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The focus of this essay will be on developing a marketing strategy for Classic Coca-Cola or Coke for first half of 2012.pricing strategy and target market using micro and macroeconomics concepts. installing automated manufacturing machines and reducing the labor numbers in the production line will help to reduce its cost.This will also discuss about the market segmentation . The economic forecast report 2012 from different sources clearly communicates high economic growth .com/businomics_blog/2010/11/economic-forecast-2011-2012. less unemployment and inflation rates. http://businomics.typepad. .html Coca cola can use alternative scenarios to reduce the production cost In countries were labors are very expensive.The company's primary product is Coca cola which was invented in the year 1886 and was first bottled in 1894.Introduction : The below essay is about Coca-Cola company which is a beverage manufacturer established in the year 1892.
Price elasticity -The opportunity cost of coca cola is very low. Coco cola base syrup which is the raw material is imported from regional units to several bottling plants which incurs transport cost. PET bottles have 25% recycled plastic and glass bottles have 40% recycled glass. if it is manufactured at the same bottling plant some cost can be saved. the sales demand will increase by 20%.wind in the bottling plant will help to reduce energy costs.Therefore coca cola is said to be elastic as the demand is responsive to change in price. in which if the price of the product increases the demand decreased and vice versa responsively.this will reduce its bottle manufacturing and disposal costs. Coca cola can effectively introduce bio degradable plant bottle which can be recycled. Production of own energy from renewable sources like solar . The use of LED lighting and automatic shut-down technology during rest periods in all plants will help to reduce cost on Energy. PED = %ΔQd /%ΔP (PED=20/-10) . a carbonated soft drink is a FMCG brand . For instance if the price of coke is decreased by 10% . Coca cola.
in that way if the price of Coke decreases by 10%then Pepsi will have increase in its demand by10%.org/wiki/Price_elasticity_of_demand Income elasticity of Coca cola is the response of demand in quantity to change of consumers income . instead the demand for Milk and bread increases .41 1 -http://en. Cross price elasticity of demand: The substitute product of coca cola is considered to be Pepsi. If the price fast food increases the demand for coke will decrease.On the other hand when the consumers income rises the demand of coca cola increases termed as 'Normal Good'. XED = %ΔQd Good A /%ΔP Good B (+10/+10= +1) The complimentary product of coke will be fast foods like McDonald's burgers etc. .wikipedia.During the period of decline in consumers income .Graph 1.as Coca cola is not considered to be a basic necessity for consumers .the demand of coca cola also declines.
pepsi.http://www. there is chances of indirect rivalry for price decisions.org/wiki/Substitute_good The market structure of coca cola is considered to be Duopoly which is also a type of oligopoly.51 1-http://en.thecoca-colacompany. The target market of Pepsi and Coke are focused more on Teen and youngsters.Graph 1.Also for consumers who require more caffeine. Also Coca cola has started a competition called 'Discover with Taio Cruz' 3 which is a challenge for upcoming artist to collaborate with Taio Cruz. the company has Diet coke Which has no sugar .com/thexfactor/ . Coca cola and its rival competitor Pepsi is having this type of market structure.html 2&3 Coca cola segments its market as Demographic Segmentation Age Income Family size Age is a very important factor for determining the segments of coke. no . Music loving Youngsters and teenagers but different strategy.http://www.e. There is a high barrier for new competitors to enter as the sector is dominated by these two firms. Thus they decided to become the official sponsor for 'The X Factor' 1 . Pepsi came up with a strategy to sponsor an music event by which teens are more attracted.For age groups 14-28 the regular classic coke takes its share.Also. 1 . On the other hand for diabetes people.com/dynamic/press_center/2011/03/create-perfect-harmony-with-taio-cruz. 28-40 age groups.wikipedia. By the above example it is clearly understood that Both Coca cola and Pepsi are targeting the same market i.In response Coca cola planned to sponsor 'American Idol' 2 .
apart from that coke's pricing strategy is in a way that most of the people can afford so they also have Tin cans coke.sugar& zero calorie the company has Coke zero as choice. They set the price to end in a 9.12s. . for high income groups PET bottle coke is available. Psychographic segmentation Focuses on Music and sports lovers (ex : Coca cola owns a baseball park in Allentown.Pennsylvania attracts sports consumers) Pricing Strategy: Coca-Cola uses have different pricing strategies because of its existence over 195 countries: Psychological pricing strategy: The price of a 2-liter bottle of Original Coke was $2.495. For various family sizes coke has various quantities such as 200ml.350ml.50.18s).500ml.3ltr and cluster of cans(6s. because this makes customers think the price is less than $2. Geographic Segmentation Hot and sunny weather pattern countries like UAE and African countries. For low income groups coke has returnable glass bottles. to appeal to the customer.1ltr.
