The Main Objective of Coke - Essay Example

?Market Planning Table of Contents Market Planning Table of Contents 2 Introduction: Coca Cola Corporation Ltd 3 Marketing Planning Changes & Assessing Capability 3 Assessment of Capability: Value Chain Analysis 5 Macro Environmental Analysis 8 PEST Analysis 8 Social Cultural Factors 9 Organizational Barriers & Suggestions for Overcoming Barriers 9 SWOT Analysis & Marketing Plan 10 Marketing Mix & Marketing Strategy 12 Ethical Issues in Marketing 14 Reference List 16 Introduction: Coca Cola Corporation Ltd Coca Cola is one of the leading carbonated beverage companies of the world headquartered at Atlanta, Georgia. The company manufactures and sells carbonated beverages throughout the countries of the world except North Korea and Cuba. The cola drink was initially formed by John Pemberton in the year 1884 and by the year 1886 the company had sold 3 versions of cola drinks to individual business units (Coca Cola, 2013d). The objective of the company is to offer the employees a congenial atmosphere to work and customers a wide range of drinks which can satisfy their needs. Some of the main objectives of the company are to lay emphasis on the needs of the customers and develop innovative products. Presently, the company offers 3500 products in more than 200 countries (Coca Cola, 2013a). The company tries innovative methods to develop core products which can suit the taste buds of the customers and provide satisfaction (Coca Cola, 2013b). Presently, the company manufactures carbonated beverages in various flavours, juices, bottled water and sports drink (Coca Cola, 2013h). Marketing Planning Changes & Assessing Capability Marketing Planning is a method to develop plans which can identify and satisfy customer needs and wants. The main elements of market planning are to conduct a market research to understand the customer requirements. Understanding customer requirements is essential to develop products as per customer preference and specifications. After 70 years of success in developing cola drinks only in singular flavour the company decided to manufacture drinks in varied flavours to diversify their risk and yield profits from varied products. This was one of major breakthrough market planning initiatives by the company to manufacture beverages for a diversified customer base. The company started selling juices under the brand Minute Maid to portray itself as a healthy beverage manufacturer. The company also increased its availability in remote countries like Cambodia, Paraguay, Macau, Turkey and Montserrat. The first television advertisement for Coke appeared in the year 1970 which related the brands with friendliness and good times. In the year 1980 during the tenure of the chairman Mr. Roberto C. Goizueta the company started focusing more on manufacturing healthy beverages which would suit the taste bud of the consumers. During the 1980’s the company started manufacturing sugar free and low sugar content drinks under the brand names “Diet Coke”. This decision was made to strengthen the brand image of the company. Mr. Roberto C. Goizueta also introduced a drink with a relatively new flavour under a new formula which was popularly termed as “New Coke”. However, coke started manufacturing drinks under the original formula to regain the customer and critic’s confidence. During the 1990’s the company started formulating a different strategy by associating itself with sports. The company associated itself with leading sports which were popular among the common masses. The company became one of the sponsors of FIFA, Rugby, and National Basketball Association etc to connect with a larger audience. The advertising and various other marketing strategies had a profound impact on the company’s earnings. Traditionally the company served 9 drinks per day compared to 1.7 billion servings per day presently (Coca Cola, 2013e). Thus, we can observe that the company had adapted to the changing marketing environment and had changed the marketing strategies accordingly. Coke is one of the few companies to believe in innovative development without changing the core value of the product. Assessment of Capability: Value Chain Analysis The value chain analysis will be conducted to understand the internal capabilities of the organization. It will be divided into primary and supporting activities as observed in Figure 1.The value chain analysis is important to lay down the business level strategies. Figure 1: Value Chain Analysis (Source: Hitt, Ireland & Hoskisson, 2010) Primary Activities The core activities of the company are to manufacture carbonated and non carbonated beverages for customers. The company manufactures beverages under various brands for a wider customer base which include teenagers, kids, young adults and aged people. Inbound & Outbound Logistics Coke operates on a larger scale hence the availability of the product is also large which indicates that the availability of the product is totally dependent on the suppliers of the company. The company does own or control any of the bottling operation units which are responsible for the timely supply of the beverages. The company has a strong alliance with more than 250 bottling operations. These bottling partners are responsible for