introduction of coco-cola

The Coca-Cola Company is the world's largest beverage company

and owner of the world's most recognised trademarks and best
selling soft drinks. The latter is available in more than 195 countries.
Coca-Cola has 47% of the worldwide market share in soft drinks:
80% of its earnings come from outside North America. The over-
riding message in the company's literature is that it believes it has an
infinite opportunity for growth. Coca-Cola states that one of the most
important factors of the company's success is its commitment to the
economic success of every market in which it operates and its long-
term sustainable economic growth. Its global business system
consists of three partners: the Coca-Cola company which develops
brands and produces concentrates; its bottlers who manufacture and
distribute finished products and undertake local marketing; and its
customers - for example, retailers who present the company's
products to the public

The History of Coca Cola

John Pemberton was the inventor of Coca
Cola
in May, 1886, Coca Cola was invented by Doctor John Pemberton a
pharmacist from Atlanta, Georgia. John Pemberton concocted the
Coca Cola formula in a three legged brass kettle in his backyard. The
name was a suggestion given by John Pemberton's bookkeeper
Frank Robinson.
Birth of Coca Cola
Birth of Coca Cola

Being a bookkeeper, Frank Robinson also had excellent penmanship.

It was he who first scripted "Coca Cola" into the flowing letters which
has become the famous logo of today.
The soft drink was first sold to the public at the soda fountain in
Jacob's Pharmacy in Atlanta on May 8, 1886.

About nine servings of the soft drink were sold each day. Sales for
that first year added up to a total of about $50. The funny thing was
that it cost John Pemberton over $70 in expanses, so the first year of
sales were a loss.

Until 1905, the soft drink, marketed as a tonic, contained extracts of

cocaine as well as the caffeine-rich kola nut.

Asa Candler

In 1887, another Atlanta pharmacist and businessman, Asa Candler

bought the formula for Coca Cola from inventor John Pemberton for
$2,300. By the late 1890s, Coca Cola was one of America's most
popular fountain drinks, largely due to Candler's aggressive
marketing of the product. With Asa Candler, now at the helm, the
Coca Cola Company increased syrup sales by over 4000% between
1890 and 1900.
Advertising was an important factor in John Pemberton and Asa
Candler's success and by the turn of the century, the drink was sold
across the United States and Canada. Around the same time, the
company began selling syrup to independent bottling companies
licensed to sell the drink. Even today, the US soft drink industry is
organized on this principle.

Marketing plan Coco Cola

Uploaded by joeydaprof (2101) on Jun 12, 2006
Executive summary
Giant soft drink company Coca Cola has come under intense scrutiny
by investors due to its inability to effectively carry out its marketing
program. Consequently it is seeking the help of Polianitis Marketing
Company Pty Ltd to develop a professional marketing plan which will
help the business achieve it’s objectives more effectively and
efficiently, and inevitably regain there iron fist reign on the soft drink
industry.

When establishing a re-birthed marketing plan every aspect of the

marketing plan must be critically examined and thoroughly
researched. This consists of examining market research, auditing
business and current situation (situation analysis) and carefully
scrutinising the soft drink industry and possibilities for Coca Cola in
the market. Once Coca Cola have carefully analysed the internal and
external business environment and critically examined the industry in
general the most suitable marketing strategies will be selected and
these strategies will be administered by effectively and continually
monitoring external threats and opportunities and revising internal
efficiency procedures.

Situation Analysis

Market Analysis:

The market analysis investigates both the internal and external

business environment. It is vital that Coca cola carefully monitor both
the internal and external aspects regarding it’s business as both the
internal and external environment and their respective influences will
be decisive traits in relation to Coke’s success and survival in the soft
drink industry.

Internal Business Environment

The internal business environment and its influence is that which is to

some extent within the business’s control. The main attributes in the
internal environment include efficiency in the production process,
through management skills and effective communication channels.
To effectively control and monitor the internal business environment,
Coke must conduct continual appraisals of the business’s operations
and readily act upon any factors, which cause inefficiencies in any
phase of the production and consumer process.

