BRIEF INTRODUCTION

COMPANY TYPE - PUBLIC COMPANY

INDUSTRY TYPE - BEVERAGE.
FOUNDERS - JOHN SITITH PEMBERTON
&
ASA GRIGGS CANDLER

HEADQUARTERS - ATLANTA, GEORGIA, US.

AREA SERVED - WORLDWIDE

KEY PEOPLE - JAMES QUINCEY (CHAIEMAN&CEO)

BRAIN SMITH (PRESIDENT &CEO)

PRODUCT - NON-ALCHOHOLIC BEVERAGE

REVENUE - US$ 31.85 BILLION
OPERATING INCONE- US$ 8.70 BILLION
NET INCOME - US$ 6.43 BILLION

TOTAL ASSESTS - US$ 83.21 BILLION

TOTAL EQUITY - US$ 16.98 BILLION
 CHAPTER 1

1.1 INTRODUCTION TO COCA-COLA

Coca-Cola, the product that has given the world its best-known taste was born in Atlanta,
Georgia, on May 8, 1886. Coca-Cola Company is the world’s leading manufacturer, marketer
and distributor of non-alcoholic beverage concentrates and syrups, used to produce nearly 400
beverage brands. It sells beverage concentrates and syrups to bottling and canning operators,
distributors, fountain retailers and fountain wholesalers. The Company’s beverage products
comprises of bottled and canned soft drinks as well as concentrates, syrups and not-ready-to-
drink powder products. In addition to this, it also produces and markets sports drinks, tea and
coffee. The Coca- Cola Company began building its global network in the 1920s. Now
operating in more than 200 countries and producing nearly 400 brands, the Coca-Cola system
has successfully applied a simple formula on a global scale: “Provide a moment of
refreshment for a small amount of money- a billion times a day.”

The Coca-Cola Company and its network of bottlers comprise the most sophisticated and
pervasive production and distribution system in the world. More than anything, that system is
dedicated to people working long and hard to sell the products manufactured by the Company.
This unique worldwide system has made The Coca-Cola Company the world’s premier soft-
drink enterprise. From Boston to Beijing, from Montreal to Moscow, Coca-Cola, more than any
other consumer product, has brought pleasure to thirsty consumers around the globe. For more
than 115 years, Coca-Cola has created a special moment of pleasure for hundreds of millions of
people every day.
The Company aims at increasing shareowner value over time. It accomplishes this by working

with its business partners to deliver satisfaction and value to consumers through a worldwide

system of superior brands and services, thus increasing brand equity on a global basis. They

aim at managing their business well with people who are strongly committed to the Company

values and culture and providing an appropriately controlled environment, to meet business

goals and objectives.

 1.2 INDUSTRY PROFILE
BEVERAGE INDUSTRY

A BRIEF INSIGHT - THE FMCG INDUSTRY IN INDIA

Fast Moving Consumer Goods (FMCG), also known as Consumer-Packaged Goods (CPG) are
products that have a quick turnover and relatively low cost. Consumers generally put less
thought into the purchase of FMCG than they do for other products.

The Indian FMCG industry witnessed significant changes through the 1990s. Many players had
been facing severe problems on account of increased competition from small and regional
players and from slow growth across its various product categories. As a result, most of the
companies were forced to revamp their product, marketing, distribution and customer service
strategies to strengthen their position in the market.

By the turn of the 20th century, the face of the Indian FMCG industry had changed significantly.
With the liberalization and growth of the Indian economy, the Indian customer witnessed an
increasing exposure to new domestic and foreign products through different media, such as
television and the Internet. Apart from this, social changes such as increase in the number of
nuclear families and the growing number of working couples resulting in increased spending
power also contributed to the increase in the Indian consumers' personal consumption. The
realization of the customer's growing awareness and the need to meet changing requirements
and preferences on account of changing lifestyles required the FMCG
producing companies to formulate customer-centric strategies. These changes had a positive
impact, leading to the rapid growth in the FMCG industry. Increased availability of retail space,
rapid urbanization, and qualified manpower also boosted the growth of the organized retailing
sector.
 1.3 HISTORY OF COCA-COLA

The prototype Coca-Cola recipe was formulated at the Eagle Drug and Chemical Company, a
drugstore in Columbus, Georgia by John Pemberton, originally as a coca wine called
Pemberton's French Wine Coca. He may have been inspired by the formidable success of Vin
Mariani, a European coca wine.

In 1886, when Atlanta and Fulton County passed prohibition legislation, Pemberton responded
by developing Coca-Cola, essentially a non-alcoholic version of French Wine Coca. The first
sales were at Jacob's Pharmacy in Atlanta, Georgia, on May 8, 1886. It was initially sold as a
patent medicine for five cents a glass at soda fountains, which were popular in the United
States at the time due to the belief that carbonated water was good for the health.[9] Pemberton
claimed Coca-Cola cured many diseases, including morphine addiction, dyspepsia,
neurasthenia, headache, and impotence. Pemberton ran the first advertisement for the beverage
on May 29 of the same year in the Atlanta Journal.

By 1888, three versions of Coca-Cola — sold by three separate businesses — were on the
market. Asa Griggs Candler acquired a stake in Pemberton's company in 1887 and
incorporated it as the Coca Cola Company in 1888. The same year, while suffering from an
ongoing addiction to morphine, Pemberton sold the rights a second time to four more
businessmen: J.C. Mayfield, A.O. Murphey, C.O. Mullahy and E.H. Bloodworth. Meanwhile,
Pemberton's alcoholic son Charley Pemberton began selling his own version of the product.

John Pemberton declared that the name "Coca-Cola" belonged to Charley, but the other two
manufacturers could continue to use the formula. So, in the summer of 1888, Candler sold his
beverage under the names Yum Yum and Koke. After both failed to catch on, Candler set out
to establish a legal claim to Coca-Cola in late 1888, in order to force his two competitors out
of the business. Candler purchased exclusive rights to the formula from John Pemberton,
Margaret Dozier and Woolfolk Walker. However, in 1914, Dozier came forward to claim her
signature on the bill of sale had been forged, and subsequent analysis has indicated John
Pemberton's signature was most likely a forgery as well.

In 1892 Candler incorporated a second company, The Coca-Cola Company (the current
corporation), and in 1910 Candler had the earliest records of the company burned, further
obscuring its legal origins. By the time of its 50th anniversary, the drink had reached the status
of a national icon in the USA. In 1935, it was certified kosher by Rabbi Tobias Geffen, after
the company made minor changes in the sourcing of some ingredients.

Coca-Cola was sold in bottles for the first time on March 12, 1894. The first outdoor wall
advertisement was painted in the same year as well in Cartersville, Georgia. Cans of Coke first
appeared in 1955. The first bottling of Coca-Cola occurred in Vicksburg, Mississippi, at the
Biedenharn Candy Company in 1891. Its proprietor was Joseph A. Biedenharn. The original
bottles were Biedenharn bottles, very different from the much later hobble-skirt design that is
now so familiar. Asa Candler was tentative about bottling the drink, but two entrepreneurs
from Chattanooga, Tennessee, Benjamin F. Thomas and Joseph B. Whitehead, proposed the
idea and were so persuasive that Candler signed a contract giving them control of the
procedure for only one dollar. Candler never collected his dollar, but in 1899 Chattanooga
became the site of the first Coca-Cola bottling company. The loosely termed contract proved
to be problematic for the company for decades to come. Legal matters were not helped by the
decision of the bottlers to subcontract to other companies, effectively becoming parent
bottlers. Coke concentrate, or Coke syrup, was and is sold separately at pharmacies in small
quantities, as an over-the-counter remedy for nausea or mildly upset stomach.

On April 23, 1985, Coca-Cola, amid much publicity, attempted to change the formula of the
drink with "New Coke". Follow-up taste tests revealed that most consumers preferred the taste
of New Coke to both Coke and Pepsi, but Coca-Cola management was unprepared for the
public's nostalgia for the old drink, leading to a backlash. The company gave in to protests and
returned to a variation of the old formula, under the name Coca-Cola Classic on July 10, 1985.
On February 7, 2005, the Coca-Cola Company announced that in the second quarter of 2005
they planned to launch a Diet Coke product sweetened with the artificial sweetener sucralose,
the same sweetener currently used in Pepsi One. On March 21, 2005, it announced another
diet product, Coca-Cola Zero, sweetened partly with a blend of aspartame and acesulfame
potassium. In 2007, Coca-Cola began to sell a new "healthy soda": Diet Coke with vitamins
B6, B12, magnesium, niacin, and zinc, marketed as "Diet Coke Plus”. On July 5, 2005, it was
revealed that Coca-Cola would resume operations in Iraq for the first time since the Arab
League boycotted the company in 1968.