delivery of beverages to the retail outlets, restaurants, street vendors, amusement parks and movie theatres. The suppliers are responsible for distributing more than 1.8 million drinks per day (Coca Cola, 2013f). Operations The bottling operational units of the company are responsible for packaging the beverages and supplying it to leading retail outlets and companies for consumption purposes (Coca Cola, 2013g). Marketing The company has associated itself with popular celebrities for endorsement of the brand and promotes its brand through television, print, radio and other forms of communication. The company promotes itself actively through social media networks like Facebook, Twitter, YouTube etc and keeps updating about the comments from customers in its official website (Coca Cola, 2013j). Services The company also offers students to apply for their internship programme by filling an application form through its official website (Coca Cola, 2013l). It allows customers to listen to varied music for free in their official websites. Supporting Activities Support activities involves support assistance require for the primary activities. Procurement The company procures sugar, caramel and juice extracts from leading companies for the manufacturing of fine and high quality beverages. Technology development The company is solely dependent on technological advancement for the manufacturing and filtration of the carbonated and non carbonate beverages. Advanced technology permits the management of the company to package the beverages and distribute it efficiently. Human Resource Management Employees form an integral part of Coke because they are contributing factors in manufacturing beverages of high quality (Coca Cola, 2013i). Regular training and induction is imparted to the employees for enhancement of their technical and non technical skills. Infrastructure The company owns a large and advanced factory layout for manufacturing, distribution and packaging purposes. The company has dedicated an entire building for training, research & development purposes. Coke owns Beverage Institute for Health & Wellness which focuses on development of the quality of the product (Coca Cola, 2013k). Competitive Advantage Apart from being one of the first cola beverages companies to manufacture sparking drinks it also imparts training and development programs to suppliers to increase the efficiency. Macro Environmental Analysis PEST Analysis This analysis will help in determining the external threats and opportunities faced by the beverages industry of UK. Political Presently, the corporate tax rate in UK for multinational corporations is 23 percent which is very high (Government of UK, 2013). The UK economy is recovering from an economic slowdown and the government has increased its corporate tax rate for the betterment of the common people. The beverage market has been growing steadily compared to the other markets of different countries. The beverage consumption was 14585 million litres in the year 2010 to 14685 million litres in the year 2011 (BSDA, 2012). Economic The carbonated beverages are usually low priced and the sales of the beverages are not affected by recession to a large extent. In spite of the economic slowdown in UK the beverage consumption is increasing and the industry has been gaining stability. Social Cultural Factors The social life of the UK residents is hectic and they require additional energy to improve their zeal. This is one of the major reasons that beverages play an important role in the lives of the common people of UK. Technology The beverage companies of UK are highly dependent on technology as it is required in the research and development purposes, manufacturing and processing the drinks. Technology also helps the beverage companies to purify their carbonated drinks. From the above PEST analysis it is observed that the apart from the political scenario the social, economic and technological factor are favourable for the further expansion of Coke. Organizational Barriers & Suggestions for Overcoming Barriers Organizational barriers can be called as those factors which act as hindrance to the communication, manufacturing and development process of the company. In spite of being one of the most popular drinks of the world Coke is faced with several accusations which have the potentiality of tarnishing the image of the company. Some of the major barriers which can act as a hindrance for further expansion for the company include the increasing corporate tax rate of UK and others countries, decreasing purchasing power of customers, accusation of being an unhealthy drink and a contributing factor for increasing obesity among the people. Some of the major remedial solutions for Coke to overcome the barriers are as follows: Increasing Corporate Tax Rate: The countries with a high beverage consumption rate have high corporate taxes. This has made the penetration of the beverage companies very difficult in several counties. It is claimed that the future of beverages market in UK and other countries would be stable by the end of the year 2014. The UK government has also claimed that the corporate tax rate of UK and other countries would lower down by the end of the end of 2015. Therefore, it would be wise for Coke