External Business Environment

The External business environment and its influences are usually

powerful forces that can affect a whole industry and, in fact, a whole
economy. Changes in the external environment will create
opportunities or threats in the market place Coca cola must be aware
off. Fluctuations in the economy, changing customer attitudes and
values, and demographic patterns heavily influence the success of
Coka Cola’s products on the market and the reception they receive
from the consumers.

SWOT Analysis:

SWOT stands for Strengths Weakness Opportunities Threats. SWOT

analysis is a technique much used in many general management as
well as marketing scenarios. SWOT consists of examining the current
activities of the organisation- its Strengths and Weakness- and then
using this and external research data to set out the Opportunities and
Threats that exist.

Strengths:
Coca-Cola has been a complex part of world culture for a very long
time. The product's image is loaded with over-romanticizing, and this
is an image many people have taken deeply to heart. The Coca-Cola
image is displayed on T-shirts, hats, and collectible memorabilia. This
extremely recognizable branding is one of Coca-Cola's greatest
strengths. "Enjoyed more than 685 million times a day around the
world Coca-Cola stands as a simple, yet powerful symbol of quality
and enjoyment" (Allen, 1995).
Additionally, Coca-Cola's bottling system is one of their greatest
strengths. It allows them to conduct business on a global scale while
at the same time maintain a local approach. The bottling companies
are locally owned and operated by independent business people who
are authorized to sell products of the Coca-Cola Company. Because
Coke does not have outright ownership of its bottling network, its
main source of revenue is the sale of concentrate to its bottlers.

Weaknesses:
Weaknesses for any business need to be both minimised and
monitored in order to effectively achieve productivity and efficiency in
their business’s activities, Coke is no exception. Although domestic
business as well as many international markets are thriving (volumes
in Latin America were up 12%), Coca-Cola has recently reported
some "declines in unit case volumes in Indonesia and Thailand due
to reduced consumer purchasing power." According to an article in
Fortune magazine, "In Japan, unit case sales fell 3% in the second
quarter [of 1998]...scary because while Japan generates around 5%
of worldwide volume, it contributes three times as much to profits.
Latin America, Southeast Asia, and Japan account for about 35% of
Coke's volume and none of these markets are performing to
expectation.
Coca-Cola on the other side has effects on the teeth which is an
issue for health care. It also has got sugar by which continuous
drinking of Coca-Cola may cause health problems. Being addicted to
Coca-Cola also is a health problem, because drinking of Coca-Cola
daily has an effect on your body after few years.

Opportunities:
Brand recognition is the significant factor affecting Coke's competitive
position. Coca-Cola's brand name is known well throughout 94% of
the world today. The primary concern over the past few years has
been to get this name brand to be even better known. Packaging
changes have also affected sales and industry positioning, but in
general, the public has tended not to be affected by new products.
Coca-Cola's bottling system also allows the company to take
advantage of infinite growth opportunities around the world. This
strategy gives Coke the opportunity to service a large geographic,
diverse area.

Threats:
Currently, the threat of new viable competitors in the carbonated soft
drink industry is not very substantial. The threat of substitutes,
however, is a very real threat. The soft drink industry is very strong,
but consumers are not necessarily married to it. Possible substitutes
that continuously put pressure on both Pepsi and Coke include tea,
coffee, juices, milk, and hot chocolate. Even though Coca-Cola and
Pepsi control nearly 40% of the entire beverage market, the changing
health-consciousness of the market could have a serious affect. Of
course, both Coke and Pepsi have already diversified into these
markets, allowing them to have further significant market shares and
offset any losses incurred due to fluctuations in the market.
Consumer buying power also represents a key threat in the industry.
The rivalry between Pepsi and Coke has produce a very slow moving
industry in which management must continuously respond to the
changing attitudes and demands of their consumers or face losing
market share to the competition. Furthermore, consumers can easily
switch to other beverages with little cost or consequence.

