TERM PROJECT MARKETING STRATEGY

Marketing Strategies Of

Coca Cola

PRESENETED TO: MR. SUFIAN AHMAD PRESENTED BY: Sami Ullah Khan 27s-640

TABLE OF CONTENTS CONTENTS 1. 2. 3. 4. Acknowledgement. Mission statement Introduction. Coca Cola. a. Coca Cola International. b. History. 5. Management. 6. Market share. 7. Financial report. 8. Dividends and Cash Plan. 9. Products. 10. Strategic planning. 11. Bottlers owned by Coca cola 12. Coca Cola Pakistan. 13. Major Competitors a. Pepsi b. History. c. Financial assets. Market share. Financial report. Products. Methodology 14. Some basic information regarding marketing of coke a. Target market: b. Major segments: c. Factors effecting sales: d. Major competitors: e. Strategies of quality: f. Threats from competitors: g. Targets that would like to attain: h. Expanding target market i. Threats and opportunities for price: j. Strategies of getting goals i.e. high profits: k. Marketing strategy: l. Expectations for the coming year: m. How coke determine the yearly budget: 15. Marketing strategies 16. Pest analysis

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DEDICATION
This report is dedicated to my beloved parents, Who educated me and enabled me to reach at this level.

ACKNOWLEDGEMENT

We think if any of us honestly reflects on who we are, how we got here, what we think we might do well, and so forth, we discover a debt to others that spans written history. The work of some unknown person makes our lives easier everyday. We believe it's appropriate to acknowledge all of these unknown persons; but it is also necessary to acknowledge those people we know have directly shaped our lives and our work. First of all we would like to thank our teacher Mr. Muhammad Shafique for their guidance through out the semester. Then we would like to thank our friend and brother Mr. Zeeshan Anjum for providing us the information that was required for completion of this project.

The Mission Statement of the Coca Cola Company

Our mission statement is to maximize shareowner value over time. In order to achieve this mission, we must create value for all the constraints we serve, including our consumers, our customers, our bottlers, and our communities. The Coca Cola Company creates value by executing comprehensive business strategy guided by six key beliefs: 1. Consumer demand drives everything we do. 2. Brand Coca Cola is the core of our business 3. We will serve consumers a broad selection of the nonalcoholic ready-todrink beverages they want to drink through out the day. 4. We will be the best marketers in the world. 5. We will think and act locally. 6. We will lead as a model corporate citizen. The ultimate objectives of our business strategy are to increase volume, expand our share of worldwide nonalcoholic ready to drink beverages sales, maximize our longterm cash flows, and create economic value added by improving economic profit. The Coca Cola system has more than 16 million customers around the world that sells or serves our products directly to consumers. We keenly focus on enhancing value for these customers and helping them grow their beverage businesses. We strive to understand each customers business and needs, whether that customer is a sophisticated retailer in a developed market a kiosk owner in an emerging market. There are nearly 6 million people in the world who are potential consumers of our companys product. Ultimately, our success in achieving our mission depends on our ability to satisfy more of their beverage consumption demands and our ability to add value for customers. We achieve this when we place the right products in the right markets at the right time.

COCA COLA INTERNATIONAL

HISTORY:
Coca-Cola Enterprises, established in 1986, is a young company by the standards of the Coca-Cola system. Yet each of its franchises has a strong heritage in the traditions of Coca-Cola that is the foundation for this Company. The Coca-Cola Company traces its beginning to 1886, when an Atlanta pharmacist, Dr. John Pemberton , began to produce Coca-Cola syrup for sale in fountain drinks. However the bottling business began in 1899 when two Chattanooga businessmen, Benjamin F. Thomas and Joseph B. Whitehead , secured the exclusive rights to bottle and sell Coca-Cola for most of the United States from The Coca-Cola Company. The Coca-Cola bottling system continued to operate as independent, local businesses until the early 1980s when bottling franchises began to consolidate. In 1986, The Coca-Cola Company merged some of its company-owned operations with two large ownership groups that were for sale, the John T. Lupton franchises and BCI Holding Corporation's bottling holdings, to form Coca-Cola Enterprises Inc. The Company offered its stock to the public on November 21, 1986, at a split-adjusted price of $5.50 a share. On an annual basis, total unit case sales were 880,000 in 1986. In December 1991, a merger between Coca-Cola Enterprises and the Johnston Coca-Cola Bottling Group, Inc. (Johnston) created a larger, stronger Company, again helping accelerate bottler consolidation. As part of the merger, the senior management team of Johnston assumed responsibility for managing the Company, and began a dramatic, successful restructuring in 1992.Unit case sales had climbed to 1.4 billion, and total revenues were $5 billion

MANAGEMENT:
The hierarchy of Coca Cola Company is as follows.

Chairman Board of governors

Vice Chairman and chief operating officer

Executive Vice Presidents

Senior Vice Presidents

Vice Presidents

MARKET SHARE: SHARE

Being the biggest company in the soft drink industry, Coca Cola enjoys the largest market share. This company controls about 59% of the world market.

GLOBAL MARKET SHARE:

The following table can show the worldwide operating segments. (Table) Unit case growth 10 year compound annual growth
Compan y Industry

5-year compound annual growth

Compan y Industry

2001 annual growth

Compan y Industry

Nonalcoholic drink 2002

Company share

All commercial Beverages 2002

Compan y share Compan y per capita Income

6%

5%

5%

5%

4%

4%

18%

9%

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This shows that the market of the company is geographically vast and it is controlling it with great success. In 2002, the company grew their carbonated soft-drink business by nearly 250 million unit cases and generated record volumes. Because carbonated soft drinks are the largest growth segment within the nonalcoholic ready-to-drink beverage category measured by volume, that is why they are focusing more on this and they are continually increasing the pace because they know that accelerating this pace is crucial to their future success. Thus they are increasing their market day by day. The operation income earned by Coca Cola Company can be illustrated by the following pie chart. (Figure)

This strategy has worked a lot and it has helped them to become the Worlds leading Soft Drink Company. The global unit sale of the Coca Cola Company is increasing from the last ten years. The data of the global unit sale of the Coca Cola Company can be represented by following chart. (Figure)
12 10 8 6 4 2 0 1971 1981 1991 2002 unit sale in billions

So there is positive growth in the market of the Coca Cola Company. There is a worldwide volume increase by 4% with strong international growth of 5%. This is only due to the innovative marketing programmers, which has deepened the relationship of the customers and Coca Cola. The financial health and success of their bottling partners is a critical component of The Coca-Cola Company's ability to build and deliver leading brands. 10

In 2002, the company had worked with their bottlers to turn good intentions into reality by improving the system economics. The results in 2002 reflect this steadily improving and mutually constructive relationship between the Company and their bottling partners. The main reason behind this relationship is to continue realizing shared opportunities for growth, with closer coordination of operations including customer relationships, logistics and production.

MARKET SHARE BY AREA:

Coca Cola is the world-renowned soft drink and the company is currently operating through out the world. The world wide total is about 17.8 billion. The operation review according to the segments is as follows. Operation Review (2002 worldwide unit case volume by operating segment) NORTH AMERICA 30% LATIN AMERICA 25% EUROPE & MIDDLE EAST 22% ASIA 17% AFRICA 6%

NORTH AMERICA LATIN AMERICA EUROPE & MIDDLE EAST ASIA AFRICA

So the volume is least in the Africa and most in the North America. The data about the market share of this company area wise is given in the following table. The above table shows the geographical earning of the Coca Cola Company and from this data; we can find out that the customers of Coca Cola are increasing which is shown by the companys per capita income. Unit case equals 24 eight-ounce servings. The column, which shows the non-alcoholic beverages consist of commercially, sold beverages, as estimated by the Company based on available industry sources. The country column is derived from 11

The Company's unit case volume while the industry column includes nonalcoholic ready-todrink beverages only, as estimated by the Company based on available industry sources. (Table) Country Unit case growth Nonalcoholi c Drinks 2002
Compan y share

All commercial Beverages

10 year 5-year compound compound annual annual growth growth

Compan y Industry Compan y Industry

2002 annual growth

Compan y Industry

2002
Compan y share Company per capita Income

North America United States Latin America Argentin a Brazil Chile Mexico Europe & Middle East Eurasia France German y Great Britain Italy Middle East Spain Asia Africa

4 4 6 7 5 9 7 6

5 5 7 4 5 6 10 3

3 3 6 6 3 5 8 5

3 3 6 2 6 3 9 3

2 2 3 7 3 (2) 2 2

2 2 4 2 5 3 5 4

22 23 24 20 23 56 22 12

15 16 15 10 13 23 18 6

398 419 205 236 144 336 462 72

17 8 1 8 1 12 6 7 7

8 3 2 2 3 12 4 6 6

6 9 (1) 11 4 7 8 6 8

5 3 1 2 3 5 5 7 3

(14) 7 (6) 8 2 4 4 10 10

1 3 1 3 2 8 4 7 6

14 9 14 17 9 8 17 14 34

5 5 7 6 6 3 12 5 11

39 110 193 193 104 17 264 23 34

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In Asian population, which is the satisfied customer of Coca Cola, is approximately 3.2 billion and the average consumer enjoys close to two servings of our products each month. Through an intense focus on Coca-Cola, innovation and new beverages, the company has achieved volume growth of 10 percent in 2002. With developing economies and populations, this region has strong long-term potential, and the company is building an exciting family of beverage brands in addition to expanding the popularity of our core brands, led by Coca-Cola. In China, for example, sales of Coca-Cola increased 6 percent. The total unit case sale of Coca Cola in Asia can be shown by the following pie chart. (Figure)

So the company is emphasizing more in this area and is trying to develop a strategy, which can increase the growth of the consumption of Coca Cola by the people of Asia. Among the countries of Asia, Japan has the highest percentage, which is about 29%. Among others, Pakistan, India and Bangladesh are those countries where the average consumption is increasing day by day.

