NO: 0789674960

LECTURER: MR. WAFULA BIKETI

DATE: 18/4/2018

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Reasons why Coca Cola has a large market share in Kenya and the world

Introduction

Coca-Cola’s international and local success has helped it become one of the
most recognized brands in the world. Coca-Cola has been expanding
internationally throughout the last fifty years and positioned itself better than
any other soda in the beverage industry (Sivny, 2007).

Healey (2008) defines a brand as a promise of satisfaction and emphasis that

good branding reinforces reputation, generates loyalty and assure quality. Few
companies in this world have developed a brand as strong as Coca Cola. The
company has used its marketing resources to create a brand that is widely
known and has become the biggest competitive advantage for the company. The
following are some of the reasons why Coca Cola continues to have a large
market share all over the world:

1. Variety and Impact

Coca Cola offers a wide variety of products to suit the various needs of its
customers. There is Fanta, Sprite, Dasani, Minute Maid - all of which are Coca-
Cola products. The product is recognized by 94% of the people across the globe
and they have more than 500 brands under the same company. With its revenue
around 80 Billion $, Coke can be drawn parallel to the 75th largest economy in
the world. According to Facebook, Coca-Cola is the number one most
consumed product. All successful businesses today are based on focusing on the
consumer. If a company meets the requirements of its consumers (and indeed
exceeds these requirements), then you have a sure-fire recipe for success.
2. Differentiation with customers
The direct customers of Coca-Cola are outlets such as kiosks, dukas,
newsagents, entertainment centres, cinemas, clubs, supermarkets and many
other retailers selling soft drinks. In this area the emphasis in marketing has
therefore been on providing superior delivery, promotional services and sales
support. All of these elements clearly differentiate Coca-Cola as being the
beverage supplier most likely to generate profits for retailers.
3. Its logo uses a timeless font.

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Coca-Cola's logo was first written in the Spencerian script, which accountants
used, because it would differentiate it from its competitors. The company
standardized the logo in 1923 and, like the recipe, decided that while packaging
could adjust to the times, the core logo was to be untouched. It's resulted in a
logo that has had more than 100 years to become imprinted in the minds of
people around the world.
4. Simplicity
Despite having grown into a massive global industry with innumerable
products, Coca-Cola has never strayed from its timeless and basic ideals.
Throughout the decades and multitudes of marketing campaigns, Coca-Cola has
remained consistent when communicating one strong and effective message:
pleasure. Enduring, simple slogans such as “Enjoy” and “Happiness” never go
out of style and translate easily across the globe.
5. Personalization- Coca Cola’s glocal strategy
Despite its status as a global icon, Coca-Cola understands that it has to find a
way to speak to consumers at a more personal, localized level. Coca Cola has
used its organizational capability to adopt a glocal strategy Gay et.al. (2007) –
using a mix of central and local marketing functions in order to achieve
maximum marketing and distribution effectiveness. Using this, Coca Cola
maintains the strong global brand while introducing the local elements in the
marketing to make sure that the product image is in harmony with the local
culture.
Initially introduced in Australia, the company’s ‘Share a Coke’ campaign has
now successfully expanded to over 50 countries. Each country’s offerings are
customized to its local culture and language, with the most popular names of
each region printed on cans and bottles in place of the company’s moniker. This
campaign is the perfect example of effectively applying a localized positioning
strategy to a global market.

6. Economies of scale

The Coca Cola company is the largest manufacturer and marketer of non-
alcoholic beverages in the world. The company sells its products in more than
200 companies. The large scale of operations ensures that the company is able
to invest in new markets and reap the benefits when the business grows there.

7. Innovative advertising

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The company has used every medium available for advertisement and has been
on the edge of technology for it from televisions, radios, twitter, Facebook,
Billboards, Newspapers. The Company has successfully launched many famous
campaigns such as “The Coke adds life” and “Have a coke and smile” in 1970s;
“can’t beat the feeling” and “Coke is it!” in 1980s; “can’t beat the real thing” in
1990s and “always life” in 2000s. The company sponsors major sporting events
around the world and in Kenya and hires top sportspersons such as Mariga,
Wanyama, to promote the brand. The company also hires top models and movie
stars as their brand ambassadors. The company always portrays itself as the
number one and has the best products available. With the advent of internet, the
company has been advertising online to connect with the online population.