In April 2007, in Canada, the name "Coca-Cola Classic" was changed back to "Coca-Cola."
The word "Classic" was truncated because "New Coke" was no longer in production,
eliminating the need to differentiate between the two. The formula remained unchanged.

In January 2009, Coca-Cola stopped printing the word "Classic" on the labels of 16-ounce
bottles sold in parts of the south-eastern United States. The change is part of a larger strategy
to rejuvenate the product's image. In November 2009, due to a dispute over wholesale prices
of Coca-Cola products, Costco stopped restocking its shelves with Coke and Diet Coke.
 1.4 MISSION AND VISION OF COCA-COLA

 MISSION:
Our Roadmap starts with our mission, which is enduring. It declares our purpose as a company
and serves as the standard against which we weigh our actions and decisions.

 To refresh the world...

 To inspire moments of optimism and happiness...
 To create value and make a difference.

 VISION:
Our vision serves as the framework for our Roadmap and guides every aspect of our
business by describing what we need to accomplish in order to continue achieving
sustainable, quality growth.
 People: Be a great place to work where people are inspired to be the best they can be.
 Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and
satisfy people's desires and needs.
 Partners: Nurture a winning network of customers and suppliers, together we create
mutual, enduring value.
 Planet: Be a responsible citizen that makes a difference by helping build and support
sustainable communities.

 Profit: Maximize long-term return to shareowners while being mindful of our overall
responsibilities.
 Productivity: Be a highly effective, lean and fast-moving organization.
  WINNING CULTURE:
Our Winning Culture defines the attitudes and behaviors that will be required of us to
make our 2020 Vision a reality.

LIVE OUR VALUES:

Our values serve as a compass for our actions and describe how we behave in the world.
 Leadership: The courage to shape a better future.
 Collaboration: Leverage collective genius.
 Integrity: Be real.
 Accountability: If it is to be, it's up to me.
 Passion: Committed in heart and mind.
 Diversity: As inclusive as our brands.
 Quality: What we do, we do well.

 FOCUS ON THE MARKET:

 Focus on needs of our consumers, customers and franchise partners.

 Get out into the market and listen, observe and learn.
 Possess a world view.
 Focus on execution in the marketplace every day.
 Be insatiably curious.

ACT LIKE OWNERS:

 Be accountable for our actions and inactions.
 Steward system assets and focus on building value.
 Reward our people for taking risks and finding better ways to solve problems.
 Learn from our outcomes -- what worked and what didn’t.
1.5 SOME MAJOR PRODUCTS OF COCA-COLA

 COCA-COLA: -

In India Coca-Cola was leading soft drink till 1977 when Government policies necessitated its
departure. Coca-Cola made its return to the country in 1993 and made significant investments
to ensure that the beverage is available to more and more people, even in remote and
inaccessible parts of the nation.

Over the past fourteen years has enthralled consumers in India by connecting with passions of
India – Cricket, movies, music & food. Coca-Cola’s advertising campaigns “Jo Chaho Ho
Jaye” & “Life Ho Toh Aise” were very popular & had entered youths vocabulary. In
2002.Coca-Cola launched its iconic campaign “Thanda Matlab Coca-Cola” which sky
rocketed the brand to make it India’s favorites soft drink brand.

GLASS PET CAN FOUNTAIN

200ml, 300ml, 500ml, 1.5L, 2L, 330 ml VARIOUS SIZES
500ml, 1000ml 2.25L, 500ml, 100ml

Table - 1.0

LIMCA:-

Limca was introduced in 1971 in India. Limca has remained unchallenged as the No.1
sparkling drink in the cloudy lemon segment. The success formula is the sharp fizz and lemoni
bite combined with the single-minded proposition of the brand as the provider of “Freshness”.

Limca can cast a tangy refreshing spell on anyone, anywhere. Derived from “Nimbu” +
“Jaise” hence Lime Sa, Limca has lived up to its promises of refreshment and has been the
original thirst choice of millions of customers for over 3 decades.
 GLASS PET CAN FOUNTAIN
200ml, 300ml, 500ml, 1.5L, 2L, 330 ml VARIOUS SIZES
500ml, 1000ml 2.25L, 500ml, 100ml

Table - 1.1

THUMS UP: -

Thums up is a leading sparkling soft drink and most trusted brand in India. Originally
introduced in 1977, Thums up was acquires by The Coca-Cola Company in 1993. Thums up is
known for its strong, fizzy taste and it confident, mature and uniquely masculine attitude. This
brand clearly seeks to separate the men from the boys.

GLASS PET CAN FOUNTAIN

200ml, 300ml, 500ml, 1.5L, 2L, 330 ml VARIOUS SIZES
500ml, 1000ml 2.25L, 500ml, 100ml

Table - 1.2

SPRITE: -

Sprite a global leader in the lemon lime category is the second largest sparkling beverage
brand in India. Launched in 1999, Sprite with its cut-thru perspective has managed to be a true
teen icon.

RGB PET CAN FOUNTAIN

200ml, 300ml 500ml, 600ml, 330 ml VARIOUS SIZES
1250ml, 1500ml,
2000ml, 2250ml

Table – 1.3
FANTA:-

Fanta entered the Indian market in the year 1993. Over the years Fanta has occupied a strong
market place and is identifies as “The Fun Catalyst”. Perceived as a fun youth brand, Fanta
stands for its vibrant colour, tempting taste and tingling bubbles that not just uplifts feelings
but also helps free spirit thus encouraging one to indulge in the moment. This positive imagery
is associated with happy, cheerful and special times with friends.

GLASS PET CAN FOUNTAIN

200ml, 300ml 500ml, 1.5L, 2L, 330 ml VARIOUS SIZES
2.25L, 500ml, 100ml

Table – 1.4

MINUTE MAID PULPY ORANGE: -

The history of the Minute Maid brand goes as far back as 1945 when the Florida Food
Corporation developed orange juice powder. The company developed a process that
eliminated 80% of the water in the orange juice, forming a frozen concentrate that when
reconstitute created orange juice. They branded it Minute Maid a name connoting the
convenience and the ease of preparation. Minute Maid thus moved from a powdered
concentrate to the first ever orange juice from concentrate.

The launch of Minute Maid in India (started with the south of the country) is aimed to further
extend the leadership of Coca-Cola in India in the juice drink category.

Available in 3 PET pack sizes i.e. 400ml, 1 liter, 1.25 liters.

MAAZA: -

Maaza was introduced in late 1970’s. Maaza has today come to symbolise the very spirit of
mangoes. Universally loved for its taste, colour, thickness and wholesome properties, Maaza is
the mango lover’s first choice.

RGB PET POCKET MAAZA

200ml, 250ml 250ml, 600ml, 1.2L 200ml

Table – 1.5

KINLEY: -

The importance of water can never be understated, particularly in a nation such as India where
water governs the lives of the millions, be it as a part of everyday ritual or as the monsoon
which gives life to the sub-continent. Kinley water comes with the assurance of safety from
the Coca-Cola Company.

Available in PET 500ml and 1000ml.

GEORGIA GOLD COFFEE: -

Georgia coffee was introduced in India in 2004. The Georgia gold range of Tea and coffee
beverages is the perfect solution for office and restaurant needs. Today Georgia coffee is
available at Quick-Service Restaurants, Airports, Cinemas and in Corporates across all major
metros in India.

HOT BEVERAGES Espresso, Americano, Cappuccino, Caffe Latte, Mochaccino,

Hot Chocolate, Cardamom Tea.
COLD BEVERAGES Ice Teas, Cold Coffee.