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FINANCIAL REPORT:
This company is financially very strong. It is due to the strong finances, the company is still surviving the ups and down of the business world. The financial report of Coca Cola Company of the year 2001 and 2000 along with the percentage change is as follows. (Table) Year Ended December 31, (In millions except per share data, ratios and growth rates) 2002 Net operating revenues Operating income Net income Net income per share (basic) Net income per share (diluted) Net cash provided by operating activities Business reinvestment Dividends paid Share repurchase activity Free cash flow Return on capital Return on common equity Unit case sales (in billions) International operations North America operations Worldwide 20,092 5,352 3,969 1.601 1.601 4,110 (963) (1,791) (277) 3,147 26.6% 38.5% 12.5 5.3 17.8 2001 19,889 3,691 2,177 0.882 0.882 3,585 (779) (1,685) (133) 2,806 16.2% 23.1% 11.9 5.2 17.1 Percentage change 1% 45% 82% 82% 82% 15% 24% 6% 108% 12% 5% 2% 4%

2002 basic and diluted net income per share includes a non-cash gain of $.02 per share after taxes, which was recognized on the issuance of stock by Coca-Cola Enterprises Inc., one of the equity investors of this company. 2002 basic and diluted net income per share includes the following charges: $.24 per share after income taxes related to an organizational Realignment. $.19 per share after income taxes related to the Company's portion of charges recorded by the investors of the company. $.16 per share after income taxes related to the impairment of certain bottling, manufacturing and intangible assets. $.05 per share after income taxes related to the settlement terms of a discrimination lawsuit. $.01 per share after income taxes related to incremental marketing expenses in Central Europe. 14

These charges are partially offset by a gain of $.05 per share after income taxes related to the merger of Coca-Cola Beverages plc and Hellenic Bottling Company S.A. and $.04 per share after income taxes related to benefits from a tax rate reduction in Germany and from favorable tax planning strategies.

DIVIDEND AND CASH INVESTMENT PLAN:

The Dividend and Cash Investment Plan permits shareowners of record to reinvest dividends from Company stock in shares of The Coca-Cola Company. The Plan provides a convenient, economical and systematic method of acquiring additional shares of our common stock. All shareowners of record are eligible to participate. Shareowners also may purchase Company stock through voluntary cash investments of up to $125,000 per year. At year-end, 76 percent of the Company's shareowners of record were participants in the Plan. In 2002, shareowners invested $36 million in dividends and $31 million in cash in the Plan.

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COMPANY STATISTICS:
The statistics of this company is impressive. Since it is operating through out the world that is why the number of employees and the bottling equipments is highest among the other bottling companies. There is a constant increase in every aspect when we compare the statistics of 2001 and the statistics of 2002. This is because; Coca Cola Company is increasing its volume day by day. The expansion of this company, which shows the success of Coca Cola brands, results in the percentage change in the statistics of the two years. The statistics is as follows. (Table) 2002 Equivalent cases Bottle and cans Fountain Employees Vehicles Cold drink equipments Facilities Production only Distribution Combination Total Percent of North America population coverage Number of States of Operation Bottle and can equivalent case package distribution Cans Non-refillable bottles Refillable bottles Capital structure Net debt to total capital ratio EBITDA interest coverage Weighted average cost of debt Key Statistics Constant territory bottle and can volume growth Bottle and can net revenues per case change Bottle and can cost of sales per physical case change Reported EBITDA (in billions) Reported EBITDA change Capital expenditures( in billions) %-age of net operating revenues Coverage of North American Can/bottle volume 4.2 billion 87% 13% 72,000 54,000 2.4 million 25 385 53 463 80% 46 44% 52% 4% 63% 3 6.3% 3% Flat 1 $1.95 (18)% $0.97 6% 83% 2001 3.8 billion 87% 13% 67,000 52,000 2.3 million 25 361 50 436 72% 46 45% 51% 4% 59% 3 6.8% % 2% % $2.39 9% $1.18 8% 74%

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EBITDA is the Earnings before interest, taxes, depreciation, and amortization, and other non-operating items. Net Debt is the Long-term debt plus current portion of long-term debt less cash and marketable securities. Equivalent Case or Unit Case is the physical case and fountain gallons converted to a standard unit of measure defined as 24 eight-ounce servings or 192 ounces per equivalent case sold by Coca-Cola Enterprises.

PRODUCTS:
There are different brands of the Coca Cola Company, which are currently in use through out the world. This company not only deals in the carbonated drinks but also other drinks. While launching its product, the marketing team considers the culture of the country.

Major brands of coca cola

Coke Sprite Fanta Diet coke Coke classic

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The over all volume of this company is as follows.

(Figure)

The commitment of the company is to devote resources to water only in markets where it expects profitable growth. This strategy has paid dividends. The company has successfully applied its approach to brands in several key markets, including Ciel in Mexico, Mori No Mizudayori in Japan, Bonaqua in Russia and Kinley in India. Backed by a strong network of bottling partners through out the United States, Dasani became the nation's fastest-growing water brand. In Eurasia, the entire Turkuaz brand team worked together to launch Turkey's first purified water brand. This year, Coca-Cola Company also successfully energized a major piece of its beverage strategywater. By the end of 2001, its bottled water volume exceeded 570 million unit cases, making it the second biggest contributor to the growth of the company after carbonated soft drinks. Three of the water brands, Dasani, Ciel and Bonaqua each achieved sales of over 100 million unit cases for the year. In 2001and 2002, the company has also made good progress in coffees and teas. Beverage Partners Worldwide, the renewed and strengthened marketing partnership with Nestl S.A., began operations in 2001. This partnership combines Nestl's knowledge in life science, research and development with the expertise of Coca Cola Company in brand building and distribution. At the same time, the company grew Georgia coffee in Japan by 3 percent through awardwinning marketing in a category that was flat for the year. Also in Japanwhere The CocaCola Company is the leader in the total tea category, the second-largest category in the non-alcoholic ready-to-drink segmentit launched Marocha Green Tea. With sales of 46 million unit cases for the year, Marocha Green Tea is the fastest-growing product in the fastest-growing category: green tea. The popularity of Marocha is also recognized by the industry with a leading trade journal naming Marocha the most popular new food and beverage product of the year. 18

Know the most recognized word on the planet after OK!

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Among the soft drinks Fanta and Sprite become successful along with the major brand Coca Cola and Diet Coke. In key markets, the company has created new packaging sizes to satisfy consumer demands. Increasingly, Mexican families have lunch together at home. The average Mexican household drinks two-and-a-half liters or more of soft drinks during that break, while a twoliter bottle was the largest available package. So the company introduced a convenient 2- liter bottle to select regions, contributing to the sale of nearly 1.5 billion unit cases of CocaCola in Mexico this year. This larger bottle will complete its nationwide rollout in 2002. In China, Coca-Cola is an integral part of holiday celebrations and the family get-togethers that accompany such events. Through an intense focus on Coca-Cola, innovation and new beverages, it has achieved volume growth of 10 percent in 2001. In China, sales of CocaCola increased by 6 percent. In the United States, recognizing that consumers often enjoy their diet Coke with a slice of lemon, the company "bottled" the concept. The resultdiet Coke with lemoncontributed to volume growth of 4 percent for the number-one diet. Soft drink in North America: diet Coke. The company increased its two largest bottle sizes during the 2001 holidays, and festival packaging helped drive a 6 percent volume increase for Coca-Cola. The packaging innovations do not just involve resizing. The company has also responded to consumers' changing fashion styles with new bottles. With brands such as Minute Maid, Hi-C, Simply Orange and Disney juices and juice drinks in the United States, Qoo in Asia, Kapo in Latin America and Bibo in Africa. This year, the company re-launched its global sports-drink business, investing in new products, packaging, positioning and marketing. The results speak for themselves: its global sports drinks, led by Powerade and Aquarius, grew by 13 percent in 2002, nearly double the growth rate of the worldwide sports-drink category. Revitalized in the United States, the company introduced Powerade in nearly every major Western European market, including Great Britain, Germany and Spain, as well as in Mexico and Latin America. The company launched 27 products in 2001. The commitment of the company to packaging innovation also resulted in new initiatives for our fountain business, a channel through which many consumers enjoy Coca-Cola. In the United States, the company developed Fountain, a total beverage dispensing system that is more flexible and more reliable. Two years of research resulted in a dispensing system that provides exceptional beverage quality, easy to upgrade technology, brand and graphic customization and improved reliability.

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STRATEGIC PLANNING
In the year 2002, the company had a great success, as the strategy worked which resulted in making Coca Cola Company the worlds leading company. In 2001, company accomplished the crust of its strategy as Worldwide volume increased by 4 percent with strong international growth of 5 percent and clear signs that our North American business is growing solidly and predictable. Earnings per share grew by 82 percent, as we delivered on our commitment to create volume growth while aggressively Return on common equity grew from 23 percent in 2000 to 38 percent this year. Return on capital increased from 16 percent in 2000 to 27 percent in 2001. The company has generated free cash flow of $3.1 billion, up from $2.8 billion in 2000, a clear indication of its underlying financial strength. The strategy for the future of the company is very straightforward. The marketing strategy for the year 2002 is as follows, Accelerate carbonated soft-drink growth, led by Coca-Cola. Selectively broaden the family of beverage brands to drive profitable growth. Grow system profitability and capability together with our bottling partners. Serve customers with creativity and consistency to generate growth across all channels. Direct investments to highest potential areas across markets. Drive efficiency and cost-effectiveness everywhere.

MAJOR COMPETITOR
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PEPSI INTERNATIONAL
HISTORY
PepsiCo is a world leader in convenient foods and beverages, with revenues of about $27 billion and over 143,000 employees. The company consists of the snack businesses of Frito-Lay North America and Frito-Lay International; the beverage businesses of PepsiCola North America, Gatorade/Tropicana North America and PepsiCo Beverages International; and Quaker Foods North America, manufacturer and marketer of ready-to-eat cereals and other food products. PepsiCo brands are available in nearly 200 countries and territories. Many of PepsiCo's brand names are over 100-years-old, but the corporation is relatively young. PepsiCo was founded in 1965 through the merger of Pepsi-Cola and Frito-Lay. Tropicana was acquired in 1998 and PepsiCo merged with The Quaker Oats Company, including Gatorade, in 2001.would entertain the listener with the latest musical selections rendered by violin or piano or both. The new name, Pepsi Cola, is derived from the two of the principle ingredients, Pepsin and Kola Nuts. It was first used on the August 28. At that time, Bradhams advertising praises his drink as Exhilarating, invigorating, aids digestion.

1990-2002
The advertisement of the Pepsi changes to, You got the right one baby, Uh-Huh!.With the extensive usage of the stars in the adds, the popularity of Pepsi increase. In 1992 PepsiCola formed a partnership with Thomas J. Lipton Co. Today Lipton is the biggest selling ready-to-drink tea brand in the United States. Outside the United States, Pepsi-Cola Company's soft drink operations include the business of Seven-Up International. PepsiCola beverages are available in more than 190 countries and territories. In Asia, they selected Lahore to make their regional office. This was done in 1970. This regional office is monitoring all the operations carried out in South West Asia. As in Pakistan, they only entered beverage industry. They have eleven bottlers covering whole Pakistan. The plant operating here is Riaz Bottlers (Pvt) LTD. This plant was established at Lahore in 1974. The total capacity of the plant is 30,000 cases per day. They have four filling lines in the plant operating on the three shift bases. Each shift is of eight hours. They have permanent work force of 750 people and they employee approximately 1000 people more on temporary basis during summer season.