Product Life cycle:

When referring to each and every product or service ever placed

before the consumer i.e. in the long term all the existing products and
services are dead. For e.g.:- Replacement of Ford Cortina ( a highly
successful car) by Ford Sierra, the replacement of sierra by the Ford
Mondeo and the replacement of the old Mondeo by the new Mondeo
in 2001. So every product is born, grows, matures and dies. So in the
commercial market place products and services are created,
launched and withdrawn in a process known as Product Life Cycle.
To be able to market its product properly, a business must be aware
of the product life cycle of its product. The standard product life cycle
tends to have five phases: Development, Introduction, Growth,
Maturity and Decline. Coca-Cola is currently in the maturity stage,
which is evidenced primarily by the fact that they have a large, loyal
group of stable customers.
Furthermore, cost management, product differentiation and marketing
have become more important as growth slows and market share
becomes the key determinant of profitability. In foreign markets the
product life cycle is in more of a growth trend Coke's advantage in
this area is mainly due to its establishment strong branding and it is
now able to use this area of stable profitability to subsidize the
domestic Cola Wars.
Insert the picture of the product lifecycle

Marketing Objectives

The objective is the starting point of the marketing plan. Objectives

should seek to answer the question 'Where do we want to go?'. The
purposes of objectives include:

-> to enable a company to control its marketing plan.

-> to help to motivate individuals and teams to reach a common goal.
-> to provide an agreed, consistent focus for all functions of an
organization.

All objectives should be SMART i.e. Specific, Measurable,

Achievable, Realistic, and Timed.

Specific - Be precise about what you are going to achieve

Measurable - Quantify you objectives
Achievable - Are you attempting too much?
Realistic - Do you have the resource to make the objective happen
(men, money, machines, materials, minutes)?
Timed - State when you will achieve the objective (within a month?
By February 2010?)

1.Market Share Objectives:

To gain 60% of the market for soft drink industry by September 2007.

2.Profitability Objectives:
To achieve a 20% return on capital employed by August 2007
3. Promotional Objectives
To increase awareness of the product on the market.
4. Objectives for Survival
To survive the current market war between competitors.

5. Objectives for Growth

To increase the size of the worldwide Coca Cola enterprise by 10% .

Selecting Target Market

Once the situation analysis is complete, and the marketing objectives

determined, attention turns to the target market. The soft drink market
is very large, and the business cannot be “all things to all people”, so
it must choose which market segments have the greatest potential.
The target market is the group of customers on whom the business
focuses attention. The target market is where Coca Cola focuses its
marketing efforts as it feels this is where it will be most productive
and successful. The target market for Coca cola is very wide as it
satisfy’s the needs for many different consumers, ranging from the
healthy diet consciousness through Diet Coke to the average human
through its best selling drink regular Coke. Most Coke products
satisfy all age groups as it is proven that most people of different age
groups consume the Coca Cola product. This market is relatively
large and is open to both genders, thereby allowing greater product
diversification.
There are four broad ways which Coca Cola can segment its market:
-> Mass marketing
-> Concentrated marketing
-> Differentiated marketing
-> Niche marketing
The most apparent method used by Coca Cola is with no doubt the
differentiated marketing method as Coke satisfy’s a range of different
markets. Diet coke satisfy’s the weight consciousness, regular coke,
sprite, fanta the average human, coffee, iced tea etc. Each group of
beverages satisfy a particular group of people but majority the
average human.
Developing The Marketing Mix

The marketing mix is probably the most crucial stage of the marketing
planning process. This is where the marketing tactics for each
product are determined. The marketing mix refers to the combination
of the four factors(price, promotion, product, place) that make up the
core of a business’s marketing strategy. In this step of the marketing
planning process, marketing mix must be designed to satisfy the
wants of target markets and achieve the marketing objectives. The
most successful businesses have continually monitored and changed
their marketing mix due to respective internal and external factors
and have monitored the external business environment in order to
maximise their marketing mix components.