to enter into the beverages market of UK and other countries by the end of 2020. They should continue to expand further in companies with lower corporate tax rate. Nutritional Content: The Company has been accused on manufacturing beverages with high calories and low nutritional content. The company needs to focus on improving the existing technological process of the company which can improve the quality of the product. The company needs to also lay emphasis on the research and development process and try to infuse nutritional content in the carbonated beverages which can be beneficial for the customers. The company infuses additional nutritional requirements in its sparkling and energy drinks but it has to focus on developing its core product also. The company can also conduct various programs which highlight techniques to combat obesity. SWOT Analysis & Marketing Plan A SWOT analysis will be conducted to understand the strength, weakness, opportunity and threats of Coca Cola at the present moment. Strength The company manufactures cola, nutritional, sparking, bottled water and energy drinks to cater to a wider customer base. This has helped the company to diversify its risk and also yield profitability from other segments. One of the unique qualities of Coke is that it offers a distinctive taste of the cola drink to its customers which are highly preferable to its customers. The distribution process is very strong and wide which makes the availability of the product easy. Weakness The company introduced its energy drink much later in the market than its competitors. Coke generates lesser amount of revenue than its competitors in the energy drink segment. Opportunity Due to its immense popularity and long association with sports many reputed organizations and companies have tried acquiring Coke. The government of various countries plans to lower the corporate tax rate of several countries which will help the company to expand further. Threats The beverages industry is one of the most lucrative and profitable industries which make it attractive for existing beverage companies to expand further and novice companies to enter into the markets. Coke needs to introduce innovative marketing strategies to retain its position as the market leader of the industry. Although the Coke manufactures varied range of beverages for a wider customer base it is observed that the company faces several accusation of manufacturing unhealthy drinks which are a major contributing factor for increasing obesity. Firstly, the company needs to identify its customer base and conduct thorough market segmentation for the development of accurate marketing strategies. The management of the company should keep in mind that there are four types of customers; external, internal, business and government. The main objective of Coke should be to develop marketing strategies for the end users and convince about these strategies to the government, internal customers and other business departmental units. Secondly, after the markets segmentation is performed it is necessary to analyze the customer purchase behaviour because the psychological aspect of customer behaviour needs to be satisfied. A survey should be conducted by the company in the leading supermarkets to understand the customer requirements, specification and taste. Thirdly, as observed that the immediate competitors of Coke like Pepsi, Red Bull etc are fiercely competitive and develop continuous plans to attract potential customers it is necessary for Coke to observe the marketing strategies of competitors closely. The company needs to categorize its various types of competitors; immediate, distant, strong and weak. This will help the company to understand their and the competitor’s strategic position clearly. To combat against obesity and unhealthy habits the company has launched various programs like Triple Play which provides nutritional requirement information and avenues for exercise and play for children aged between 6 to 18 years (Coca Cola, 2013c). The company also provides several effective nutritional information and habits in its official website (Beland, 2013). The company needs to develop several other wellness programs for the betterment of the society and the individuals like developing a wellness program for the teenagers, young adults and the elderly people. In the year 2012 the company introduced non sweetened drinks in several packages to make fine selective choices for the customers. Marketing Mix & Marketing Strategy Product The company offers carbonated cola, nutritional, bottled water, iced tea, energy drinks and juices in various flavours packages. The company earns majority of its revenue from the cola drink and juices. However, the products availability of certain drinks is limited to few geographic locations only. Price The cola drinks and juices are available at low prices. The non sweetened and low calorie drinks are available slightly at higher price than the core product. The products which are refined and processed are expensive. Place Mostly the drinks are available at all the leading supermarkets, retail outlets, colleges, schools and vending machines. The business enterprises can make a bulk order through the official websites. Promotion The company promotes