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Pepsis Products
Pepsi Teem Mirinda Pepsi Max Pepsi Lemon Pepsi Blue Mountain Dew 7up

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COCA COLA PAKISTAN

The Coca-Cola Company began operating in Pakistan in 1953. Coca-Cola, Fanta and Sprite are the brands in Pakistan. The Coca-Cola System in Pakistan operates through eight bottlers, four of which are majority-owned by Coca-Cola Beverages Pakistan Limited (CCBPL). The CCBPL plants are in Karachi, Hyderabad, Sialkot, Gujranwala, Faisalabad, Rahimyar Khan, Multan and Lahore. The remaining two plants, independently owned, are in Rawalpindi and Peshawar. The Coca-Cola System in Pakistan serves 70,000 customers/retail outlets. The Coca-Cola System in Pakistan employs 1,800 people. During the last two years, The Coca-Cola System in Pakistan has invested over $130 million (U.S.)

49 years of refreshment in Pakistan

Coca-Cola introduced in Pakistan 1953 Fanta introduced in Pakistan Sprite was introduced Diet Coke & Fanta Lemon 1965 1972 2001

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PROMISE OF COKE
The basic proposition of our business is simple, solid and timeless. When we bring refreshment, value, joy and fun to our stakeholders, then we successfully nurture and protect our brands, particularly Coca-Cola. That is the key to fulfilling our ultimate obligation to provide consistently attractive returns to the owners of our business.

TARGET MARKET
Cokes commercials basically based on young generations, So, the young generation is the target market of Coke because they want to represent Coke with the youth and energy but they also consider about the old people they take then as a co-target market.

MAJOR SEGMENTS
Major segments are basically those people who take this drink daily and those areas where the demands is higher then the other areas. There are so many people who take this drink daily and those people who take weekly and those who take less often are always there as well. So, their basic segments are those people who take this drink regularly.

FACTORS EFFECTING SALES

There are so many factors, which affects the sale of coke. Here we are discussing three major factors which effects coke. Per capita income Competitors Weather

Per Capita Income

First we will discuss about Per capita income. This is major factor that affects the sale of this soft drink. Because which every passing year budgets are becoming very strict and tight in order to purchase things. So the disposable incomes of the people are coming down. They spend heavily on rents, utilities, and education and basic necessities and after that when they get extra money they think about this soft drink .So the decreasing per capita income effects badly in selling and production of this soft drink. 25

And to get through with this difficulty there is need to increase the level of per capita income of Pakistan because it is much lesser than the rest of the countries.

Competitors
Cokes major competitor is PEPSI and there is no hesitation to say this because every one knows that and all the other cold drinks and water, coffee, tea are the competitors.

Weather
Weather is the third major factor in effecting the Cokes selling. This is underdeveloped market so the cokes consumption in summers is 60% and in winters is 40%.

MAJOR CUSTOMERS NEED

First of all the majority dont care that what they are going to have. In other words, they dont care before drinking that whether it is Pepsi or coke. They dont actually differentiate between these two brands in order to their tastes. Consumers basically drink what they get. They believe on WHAT COLD THEY SOLD Consumers availability in brands is basically works like: Push availability Pull consumers demand. For this reason Coca-Cola have provided their coolers and freezers in the market. They have maximum number of coolers and freezers in the market. They provide this infrastructure free of cost just to provide child coke to their customer, which they want to be purchase. Their salesman and mechanics regularly visit all the shops where coke has its infrastructure to check that either it is in proper condition or not, if not then they immediately change or repair it.

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MAJOR COMPETITORS
Consumers firstly decide that they are going to have a soft drink. Then they compete brands with each other. Like they compete Coke with Pepsi and Sprite with 7up and team .So the major competitor of Coke is Pepsi. When they motivate to any other brand or on Coke its in instinct basically that based on messages derive certain feelings. But Coca Cola thinks in a different way, they believe that RC Cola, new coming AMRAT Cola, and all juices, even they take water and tea as their competitors.

STRATEGIES OF QUALITY
After Micro and macro analysis Brand coke is primarily role 1. Enhance competition moments 2. When people watch cricket 3. Through commercialization 4. Fun time Though these strategies there could be better understanding and better connection with the public. These are the key consumption.

THREATS FROM COMPETITORS

Threats are well planned. Price is the major threat. When price goes certain beyond the exact price whether come down or go higher its effects the consumption of soft drink. Because when the price go higher people go for the substitute of coke i.e. Pepsi. And when price goes down they think that there is must be some thing wrong in it. In short it all depends on customers perception.

TARGETS THAT WOULD LIKE TO ATTAIN

Every organization runs on the bases of profit maximization so Coke is also looking for a high profit margin. There are three major ways of making money Over night profit Windfall profit Ethical and un-ethical ways

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Over Night Profits

They could be over night profit that is for the number 1 brand for the year. This could be got my increasing sales volume

Windfall Profit
Can be windfall profit. They are the extras profit. When the consumption the consumption is on boom. So, there is different kind of profits.

Ethical And Unethical Ways

Profit can also get through ethical and unethical ways. They believe on this quote Every thing is fare in love and war. Some profits stays for some time like over night profits and some just come and go like wind fall profits. And they can also get profit through different approaches.

EXPANDING TARGET MARKET

In last 2 years Coke has come back in aggressive manner. Consumer has choice Attractive brand name Brand differentiating

Consumer Has Got Choice

Now the consumer has got choice. Because now they know the name of another big brand, though coke is the 2nd best name but it can get a better position after some time

Attractive Brand Name

Now the consumers know the Name of Coke, because Coke is the name, which is the most popular after the word ok. So people can better differentiate brands with each other.

Brand Differentiation
Now different companies have got different brand names. So, people can distinguish between brands. Two major brands coke and Pepsi also have brand names. 28

Coca Colas Brand

Coca cola is US brand. Because they believe in the togetherness, being people together and friends are being together. Coca Cola strongly believes that Pakistani temperament is US not ME

Pepsis Brand
Pepsis brand is basically is basically ME branded. They use the temperament of ME. In contrast to Coke they believe on individual struggle.

THREATS AND OPPORTUNITIES FOR PRICE

Opportunities
If Coke is considered a luxury product. Then there is the tax rate system 15% - sales tax 20% - excise duty 27% - goes to government 03% - In making Budget After paying all these taxes coke has to pay electricity charges. We have to spend on distributions. After paying all these expenses Cokes margin squeezed and consumers have to pay for increasing tariffs. These are the opportunities through which we can increase the price and can get profits.

Threats
There are much more threats in increasing prices. Because same problem of substitute. If Coke increase the price lets say 1 rupee. Then people definitely wont go for coke. They have the best substitute of Coke that is Pepsi. So these are the threats in increasing prices. Coke will lose the margin of its profit and can face loss.

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STRATEGIES OF GETTING GOALS I.E. HIGH PROFITS

To increase the price is the least thing, which Coke can adopt. There are so many ways through which Coke can increase the profits. Some major ways are as follows. Volume can be increased Interest level of consumers To take part in energetic festivals

How to increase the volume of consumers?

Coke can increase the volume by expanding the industry of coke. Through advertisements, offering different interesting things to attract people towards this product.

How to increase the interest level of consumers?

Coke is increasing the interest level of consumers by offering different flavors. For example Coke is increasing the number of flavors in Fanta, this is one of the product of coke. Through offering different flavors Coke can increase the Level of consumers and through this profits can be gained.

How to take part in energetic festivals?

Coke is already taking part in the festival like Basant since last 3 years. Coke offers different attractive things in their festival and through this Coke gained high profit and consumption of coke increased on these occasions. And this year in this year 2002 people were anxiously waiting that what interesting thing coke is going to offer.

MARKETING STRATEGY
Our local marketing strategy enables Coke to listen to all the voices around the world asking for beverages that span the entire spectrum of tastes and occasions. What people want in a beverage is a reflection of who they are, where they live, how they work and play, and how they relax and recharge. Whether you're a student in the United States enjoying a refreshing Coca-Cola, a woman in Italy taking a tea break, a child in Peru asking for a juice drink, or a couple in Korea buying bottled water after a run together, we're there for you. We are determined not only to make great drinks, but also to contribute to communities around the world through our commitments to education, health, wellness, and diversity. 30

Coke strives to be a good neighbor, consistently shaping our business decisions to improve the quality of life in the communities in which we do business. It's a special thing to have billions of friends around the world, and we never forget it.

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MARKET POSITIONING
Product Range
The total range of Coca Cola company in Pakistan includes: Coke. Sprite. Fanta. Diet Coke.

And company offers their products in different bottle sizes these includes: SSRB LRB NRB PET 1.5 CANS (standers size returnable bottle) (litter returnable bottle) (no return bottle) or disposable bottle (1.5 litter plastic bottle) (tin pack 330 ml)

Packing
Coca cola products are available in different packing 24 regular bottle shell 6 bottle pack for 1.5 pets 12 bottles in a pack for disposable bottle 24 cans in one pack.

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PRICE STRATEGY
Trade Promotion
Coca cola company gives incentives to middle men or retailers in way a that they offer them free samples and free empty bottles, by this these retailers and middle man push their product in the market. And thats why coca cola seen more in the market. And they have a good sale in the market because according to the expert which product seen more in the market that sells more. Seen as sold They do agreements with a shop keepers and stores to exclusive sale in that stores. These stores are called as KEY accounts in their local language. And coke also invest heavy budget on these stores and offers them free samples and free bottles and some time cash incentives.

Different Price In Different Seasons

Some times Coca Cola Company change their product prices according to the season. Summer is supposed to be a good season for beverage industry in Pakistan. So in winter they reduce their prices to maintain their sales and profit. But normally they reduce the prices of their pet bottles or 1 litter glass bottle.

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PROMOTION STRATEGIES
Getting shelves
They gets or purchase shelves in big departmental stores and display their products in that shelves in that style which show their product more clear and more attractive for the consumers.

Eye Catching Position

Salesman of the coca cola company positions their freezers and their products in eyecatching positions. Normally they keep their freezers near the entrance of the stores.

Sale Promotion
Company also do sponsorships with different college and schools cafes and sponsors their sports events and other extra curriculum activities for getting market share.