Product:

Many Products are physical objects that you can own and take home.
But the word product means much more than just physical goods. In
marketing, product also refers to services, such as holidays or a
movie, where you enjoy the benefits without owning the result of the
service.
Businesses must think about products on three different levels, which
are the core product, the actual product and the augmented product.
The core product is what the consumer is actually buying and the
benefits it gives. Coca Cola customers are buying a wide range of
soft drinks. The actual product is the parts and features, which deliver
the core product. Consumers will buy the coke product because of
the high standards and high quality of the Coca Cola products. The
augmented product is the extra consumer benefits and services
provided to customers. Since soft drinks are a consumable good, the
augmented level is very limited. But Coca Cola do offer a help line
and complaint phone service for customers who are not satisfied with
the product or wish to give feedback on the products.
Positioning

Once a business has decided which segments of the market it will

compete in, developed a clear picture of its target market and defined
its product, the positioning strategy can be developed. Positioning is
the process of creating, the image the product holds in the mind of
consumers, relative to competing products. Coca Cola and Franklins
both make soft drinks, although Franklins may try to compete they will
still be seen as down market from Coca Cola. Positioning helps
customers understand what is unique about the products when
compared with the competition. Coca Cola plan to further create
positions that will give their products the greatest advantage in their
target markets. Coca Cola has been positioned based on the process
of positioning by direct comparison and have positioned their
products to benefit their target market. Most people create an image
of a product by comparing it to another product, thus evident through
the famous battles between Coca-Cola and Pepsi products.

Branding

It is often hard to say exactly why we buy one company’s product

over another. Companies such as Nike and Adidas spend large
amounts of money trying to win consumers away from their
competitors who make products that are very similar. The popularity
of the brand is often the deciding factor. Over the time Coca Cola has
spent millions of dollars developing and promoting their brand name,
resulting in world wide recognition. 'Coca-Cola' is the most
recognised trademark, recognised by 94% of the world's population
and is the most widely recognised word after "OK". Coca Cola’s red
and white colours and special writing are all examples of world-wide
trademarks.
There are a number of branding strategies: Generic brand strategy,
Individual brand strategy, Family brand strategy, Manufacturer’s
brand strategy, Private brand strategy and Hybrid brand strategy.
Coca Cola utilizes the Individual brand strategy as Coca Cola’s major
products are given their own brand names e.g Fanta, Sprite, Coca
Cola etc although they maybe presented as different lines they
operate under the name of Coca Cola.

Packaging
Packaging, which is not as highly perceived by businesses, is still an
important factor to examine in the marketing mix. Packaging protects
the product during transportation, while it sits in the shelf and during
use by consumers, it promotes the product and distinguishes it from
the competition. Packaging can allow the business to design
promotional schemes, which can generate extra revenue and
advertisements. Coca-Cola has benefited from packaging the product
with incentives and endorsements on the labelling as a promotional
strategy to increase it’s volume of sales and revenue.

Price:

Price is a very important part of the marketing mix as it can effect

both the supply and demand for Coca Cola. The price of Coca Cola’s
products is one of the most important factors in a customer’s decision
to buy. Price will often be the difference that will push a customer to
buy our product over another, as long as most things are fairly
similar. For this reason pricing policies need to be designed with
consumers and external influences in mind, in order to effectively
achieve a stable balance between sales and covering the production
costs.
Price strategies are important to Coca Cola because the price
determines the amount of sales and profit per unit sold. Businesses
have to set a price that is attractive to their customers and provides
the business with a good level of profit. Long before a sale was ever
made Coca Cola had developed a forecast of consumer demand at
different prices which inevitably determined whether or not the
product came on the market, as well as the allocation of adequate
money and resources to produce, promote and distribute the product.

Pricing Strategies And Tactics

The pricing Strategy a business will use will have to focus on

achieving the marketing plan’s objectives and support the positioning
of the product, and take external factors such as economic conditions
and competitors in to account. There are 5 strategies available to
business: Market skimming pricing, Penetration pricing, Loss leaders,
Price Points and Discounts. Over the years Coca Cola has used
Penetration Pricing as a way of grabbing a foothold in the market and
won a market share. It’s product penetrated the marketplace. Once
customer loyalty is established as seen with Coca Cola it is then able
to slowly raise the price of its product. There has been a fierce pricing
rivalry between Coca Cola and Pepsi products as each company
competes for customer recognition and satisfaction. Till now it
appears as if Coke has come up on top, although in order to gain
long term profits Coke had to sacrifise short term profits where in
some cases it either went under of just broke even, but as seen it has
been all for the best.
Pricing Methods