Table – 1.6
1.6MARKETING MIX OF COCA-COLA INDIA

 PRODUCT: -

Coca-Cola India has a wide range of products in its product line i.e. Coca-Cola, Fanta, Sprite,
Thums Up, Maaza, Minute Maid and Georgia Gold. Bottled water was another area where
Coca-Cola identified major opportunities. In 2002, Packaged drinking water in India was a Rs
1,000 cr industry and growing by 40% every year. PDW was a low margin – high volume
business, but it was an attractive proposition for bottlers as its increased plant utilization rates.
In this market Coke’s Kinley was pitched against Ramesh Chauhan’s Bisleri and Pepsi’s
Aquafina. The product not only faced intense competition but also was difficult to
differentiate. Coke positioned Kinley as natural water with the tag line “Bhoond Bhoond
Mein Vishwas” (Trust in each drop of water).

In early 1999, the parent company acquired Cadbury Schweppes. As a result, 12 more bottlers
were brought into CCI’s fold. This acquisition added Crush, Canada Dry and Sport Cola to
CCI’s product line. This meant CCI had three orange, clear lime and cola drinks each in its
portfolio.

 PRICE: -

Coke learnt with experience that price was a strategic weapon in an emerging market like
India. An increase in value added tax in 1996 had taken the price of the 300ml bottle beyond
the reach of many Indian customers. In 2000, CCI conducted a yearlong experiment in coastal
Andhra Pradesh by introducing a 200ml bottle at Rs 7. The volumes went up by 30%
demonstrating the importance of consumer affordability. So, the 200ml pack priced at Rs 5
was rolled out countrywide in January 2003. The advertising Campaign highlighted the
affordability and Indian image.

To make it affordable, Coke introduced Kinley in 200ml pouches for Re. 1 in selected places
in Ahmadabad and 200ml water cups in Maharashtra, priced at Rs 3 per cup in testing
marketing exercise conducted in mid – 2002. In 2002 Kinley with 35% market share had
become the leader in the retail PDW segment and was contributing 20% of CCI’s revenues.

 PLACE: -

Coke pushed down responsibilities from corporate headquarters to the local business units.
The aim was to effectively align CCI's corporate resources, support systems and culture to
leverage the local capabilities. CCI's operations had been divided into North, Central and
Southern regions. Each region had a president at the top, with divisions comprising marketing,
finance, human resources and bottling operations. The heads of the divisions reported to the
CEO. Bottling operations were divided into four companies directed by the bottling head from
headquarters. Under the new plan, CCI shifted to a six region profit center set up where
product customization and packaging, marketing and brand building were taken up locally. A
Regional General Manager (RGM) headed each region with the regional functional heads
reporting to him. All the RGMs reported to VP (Operations, who in turn reported to CEO. The
four bottling operations, with 37 bottling plants, were merged into Hindustan Coca-Cola
Beverages (HCCB). Each of the six regions had on an average six bottling plants. Each plant
was headed by an Area General Manager (AGM) and held profit center responsibility for a
business territory. He reported to the RGM as well as the head of bottling at the headquarters.

 PROMOTION: -

In the initial years, CCI focused on establishing the Coca-Cola brand quickly. The marketing
campaign positioned Coca-Cola as an international brand and did not emphasize local
association. Coke, as a deliberate strategy, decided not to spend heavily on promoting Thums
Up. Indeed, the marketing spend on Thums Up between 1993 and 1996 was almost negligible.
The overall marketing effort was also not focused as CCI changed the head of marketing three
times during the period. Thumps Up remained neglected. Inadequate marketing support for
other Parle brands also led to their declining market shares.

The bottlers taken over by Coke also had problems adjusting to a new work culture. They
argued that CCI's lack of interest in promoting Thumps Up was resulting in falling sales.
Coke is primarily targeted at young individuals over the age of twenty-five. This can be seen
by Coca-Colas advertising campaigns, which are aimed towards the young, by featuring well
known personalities popular to this age group. During 90'ies Coke's promotion efforts did not
seem to be effective. They were focused on mega events like the 1996 Cricket World Cup held
in India. CCI's World Cup Cricket campaign was overshadowed by Pepsi's "Nothing official
about it" campaign. Major analysts were surprised that Thumps Up was totally out of the
picture during such a mega event. In 1998 localization of marketing efforts, CCI signed up
celebrities like Aamir Khan, Aishwarya Rai, and Sunil Gavaskar to promote Coke. Coke also
began efforts to rejuvenate the Parle brands, Limca and Thumps Up. In 1998, India was
declared the fastest growing market within the Coca-Cola system. But things were far from
normal. Attempts at building growth through discounts and PET take home segment were not
very successful because of lack of coordination between the launches and marketing back-up.

To maintain good relationships with bottlers and avoid defections to the other camp, dealers
had been pampered by offering expensive overseas trips. In 2000, Coke wrote off investments
in India, amounting to $400 Mn. The revised value of CCI's assets after the charge was $300
mm.

CCI spent $3.5 mm to beef up advertising and distribution for Thumps Up. By 2002, it had
become India's No.2 cola drink after Pepsi. Maaza, the mango drink, was repositioned as a
juice brand and saw a growth of almost 30% in 2001. Since India was a large country of
different tastes and cultures, CCI customized its marketing strategy for different regions. It
promoted the Coke brand in Delhi, Thumps Up in Mumbai and Andhra Pradesh, and Fanta in
Tamil Nadu. Coke had plans to launch Rimzim, a spicy soda drink in North Maharashtra.
 SIZE

 REVENUE AND SALE

According to The Coca-Cola Company's 2005 Annual Report, the firm at that time
sold beverage products in more than 200 countries. The 2005 report further states that
of the more than 50 billion beverage servings of all types consumed worldwide, daily,
beverages bearing the trademarks owned by or licensed to Coca-Cola account for
approximately 1.5 billion. Of these, beverages bearing the trademark "Coca-Cola" or
"Coke" accounted for approximately 78% of the company's total gallon
sales. According to the 2007 Annual Report, Coca-Cola had gallon sales distributed as
follows: 43% in the United States, 37% in Mexico, India, Pakistan, Brazil, Japan, and
the People's Republic of China, and 20% spread throughout the rest of the world. The
figure in 2010 showed that they sold 1.6 billion drinks every day.
 In 2010, it was announced that Coca-Cola had become the first brand to top £1 billion
in annual UK grocery sales. In 2017, Coke sales were down 11% from a year earlier
due to consumer tastes shifting away from sugary drinks and health risks associated
with artificial sweeteners in diet drinks.

MANPOWER

The following are key management as of May 2017: -

 James Quincey (chairman and chief executive officer)

 Brian Smith (president and chief operating officer)

 Marcos de Quinto (chief marketing officer)

 J. Alexander M. Douglas, Jr. (President, Coca-Cola North America)

 Ceree Eberly (Chief People Officer)

  Irial Finan (President, Bottling Investments Group)

 Bernhard Goepelt (General Counsel and Chief Legal Counsel)

 Julie Hamilton (Chief Customer and Commercial Leadership Officer)

 Brent Hastie (Senior Vice President, Strategy and Planning)

 Nancy Quan (Chief Technical Officer)

 Barry Simpson (chief information officer)

 Clyde C. Tuggle (Chief Public Affairs and Communications Officer

 Kathy N. Waller (chief financial officer)

 Craig Williams (President, The McDonald's Division)

FALLOWING CHART SHOW REVENUE, INCOME, AND MANPOWER

Net
Revenue
income Price per Share
Year in mil. Employees
in mil. in USD$
USD$
USD$

2000 17,354 2,177 17.11

2001 17,545 3,969 15.24

2002 19,394 3,050 15.82

2003 20,857 4,347 14.28

2004 21,742 4,847 15.34

2005 23,104 4,872 14.47

2006 24,088 5,080 15.26

2007 28,857 5,981 19.24 90,500

2008 31,944 5,807 19.71 92,400

2009 30,990 6,824 18.49 92,800

2010 35,119 11,787 22.12 139,600

2011 46,542 8,584 26.84 146,200

2012 48,017 9,019 30.70 150,900

2013 46,854 8,584 33.78 130,600

2014 45,998 7,098 35.82 129,200

2015 44,294 7,351 37.29 123,200

2016 41,863 6,527 40.63 100,300

2017 35,410 1,248 42.80 61,800

 CHAPTER 2

2.1 GLOBAL MARKET SHARE OF COCA-COLA

In 2009, the company generated revenues of $31 billion with $6.8 billion net income. An
increased consumer preference for healthier drinks has resulted in slowing growth rates for sales
of carbonated soft drinks (abbreviated as CSD), which constitutes 78% of KO’s sales. KO’s
profits are also vulnerable to the volatile costs for the raw materials used to make drinks - such
as the corn syrup used as a sweetener, the aluminium used in cans, and the plastic used in bottles.
Furthermore, slowing consumer spending in Coke's large North American market compounds
the challenge of increasing costs and a weak economic environment. Finally, Coca-Cola earns
approximately 75% of revenue from international sales, exposing it to currency fluctuations,
which are particularly adverse with a stronger U.S. Dollar (USD).