UTC Scheme
UTC mean under the crown scheme, coca cola often do this type of scheme and they offer very handy prizes in it. Like once they offer bicycles, caps, tv sets, cash prizes etc. This scheme is very much popular among children.

DISTRIBUTION CHANNELS
Coca Cola Company makes two types of selling Direct selling Indirect selling

Direct Selling
In direct selling they supply their products in shops by using their own transports. They have almost 450 vehicles to supply their bottles. In this type of selling company have more profit margin.

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Indirect Selling
They have their whole sellers and agencies to cover all area. Because it is very difficult for them to cover all area of Pakistan by their own so they have so many whole sellers and agencies to assure their customers for availability of coca cola products.

FACILITATING THE PRODUCT BY INFRASTRUCTURE

For providing their product in good manner company has provided infrastructure these includes: Vizi cooler Freezers Display racks Free empty bottles and shells for bottles

ADVERTISEMENT
Coca cola company use different mediums Print media Pos material Tv commercial Billboards and holdings

Print Media
They often use print media for advertisement. They have a separate department for print media.

POS Material
Pos material mean point of sale material this includes: posters and stickers display in the stores and in different areas.

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TV Commercials
As everybody know that TV is a most common entertaining medium so TV commercials is one of the most attractive way of doing advertisement. So Coca Cola Company does regular TV commercials on different channels.

Billboards And Holdings

Coca cola is very much conscious about their billboards and holdings. They have so many sites in different locations for their billboards.

EXPECTATIONS FOR THE COMING YEAR

Every thing starts from the attitude of consumers behavior. And the basic key to attract the consumers is to throw the money away. And positive feeling felling with the brand, which they used to have Coke wants to advertise their products heavily in the coming year. And it will take the 10% of their profits. And when we take it as a global level it is $ I billion. Coming year is the challenging year for the industry of Coke. They have to take lots of decisions that how to increase the production and where they have to spend money. For gaining success in coming year they have to have some important things like: 1. Loyal consumers are important for companys success. 2. Workers should be the brand centric not the promotion centric. 3. They should know how much to for the brand activities. 4. They should also know that how much to do with the promotion activities for brand.

HOW COKE DETERMINE THE YEARLY BUDGET

Coke determines its yearly budget by the Sales volume Profitability Target volume

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Sales Volume
Coke determines its yearly budget through the sales volume. They first concentrate on the thing is what is the condition of their sales? if the condition is good of their sales then they definitely increase their production and sales volume. Otherwise they concentrate on their old strategies.

Profitability:
The second thing through which they determines budget is the profit .if they r getting profits with the high margin, then they definitely want to increase their profits in the next coming year. Every organization runs on the basis of getting high profits. No organization wants to face Loss in their business. To get profit is the first priority of the Coke.

Target Volume:
To run the business every industry has some targets, which they want to achieve in a specific time period. If industry achieves those goals in that period then for the coming year it increases the volume of the target. So Coke Follow the same thing it has also some goals and targets to achieve in the given time period. When they succeed to achieve that target then they increase their target volume in the next year.

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SALES PROMOTION ACTIVITIES

Coca-Cola Cricket
Cricket the most sought after; watched & played game in Pakistan .the game of cricket has been owned by various brands in the industry for the promotion of their products over a period of time. It has ranged from tobacco to lubricants to communication companies to banks to airlines & lately to the beverage industry. The competition has become tougher & tougher as the time has progressed. Coca-Cola signed a sponsorship agreement with eight of Pakistans National cricket players. Coca-Cola realizing the fact that cricket is a very strong element by which it can reach it consumers & masses invested in the opportunity and launched a massive campaign on mass media showing all these cricket stars endorsing & complimenting CocaCola brand. The Coca-Cola Company developed three TV commercials & four testimonial ads with the player & ran them on the national net work during various cricket matches. These bold steps taken by the Coca-Cola marketing unit acclaimed them many acknowledgements across the board. This campaign helped Coca-Cola to establish its association with the game & the player.

Coca-Cola Concerts
Abrar-ul-haqs distinct style, lyrics & songs have made him an instant hit among the masses in Pakistan. His enormous popularity in the country & abroad is supported by Coca-Colas commitment towards providing healthy & fun-filled entertainment for the youth of Pakistan. Coca-Cola brought Abrar to his fans through holding concerts & featuring Abrar in a much-appreciated TVC & MMT featured throughout the country. The TVC campaign focused on the hectic lifestyle of a pop star who found respite & relief through Coca-Cola in short moments that he had to himself during a concert. Coca-Colas brand positioning of providing deep down refreshment for the body, soul & mind were captured accurately in the TVC & depicted aptly how the drink completes the moment for Abrar.

Coca-Cola Food Mela

With a splash of food, fun & prizes to be won, the Coca-Cola food mela treated the people of Karachi, to a festive food festival comprising of 50 restaurants, spread out all over the bustling citys map. The promotion saw the avid families & friends enjoying the delicacies at the restaurants; all resiliently upholding the Coca-Cola identity.

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Coca-Cola Basant Festival

In February the month of basant the parks & horticulture authority in Lahore nominated Coca-Cola the official sponsor of the basant festival .Coca-Cola added to the carnival atmosphere by making the festival free to enter & decorating all main roads in Lahore with illuminated kites. Coca-Cola also hosted a concert of pop idol Abrar-ul-haq, had childrens parade & held the Coca-Cola kite flying championship during the basant festival. Now where there is basant there is Coca-Cola, it has been impossible to envisage basant without Coca-Cola. Coca-Cola give the more refreshing flavor to the colors of basant by adding more life to the festival, giving the consumer a unique experience which they had never tasted before.

Coca-Cola GO-RED
Quenching the thirst of motorist, pedestrians & passerbys during Lahores hottest summer season, Coca-Colas GO-RED teams went out into the cities main quadrants to serve & refresh on the spot with ice-cold Coca-Colas at discounted prices backed by a heavy FM announcement campaign the GO-RED stall, served well to promote the Coca-Cola industry.

Coca-Cola Party in a Park

In June 2000, Coca-Cola created an experiential musical evening in Lahore, where Junoon performed. This program was recorded and one-hour program shown in the national TV for free.10 million households saw Coca-Cola Party in a Park while 10 thousand people attended the event.

Coca-Cola Shopping Festival

Coca-Cola hosted The Coca-Cola Shopping Festival Lahores first shopping festival, a resounding success with tempting discounts, live music, great prizes & fire works. Liberty marketing Gulberg was a hive of activity during the weeklong shopping extravaganza. The in augural event proved so popular that it is now set to become an annual fixture.

Coca-Cola Pet Promotion

In 1996, Coca-Cola launched 1.5 liter Pet contour bottle for the first time in Pakistan. Targeting house wives & family home, Coca-Colas 1.5 liter Pet bottle, took the limelight & gained momentum with a campaign promoting the unique packaging and its numerous consumer benefits .A treat for the family, Coca-Colas PET was offered through a price-off promotion that said.Go out & get some

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Coca-Cola Ramzan Campaign

A very special occasion for the people of Pakistan Ramzan saw another very special CocaColas promotion, marketing the popular 1.5 liter PET bottle & the 1 liter bottle with a super price-off promotion. The emphasis on enjoying Coca-Cola at Iftar with friends & family.

Coca-Cola Wonder of the World Promotion

In July 2000, Coca-Cola set the stage of the grand UTC promotion. Coca-Cola went ahead with the idea of giving consumer chances to win fabulous, magical dream vacation to numerous wonder destination throughout the world on every purchase of a 250 ml RGB bottle of Coca-Cola, Sprite, & Fanta.The promotion gave consumers a chance to win free drink, a trip to PARIS, HOLLYWOOD, NEWYORK, SINGAPORE & CAIRO along with airfare & four nights free stay in these dream lands. The promotion saw avid consumer collecting Coca-Cola Crown caps & sparked a keen response from the public , rendering an outstanding testimonial campaign in the second phase, highlighting the winners over whelmed in the magical delight of their favorite beverage Coca-Cola.

Coca-Cola & Nokia

In August 2001, the new under-the-crown promotion Nikla Kiya?(What have u won) was launched in collaboration with Chimera Nokia.The promotion gave consumer a chance to win thousands of Coca-Cola branded Nokia 3310 cellular phones on every purchase of 750ml RGB bottle of Coca-Cola ,Sprite, & Fanta.The other highlight of promotion was the Caught Red Handed campaign. Branded Coca-Cola with caught red handed team in them went to Lahore & Karachi for three days, with target that anyone being caught drinking Coca-Cola will be awarded a nokia 3310 mobile phone & if someone is caught talking on a nokia mobile will win free supply of Coca-Cola. Caught red handed become a huge success among the masses as it was one to one interaction between the Coca-Cola brand & the consumers. This activity helped billed confidence and brand loyalty among core consumers.

Coca Cola TV Mazza

The coca cola new campaign is coca cola tv mazza, it is a utc scheme in which people are getting television sets of different sizes. These days this scheme is very popular among the people.

Coca-Cola & Mc Donalds

Coca-Cola & key account of MC Donalds launched the we go together joint promotion to reinstate amongst consumers a real sense of the affinity that, both shares globally. The promotion kicked off with pos material (Danglers, Bunting etc) displayed at all MC Donalds restaurants along with a special offer for coke & fries. 40

Fanta & Sprite Launched

In November 2000moving on to the Sprite & Fanta brands, the consumers in Pakistan witnessed a soft launch in essence. The Coca-Cola Company declared the new NonReturnable bottles of Sprite & Fanta as the New, On the Go Packs flaunting the innovative packaging convenience. Fanta & Sprite are sure to enjoy considerable success in Pakistan.

Diet Coke
After the acquisition of the individual local franchise bottling facilities in 1996, the company has successfully launched its first new product, diet coke, for the first time in almost 3 years. The was linked with three fashion shows as Diet Coke is related to fashion & fitness, but the major hit was thematic fashion shows in restaurants, which are the key accounts of the company as this has been never done before in Pakistan.

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CONCLUSION
After thorough research, we come to the conclusion that the marketing strategy of Coca Cola is working for them and the product is gaining popularity among youth day by day.

RECOMMENDATIONS
After completing our project we have concluded some recommendation for the coca cola company, which are following. Coca Cola Company should try to emphasis more on providing their infrastructure in the market to facilitate their customers. According to the survey, conducted by the international firm Pakistani people like little bit sweeter cola drink. So for this coca cola company should produce their product according to the local demand. Marketing team should try to increase the availability of Coke in rural areas. They should also focus the old people. Now young generation has a trend to drink a coke 2 regular bottles at same time, so providing more satisfaction to them company should introduce liter disposable bottle.