cokecce.000 athletes and more than 200 countries competing. because there is not much difference in the costs required to produce the products. they get to increase their revenue. 10.Promotional pricing strategy: In supermarkets coke is priced temporarily low. the show is now coming to London in 2012.aspx?&sid=28580561&sid_guid=93f0e5bc-1c27-4eb6-a3dd- e8fd84d5ae82&strid=2D462&sc=wwwNG_D1A024EE&strtab=Grocery&catL0=570&catL1=-1&catL2=-1&catL3=1&HasProducts=0&ForceMenu=1&shopurl=browse. the price of a 2-litre bottle of Coke in the United States is different from the price of the same product in China.netgrocer. It creates a sense of urgency to purchase it quickly as it the price is for short term Segmented pricing strategy: Coca-Cola has 6s cans. to increase short-period sales.aspx&ns=1 Coca cola will be the Official Sponsor for London Olympics& Paralympic games 2012 .uk/about-us/-olympic-games. all for separate prices.com/shop. To use the power of the Olympic Games and the passion and talent of our people to accelerate our plans to create an even stronger business for years to come"(http://www.aspx) . This has to do with the difference in economic conditions. and laws. and 12s cans of the same product. 6s bottles. By their product in different sizes and at different costs. competitive situations. International pricing strategy: For instance. a fast-food restaurant.By sponsoring this massive event Coca cola is targeting to create high demand among young athletes and sport loving spectators.Our aim is clear. Channel pricing: Coke carries a different price depending on whether it is purchased ill a fine restaurant. 5- http://shop.co. 8 million spectators. or a vending machine. With a global TV audience of over 4 billion. "The Olympic Games are described as the 'Greatest Show on Earth'.
In 1999 Belgium government banned the sales of coke due to health policies (http://news.stm ) In 2006. we can forecast that there will surely be High demand in 2012. http://seekingalpha.( http://en. due to concerns of high levels of pesticide residue. spring water etc.co. along with other soft drinks.bbc.which in turn affects the sales rate of Coke. Therefore.wikipedia.uk/1/hi/world/europe/369089. Government policy: In some countries the government policies act as barrier to increase demand.org/wiki/Criticism_of_Coca-Cola ) .By this statement it is clearly understood that Coca cola has planned to create high demand. by this graph and the strategy to sponsor Olympics . the Indian state of Kerala banned the sale and production of Coke.com/article/271106-coca-cola-a-dividend-pick-for-the-next-5-years As you can see from the above graph that there has been a steady growth in sales for the last decade exceptionally due to the effect of global economic recession a mere decline in 2009 happened. When Recession occurs some consumers choose to buy only basic beverages like Milk.
Additionally. a number of states had regulations restricting the sale of soft drinks and other foods in schools. In 2005. which allows us to net certain exposures and take advantage of any natural offsets. At 2006 in USA.wikinvest. therefore. "The company manages most of the foreign currency exposures on a consolidated basis. we enter into forward exchange contracts to offset the earnings impact relating to exchange rate fluctuations . weakness in one particular currency might be offset by strengths in others over time. Coke uses cumulative foreign exchange structure i. we generated approximately 71 percent of our net operating revenues from operations outside of our North America operating group. Our Company enters into forward exchange contracts and purchases currency options (principally euro and Japanese yen) and collars to hedge certain portions of forecasted cash flows denominated in foreign currencies._Consolidated_%28COKE%29/Government_Regulation The company functions over 195 countries and it deals with 47 currencies. If there is some fluctuation in the currency market it affects International operation Weakness in global economy Price reduction due to local competition Less profit due to weakened currency Dollar's fall against other major currencies will increase its turnover.com/stock/CocaCola_Bottling_Co. We use derivative financial instruments to further reduce our net exposure to currency fluctuations.e holistic not a individual currency market. http://www.
com/investors/pdfs/10-K_2005/Coca-Cola_10-K_Item_07a. We also enter into forward exchange contracts as hedges of net investments in international operations.pdf Conclusion ." http://www.thecoca-colacompany. From time to time we enter into interest rate swap agreements to manage our mix of fixed-rate and variable-rate debt. as well as our mix of term debt versus non-term debt. Interest Rates: We monitor our mix of fixed-rate and variable-rate debt.on certain monetary assets and liabilities.
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