Despite these challenges, Coca-Cola has remained profitable. Though the non-CSD market is
growing quickly, the traditional CSD market is still large in terms of both revenues and volume
and highly lucrative. The size and variety of KO’s offerings in the CSD category, coupled with
the unparalleled brand equity of the Coca-Cola trademark, has allowed KO to maintain its share
of this important market. KO has also responded to consumers’ changing tastes with new, non-
CSD product launches and acquisitions such as that of Glaceau in 2007. Strong international
growth has also more than offset a weak domestic market.

On February 25, Coca-Cola Company announced its plan to buy Coca-Cola Enterprises (CCE)
for $12.3 million.[7] Since spinning of Coca-Cola Enterprises (CCE) 24 years ago, the soft drink
market has changed dramatically with consumers buying fewer soft drinks and more non-
carbonated beverages, such as Powerade and Dasani water. Under the new deal, Coca-Cola
Company will take control of the bottler's North America operations, giving the company
control over 90% of the total North America volume. In return, Coca-Cola Enterprises will take
over Coke's bottling operations in Norway and Sweden, becoming a European-focused producer
and distributor.

In March 2010, Coca-Cola Company entered into discussions to buy the Russian juice company,
OAO Nidan Juices. The company is 75% owned by a private equity firm in London and 25%
by its Russian founders and controls 14.5% of the Russian juice market. If successful, the
purchase would add to Coca-Cola's 20.5% market share, passing Pepsi's 30% market share. The
Russian juice market is estimated to be $3.2 billion dollars, and estimates of Nidan's purchase
price are between $560-$620 million.

In April 2010, Coca-Cola Company purchased a majority share of Innocent, the British fruit
smoothie maker. Last year the company bought an 18% share of the company for more than $45
million, and recent purchases of additional shares increased Coke's stake to 58%.

In June 2010, Coca-Cola Company agreed to pay Dr Pepper Snapple Group (DPS) $715 million
for the continued right to sell their products following the company's acquisition of Coca-Cola
Enterprises (CCE). The deal covers the next 20 years with an option to renew for an additional
20 years.

2.2 Major Competitors

The greatest competition that Coca-Cola faces is from the rival sellers within the industry. Coca-
Cola, Pepsi Co, and Cadbury Schweppes are among the largest competitors in this industry, and
they are all globally established which creates a great amount of competition. Aside from these
major players, smaller companies such as Cott Corporation and National Beverage Company
make up the remaining market share. All five of these companies make a portion of their profits
outside of the United States.

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, PepsiCo is the main competitor for Coca-
Cola and these two brands have been in a power struggle for years (Murray, 2006c). Coke has
been more dominant with a 53% of market share as in 1999 compared to Pepsi with a market
share of 21%.

According to Beverage Digest's 2008 report on carbonated soft drinks, PepsiCo's U.S. market
share has increased to 30.8%, while the Coca-Cola Company's has decreased to 42.7% due to
Pepsi marketing schemes still the higher large gap between the market share can be attributed
to the fact that Coca-Cola took advantage of Pepsi entering the market late and has set up its
bottler's and distribution network especially in developed markets.

"The Coca-Cola Company" is the largest soft drink company in the world. Every year
800,000,000 servings of just "Coca-Cola" are sold in the United States alone. Bottling plants
with some exceptions are locally owned and operated by independent business people who are
native to the nations in which they are located. Coca-Cola manufactures, distributes and markets
non-alcoholic beverage concentrates and syrups, including fountain syrups.

It supplies concentrates and beverage bases used to make the products and provides management
assistance to help its bottler's ensure the profitable growth of their business. This has put Pepsi
at a significant disadvantage compared to US market. Overall, Coca-Cola continues to outsell
Pepsi in almost all areas of the world. However, exceptions include India, Saudi Arabia and
Pakistan.

By most accounts, Coca-Cola was India's leading soft drink until 1977 when it left India after a
new government ordered, The Coca-Cola Company to turn over its secret formula for Coke and
dilute its stake in its Indian unit as required by the Foreign Exchange Regulation Act (FERA).

In 1988, PepsiCo gained entry to India by creating a joint venture with the Punjab government-
owned Punjab Agro Industrial Corporation (PAIC) and Voltas India Limited. This joint venture
marketed and sold Lehar Pepsi until 1991 when the use of foreign brands was allowed. PepsiCo
bought out its partners and ended the joint venture in 1994. In 1993, The Coca-Cola Company
returned in pursuance of India's Liberalization policy. In 2005, The Coca-Cola Company and
PepsiCo together held 95% market share of soft-drink sales in India. Coca-Cola India's market
share was 52.5%.

In Russia, Pepsi initially had a larger market share than Coke but it was undercut once the Cold
War ended. In 1972, Pepsi Co Company struck a barter agreement with the government of the
Soviet Union, in which Pepsi Co was granted exportation and Western marketing rights to
Stolichnaya vodka in exchange for importation and Soviet marketing of Pepsi-Cola.
This exchange led to Pepsi-Cola being the first foreign product sanctioned for sale in the
U.S.S.R. Pepsi, as one of the first American products in the Soviet Union, became a symbol of
that relationship and the Soviet policy.

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 increase sales and getting new customers.

Pepsi is however trying to counter this by competing more aggressively in the emerging
economies where the dominance of Coke is not as pronounced, with the growth in emerging
markets significantly expected to exceed the developed markets, rivalry in international market
is going to be more pronounced.

Pepsi advertisements often focused on celebrities, choosing Pepsi over Coke, supporting Pepsi's
positioning as "The Choice of a New Generation." In 1975, Pepsi began showing people doing
blind taste tests called Pepsi Challenge in which they preferred one product over the other. Pepsi
started hiring more popular spokespersons to promote their products.

In the late 1990s, Pepsi launched its most successful long-term strategy of the Cola Wars, Pepsi
Stuff. Consumers were invited to "Drink Pepsi, Get Stuff" and collect Pepsi Points on billions
of packages and cups. They could redeem the points for free Pepsi lifestyle merchandise. After
researching and testing the program for over two years to ensure that it resonated with
consumers, Pepsi launched Pepsi Stuff, which was an instant success.

Tens of millions of consumers participated. Pepsi outperformed Coke during the summer of the
Atlanta Olympics, held at Coke's hometown where Coke was the lead sponsor for the Games.
Due to its success, the program was expanded to include Mountain Dew into Pepsi's
international markets worldwide. The company continued to run the program for many years,
continually innovating with new features each year.
Coca-Cola and Pepsi engaged in a "cyber-war" with the re-introduction of Pepsi Stuff in 2005
& Coca-Cola retaliated with Coke Rewards. This cola war has now concluded, with Pepsi Stuff
ending its services and Coke Rewards still offering prizes on their website. Both were loyalty
programs that give away prizes and product to consumers after collecting bottle caps and 12 or
24 pack box tops, then submitting codes online for a certain number of points.

Competitive advantage
The greater value, by either lower price or by providing more benefit that justify higher price
(Kotler Competitive advantage, an advantage over the competitor which is gained by offering
consumer & Armstrong, 2008).

Competitive advantage is an ability of a company to perform in one or more ways that the
competitors cannot or will not match. A company must have a sustainable competitive
advantage because it benefits the company in longer runs. Competitive advantage gives
customer advantage for example if Coca Cola deliver its product better than any other
competitors then customers will choose Coca Cola over other companies.