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PEST ANALYSIS OF COCA-COLA

There are four variables, which we will discuss in our report, they are:

POLITICAL VARIABLES
Political variables Effects of government regulations & deregulations Effect of environmental protection laws if any Import and export regulations Effect of political conditions in certain countries of Coke Any effect of election, military take over, Revolution at Coke Strongly Effected ++ Some what Effected + No Effect + NE Some what Effected Strongly Effected

YES NE NE YES

Conclusion Of Political Analysis:

As far as the above table is concerned it could be seen that there are very little chances of political variables to effect the cokes production and selling behavior. In the political variables most of the things are related to Governmental activities. So, they dont leave any good or bad impact in the Industry of coke. And there are some exceptional things like: environmental protection laws they some what effect the industry of Coke. From last two years Government is going to be really very much conscious about the environment. But after making the adjustments in plants and applying the proper way of wastage the chances of being affected by the protection laws are going to be diminished. So it impact good for the Cokes reputation. And the second thing in political variables which effects Coke is elections & military take over Because in the days of elections and marshal laws condition the countries production in any field is declined. So it affects slightly the revolution of Coke. So political conditions are over all leave neutral effects on cokes industry.
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ECONOMICAL VARIABLES
Economical Variables Do soaring interest rates make business task any harder Any effect due to inflation Anything done to reduce unemployment Any effect of 11th September 2001, incident at Coke in Pakistan Strongly Effected ++ Some what Effected + No Effect + Some what Effected Strongly Effected YES YES YES NE

Conclusion Of Economical Analysis

It could be seen that economical variables highly affects the Cokes resolution. Economic factors are those actors who effect the production of any industry. So, Coke is not the out of question. If the economic conditions of the country is not that strong and Coke increases its Price in this situation. Then it would impact highly negative. And inflation is also not a good position for any countrys production point of view. It also impacts highly negative in the Cokes production. And as a country concerned like Pakistan where the unemployment rate is very much high. The Coca-Cola system in Pakistan employs 1,800 people. During the last 2 years, the Coca-Cola system in Pakistan has involved over $130 million (U.S). When we draw the conclusion of economic variables. Then we come to know that if economic variables are in the favorable position of country then they impact good other wise the impact highly bad.

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SOCIAL VARIABLES
Social variables Effects of advertisement of Coke on Public popularity How will do Cokes contribution affect charity organizations of Pakistan Has rising consciousness of natural resources in people effected your save environment activities. Strongly Effected ++ YES YES YES Some what Effected + No Effect + Some what Effected Strongly Effected

CONCLUSION OF SOCIAL ANALYSIS EDUCATION

The Coca-Cola Company has always believed that education is a powerful force in improving the quality of life and creating opportunity for people and their families around the world. The Coca-Cola Company is committed to helping people make their dreams come true. All over the world, we are involved in innovative programs that give hard-working, Knowledgehungry students books, supplies, places to study and scholarships. From youth in Brazil to first generation scholars, educational programs in local communities are our priority.

ENVIRONMENT
A large part or our relationship with the world around us is our relationship with the physical world. While we have always sought to be sensitive to the environment, we must use our significant resources and capabilities to provide active leadership on environmental issues, particularly those relevant to our business. We want the world we share to be clean and beautiful. We are always innovating to bring you different delicious beverages. This same spirit of innovation comes alive in our environment programs. Were committed to preserving our environment, from use of more than $ 2 billion (U.S) a year in recycling content and suppliers, and environment Management initiatives, down to very local neighborhood collection and beautification efforts. Heres a sample of what were doing in different communities around the world regarding the conservation of water and natural resources, climate changes, waste environment education. 45

The Coca-Cola system in Pakistan operates through eight bottlers. Four of which are majority-owned by Coca-Cola Beverages Pakistan Limited (CCBPL).

COMMUNITY INVOLVEMENT:
In 2000, when eastern Pakistan suffered its worst droughts, The Coca-Cola system initiated a famine-relief program to help victims and was the first private-sector company to assist. The Coca-Cola system in Pakistan initiated a voluntary Hajj program that allows one employee from each plant, selected through a draw, to be sent on the Holy Pilgrimage to Mecca at the Companys expense.

TECHNOLOGICAL VARIABLES
Technological variables Have business innovations effectively promoted your business Has the governments regulations ever hindered in importing technical equipment Does Coke help in promoting paperless environment Strongly Effected ++ YES Some what Effected + No Effect + Some what Effected Strongly Effected

YES

YES

Conclusion Of Technological Analysis

Of course business innovation leaves highly good impacts in the business of Coke. As coke use more advance technology in its production process. It will resulted in increment of their production through out the country. As far as the governmental hindrances are concerned the impacts highly bad on cokes production. Ever year when budget in announced government taxes rates always shoot up. This approach of government decreases the profit margin of Coke. As the coke helping in promoting paperless environment .it impacts good, because computers are the basic need of any person now a days. And though its a big industry so it is promoting the trend of paperless environment. And it is giving the way of other industries to come to new technologies and into a new world of business. Through computers coke can increase the efficiency of its business and can have up to-date data about their productions. 46

OVER ALL RESULTS OF PEST ANANYSIS

After our studies and analysis of CCBPL (Coca-Cola Beverages Private Limited), we came up with the very interesting report of facts and figures. Coca-Cola is no doubt one of the most popular beverage company and its product COKE is one of most consumed cola drink. They spend billion of dollars on their advertisement, promotions and recreational campaign. Coca-Cola is a close competitor of Pepsi and it certainly gives its rival a tough time. CocaCola is a 27% shareholder in the Pakistan market and they dont want to stop here!! Its target market is to achieve a much higher %age. Coca-Cola has about 2000 employees at Pakistani plants. Lahore plant of Coca-Cola is one of the beautiful plant in Asia, Situated on Raiwand Road. Coca-Cola has always had a close consumer and supplier relationship with its customers. Its entertaining and colorful advertisements have always and will always rock the media. Pakistani rock stars, sportmen and actors have played a very vital role in making CocaCola such a popular beverage.

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CONCLUSION:
Coca-Cola no doubt come the heart beat of Pakistanis. Coca-Cola is one of the leaders in sponsoring the most important, thrilling events. E.g. Cricket matches, concerts and many other social occasions. Event at the present they are organizing a Basant festival for which they busily organizing stuff.

So

Jo chaho ho jaye cocacola enjoy

It has 16,635 stores in different countries including 11068 in United States. Customers are satisfied with the quality and taste of Coffee. High brand equity. Operating in 40 countries worldwide. Huge number of employees approx 13 thousand. Financial conditions of the company are good Company is expanding with speedy pace; it has opened 900 in US during the year 2009. Starbucks coffee shops locations are at convenient places like library, shopping malls and etc. Customer service is excellent. High brand awareness. Starbucks making their business more environmental friendly.

Weaknesses
Pricing are higher as compared to the competitors. High operating cost The business profits are highly dependent on coffee product. Closed numbers of stores in different countries during year 2008-2009. Starbucks have less control over stores outside the US. Protest against the company on different issues.

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Opportunity
Entry into Asian market like Pakistan, India and Bangladesh. Product diversification Market penetration in International countries Co-branding with other food manufactures. Whole bean sales in supermarkets

Threats
Current recession may impact the sales. Entry barrier in the international market Numbers of competitors are increasing. Variation in coffee prices in developing countries Starbucks facing huge resistance in international countries over cultural and political issues. People started to become more health conscious Competitors are trying to minimize the differentiation by imitating. Labor Unions issues in US and international countries Security risk at crowded places.

Case Study / Analysis of Starbucks Corporation

Uploaded by TonyMontana on Jul 11, 2005

CASE ANALYSIS FOR STARBUCKS CORPORATION I. Case Profile/ Company History Three Seattle entrepreneurs started the Starbucks Corporation in 1971. Their prime product was the selling of whole bean coffee in one Seattle store. By 1982, this business had grown tremendously into five stores selling the coffee beans, a roasting facility, and a wholesale business for local restaurants. Howard Schultz, a marketer, was recruited to be the manager of retail and marketing. He brought new ideas to the owners, but was turned down. Schultz in turn opened his own coffee bar in 1986 based on Italian coffee cafes, selling brewed Starbucks coffee. By 1987, Schultz had expanded to three coffee bars and bought Starbucks from the original owners for $4 million. He changed the name of his coffee bars from Il Giornale to Starbucks. His intention for the company was to grow slowly with a very solid foundation. He wanted to create a top-notch management by wooing top executives from other well-known corporations. For the first two years, Starbucks losses doubled as overhead and operating expenses increased with Starbucks' expansion. Schultz stood his ground and did not sacrifice long term integrity and values for short-term profit. By 1991, Starbucks' sales increased by 84% and the company was out of debt. Starbucks grew to 26 stores by 1988. By 1996 it grew to 870 stores with plans to open 2000 stores by the year 2000. II. Situational Analysis Strategic Analysis Business Level-Strategy: The business strategy of Starbucks' is identical to the corporate level strategy since the company is a single business company, focusing on only coffee-related products and retail stores. Corporate Level-Strategy: Starbucks corporate strategy has been to establish itself as the premier purveyor of the finest coffee in the world, while maintaining their uncompromised principles as the grow. The firm principles of the company are seen with its maintenance of a great and proven work environment for every staff member in its retail stores. It upholds diversity and promises the highest standards for its products. The company satisfies customers and gives back to the community and the environment. Also, Starbucks persists to be profitable and it is. They live by a strict, slow growth policy completely dominating a market before setting its sights further abroad. This strategy has gained them the advantage of being one of the fastest growing companies in the country. Structure and Control Systems: Starbucks believes that their employees are one of their important assets in that their only sustainable advantage is the quality of their workforce. They have accomplished building a national retail company by creating pride in the labor