Good pricing decisions are based on an analysis of what target

customers expect to pay, and what they perceive as good quality. If
the price is too high, consumers will spend their money on other
goods and services. If the price is too low, the firm can lose money
and go out of business.
Pricing methods include: Cost based Pricing, Market based pricing
and Competition based Pricing. Over the years Coca has lost ground
here in it’s pricing but has regained it’s strength as it employed the
Competition-based pricing method which allowed it to compete more
effectively in the soft drink market. Leader follower pricing occurs
when there is one quite powerful business in the market which is
thought to be the market leader. The business will tend to have a
larger market share, loyal customers and some technological edge,
thus the case currently with Coke, it was first the follower but through
effective management has now become the leader of the market and
is working towards achieving the marketing objectives of the Coca
Cola. Survival in the market place, own 60 % of market share by
2007, increase further awareness of product and a return on 20% on
capital employed for August 2007.

Promotion:

In today’s competitive environment , having the right product at the

right place in the right place at the right time may still not be enough
to be successful. Effective communication with the target market is
essential for the success of the product and business. Promotion is
the p of the marketing mix designed to inform the marketplace about
who you are, how good your product is and where they can buy it.
Promotion is also used to persuade the customers to try a new
product, or buy more of an old product.
The promotional mix is the combination of personal selling,
advertising, sales promotion and public relations that it uses in its
marketing plan. Above the line promotions refers to mainstream
media:Advertising through common media such as television, radio,
transport, and billboards and in newspapers and magazines.
Because most of the target is most likely to be exposed to media
such as television, radio and magazines, Coca Cola has used this as
the main form of promotion for extensive range of products. Although
advertising is usually very expensive, it is the most effective way of
reminding and exposing potential customers to Coca Cola Products.
Coca Cola also utilizes below the line promotions such as contests,
coupons, and free samples. These activities are an effective way of
getting people to give your product a go.

Place and Distribution:

The place P of the marketing mix refers to distribution of the product-

the ways of getting the product to the market.The distribution of
products starts with the producer and ends with the consumer.
One key element of the “Place/Distribution” aspect is the respective
distribution channels that Coca Cola has elected to transport and sell
its product.

Selecting the most appropriate distribution channel is important, as

the choice will determine sales levels and costs. The choice for a
distribution channel for any business depends on numerous factors,
these include:
• How far away the customers are;
• The type of product being transported;
• The lead times required; and;
• The costs associated with transport;
There are four types of distribution strategies that Coca Cola could
have chosen from, these are: intensive, selective, exclusive and
direct distribution. It is apparent from the popularity of the Coca
Cola’s product on the market that the business in the past used the
method of intensive distribution as the product is available at every
possible outlet. From supermarkets to service stations to your local
corner shop, anywhere you go you will find the Coca Cola products.

Physical Distribution Issues

Coca Cola needs to consider a number of issues relating to the

physical distribution of its soft drink products. The five components of
physical distribution are, order processing, warehousing, materials
handling, inventory control, transportation. Coca Cola must further try
to balance their operations with more efficient distribution channels.

Order Processing- Coca Cola cannot delay their processes for

consumer deliveries (i.e. delivery to selling centers), as this is
inefficient business functioning and is portrays a flawed image of the
product and overall business.
Warehousing and inventory control- warehousing of Coca Cola
products is necessary. Inventory control is another important aspect
of distribution as inventory makes up a large percentage of
businesses assets. Choosing the correct and desired inventory
measure that Jackson’s sees as most effective is vital. Jackson’s
must remember though that there are factors involved with inventory
control that can hinder the products sales and customer perceptions
(hazards, distribution from storage facilities, etc…).
Materials handling- this deals with physically handling the product
and using machinery such as forklifts and conveyor belts. When
holding products, then Coca Cola has benefited from purchasing or
renting respective machinery.
Transportation- transporting Coca Cola products is the one most
important components of physical distribution. Electing either to
transport the sports drink by air, rail, road or water depends on the
market (i.e. global, or domestic?) and depends on the associated
costs. The most beneficial transportation method for Coca Cola would
be ROAD if the product were moved around from storage to the cost
centers.