8. Distribution

Coca-Cola Kenya has adopted a Route to Market strategy in its distribution

system. A company could have the best product or service in the world,
but it will fail if it does not put it in front of the right customers. To maximize
its chances of business success, it will need to identify and focus on the most
effective routes to its market.
Coca-Cola Kenya has moved from a centralized distribution model to a hub-
and-spoke approach. Rather than transporting beverages directly from the
bottling plants to retailers, its goods are now sent first to a "hub," and are then
parceled out to nearby "spoke" centers when orders need filling. Among the
benefits, this approach reduces costs because fewer long-haul journeys in large,
uneconomical vehicles are needed, while efficiency increases through more
timely, tailored fulfilment.

In Nairobi alone, it has more than 250 Manual Distributing Channels (MDCs)
even in the remotest areas of Nairobi so that its products reach each and every
consumer when needed. The products required are made available at all times
for example from the sales statistics, Fanta Black currant sells a lot in the North
Eastern part of Kenya therefore it is always made available at all times in that
region.

There are customer loyalty programmes which are carried out to motivate the
manual distributers and retailers. Their loyalty is rewarded through incentives
such as free products and discounts. Trade fortification programmes like giving
equipment such as coolers, ice boxes and ice chests are also being done in
various regions. Some of these ice chests are movable on wheels so that some
retailers can actually hawk products to reach consumers instead of consumers
looking for them. The incentive programmes is not only targeted to the
retailers and distributors but also to the company sales force, they are given

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handsome rewards when they surpass their targets. Coca-Cola Kenya also
intends to open more outlets across its various regions.

9. It holds retailers responsible for maintaining its high standard.

The Coke team decided that its drink should be served at 36 degrees Fahrenheit,
and would send salesmen to new retailers to tell them the product should never
be served above 40 degrees.

The tactic may seem a bit silly today, but the 36-degree standard was just
another example of establishing Coca-Cola as a premium product that was
worthy of more attention than any of its competitors.

10.Pricing

The price of the Coca Cola drinks have been very consistent over the years to
make them affordable to everyone. The company uses various pricing strategies
to appeal to its custmers:

a) Psychological Pricing

Coca Cola utilizes the psychological estimating system for their coke. For
example, In the USA, the cost of the 2-litre bottle is $2.49. They set the cost to
end in 9, since this influences clients to think the cost is under $2.50, to speak to
the client.

b) Promotional Pricing

Coke also uses the promotional pricing strategy. Coca Cola has had many
promotional prices in Kenya. In stores that offer Coca-Cola, costs are regularly
incidentally valued underneath the rundown cost to build short-run deals.
Particularly on some event Coca Cola diminishes its rates like in Coca Cola
decreases its rate on 1.5 litre container. It gives the item a feeling of criticalness
and customers buy the item in view of the lower cost. Coca cola organization
gives incentives to middle men or retailers in way a they offer them free
samples and by doing so, these retailer and middle men push their products in
the market thereby contributing to their large market share.

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11. It was distributed in a proprietary bottle.

After the Georgia businessman Asa Griggs Candler became the majority
shareholder of Coca-Cola in 1888, he set his sights on making Coke the nation's
most popular cola through marketing and partnerships with regional bottlers.

By 1915, Candler was losing market share to hundreds of competitors. He

launched a national contest for a new bottle design that would signal to
consumers that Coke was a premium product that couldn't be confused with
some other brown cola in an identical clear glass bottle.

The new bottle had to be able to be mass produced using existing equipment yet
also be distinct.

The Root Glass Company in Indiana decided to enter the contest and base its
design off the product's name. While combing through the dictionary for the
word "coca" and words like it, Butler writes, mold shop supervisor Earl R. Dean
came across an illustration for the cocoa plant that caught his attention. Coca-
Cola had nothing to do with cocoa, but the cocoa pod had a strange but
appealing shape. He and his team got to work and were declared the contest
winners the next year.

Coca-Cola commissioned the bottle design as a piece of defensive marketing,

but began promoting the shape as much as the logo and product. Even after
plastic replaced glass as the standard means of drinking Coke in countries like
the US, the company continued to promote the image of the Coke bottle as an
icon.

12. Sponsorship

Coca-Cola is one of the most

recognized sponsor brands, it has a long sponsorship history that includes
American Idol, The Olympic Games, BET Network, NASCAR, etc.The
Amsterdam 1928 Olympic Games were the first time when CocaCola got
involved in the Olympic sponsorship. Since then, Coca-Cola has become one of
the most long-term partners of the games.