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produced through an empowering corporate culture, exceptional employee benefits, and employee stock ownership programs. The culture towards employees is laid back and supportive. Employees are empowered by management to make decisions without management referral and are encouraged to think of themselves as a part of the business. Management stands behind these decisions. Starbucks has avoided a hierarchical organizational structure and has no formal organizational chart. The company has both functional and product based divisions. There is some overlap in these divisions with some employees reporting to two division heads. III. SWOT Analysis Starbucks has become a well-known company for selling the highest quality coffee beans and best tasting coffee products. It was one of the first companies to realize that the real money to be made was in beverage retailing, not just coffee beans. Starbucks created a coffee for the coffee connoisseurs and go to great lengths to acquire only the highest quality of coffee beans. They have set new precedence by outbidding the European buyers for an exclusive crop of coffee beans, which produces one of the best coffees in the world. Roasters of Starbucks coffees are extensively trained for one year. Starbucks has the distinction of being the public's educator on Expresso. They have also recently started to expand to packaged and prepared tea in response to the growing demand for this product. There are no other national coffee bar competitors in the same scale as Starbucks. Starbucks is the only competitor in the coffee bar market that has a recognized brand image. The difference between Starbucks and other coffeehouses is that they own all their stores and do not franchise. Starbucks stores operates in most metropolitan areas of the United States and also has a direct mail business to serve customers in every state. They have introduced gourmet flavored decaffeinated coffees as well as specialty flavors and whole bean coffees for the faithful coffee drinkers. They have also added light lunch fare to their menu. Starbucks had recently expanded its emphasis internationally. There are opportunities waiting in possible joint ventures with other corporations to design new product associations with Starbucks' coffee. Although Starbucks has enjoyed tremendous success in the past few years, there are a few obstacles looming. Since the popularity of the coffee house idea has grown, some cities wish to issue regulations on the coffeehouses due to complaints of late night patrons becoming uncontrollable. The cost of coffee beans is expected to rise in the future due to lower supply, which may tighten the margins on coffee merchants. The higher costs have cut into markets, which have heightened the competition in a crowded market. There is an enthusiasm of health consciousness growing in the United States. People are cutting down on caffeine but the consumption of decaffeinated coffee has not seen an increase. Although Starbucks does not have major national competitors, they do have regional ones. Tourists become confused when ordering, since they cannot simply order a cup of coffee. Although Starbucks is interested in gaining recognition and growth in Europe, they will not be pioneers in the European coffee market as they were in the United States. Internal Strengths and Weaknesses Strengths Weaknesses Brand name recognition Non-pioneer in global market Quality Products Narrow Product line Potential Internal Strengths Complicated Products Good Marketing Skills Well Developed Corporate strategy Location Visionary leader Distribution Manufacturing competencies Exclusive marketing rights Environmental Opportunities and Threats Opportunities Threats

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Expand into Foreign Markets Change in consumer tastes Widen Product Range City regulations Diversify into new Growth Businesses Increase in domestic competition Apply brand name capital in new areas Changes in economic factors Downturn in economy IV. Recommendation Analysis Starbucks has become a great successful company in the coffee bean and beverage business and its strategy has been very effective. From the beginning, Schultz, the company's owner, has professed a strict, slow growing policy. He feels it is also important to keep all the stores company owned to improve and grow the business further. To further grow, Starbucks will need to expand further in other areas of the United States as well as internationally. Future joint ventures will expand the products into grocery and convenience store shelves through bottled beverages and ice cream flavors. Other joint ventures will allow further expansion into the brewery business, which will produce beer with Starbucks' coffee beans. Other partnerships will bring new products for Starbucks, such as jazz CDs, and tandem units with bagel bakeries. As the company expands, the culture and corporate strategy must be maintained for success. This will ensure the health of the organization throughout any future expansion. ADDITIONAL: ADDITIONAL RESEARCH: Wake up and smell the coffee -- Starbucks is everywhere. The US's #1 specialty coffee retailer, Starbucks operates nearly 4,000 coffee shops in a variety of locations (office buildings, shopping centers, airport terminals, supermarkets) in some 20 countries worldwide. Starbucks sells coffee drinks and beans, pastries, and other food items and beverages, as well as mugs, coffeemakers, coffee grinders, and storage containers. The company also sells its beans to restaurants, businesses, airlines, and hotels, and it offers mail-order and online catalogs. Starbucks has expanded into coffee ice cream (with Dreyer's) and makes Frappuccino, a bottled coffee drink (with PepsiCo). Starbucks Corporation NASD : SBUX Sector: Consumer/Non-Cyclical Industry: Food Processing STARBUCKS BUSINESS SUMMARY Starbucks Corporation purchases and roasts high quality whole bean coffees and sells them, along with fresh, richbrewed coffees, Italian-style espresso beverages, cold blended beverages, a variety of pastries and confections, coffee-related accessories and equipment, and a line of premium teas, primarily through its Company-operated retail stores. In addition to sales through its Company-operated retail stores, Starbucks sells coffee and tea products through other channels of distribution (specialty operations). Starbucks, through its joint venture partnerships, also produces and sells bottled Frappuccino coffee drink and a line of premium ice creams. The Company's objective is to establish Starbucks as the most recognized and respected brand in the world. Company-Operated Retail Stores As of the fiscal year ended October 1, 2000, Starbucks had 2,619 Company-operated stores in 34 states, the District of Columbia and five Canadian provinces (which comprise the Company-operated North American retail operations), as well as the United Kingdom, Thailand and Australia (which comprise the Company-operated international retail operations). Company-operated retail stores accounted for approximately 84% of net revenues during fiscal 2000. All Starbucks stores offer a choice of regular and decaffeinated coffee beverages, including at least one "coffee of the day," a broad selection of Italian-style espresso beverages, cold blended beverages, a selection of teas and distinctively packaged, roasted whole bean coffees. Starbucks stores also offer a selection of fresh pastries and other food items, sodas, juices, and coffee-making equipment and accessories.

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Each Starbucks store varies its product mix depending upon the size of the store and its location. Larger stores carry a broad selection of the Company's whole bean coffees in various sizes and types of packaging, as well as an assortment of coffee and espresso-making equipment and accessories such as coffee grinders, coffee makers, espresso machines, coffee filters, storage containers, travel tumblers and mugs. Smaller Starbucks stores and kiosks typically sell a full line of coffee beverages, a more limited selection of whole bean coffees and a few accessories such as travel tumblers and logo mugs. Approximately 15% of Starbucks stores carry a selection of "grab and go" sandwiches and salads. During fiscal 2000, the Company's retail sales mix by product type was approximately 73% handcrafted beverages, 14% food items, 8% whole bean coffees, and 5% coffee-making equipment and accessories. Specialty Operations Starbucks specialty operations strive to develop the Starbucks brand outside the Company-operated retail store environment through a number of channels. Starbucks specialty operations include retail store licensing agreements, wholesale accounts, grocery channel licensing agreements and joint ventures. Starbucks specialty operations also include direct-to-consumer marketing channels. In certain licensing situations, the licensee is a joint venture in which Starbucks has an equity ownership interest. During fiscal 2000, specialty revenues (which include royalties and fees from licensees as well as product sales) accounted for approximately 16% of the Company's net revenues. Although the Company does not generally relinquish operational control of its retail stores in North America, in situations in which a master concessionaire or another company controls or can provide improved access to desirable retail space, the Company may consider licensing its operations. As part of these arrangements, Starbucks receives license fees and royalties and sells coffee and related products for resale in the licensed locations. Employees working in the licensed locations must follow Starbucks detailed store-operating procedures and attend training classes similar to those given to Starbucks store managers and employees. As of October 1, 2000, the Company had 530 licensed stores in continental North America. Starbucks retail stores located outside of North America, the United Kingdom, Thailand and Australia are operated through a number of joint venture and licensing arrangements with prominent retailers. During fiscal 2000, the Company expanded its international presence by opening 184 new international licensed stores, including the first stores in Lebanon, the United Arab Emirates, Qatar, Hong Kong and Shanghai. At fiscal year end, the Company had 154 stores in Japan, 47 in Taiwan, 28 in China, 28 in Singapore, 27 in the Philippines, 20 in Hawaii, 15 in New Zealand, 14 in Malaysia, six in South Korea, five in the United Arab Emirates, four in Kuwait, three in Lebanon, and one in Qatar. Starbucks also sells whole bean and ground coffees to several types of wholesale accounts, including office coffee distributors and institutional foodservice management companies that service business, industry, education and healthcare accounts, and hotels, airlines and restaurants. In fiscal 1998, Starbucks entered into a long-term licensing agreement with Kraft Foods, Inc. to accelerate the growth of the Starbucks brand into the grocery channel in the United States. Pursuant to such agreement, Kraft manages all distribution, marketing, advertising and promotions for Starbucks whole bean and ground coffee in grocery, warehouse club and mass merchandise stores. By the end of fiscal 2000, the Company's whole bean and ground coffees were available throughout the United States in approximately 16,000 supermarkets. The Company has two non-retail domestic 50-50 joint ventures. The North American Coffee Partnership, a joint venture with the Pepsi-Cola Company, a division of PepsiCo, Inc. , was formed in fiscal 1994 to develop and distribute ready-to-drink coffee-based products. By the end of fiscal 2000, the joint venture was distributing bottled Frappuccino coffee drink to approximately 250,000 supermarkets, convenience and drug stores and other locations throughout the United States and Canada. The Company formed a joint venture with Dreyer's Grand Ice Cream, Inc. in fiscal 1996 to develop and distribute Starbucks premium coffee ice creams. By the end of fiscal 2000, the joint venture was distributing a variety of ice cream and novelty products to over 21,000 supermarkets throughout the United States. The Company makes fresh Starbucks coffee and coffee-related products conveniently available via mail order and online. Starbucks publishes and distributes a mail order catalog that offers its coffees, certain food items and select coffee-making equipment and accessories, and the Company maintains a web site at www.starbucks. com with an online store that allows customers to browse for and purchase coffee, gifts and other items via the Internet. The Company believes that its direct-to-consumer operations support its retail store expansion into new markets and reinforce brand recognition in existing markets. INDUSTRY FINANCIAL SUMMARY SBUX purchases, roasts and sells high quality whole bean coffees, rich-brewed coffees, Italian-style espresso beverages, cold blended beverages and a variety of pastries. For the 26 weeks ended 4/1/01, net sales rose 25% to $1.30 billion. Net income rose 40% to $81.2 million. Revenues reflect the opening of new retail stores and higher

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comparable store sales. Net income also reflects a higher gross margin due to an increase in sales prices.