Implementing, Monitoring And Controlling

Financial Forecasts

Financial forecasts are predictions of future events relating strictly to

expected costs and revenue costs for future years. There are five
major marketing expenditures, which include research costs, product
development costs, product costs, promotion costs and distribution
costs.

Sales force composite is the most logical method in forecasting

revenue. This involves estimates from individual salespeople to sell to
work out a total for the whole business. Once these costs and
revenues are forecasted, management can then decide which
combination of marketing mix strategies will deliver the most sales
revenue at the lowest cost.

Implementing

Implementation is the process of turning plans into actions, and

involves all the activities that put the marketing plan to work.
Successful implementation depends on how well the business blends
its people, organisational structure and company culture into a
cohesive program that supports the marketing plan.

For its further success, Coca Cola must impose several key changes.
Production needs to be on time and meet the quota demanded from
wholesalers. It must also be efficient so as not to build inventory
stocks and inventory prices. The marketing needs to be motivated
and knowledgeable about the product. The forms of promotion such
as advertising must be attracting and enticing to the target market to
get the greatest amount of exposure possible for the product. This will
ensure the success of the product in the stores. Distribution of the
product must be efficient. This problem has already been taken care
of with convenient transport routes to commercial areas and transport
already being arranged.

Monitoring And Controlling

Monitoring and controlling allows the business to check for variance
in the budget and actual. This is important because it allows Coca
Cola to take the necessary actions to meet the marketing objectives.
There are three tools Coca Cola should use to monitor the marketing
plan. They are the following:

i. Sales Analysis
The sales analysis breaks down total business sales by market
segments to identify strengths and weaknesses in the different areas
of sales. Sellers of Coca Cola products vary from major retail
supermarkets to small corner stores. This gives the its products
maximum exposure to customers at their convenience.

ii. Market Share Analysis

Market share analysis compares Coca Cola’s business sales
performance with that of its competitors. Coca Cola looks to increase
its market share by over 60%. With the changes Coca Cola is
currently undergoing, they aim to regain an iron fist control of the
market. Target market various age groups and lifestyles from high
school students too universities, and male or female.

Marketing Profitability Analysis

This analysis looks at the cost side of marketing and the profitability
of products, sales territories, market segments and sales people.
There are three ratios to monitor marketing profitability; they are
market research to sales, advertising to sales and sales
representatives to sales. The results of these three tools can help
Coca Cola determine any emerging trends, such as the need for a
different product. Comparing these results with actual results gives
the business an idea on when to change.

Market Research

When attempting to implement a new Marketing plan a business must

address its target market and conduct the relevant information to
insure the new marketing plan both differs from the old and is better
for the business. When conducting market research a business must
first define the problem and then gather the appropriate information to
solve the problem. There are 3 types of information a business can
gather to solve its problems.
->Exploratory Research which clarifies the problem an d searches for
ways to address it.
->Descriptive Research is used to measure and describe things like
the market potential for a product and characteristics of the target
market.
->Casual Research is used to test a hypothesis about a cause and
effect relationship.
Coca Cola through its market research has addressed all three types
of research to define the problem raised by shareholders and
gathered information to serve their needs.

Factors Influencing Consumer Choice

When making decisions on products a business must look at factors

that influence consumer choice such as psychological factors,
Sociocultural factors, Economic factors and Government Factors.
Psychological Factors: such as motivation, perception, lifestyle,
personality and self concept, learning , and attitudes influence the
consumers behaviour towards a product and Coca Cola has
addressed this issue by introducing Diet Coke to satisfy different
lifestyles.
Sociocultural factors: such as culture, subculture, socio-economic
status, family and reference groups influence the consumers
behaviour towards a product.
Economic factors: such as Disposable income and discretionary
income. Coca Cola has addressed this side of the influence by
maintaining a low price on the price of its products.
Government Factors: such as new regulations, inflation, interest rates
all influence consumer spending and choice.