In Kenya, the company sponsors many sporting events including the recent
World Cup trophy tour. This endears them to many fans as well as customers
who choose to remain faithful to the brand by purchasing their products.

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 13. Customer engagement

Considering that social media has become the greatest tool for marketing, of
course, Coca-Cola has taken the advantage and created its social profiles on
reputable media like Facebook, Google+, Twitter, Pinterest. Taking into
account, that Coca-Cola is the most recognized brand, it’s easy for them to
attract dozens of fans without even trying. But still, engaging and interacting
with consumers is still something that must be done.

Moreover, due to the fact that Coca-Cola doesn’t own any stores to drive
customers, their aim is to increase awareness for future ads, expand brand
recognition and increase authority. Coca-Cola is one of the most active
brands on twitter. The company has 3M+ followers and more than 129K tweets.
They encourage people to interact with the brand more often, and inspire the
society to take their chance and get featured on the brand’s official social
profile.

14. Licensed Bottlers

Coca-Cola’s bottling structure also permits the firm to take advantage of

immeasurable growth opportunities all over the world. This approach provides
Coke the opportunity to serve a greater geographic diverse area. The company
manufactures the concentrate which is afterward sold to licensed Coca-Cola
bottlers all over the globe.

The bottlers, who have territorially limited contracts with the company,
manufacture finished goods in bottles and cans from the concentrate. The
bottlers then distribute and sell Coca-Cola to vending machines and retail shops.

15. Labour Relations and Management Strategy

Labour relation strategies and management strategies are two very important
strategies firms must consider when operating in foreign countries. Differences
prevail across countries in how labor and management view each other
(Daniels, 2011, p.775). It is important for companies to evaluate the differences
in each country’s culture, laws, norms, religious beliefs and values to determine
how to implement labor and management strategies that are not only effective,
but also socially acceptable. Before starting operations in any country, a firm
should determine how they plan to staff their facilities. There are three
frameworks in which a company can staff their international operations. These
include the ethnocentric, polycentric and geocentric frameworks.

The ethnocentric approach is when people from the home company are charged
with managing the operations in the foreign country. The polycentric approach
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is when the local people of the foreign country manage operations. Geocentric
staffing is when the company chooses the best people to manage operations.
Therefore, in a geocentric framework, there could be a mixture of home, host-
country and even third-party managers. One of the reasons why Coca-Cola is so
successful is because it has implemented the geocentric staffing approach. This
is sometimes a difficult strategy to initiate because of the various cultural
differences managers will encounter, not just among their direct reports, but
among fellow managers. However, Coca-Cola has explained that they “deal
with cultural differences through organization design by creating a variety of
flexible structures and partnerships that can complement different markets and
through staffing by valuing international assignments and giving our best people
exposure to different cultures and ways of conducting business” (Veale, 1995,
p.77).

Conclusion

Coca Cola is a truly global company with presence in multiple countries. The
company’s biggest competitive strength comes from the strong brand that has
been developed over 125 years of consistent marketing efforts. Economies of
scale and the network with suppliers and distributors also contribute to the
success.

Marketing and advertising has been the most important function that has taken
Coca Cola to new heights. The company has adopted innovating marketing
techniques right from the times of Candler and Robert Woodruff. Apart from
usual advertising through bill boards and newspapers, Coca Cola focused on
organizations, universities and colleges and this increased sales while promoting
the brand name.

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REFERENCES

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Daniels, J. D., Radebaugh, L. H., & Sullivan, D. P. (2009).International

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Healey, M. 2008. What is Branding? Miese: RotoVision SA

Henry, A. 2008. Understanding Strategic Management. New York: Oxford

university press

Kotler, P., 1991. Marketing Management. 7th edition. Englewood Cliffs:

Prentice-Hall

Porter, M. E., 2008. Strategic. Competitive Forces that shape Strategy. Harvard
Business Review. Cambridge: Harvard Press

Sivny, L. (2007). Improving firm performance by matching strategic decision-

making processes to competitive dynamics. Academy of Management
executive,2004, Vol.18, No.4

The Coca Cola System. 2011. The Coca Cola System. [online] Available at: <
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[Accessed on 27th June, 2011]

Veale, David, Oliver, Lynn & Van Langen, Kees. (1995). Three Coca-Cola
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