Major competitors of coco-cola

 PepsiCo- The biggest and closest competitors of coco-cola, its arch rival PepsiCo
was formed after the manager of Pepsi and Frito lay in 1965.

 Red bull- Red bull despite its limited product portfolio is a major competitors of
energy drink product of coco cola.it is a famous brand that sells across 171 country.

 Dr Pepper Snapple- it has a portfolio of more than 50 refreshing brands. The

brand is major competitor for coco cola in us market

 Nestle-while nestle is not a direct competitors of coco cola, still it competes with the
brand across some specific product categories like Bottle water.
 CHAPTER 3

PESTEL ANALYSIS OF COCA- COLA

PESTLE stands for Political, Economic, Social, Technological, Legal and Environmental. It is
a tool that helps the organizations for making strategies and to know the EXTERNAL
environment in which the organization is working and is going to work in the future.
Coca-Cola beverage, which is the leading manufacturer and distributor of non-alcoholic drinks
also need to undergo this PESTLE analysis to know about the external environment (especially
their competitors and the opportunities available) in order to keep pace with the fast-growing
economy.

Political Analysis:
Political factors are how far a government intervenes in the operations of the company. The
political factors may include tax policy, trade restrictions, environmental policy, laws imposed
on the recruiting labours, amount of permitted goods by the government and the service
provided by the government.
Globally, Coca-Cola beverages being a non-alcoholic industry falls under the FDA (Food and
Drug Administration), it is an agency in the United States Department of Health and Human
Services. Its headquarters is in USA and it has started opening offices in foreign countries as
well. The job of the FDA is to check and certify whether the ingredients used in the
manufacturing of Coca-Cola products in the particular country is meeting to the standards or
not. In Coca-Cola the company takes all the necessary steps to analyze thoroughly before
introducing any ingredients in its products and get prior approval from the FDA. The company
also has to take into consideration of the regulation imposed by FDA on plastic bottled products.
Apart from FDA the other political factors includes tax policies and accounting standards. The
accounting standards used by the company changes from time to time which have a significant
role in the reported results.
The company also is subjected to income tax policies according to the jurisdiction of various
countries. In addition to this, the company is also subjected to import and excise duties for
distribution of the products in the countries where it does not have the outsourcing units.
Moreover, if there is any unrest or changes in the government and any kind of protest by the
political activists may decline the demand for the products. Also the situations like the unsure
conditions prevailing in Iraq and escalation of the terrorist activities in these areas could affect
the international market of our product. It creates an inability for the company to penetrate in
the markets of such countries.

Economic Factors:
The economic factors analyze the potential areas where the firm can grow and expand. It
includes the economic growth of the country, interest rates, exchange rates, inflation rates, wage
rates and unemployment in the country.
The company first analyzes the economic condition of the country before venturing into that
country. When there is an economic growth in the country, the purchasing power among people
increases. It gives the company or the marketer a good chance to market the product. Coca-Cola,
in the past identified this correctly and rightly started its distribution across various countries.
The net operating profits for the company outside US stands at around 72%. Along with this the
company uses 63 various types of currencies other than US Dollar. Hence there is a definite
impact in the revenues due to the fluctuating foreign currency exchange rates. A strong and
weak currency tends to affect the exporting of the products globally.
Interest rates are the rate which is imposed on the company for the money they have borrowed
from government. When there is an increase in the interest rates, it may deter the company in
further investment as the cost for borrowing is higher. Coca-Cola uses derivative financial
instruments to cope up with the fluctuating interest rates. Inflation and wage rate go hand in
hand, when there is an increase in the inflation the employee demand for a higher wage rate to
cope up with the cost of living.
This comes as additional cost for the company which cannot be reflected in the price of the
final product as the competition and risk in this segment is higher. This is a threat in the external
environment faced by the company. From the above explanation it is clearly seen that the
economic factors involves a major impact in the behaviour of the company during various
economic situations.

Social Factors:
Social factors are mainly the culture aspects and attitude, health consciousness among people,
population growth with age distribution, emphasis on safety. The company cannot change the
social factors but the company has to adjust itself to the changing society. The company adapts
various management strategies to adapt to these social trends.
Coca-Cola which is a B2C company, is directly related to the customer, so social changes are
the most important factors to consider. Each and every country has a unique culture and attitude
among the people. It is very important to know about the culture before marketing in a particular
country. Coca-Cola has about 3300+ products in their stable, when entering into a country it
does not introduce all the products. It introduces minimum number of products according to the
culture of the country and the attitude of the people.
Consumers and government are becoming increasingly aware of the public health consequences,
mainly obesity which is the second social factor in the soft drinks industry. It inspired the
company to venture into the areas of Diet coke and zero calorie soft drinks. The problem of
obesity is taken seriously among the youngsters who like to maintain a good physique. Hence
coke introduced dietary products for those youngsters who can enjoy coke with zero calories.
In one of the study it is said that “Consumer from the age groups 37 to 55 are also increasingly
concerned with nutrition”. Since many are aware, they are concerned with the longevity of their
lives. This will affect the demand of the company in the existing product and also is an
opportunity to venture into new health and energy drinks industry.
Population growth rate and the age distribution is another social factor to be considered. It is
very important because non-alcoholic markets have most of its share from the children and
youngsters. Adults used to celebrate mostly with alcohol. The age distribution of the country
becomes important for the success of the product in a country.

Technological Factors:
Technology plays a varied role in the soft drinks industry. The manufacturing and distribution
of the products is relatively a Low-Tech business, although the creation of a new product with
the perfect blend and taste is a science (an art in itself).
Technological contributions are most important in packaging. The company rely on their
bottling partners for a significant portion of their business. Nearly 83% of the worldwide unit
case volume is manufactured and distributed by their bottling partners in whom the company
does not have controlling power. Hence it is necessary for the company to maintain a cordial
relation with their bottling partners. If the company do not give ample support in pricing,
marketing and advertising then the bottling industry while increase their short term profits, may
become detrimental to the company.
The advancement in technology in the company has led to: Introduction of new ways for the
availability of Coca-Cola, it introduced general vending machines all over the world. In products
it led to the development of new products like Cherry Coke, Diet Coke etc. The technical
advancement in the bottling industries include, introduction of recyclable and non refillable
bottles, introduction of cans which are trendy, stylish and popular among the youngsters.

Legal Factors

The legal factors include discrimination law, customer law, antitrust law, employment law and
health and safety law. In Coca-Cola the business is subjected to various laws and regulation in
the numerous countries in which they do the business, the laws include competition, product
safety, advertising and labelling, container deposits, environment protection, labour practices.
In the US the products of the company is subjected to various acts like Federal Food, Drug and
Cosmetic Act, the Federal Trade Commission Act, Occupation Safety and Health Act, various
environment related acts and regulations, the production, distribution, sale and advertising of all
the products are subjected to various laws and regulations. Changes in these laws could result
in increased costs and capital expenditures, which affects the company profitability and also the
production and distribution of the products.
Various jurisdictions may adopt significant regulations in the additional product labelling and
warning of certain chemical content or perceived health consequences. These requirements if
become applicable in the future the company must be ready to accept and have necessary
changes in hand for the same.

Environment Factors
These factors include the environment such as the weather conditions and the seasons in which
people prefer to buy cool beverages. Also the company must follow the environmental issues
related to the product manufacturing, packaging and distributing in various countries. It must
 CHAPTER 4
SWOT ANALYSIS OF COCA-COLA

STRENGTHES WEAKNESS
Negative Publicity.
World's leading brand.
Decline in cash from Operating
Large scale of operations.
Activities.
Robust revenue growth in 3
Sluggish Performance in North
segments.
America.
SWOT
ANALYSIS
THREATS
OPPORTUNITIES
Intense Competition.
Acquisitions.
Dependence on bottling Patners.
Growing bottled water market.
Sluggish growth of Carbonated
Growing Hispanic Population in U.S. beverages.