Approaches to Branding
Branding approaches include the following:
Individual Product Branding Under this branding approach new products are assigned

new names with no obvious connection to existing brands offered by the company. Under individual product branding the marketing organization must work hard to establish the brand in the market since it cannot ride the coattails of previously introduced brands. The chief advantage of this approach is it allows brands to stand on their own thus lessening threats that may occur to other brands marketed by the company. For instance, if another company brand receives negative publicity this news is less likely to rub off on the companys other brands that carry their own unique names. Additionally, as mentioned in the Product Decisions tutorial, brands can create financial gains through the concept known as brand equity. Under an individual branding approach, each brand builds its own separate equity which allows the company, if they choose, to sell off individual brands without impacting other brands owned by the company. The most famous marketing organization to follow this strategy is Procter and Gamble, which has historically introduced new brands without any link to other brands or even to the company name. Family Branding Under this branding approach new products are placed under the umbrella of an existing brand. The principle advantage of this approach is that it enables the organization to rapidly build market awareness and acceptance since the brand is already established and known to the market. But the potential disadvantage is that the market has already established certain perceptions of the brand. For instance, a company that sells low-end, lower priced products may have a brand that is viewed as an economy brand. This brand image may create customer confusion and hinder the company if they attempt to introduce higher-end, higher priced products using the same brand name. Additionally, with family branding any negative publicity that may occur for one product within a brand could spread to all other products that share the same name. Co-Branding This approach takes the idea of individual and family branding a step further. With co-branding a marketer seeks to partner with another firm, which has an established brand, in hopes synergy of two brands on a product is even more powerful than a single brand. The partnership often has both firms sharing costs but also sharing the gains. For instance, major credit card companies, such as Visa and MasterCard, offer co-branding options to companies and organizations. The cards carry the name of a cobranded organization (e.g., University name) along with the name of the issuing bank (e.g., Citibank) and the name of the credit card company. Besides tapping into awareness for multiple brands, the co-branding strategy is also designed to appeal to a larger target market, especially if each brand, when viewed separately, does not have extensive

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overlapping target markets with the other brand. Thus, co-branding allows both firms to tap into market segments where they did not previously have a strong position. Private or Store Branding Some suppliers are in the business of producing products for other companies including placing another companys brand name on the product. This is most often seen in the retail industry where stores or online sellers contract with suppliers to manufacture the retailers own branded products. In some cases the supplier not only produces product for the retailers brand but also markets their own brand so that store shelves will contain both brands. No-Name or Generic Branding Certain suppliers supply products that are intentionally brandless. These products are mostly basic commodity-type products that consumer or business customers purchase as low price alternatives to branded products. Basic household products such as paper products, over-the-counter medicines such as ibuprofen, and even dog food are available in a generic form. Brand Licensing Under brand licensing a contractual arrangement is created in which a company owning a brand name allows others to produce and supply products carrying the brand name. This is often seen when a brand is not directly connected with a product category. For instance, several famous childrens characters, such as Sesame Streets Elmo, have been licensed to toy and food manufacturers who market products using the branded characters name and image
I was chatting with a couple of friends, all of us are either copy writers or graphic designers...or both....in the advertising industry, so, naturally, our conversations leaned towards the topic. This one particular friend who works in an American advertising firm is now an Art Director, so, needless to say, he considers himself a notch higher than us mere freelancers and employees. After all, he is the one person who decides on the direction of a whole advertising campaign. He is also in-charge of a couple of large International brands of products. And during this conversation, he told me about this story that inspired me. He says that branding is so important to a product that it can either make or break a product...or even the company. For instance, he was trying to come up with something unique for a particular brand of body wash (he thought the smell was awful because it smelt like mud...wet and totally disgusting). Guess what he did? He went the NATURAL WAY...... Obviously, it worked wonders for the product! He came up with headlines like "So natural, you'd roll around in it" "Just like a second skin" "Aroma-therapeutic" "Go back to nature" ...and the likes. I was impressed. So happens that he brings back a lot of samples of products each time he comes back to Malaysia and this time he had the said product handy to show us - to although I didn't think it was disgusting (he has a way with words, shall I say?"), it wasn't your conventional bath wash. It sure didn't smell like anything else I can get here in supermarkets.

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Joe, my friend from America, said that he steered the product in the realm of conservation of the environment, going natural, using natural products, natural cleansing properties....etc and it worked wonderfully. When combined with a superb design and ad, the product sold like nothing else he had known! This was the product he thought smelt like mud, remember? And with good direction, copy and design, the product is as good as sold. The theory is that, people's mind accepts what they want to accept. Let me give you some examples of beautiful copy work for International brands. "milk bath" - Johnson and Johnson. Sounds simple enough? But accordingly, many people bought the products, not because it was superb or any better than all the other Johnson and Johnson products or bath gels, it was because the 'milk bath' copy suggested that whenever you use the product, you'd be bathing in milk, pampering yourself, making your skin whiter and smoother. Asians will buy anything that you say can turn their skin white. "Not perfumed, Not coloured. Just kind" - Simple. This is a very unique stance taken by a skincare company because Simple is the first brand that suggested that you don't need anything extra have superb skin. Simple is....well, simple, but it gives you good skin because it doesn't make your skin look worse. "Against animal testing" - The Body Shop. The products being sold by The Body Shop, without a doubt, is produced without being tested on animals. This, they claim, is because the properties used to produce their products is very natural. I think placing the words "AGAINST ANIMAL TESTING" in bolded letters in all of their labels is a good idea. Anyone who loves natural products and are animal lovers will definitely stay true to The Body Shop. "The beer only a true man knows how to appreciate" This is a tagline being used by a well-known beer company. I am not certain of the exact words being used, therefore, I decline to name the brand and beer type. Anyway, this tagline suggests that if you're a man at all, you'll like this beer.....and if you don't, you're not a TRUE man. I am a woman and I like the beer because of its richness in taste but I absolutely object to their tagline. I suppose they have their reasons. Their target market were mostly men and if they were women who drink, they will let the tagline slide because they like the beer so much. So, you see, the kind of branding, the kind of tagline and headlines that you use determines the direction of your product. If you use a tagline like 'lustrous long hair"....don't expect a lot of male customers who takes you up on your offer. So, decide on a tagline once and for all for each and every one of your products, take them very seriously and if you can't think of anything, hire someone to do the thinking for you. Branding and copy writing is SO IMPORTANT that you'd rather pay for it than be stuck with one that gives out mixed messages. Marsha Maung is a freelance graphic designer and writer who has been working from her home in Selangor, Malaysia the past 6 years. She is also the author of "Raising Little Magicians", "No products to sell" and the popular "The Lance in Freelancing" and other books. F Netflix came up with a brilliantly simple concept when it launched its service in 1999: rent DVDs by mail for a flat monthly fee. You choose the movies you want on the Netflix Web site, receive from one to eight discs at a time (depending on the pricing plan you've chosen), and--using a prepaid envelope--return them in the mail whenever you're finished viewing. The set monthly billing rate means that the decades-old bane of the video store--late fees--is a thing of the past. In fact, not only has Netflix's pricing strategy prompted brickand-mortar rival Blockbuster to adopt a "no late fees" strategy at its retail stores, the old-line video rental giant has chosen to fight Netflix as well, offering a very similar online rental service starting in August 2004 that's since been enhanced by limited integration with its brick-and-mortar video stores. With retailing superpower

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Wal-Mart already having pulled out and Amazon opting for digital delivery with its Unbox service, here's how the two main players in the online DVD rental market stack up against one another.

A quick overview:

Netflix
Founded in 1999 More than 5.7 million members (as of September 2006) In excess of 40 million total discs in stock Distributes over 1.5 million discs a day

Blockbuster
Company was founded in 1985; online rentals started 2004 More than 1.5 million online members (as of September 2006) Operates nearly 9,000 stores nationwide Lost a takeover bid for the Hollywood Video rental chain to rival Movie Gallery

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Side-by-side comparison:

Monthly pricing Eight plans, ranging in price from $9.99 for one Four plans, ranging in price from $9.99 for one plans (unlimited movie out at a time to $47.99 for eight movies DVD out at a time to $23.99 for four DVDs out at rentals) out at a time. a time. Monthly pricing $5.99 for a total of two DVDs per month (one out $5.99 for a total of two DVDs per month (one out plan (limited at a time); $11.99 for a total of four DVDs per at a time); $7.99 for a total of three DVDs per rentals) month (two titles out at a time). month (one out at a time). Each account can have as many as five separate Online subscribers are entitled to two to four free Distinguishing rental queues (with ratings-based parental in-store rentals per month and can return mailed feature controls), offering separate viewing choices to movies straight to local stores as well. individual family members. Number and type More than 65,000, including TV shows and More than 60,000, including TV shows and of titles available unrated and NC-17 movies unrated movies Shipping centers 41 30 distribution centers, 200 stores Users can invite each other to join a Friends list, Currently, Blockbuster does not offer a way for Community so they can see each other's rental queues and users to share rental information with other features make additional viewing suggestions. users. Blockbuster's Total Access plans have some nice perks (free in-store rentals and the ability to return movies at local stores) for cinephiles who Netflix's enhanced customization features and prefer to mix Web ordering with real-world aisleConclusion extensive catalog will appeal to those who prefer browsing, but those advantages come with the online-only browsing and mailbox delivery. same old video-store caveats (in-store rentals are subject to late fees and must be returned to the store rather than mailed) that drove many people to online rental plans in the first place. Sign up for Netflix now Sign up for Blockbuster now

A consumer is the ultimate user of a product or service. The overall consumer market consists of all buyers of goods and services for personal or family use, more than 270 million people (including children) spending trillions of dollars in the United States as of the late 1990s. Consumer behavior essentially refers to how and why people make the purchase decisions they do. Marketers strive to understand this behavior so they can better formulate appropriate marketing stimuli that will result in increased sales and brand loyalty. There are a vast number of goods available for purchase, but consumers tend to attribute this volume to the industrial world's massive production capacity. Rather, the giant known as the marketing profession is responsible for the variety of goods on the market. The science of evaluating and influencing consumer behavior is foremost in determining which marketing efforts will be used and when. 57

To understand consumer behavior, experts examine purchase decision processes, especially any particular triggers that compel consumers to buy a certain product. For example, one study revealed that the average shopper took less than 21 minutes to purchase groceries and covered only 23 percent of the store, giving marketers a very limited amount of time to influence consumers. And 59 percent of all supermarket purchases were unplanned. Marketers spend a great deal of time and money discovering what compels consumers to make such on-the-spot purchases. Market researchers obtain some of the best information through in-store research, and will often launch new products only in select small venues where they expect a reasonable test of the product's success can be executed. In this manner, they can determine whether a product's success is likely before investing excessive company resources to introduce that product nationally or even internationally.

