Coca Colas Marketing Strategy - Case Study Example

Coca Cola’s Marketing Strategy 1. Introduction Marketing is a very broad area. Most people think of marketing as only promotions and/or advertising and the sales of goods and services. These two, advertising and selling are just two of the broad scopes of marketing activities. In general, marketing activities are all those associated with identifying the particular wants and needs of a target market of customers, and then going about satisfying those customers better than the competitors. This involves doing market research on customers, analyzing their needs, and then making strategic decisions about product design, pricing, promotion and distribution. The establishment of a market economy wrought marked changes in the social and economic structure. A new attitude toward business revolutionized the economy of the country and that revolutionary element was identified by the term ‘marketing.’ Historical accounts of trade lead one to conclude that marketing has always existed. By marketing was first meant “that combination of factors which had to be taken into consideration prior to the undertaking of certain selling or promotional activities.” The essence of marketing was the combination of factors. Blindness to and ignorance of that combination of factors is the reason for the absence of terms equivalent to marketing in other languages. Marketing must be regarded not merely as a business practice, but as a social institution. Marketing is essentially a means of meeting and satisfying certain needs of people. It is a highly developed and refined system of thought and practice characteristic of a period in the development of market economy. A latent presumption in the practice of marketing has been that marketing gives to society more than society gives to it. The fact is that marketing is but one of several means of accomplishing a social objective. (Bartels, 1976) This paper will discuss in particular the different definitions of marketing given by famous book authors and marketing organizations all over the world. It will also tackle the history of modern marketing, functions of marketing in an organization, marketing strategies and processes and the recent changes and updates in the marketing world. Throughout the paper, COCA COLA Company is used as the main focus and object of discussion. The company’s marketing strategies and techniques will be reviewed and analyzed and will be use as examples and citations. The paper aims to answer questions such as how do Coca Cola’s marketing strategies and techniques contribute to its growth and success? What is the impact of marketing strategies in an organization on the 21st century and in future years? 2.0 Coca Cola’s Marketing Strategy: A Case Analysis 2.1 Company Background The Coca Cola Company is one of the world’s leaders in soft dink sales. It produces and distributes several brands of beverage internationally. The company also manufactures and distributes many fruit juices and other non soda beverages. It is based in Atlanta, Georgia. Coca-Cola’s soft drinks include its flagship product Coca-Cola, popularly known as Coke, Diet Coke, Tab, Sprite, Fanta, Fresca, Mello Yello, and Barq’s root beer. The company’s nonsoda beverages include Minute Maid fruit juices, PowerAde sports drinks, and Nestea iced tea drinks. (Microsoft Encarta, 2006) Invented by a pharmacist named John Stith Pemberton in 1886 and was later bought by Asa Candler in 1889 who incorporated the Coca Cola Company in 1892. Coca Cola currently offers nearly 400 brands in over hundreds of countries and territories all over the world. According to the 2005 Annual Report of the company, it sells beverage product in more than 312 countries. It further states that of the more than 90 billion beverage servings of all types consumed worldwide everyday and that approximately 4.5 billion of beverages owned and licensed to the company. Also, according to the 2007 Annual Report, Coca Cola had gallon sales of 37% in the United States, 43% in Mexico, Brazil, Japan and china and 20% spread throughout the world. (Wikipedia, 2008) Like any other companies, Coca Cola has also been involved in a number of controversies, issues and lawsuits related to its perceived relationship with human rights violations ant other perceived unethical practices. Monopolistic and discriminatory practices are just a number of law suits filed against the company. Some of which were dismissed and others had made the Coca Cola Company agreed to change is business practices and some were settles in court. The company has also been involved in a discrimination case and environmental case such as the one in India where a controversy over pesticides possibly showing up in the product and the overuse of local water supply in some locations that have caused some water shortage in some farm areas. 2.2 Coca Cola’s Marketing Advantage 2.2.1 The Product Coca Cola has a very secret formula that even in its early years it was concealed. What is so distinctive about Coca Cola is its secret flavor that only a certain company makes its secret blend of the two most massive stimulants known to preindustrial cultures. The formula was later transmitted to few trusted employees but only through word of mouth. No written memorandum were permitted even written formulae weren’t shown. Labels from containers were removed and the product was only identified by sight, smell and remembering where it is put on the shelf. On April 22 1985 the management announced that it was changing its formula which led to an intense blizzard of protest that within three months the original formula was brought back. It is that secret formula which makes Coca Cola product unique that even trained chemist using latest techniques can not decode the secret formula; therefore, no other companies or chemist can copy its secret combination of mixtures. It can be stated that the inherent chemical and physical composition of Coca Cola can be given the principal or even a significant share of the credit for the company’s great success. 