Fig 2.1 SWOT ANALYSIS OF COCA-COLA

STRENGTHES:

 WORLD’S LEADING BRAND

Coca-Cola has strong brand recognition across the globe. The company has a leading brand
value and a strong brand portfolio. Business-Week and Inter-brand, a branding consultancy,
recognize. Coca-Cola as one of the leading brands in their top 100 global brands ranking in
2006.The Business Week-Inter-brand valued Coca-Cola at $67,000 million in 2006. Coca-
Cola ranks well ahead of its close competitor Pepsi which has a ranking of 22 having a brand
value of $12,690 million Furthermore; Coca-Cola owns a large portfolio of product brands.
The company owns four of the top five soft drink brands in the world: Coca-Cola, Diet Coke,
Sprite and Fanta.

Strong brands allow the company to introduce brand extensions such as Vanilla Coke, Cherry
Coke and Coke with Lemon. Over the years, the company has made large investments in
brand promotions. Consequently, Coca-cola is one of the best recognized global brands. The
company’s strong brand value facilitates customer recall and allows Coca-Cola to penetrate
new markets and consolidate existing ones.

 LARGE SCALE OF OPERATIONS

With revenues in excess of $24 billion Coca-Cola has a large scale of operation. Coca-Cola is
the largest manufacturer, distributor and marketer of non-alcoholic beverage concentrates and
syrups in the world. Coco-Cola is selling trademarked beverage products since the year 1886
in the US. The company currently sells its products in more than 200 countries. Of the
approximately 52 billion beverage servings of all types consumed worldwide every day,
beverages bearing trademarks owned by or licensed to Coca-Cola account for more than 1.4
billion.

The company’s operations are supported by a strong infrastructure across the world. Coca-
Cola owns and operates 32 principal beverage concentrates and/or syrup manufacturing plants
located throughout the world.

In addition, it owns or has interest in 37 operations with 95 principal beverage bottling and
canning plants located outside the US. The company also owns bottled water production and
still beverage facilities as well as a facility that manufactures juice concentrates. The
company’s large scale of operation allows it to feed upcoming markets with relative ease and
enhances its revenue generation capacity.

 ROBUST REVENUE GROWTH IN 3 SEGMENTS

Coca-Cola’s revenues recorded a double digit growth, in three operating segments. These
three segments are Latin America, ‘East, South Asia, and Pacific Rim’ and Bottling
investments. Revenues from Latin America grew by 20.4% during fiscal 2006, over 2005.
During the same period, revenues from ‘East, South Asia, and Pacific Rim’ grew by 10.6%
while revenues from the bottling investments segment by 19.9%.

Together, the three segments of “Latin America”, “East, South Asia” and “Pacific Rim”
bottling investments, accounted for 34.8% of total revenues during fiscal 2006. Robust
revenues growth rates in these segments contributed to top-line growth for Coca-Cola during
2006.

WEAKNESS:

 NEGATIVE PUBLICITY

The Coca-Cola Company has been involved in a number of controversies and lawsuits related
to its relationship with human rights violations and other perceived unethical practices. There
have been continuing criticisms regarding the Coca-Cola Company's relation to the Middle
East and U.S. foreign policy. The company received negative publicity in India during
September 2006.The company was accused by the Centre for Science and Environment (CSE)
of selling products containing pesticide residues. Coca-Cola products sold in and around the
Indian national capital region contained a hazardous pesticide residue.

On 10 December 2008, the US Food and Drug Administration (FDA) wrote to Mr. Muhtar
Kent, President and Chief Executive Officer, to warn him that the FDA had concluded that
Coca-Cola's product Diet Coke Plus 20 FL OZ was is in violation of the Federal Food, Drug,
and Cosmetic Act.
In January 2009, the US consumer group the Centre for Science in the Public Interest filed a
class-action lawsuit against Coca-Cola. The lawsuit was in regards to claims made, along with
the company's flavours, of Vitamin Water. Claims say that the 33 grams of sugar are more
harmful than the vitamins and other additives are helpful.

 SLUGGISH PERFORMANCE IN NORTH AMERICA

Coca-Cola’s performance in North America was far from robust. North America is Coca-
Cola’s core market generating about 30% of total revenues during fiscal 2006. Therefore, a
strong performance in North America is important for the company.

In
North America the sale of unit cases did not record any growth. Unit case retail volume in
North America decreased 1% primarily due to weak sparkling beverage trends in the second
half of 2006 and decline in the warehouse-delivered water and juice businesses. Moreover, the
company also expects performance in North America to be weak during 2007. Sluggish
performance in North America could impact the company’s future growth prospects and
prevent Coca-Cola from recording a more robust top-line growth.

 DECLINE IN CASH FROM OPERATING ACTIVITIES

The company’s cash flow from operating activities declined during fiscal 2006. Cash flows
from operating activities decreased 7% in 2006 compared to 2005. Net cash provided by
operating activities reached $5,957 million in 2006, from $6,423 million in 2005. Coca-Cola’s
cash flows from operating activities in 2006 also decreased compared with 2005 as a result of
a contribution of approximately $216 million to a tax-qualified trust to fund retiree medical
benefits.

The decrease was also the result of certain marketing accruals recorded in 2005.Decline in
cash from operating activities reduces availability of funds for the company’s investing and
financing activities, which, in turn, increases the company’s exposure to debt markets and
fluctuating interest rates.
OPPORTUNITIES:

 ACQUISITIONS

During 2006, its acquisitions included Kerry Beverages, (KBL), which was subsequently,
reappointed Coca-Cola China Industries (CCCIL). Coca-Cola acquired a controlling
shareholding in KBL, its bottling joint venture with the Kerry Group, in Hong Kong.
The acquisition extended Coca-Cola’s control over manufacturing and distribution joint
ventures in nine Chinese provinces.

In Germany the company acquired Apollinaris which sells sparkling and still mineral water.
Coca-Cola has also acquired a 100% interest in TJC Holdings, a bottling company in South

Africa. Coca-Cola also made acquisitions in Australia and New Zealand during 2006. These
acquisitions strengthened Coca-Cola’s international operations.

These also give Coca- Cola an opportunity for growth, through new product launch or greater
penetration of existing markets. Stronger international operations increase the company’s
capacity to penetrate international markets and also gives it an opportunity to diversity its
revenue stream. On 25 February 2010, Coco cola confirms to acquire the Coca cola enterprises
(CCE) one the biggest bottler in North America. This strategy of coca cola strengthens its
operations internationally.

 GROWING BOTTLED WATER MARKET

Bottled water is one of the fastest-growing segments in the world’s food and beverage market
owing to increasing health concerns. The market for bottled water in the US generated
revenues of about $15.6 billion in 2006.

Market consumption volumes were estimated to be 30 billion litres in 2006. The market's
consumption volume is expected to rise to 38.6 billion units by the end of 2010. This
represents a CAGR of 6.9% during 2005-2010.
In terms of value, the bottled water market is forecast to reach $19.3 billion by the end of
2010. In the bottled water market, the revenue of flavoured water (water-based, slightly
sweetened refreshment drink) segment is growing by about $10 billion annually. The
company’s Dasani brand water is the third best-selling bottled water in the US. Coca-Cola
could leverage its strong position in the bottled water segment to take advantage of growing
demand for flavoured water.

 GROWING HISPANIC POPULATION IN U.S

Hispanics are growing rapidly both in number and economic power. As a result, they have
become more important to marketers than ever before. In 2006, about 11.6 million US
households were estimated to be Hispanic. This translates into a Hispanic population of about
42 million.

The US Census estimates that by 2020, the Hispanic population will reach 60 million or
almost 18% of the total US population. The economic influence of Hispanics is growing even
faster than their population. Nielsen Media Research estimates that the buying power of
Hispanics will exceed $1 trillion by 2008- a 55% increase over 2003 levels.

Coca-Cola has extensive operations and an extensive product portfolio in the US. The
company can benefit from an expanding Hispanic population in the US, which would translate
into higher consumption of Coca-Cola products and higher revenues for the company.

THREATS:

 INTENSE COMPETITION

Coca-Cola competes in the non-alcoholic beverages segment of the commercial beverages

industry. The company faces intense competition in various markets from regional as well as
global players. Also, the company faces competition from various non-alcoholic sparkling
beverages including juices and nectars and fruit drinks. In many of the countries in which
Coca-Cola operates, including the US, PepsiCo is one of the company’s primary competitors.
Other significant competitors include Nestle, Cadbury Schweppes, Groupe DANONE and
Kraft Foods.