the brand through social media, print, billboard, television and radio. The company also has made collaborations with the leading sports associations and sports events to promote their brand aggressively. The company needs to develop a strong marketing strategy needs to develop to enter and become the market leader. Firstly, the attributes related to the core product does not need to be altered like the flavour, logo and the brand. The company should come up with an innovative and an attractive tagline and relates with customer needs and the brand itself. The management of the company should try to develop a non sweetened or low calorie product with the unique cola favour which would be preferred by customers of all ages. The logo of the brand should be revamped but not changed completely because customer often relates the brand with the logo. A thorough analysis should be done by the research and development team on the existing product line of the company. This will help the management of the company to identify the core products which are significant revenue contributors. The products which are not significant revenue earners should be discarded immediately. Application of new promotional strategies will help the company in incurring expenditure with unpredictable outcomes. Ethical Issues in Marketing Marketing Ethics helps in addressing the concerns and helps in establishment of acceptable codes and conduct which prevents the company from practices that are unethical and wrong (Ferell, n.d.). The ethical decision making is generally made by the stakeholders and shareholders of ethic company so that the brand image does not get hampered. When the company develops a wellness program should be carefully designed for the target customers so that it does not look a profit oriented program. This might affect the customer’s psychology to large extent and hamper the sales of the company. Since, the company is not altering the ingredients of the core product questions might arise related to nutritional content of the product. It would be beneficial for the company to highlight the product ingredients in the official website and conduct an awareness program which will constitute the details of the manufacturing, filtration process of the drinks. The conduct of awareness programs will lead to additional cost expenditures by the company. This will also require the management of the company to do a lot of convincing to the shareholders of the company. Convincing the shareholders will be time consuming and may not be fruitful also because incurring additional expenditures is usually not favoured by the shareholders. Thus, ethical decision making would require cautious and careful planning by the management of the company. Reference List Beland, N., 2013. 12 baby steps to better nutrition [online] Available at: < http://www.coca-colacompany.com/coming-together/12-baby-steps-to-better-nutrition > [Accessed 18 June 2013]. BSDA, 2012. The 2012 UK soft drink report. [online] Available at: < http://www.britishsoftdrinks.com/PDF/UK%20soft%20drinks%20report%202012.pdF > [Accessed 18 June 2013]. Coca Cola, 2013a. Our company [online] Available at: < http://www.coca-colacompany.com/our-company/ > [Accessed 18 June 2013]. Coca Cola, 2013b. Mission, vision & values [online] Available at: < http://www.coca-colacompany.com/our-company/mission-vision-values > [Accessed 18 June 2013]. Coca Cola, 2013c. Coke triple play [online] Available at: < http://www.coca-colacompany.com/coming-together/ > [Accessed 18 June 2013]. Coca Cola, 2013d. Heritage timeline [online] Available at: < http://heritage.coca-cola.com/ > [Accessed 18 June 2013]. Coca Cola, 2013e. Annual report [online] Available at: < http://www.coca-colacompany.com/annual-review/2012/pdf/TCCC_2012_Annual_Review.pdf > [Accessed 18 June 2013]. Coca Cola, 2013f. Suppliers [online] Available at: < http://www.coca-colacompany.com/our-company/suppliers/ > [Accessed 18 June 2013]. Coca Cola, 2013g. The Coca-Cola system [online] Available at: < http://www.coca-colacompany.com/our-company/the-coca-cola-system > [Accessed 18 June 2013]. Coca Cola, 2013h. Brands [online] Available at: < http://www.coca-colacompany.com/brands/the-coca-cola-company/ > [Accessed 18 June 2013]. Coca Cola, 2013i. Product safety & organization [online] Available at: < http://www.coca-colacompany.com/sustainabilityreport/me/product-safety-and-quality.html > [Accessed 18 June 2013]. Coca Cola, 2013j. Coca Cola on social [online] Available at: < http://www.coca-colacompany.com/our-company/workplace-overview > [Accessed 18 June 2013]. Coca Cola, 2013k. Beverage institute of health and wellness [online] Available at: < http://beverageinstitute.org/us/ > [Accessed 18 June 2013]. Coca Cola, 2013l. Internship opportunities [online] Available at: < http://www.coca-colacompany.com/careers/internship-opportunities > [Accessed 18 June 2013]. Ferell, L., n.d.  Marketing ethics  [pdf] Available at: [Accessed 18 June 2013]. Government of UK, 2013. Corporation tax rates [online] Available at: < https://www.gov.uk/corporation-tax-rates > [Accessed 18 June 2013]. Hitt, M. A., Ireland, R. D. & Hoskisson, R. E., 2010. Strategic management: Competitiveness and globalisation, concepts. 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