2.2.2 The System Coca Cola was able to make it this far and big because of its success in gaining national and international distribution. The product was sold only for a nickel and its ingredients were bulky and heavy. Further, a beverage such as this was a convenience good par excellence. Coca-Cola may have been selling syrup, but the consumer was buying the quenching of thirst. It is a rare consumer who will save his or her thirst for twenty or thirty minutes in order to find a Coca-Cola or any other specific soft drink. Since a thirst unquenched by Coca-Cola was a sale lost forever, Coke had to be everywhere, or, within the arm’s-length of desire. There are five factors where Coke’s ubiquity was achieved; the vision and entrepreneurship of its management, the company’s aggressive sales force, the system of franchised bottlers, the advertising program and the legal mark to defend the trademark. 2.2.3 The Sales Force In achieving national distribution, the Coca Cola’s sales force was of critical importance. In the early years of the company, the marketing people relied heavily on a personal, face-to-face selling approach even they have other alternatives such as the print media advertising or the direct mail advertising. This is done so, although advanced means of marketing has been established, because a sales person can tailor the message to the individual customer, answering questions and responding to objections as fast as possible for one employee is taking the part of the merchant and the other is taking the part of the salesman. By doing so, questions can be asked, ideas can be brought out and a general discussion of territories can be gone into. Coca Cola’s salesperson acts not only as a speaker but also as a listener which makes them bring market intelligence back to the regional office. The Coke Company is very relentless in their desire to gather marketing information and that is primarily to know their customers’ needs which enable them to intelligently analyze and describe and prescribe remedies. Coca Cola also wanted its sales force to be everywhere and that every conceivable outlet should carry the product. The decision to focus all its efforts on one product greatly eased Coca- Cola's sales management problems. The sales force was deployed geographically, and by the 1920s it was organized into a system of regions and districts that other soft drink companies have since copied and still use today. 2.2.4 Other Strategies The decision to franchise a bottling industry makes a second kind to the Coca Cola’s fortune, first being the syrup. The franchised bottler system was perhaps the best method for the company to achieve nationwide distribution to its success. Coca Cola now owns all the parent bottlers and sells syrup directly to the bottler network. Coca Cola and its bottlers had one common basic goal and that is the sale of Coca Cola product. The Coca Cola advertising program is also one source of its many reasons for success. Everyone knew from the beginning that advertising plays a big and important role in its product. Coca Cola advertising was designed not only to sell the end consumer but also to defend Coke against many charges. The basic goal of Coca-Cola advertising was to make customers think of Coca-Cola when thirsty and to assure them that the beverage would satisfy their thirst better than any other. But how did Coca-Cola define the customer? At whom was its advertising primarily aimed? An observer today would expect to find in the marketing of a product such as Coca-Cola a market segmentation scheme designed to discover the desires of groups of potential customers and to speak as directly as possible to them. 3.0 Conclusion Marketing is said to be everywhere, it is noted that it is the life of any business. According to Regis McKenna, “Marketing is everything and everything is marketing”. Everyone interacts with marketing every moment of life, even when they don’t know it. From Billboards around the city, Logos from t-shirts to the smallest prints ever. When a young girls asks her parents permission to attend a party, she is in fact, marketing herself for the exchange of their approval. No consumer can escape from marketing campaigns, and no business should be operating without a marketing plan to identify potential customers, meet their needs and wants, and keep them coming back for more. This paper gives you a glimpse into the world of marketing and the different aspects of it. You hear about the 4 “P’s” of the marketing mix and the important elements of a marketing plan. To get a specific message to a specific customer, one must be familiar with direct marketing. Internet marketing is one of more recent trends that many organizations are looking at. 4.0 Resources 1. Bartels, Robert (1976) “The History of Marketing Thought,” 2 ed., pp.1-33, 123-243, Chapters 1,2,3,4,9,10,11,12,13,14. 2. http://www.marketingteacher.com/Lessons/lesson_definition.htm. Accessed April 4, 2008 3. Herlambang, David, Marketing First, September 2007 4. “Coke and Pepsi battle it out”, AME Info, Apr. 8, 2004. Retrieved April 4, 2008-04-07 5. Terry Murden, Coke adds life to health drinks sector”, Scotland on Sunday, Scotsman, January 30, 2005. Retrieved April 4, 2008-04-07 6. "The Coca-Cola Company." Microsoft® Encarta® 2006 [CD]. Redmond, WA: Microsoft Corporation, 2005. 7. Michael Sivy, “In cola wars, Coke now has the edge”, Money Magazine, April 23, 2007. Retrieved April 4, 2008 8. Donald Hounam, “India: Softdrinks, Hard Cases”, Vandana Shiva/ Le Monde diplomatique, March 14, 2005. Retrieved April 7, 2008 9. Friedman, Ted, “The world of The World of Coca-cola”, Vol. 19 No. 5, October 1992, pp. 642-662. 10. Guang Tian, Robert PhD., “Marketing in the 21st Century; Cross-cultural Issues”, Erskine College, 2 Washington Street, Due West, SC Read More