Competitive factors impacting the company’s business include pricing, advertising, sales
promotion programs, product innovation, and brand and trademark development and
protection. Intense competition could impact Coca-Cola’s market share and revenue growth
rates.

 DEPENDENCE ON BOTTLING PARTNERS

Coca-Cola generates most of its revenues by selling concentrates and syrups to bottlers in
whom it doesn’t have any ownership interest or in which it has no controlling ownership
interest. In 2006, approximately 83% of its worldwide unit case volumes were produced and
distributed by bottling partners in which the company did not have any controlling interests.
As independent companies, its bottling partners, some of whom are publicly traded
companies, make their own business decisions that may not always be in line with the
company’s interests. In addition, many of its bottling partners have the right to manufacture or
distribute their own products or certain products of other beverage companies.

If Coca-Cola is unable to provide an appropriate mix of incentives to its bottling partners, then
the partners may take actions that, while maximizing their own short-term profits, may be
detrimental to Coca-Cola. These bottlers may devote more resources to business opportunities
or products other than those beneficial for Coca-Cola. Such actions could, in the long run,
have an adverse effect on Coca-Cola’s profitability. In addition,
loss of one or more of its major customers by any one of its major bottling partners could
indirectly affect Coca-Cola’s business results. Such dependence on third parties is a weak link
in Coca-Cola’s operations and increases the company’s business risks.
 CHAPTER 5
RESEARCH FINDING & DATA ANALYSIS
1. Response from Vice President Public Affairs and Communication, India & SWA:

Coca Cola always looks for maximum reach to its end consumers. One of the major promotional
activities includes advertising through celebrity endorsements. If we take the example of India,
majorly the brand ambassadors of Coca Cola have been Hrithik Roshan, Aishwarya Rai, Aamir
Khan, etc. who have been the face of the Indian Film industry. All of them have got huge fan
base and huge number of followers. So, tapping this opportunity has enhanced the acceptability
of Coca Cola to a great extent.
Which measure according to you is the most efficient? Response from Business Unit
President, India & SWA:
Well this question is like the egg or the chicken causality dilemma. It is tough to choose any of
the initiatives and mark it as the major contributor for the success story of Coca Cola. All the
initiatives are equally important. If the number of brands is not increased, customers will have
a tendency to switch to other alternatives available in the market. So increasing the array of
brands is very critical to sustain in long term basis. At the same time if the products are not
reaching the end consumers through an efficient supply chain, the whole purpose of coming up
with new brands will be a big failure. So, maintain an efficient network of retailers and
distributors is also very significant keeping the growth and sustainability of the company in
mind.
Response from Vice President Strategy and Innovation, India & SWA:
In this long history of sustainability, Coca Cola has taken number of initiatives or moves in the
promotion of its products. Among all these the most significant has been the success of the Coca
Cola System. The strong network of grocers and distributors across the globe has been the key
to success for this beverage giant.
What are the incentives given to bottlers which help in the growth of company’s
sales? Response from Vice President Finance, India & SWA:
There have been more than 300 bottling partners of Coca Cola who have played a vital role in
the success of the company. They have been a very important part of this Coca Cola System.
Concentrate and beverage bases are manufactured and sold by the Coca Cola Company to these
bottling partners. Finished beverages are prepared by the bottling partners by adding sweetener,
carbonated water or water with the beverage bases. After the beverage is finally produced, they
are packaged in cans, bottles etc and then sold to the distributors or retailers.
As a measure to incentivize the bottling partners often discount offers are given to them when
beverage bases or concentrate are sold to them. They also promote the bottling companies who
end up selling the higher number of products to next player in the value chain. The incentives
are either by cash or by kind. Cash incentives are majorly cash discounts on the beverage base
sale. Incentives in kind majorly happen when Coca Cola sells major part of their products to
those bottling partners.
According to you, what are the promotion measures of company that tempt the urban people
and rural people to buy Coca Cola’s products?
Response from Vice President Strategy and Innovation, India & SWA:
The major strategy for tapping both the urban and rural market has been based on three A’s:
Availability, Affordability and Acceptability.
Availability focuses on the availability of the products to the end consumers. The centralized
distribution system of Coca Cola has made it happen that Coca Cola products are reaching in
every corner of the world even in the rural areas.
Affordability majorly emphasizes on the product pricing which makes it very much affordable
for the customers. Initially they used to sell 300ml bottles. But they realized that in many areas,
especially in the rural areas 300ml bottles are not that famous as it was majorly observed that
the 300ml bottle was shared by two persons. So they came up with 200ml bottles with lower
prices mainly for the rural market and it ended up to be an instant hit in the market.
Acceptability emphasizes on creating a desire in the mind of the customers and convincing them
to purchase the product. In achieving this, Coca Cola majorly focused in television commercials
through celebrity endorsements. In countries like India, celebrities from Indian theatre
Industry have huge fan bases and followers especially in the rural areas. So television
commercials through these celebrities along with catchy punch lines “Thanda Matlab Coca
Cola” (Cool means Coca Cola) were found to be very effective in creating a mark in the mind
of the customers.
Which product of Coca Cola you sell the most? Why do consumers prefer that product
more? Response from Senior Vice President Operations, India & China:
There is no partiality with the products. So, all products are sold with the same intent: to
outsmart its other products in terms of sales figures. However, the soft drink products like Coke,
Diet Coke, Thumbs Up, Fanta, etc. have been long in the market compared to the other products
like Minute Maid pulpy Orange and Minute Maid Nimbu Fresh. So, the acceptability of those
products is also higher than that of the latter. In terms of sales figures they are still behind the
soft drink products specially Thumbs Up and Coke, though they catching up fast with other
products. Common people are more familiar with the soft drink products as they have been
consuming them since long ago and moreover, they have been viewing the television
advertisements of these products for a long time. So, they have a sense of familiarity towards
these products.
Among all the soft drink products major sales are experienced for Thumbs Up and Coke. Low
calorie soft drinks like Diet Coke is also getting sold in huge numbers and is mainly preferred
by ladies and above middle-aged people. So, it can be said that among all products cola flavour
is the most preferred flavor of soft drinks according to the trends of market.
Are the supplies to rural areas increasing? If yes, how much in comparison to growth in
urban areas? Response from Senior Vice President Operations, India:
The supplies to the rural areas are increasing significantly. This is because of the strategy based
on three A’s: Availability, Affordability and Acceptability. Availability focuses on the
availability of the products to the end consumers. Affordability majorly emphasizes on the
product pricing which makes it very much affordable for the customers. Acceptability
emphasizes on creating a desire in the mind of the customers and convincing them to purchase
the product. Because of the successful execution of the strategies and increase of availability,
affordability and acceptability in the rural market, the demand has also increased from those
areas. To satisfy the increasing demand and to tap the untapped market supply has automatically
increased to rural markets. This penetration in the rural market has resulted in an overall growth
of almost 10%.
The arch-rival Pepsi is more of a competition to Coca Cola in urban areas or rural areas?
Response from Vice President Public Affairs and Communication, India & China:
Pepsi pose a serious threat to Coca Cola. The competition is tougher in the urban market. In
rural areas people do not have their education level as high as that of urban people. To them a
cola drink from Coca Cola or Pepsi does not make much difference. They cannot do much of
comparison between the two because of the intelligence level of the people in general. So Coca
Cola does not find a huge threat in the rural market as long as they are reaching out to the end
customers efficiently through their supply chain or distribution channel.
But in the urban areas people do much of comparison between the products of Coca Cola and
Pepsi. They find differences in taste of the cola drinks offered by Coca Cola and Pepsi. Apart
from the taste the advertising campaigns also segregate the customers. The Coca Cola
campaigns mainly focuses on togetherness, sharing happiness etc and emphasizes much on
“Us”. Whereas the campaigns of Pepsi are more “Me” oriented and focuses on individual
satisfaction to a large extent. So individuals who are more social and friendly would be touched
more by the campaigns of Coca Cola. Whereas campaigns of Pepsi would attract more people
who are more individualistic and love to be happy and content with them. Thus in the urban
market Coca Cola and Pepsi rivalry is strongly exposed.
Is India today an important market for Coca Cola? Response from Business Unit
President, India & SWA:
Coca Cola in India caters to millions of customers across the country through a huge array of
products like Coca-Cola, Diet Coke, Fanta, Maaza, Limca, Thumbs Up, Sprite, Minute Maid
Pulpy Orange, Minute Maid Nimbu Fresh, Minute Maid 100%, Burn, Kinley and Georgia range
of tea and coffee. They have got a network of more 1.5 million outlets in India. Tremendous
support for Community programs all over the nation is provided by Coca Cola India. This has
been done with an emphasis on education, health and water conservation and more than 500
rain water harvesting structures spread across 22 states of the nation has already been
undertaken.
Apart from that, India has got a majority of rural population. Coca Cola has its own market
penetration strategy framed for the rural market which is proven in other parts of the globe. So
India being a country where they can apply their success formula, it is always important for
Coca Cola to consider India as one of their major target markets.
 CHAPTER 6
RECOMMENDATIONS &SUGGESTIONS
After analyzing the entire report and going through the research findings, several suggestions
can be recommended to Coca Cola to revamp their growth in the emerging nations like India,
China, Pakistan, etc. However it should be kept in mind that Coca Cola should not get deviated
from their own USP following the recommendations.