CONSUMER NEEDS
Consumers adjust purchasing behavior based on their individual needs and interpersonal factors. In order to understand these influences, researchers try to ascertain what happens inside consumers' minds and to identify physical and social exterior influences on purchase decisions. On some levels, consumer choice can appear to be quite random. However, each decision that is made has some meaning behind it, even if that choice does not always appear to be rational. Purchase decisions depend on personal emotions, social situations, goals, and values. People buy to satisfy all types of needs, not just for utilitarian purposes. These needs, as identified by Abraham Maslow in the early 1940s, may be physical or biological, for safety and security, for love and affiliation, to obtain prestige and esteem, or for self-fulfillment. For example, connecting products with love or belonging has been a success for several wildly popular campaigns such as "Reach Out and Touch Someone," "Fly the Friendly Skies," and "Gentlemen Prefer Hanes." This type of focus might link products either to the attainment of love and belonging, or by linking those products with people similar to those with whom people would like to associate. Prestige is another intangible need, and those concerned with status will pay for it. However, goods appealing to this type of need must be viewed as high-profile products that others will see in use. One benefit of targeting this type of market is that the demand curve 58

for luxury products is typically the reverse of the standard; high-status products sell better with higher prices. Some equate the type of need to be met with certain classes of goods. For instance, a need for achievement might drive people to perform difficult tasks, to exercise skills and talents, and to invest in products such as tools, do-it-yourself materials, and self-improvement programs, among others. The need to nurture or for nurturing leads consumers to buy products associated with things such as parenthood, cooking, pets, houseplants, and charitable service appeals. Personality traits and characteristics are also important to establish how consumers meet their needs. Pragmatists will buy what is practical or useful, and they make purchases based more on quality and durability than on physical beauty. The aesthetically inclined consumer, on the other hand, is drawn to objects that project symmetry, harmony, and beauty. Intellectuals are more interested in obtaining knowledge and truth and tend to be more critical. They also like to compare and contrast similar products before making the decision to buy. Politically motivated people seek out products and services that will give them an "edge," enhancing power and social position. And people who are more social can best be motivated by appealing to their fondness for humanity with advertising that suggests empathy, kindness, and nurturing behavior. One successful way an insurance company targeted this market was through its "You're in good hands with Allstate" campaign. Consumers also vary in how they determine whose needs they want to satisfy when purchasing products and services. Are they more concerned with meeting their own needs and buying what they want to, for their own happiness? Or do they rely on the opinions of others to determine what products and services they should be using? This determines, for example, whether or not they will make a purchase just because it's the newest, most popular item available or because it is truly what they need and/or want. This also influences the way marketers will advertise products. For example, a wine distributor trying to appeal to people looking to satisfy their personal taste will emphasize its superior vintage and fine bouquet; that same distributor, marketing to those who want to please others, will emphasize how sharing the wine can improve gatherings with friends and family. 59

Cultural and social values also play large roles in determining what products will be successful in a given market. If great value is placed on characteristics such as activity, hard work, and materialism, then companies who suggest their products represent those values are more likely to be successful. Social values are equally important. If a manufacturer suggests their product will make the consumer appear more romantic or competitive in a place where those values are highly regarded, it is more likely consumers will respond.

PURCHASE PATTERNS
While all of this information might be helpful to marketers, it is equally important to understand what compels the consumer to actually make a purchase, as opposed to just generating interest. For example, some consumers respond based on how they are feeling, or more emotionally, while some are focused on making the wisest economic decision. Knowing the different elements that stimulate consumer purchase activity can help marketers design appropriate sales techniques and responses. A study conducted by Susan Powell Mantel focused on analyzing the roles of "attributebased processing" and "attitude-based processing" when analyzing consumer preference. According to the study, product attributes (qualities such as price, size, nutritional value, durability, etc.) are often compared disproportionately, i.e., one is the more focal subject of comparison, thus eliciting more consideration when the consumer decides which brand is the "best." The order of brand presentation in these cases is particularly important. Adding to the complexity of the issue is the fact that purchase decisions are not always made on the basis of an "attribute-by-attribute" comparison (attribute-based processing). Consumers also make decisions based on an overall evaluation of their impressions, intuition, and knowledge based on past experience, or attitude-based processing. Learned attitudes also influence these decisions. For example, parents who drank Kool-Aid as children often buy it for their kids, either because they associate it with fond memories or just because of brand familiarity or loyalty. There is time and effort associated with each of these strategies, though attribute-based processing requires significantly more effort on the consumer's part. To dedicate the time required for an attribute-by-attribute comparison, consumers need the combination of motivation and the time or opportunity to use such a strategy.

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Other contributing factors were discussed in Mantel's study, such as personality differences and each individual's "need for cognition." Need for cognition reflects to what extent individuals "engage in and enjoy thinking." People with a high need for cognition tend to evaluate more and make more optimal in-store purchase decisions. This is in part because they do not react to displays and in-store promotions unless significant price reductions are offered. Low-need cognition people react easily when a product is put on promotion regardless of the discount offered. Consumers are also affected by their perceived roles, which are acquired through social processes. These roles create individuals' needs for things that will enable them to perform those roles, improve their performance in those roles, facilitate reaching their goals, or symbolize a role/relationship, much in the way a woman's engagement ring symbolizes her taking on the role of a wife. Other factors that influence purchase decisions include the importance attributed to the decision. People are not likely to take as much time doing brand comparisons of mouthwash as they are a new car. The importance of the purchase, as well as the risk involved, adds to how much time and effort will be spent evaluating the merits of each product or service under consideration. In cases of importance such as the purchase of a car or home appliance, consumers are more likely to use rational, attribute-based comparisons, in order to make the most informed decision possible. In some cases, consumers make very little effort to evaluate product choices. "Habitual evaluation" refers to a state in which the consumer disregards marketing materials placed in a store, whether because of brand loyalty, lack of time, or some other reason. Indeed, evaluating all relevant marketing information can become time consuming if it is done every time a person shops. On the opposite side of the coin, "extensive evaluation" is the state in which consumers consider the prices and promotions of all brands before making a choice. There are also inbetween states of evaluation, depending again on the importance of the purchase and the time available to make a decision (some consumers, usually those who earn higher incomes, value their time more than the cost savings they would incur). Decisions on whether to compare various products at any given time may be a factor of the anticipated economic returns, search costs or time constraints, and individual household purchasing patterns. 61

When it comes time to actually make purchases, however, one person in the family often acts as an "information filter" for the family, depending on what type of purchase is being made and that person's expertise and interest. The information filter passes along information he or she considers most relevant when making a purchase decision, filtering out what is considered unimportant and regulating the flow of information. For example, men are more often the family members who evaluate which tools to purchase, while children pass along what they consider to be seminal information about toys. At times, family members may take on additional roles such as an "influencer," contributing to the overall evaluation of goods being considered for purchase. Or one person may act as the "decider," or the final decision-maker. Ultimately, purchase decisions are not made until consumers feel they know enough about the product, they feel good about what they're buying, and they want it enough to act on the decision.

INTERPRETING CONSUMER BEHAVIOR

When market researchers begin evaluating the behavior of consumers, it is a mistake to rely on conventional wisdom, especially when it is possible to study the actual activity in which consumers are engaged when using a product or service. Where are they when they buy certain items? When do they use it? Who is with them when they make the purchase? Why do they buy under certain circumstances and not others? Researchers need to determine the major needs being satisfied by that good or service in order to effectively sell it. There are two principal ways to evaluate the motivation behind consumer purchases. These are by direction (what they want) and intensity (how much they want it). Direction refers to what the customer wants from a product. For example, if a customer is selecting pain reliever, they may like the idea is one pain reliever is cheaper than another, but what they really want is fast pain relief, and will probably pay more if they think the more expensive brand can do that more effectively. Marketers need to understand the principal motivation behind each type of product to correctly target potential customers. The other way to evaluate consumer behavior, intensity, refers to whether a customer's interest in a product is compelling enough that they will go out and make the purchase. Good marketing can create that kind of intensity. A successful example of such a campaign was Burger King's "Aren't You Hungry?" campaign, which aired on late-night television and was compelling enough for people to leave their homes late at night to go out and buy

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hamburgers. Understanding consumer motivation is the best way to learn how to increase buyer incentive, as well as a better alternative to the easy incentive-decreasing the price. While it is easy to speculate on all these elements of consumer motivation, it is much harder to actively research motivating factors for any given product. It is rare that a consumer's reasons for buying a product or service can be accurately determined through direct questioning. Researchers have had to develop other ways to get real responses. These include asking consumers "How do you think a friend of yours would react to this marketing material?" While consumers do not like to admit that marketing affects them at all, they are often willing to speculate on how it would affect someone else. And most often they answer with what would be their own responses. Another tactic that has proven successful is to ask consumers "What kind of person would use this type of product?" By asking this question, market researchers can determine what the consumer believes buying the product would say about them, as well as whether or not they would want to be seen as that type of person.

INFLUENCING CONSUMER BEHAVIOR

One of the best ways to influence consumer behavior is to give buyers an acceptable motive. This is somewhat related to the idea of asking what type of person would buy a certain product in evaluating consumer behavior. Consumers want to feel they're doing something good, being a good person, eating healthy, making contacts, keeping up appearances, or that they just deserve to be spoiled a little bit. If marketers can convince consumers that they need a product or service for some "legitimate" reason, customers will be more likely to make a purchase. In addition, sensory stimuli are important to marketing. When food packages are appealing or associated with other positive qualities, people often find that they "taste" better. For example, people often "taste" with their eyes, discerning differences in products where they do not see any difference during a blind taste test. One of the best examples of this was a test of loyal Coca-Cola customers who were totally unwilling to concede that any other soda was its equal. While able to see what they were drinking, they maintained this position. But during blind testing, some were unable to tell the difference between Coke and root beer. Finally, another alternative for influencing customer behavior is by offering specialized goods. While commonality was once popular, more and more people are seeking diversity 63

in taste, personal preferences, and lifestyle. Some successful campaigns touting the way their products stand out from the crowd include Dodge's "The Rules Have Changed" and Arby's "This is different. Different is good." In fact, marketers are quite successful at targeting "rebels" and the "counterculture," as it is referred to inCommodify Your Dissent.As Thomas Frank writes, "Consumerism is no longer about 'conformity' but about difference. It counsels not rigid adherence to the taste of the herd but vigilant and constantly updated individualism. We consume not to fit in, but to prove, on the surface at least, that we are rock 'n' roll rebels, each one of use as rulebreaking and hierarchy-defying as our heroes of the 60s, who now pitch cars, shoes, and beer. This imperative of endless difference is today the genius at the heart of American capitalism, an eternal fleeing from 'sameness' that satiates our thirst for the New with such achievements of civilization as the infinite brands of identical cola, the myriad colors and irrepressible variety of the cigarette rack at 7-Eleven."

Read more:Consumer Behavior - strategy, levels, examples, type, company, hierarchy, business, Consumer needs, Purchase patterns, Interpreting consumer behavior, Influencing consumer behaviorhttp://www.referenceforbusiness.com/management/Comp -De/Consumer-Behavior.html#ixzz11EWJYDeE

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