 Coca Cola should never get deviated from exploiting its value chain. The manufacturing and
distribution network of Coca Cola is called as Coca Cola System. This is the USP of Coca Cola
which has stretched its reach in every corner of the globe and still stretching (Krishna, 2012). In
the value chain Concentrate and beverage bases are manufactured and sold by the Coca Cola
Company to these bottling partners. Finished beverages are prepared by the bottling partners by
adding sweetener, carbonated water or water with the beverage bases. After the beverage is
finally produced, they are packaged in cans, bottles etc and then sold to the distributors or
retailers (Yu, 2005). Coca Cola should always give valuable effort to sustain and develop even
better network of retailers and distributors through which they can actually reach the end
consumers. It is actually creates a very important aspect of the market penetration. The better
the network of retailers and distributors the more the availability of Coca Cola products. So
distribution channel should always be on focus for the company.
 The three A’s of market penetration are Availability, Affordability and Acceptability. To make
a mark in the in the market and the industry, Coca Cola can’t make a deep impact in the
affordability considering the competition in the market (Lake, 2010). Focusing solely on the
pricing model would not work wonder for Coca Cola as Pepsi would easily replicate the same
in the market and remove the thin line of difference between the competitors. But Coca Cola
can definitely make huge difference in the Availability riding on the success of the huge network
of retailers and distributors of the Coca Cola System. To tap the untapped market Coca Cola
must leverage on the highly efficient network of retailers and distributors to reach out the end
customers (Mayard & Tian, 2004). Coca Cola can also make a huge difference in the
Acceptability in the market. Coca Cola majorly execute campaigns focusing on the togetherness
and sharing of happiness. This theme of the campaigns can touch the customers from the core
and can make them go for their brand.
 Coca Cola offer a huge of array of products to the customers in the market. They include Coca-
Cola, Diet Coke, Fanta, Maaza, Limca, Thumbs Up, Sprite, Minute Maid Pulpy Orange, Minute
Maid Nimbu Fresh, Minute Maid 100%, Burn, Kinley and Georgia range of tea and coffee
(Krishna, 2012). Coca Cola should continue with this huge array of products and probably
should come up with new brands on priority basis with more customized features. Their products
have covered the major chunk of the market and cater to the major segment of customers. They
should also focus on the niche segment and come up with more customized products to attract
that niche segment of consumers to go for Coca Cola brands (Krishna, 2005). This huge range
of brands of Coca Cola has given the customers a lot of choice to choose from the available
alternatives in the market. If Coca Cola can come up with even more range of brands then they
 can tie up their customers so that they can toggle between their products only without switching
to other brands.
 The majority of the business is coming from the urban market. But if Coca Cola has to expand
their reach and revamp their growth, they have to stretch their reach in the rural market. There
is a huge untapped market in the rural areas all over the globe which can still be captured with
lot of potential. Leveraging on the highly efficient retailer and distributor network, Coca Cola
need to reach out to this market. Consumers in this segment are not much choosy while going
for the soft drink of their choice. They do not understand the thin line of differences in taste
between Coke and Pepsi. They just take them as cola drink and will go for the one whichever is
available. So Coca Cola has to be very cautious in this part as they need to be on their toes to
enhance their Availability to this segment. Acceptability can also play an important role in
capturing this untapped segment of the market. Celebrity Endorsements would pave the way for
this in a great extent.
 Coca Cola should always be in a position to pull their socks when it comes to competing with
Pepsi. The competition is tougher in the urban market. In rural areas people do not have their
education level as high as that of urban people. To them a cola drink from Coca Cola or Pepsi
does not make much difference (Krishna, 2012). They cannot do much of comparison between
the two because of the intelligence level of the people in general. So Coca Cola should always
be two steps forward from Pepsi in reaching out to the end customers efficiently through their
supply chain or distribution channel. In the urban areas people do much of comparison between
the products of Coca Cola and Pepsi. They find differences in taste of the cola drinks offered by
Coca Cola and Pepsi (Kwon, 2008). So Coca Cola should look into adding more brands in their
array of products so that customers can toggle between their products only rather than switching
to other brands like Pepsi. Apart from the taste the advertising campaigns also segregate the
customers. The Coca Cola campaign mainly focuses on togetherness, sharing happiness etc and
emphasizes much on “Us”. Whereas the campaigns of Pepsi are more “Me” oriented and focuses
on individual satisfaction to a large extent (Lake, 2010). So individuals who are more social and
friendly would be touched more by the campaigns of Coca Cola. Whereas campaigns of Pepsi
would attract more people who are more individualistic and love to be happy and content with
them. So Coca Cola should stick to campaigns which are catchier for majority of the consumers.
 India has always been strategegy growth marketing for Coca Cola. So India should always be
focused to enhance its growth all over the globe. They have got a network of more 1.5 million
outlets in India (Krishn, 2005). Tremendous support for Community programs all over the
nation is provided by Coca Cola India. This has been done with an emphasis on education, health
and water conservation and more than 500 rain water harvesting structures spread across 22
states of the nation has already been undertaken. India’s demographic features and social and
economic dimensions are immensely contributing to the growth of the company in this nation
(Krishna, 2012). They need to continue with the assured growth of offerings to be the ready to
drink non-alcoholic beverage manufacturing company of the preference of the local consumers.
Coca Cola can also use their success story in India to tap the neighboring nations as well so that
it can continue its run all over the globe with grand success.

The suggestions made in this section are based on the market study conducted as part of
“Coca-Cola India”. The suggestions are arranged in order of priority, highest first.
 Perform a detail demand survey at regular interval to know about the unique needs
and requirements of the customer.

 The company should make hindrance free arrangement for its customers/retailers to
make any feedback or suggestions as and when they feel.

 The company should focus to bring some more flavors like health drinks and other
low-calorie offerings. Coca-Cola India can also introduce some fruit based drinks, as
it has already entered the energy drink arena with “Burn”.

 Coca-Cola’s distribution channel is mostly through retail. Whereas the competitors

also concentrates more on the multiplexes, pubs and restaurants. Coca-Cola should try
to increase their distribution in these areas.

 The company must keep a watch on its primary competitors in market in order to be
able to compete with them.

 The company should use new attractive system of word of mouth advertisement to
keep alive the general awareness in the whole market as a whole.

 The company should be always in a position to receive continuous feedback and

suggestions from its customers/ consumers as well as from the market and try to solve
it without any delay to establish its own good credibility.

 A strong watch should be kept on distributors so that the goodwill of the BRAND
doesn’t get affected.
 REFERENCES

BOOKS:

 Marketing Management – Kotler Philip.

 Research Methodology – Kothari.

WEBSITES:

 www.thecoca-colacompany.com
 www.news.bbc.co.uk
 www.india-server.com
 www.magindia.com
 www.coca-colaindia.com
 www.wikiinvest.com
 www.open2.net
 www.wikipedia.com

OTHERS

 Annual report of Coca-Cola 2008.

 Annual report of Coca-Cola 2009.
 The Economic Time
 The Hindu
 The HindustanTime
 The Times of India