The Product of Coca-Cola in South Africa and Canada - Assignment Example

The Product of Coca-Cola in South Africa and CanadaThe product chosen for analysis is Coca-Cola in Africa (South Africa) and North America (Canada), which is sold in vending machines, restaurants, and stores as a carbonated soft drink. The soft drink is a product of the Atlanta, USA headquartered company; the Coca-Cola Company and mainly produces concentrate that is distributed to other regions in the world for bottling. Both websites at http://www.cocacola.co.za/ and http://coca-cola.ca/ have graphics of the soft drink and links for the latest news.

However, the South African website has a direct link on its homepage to the company’s sustainability strategy, while it also has a list with graphics of the different brands offered by Coca-Cola, which the other does not. In addition, the South African website has the company’s mission on the home page, while the Canadian website only links to activities charitable events. Companies that sell their products in the US and foreign markets may face various risks with regards to gray market goods.

Companies may intend to sell products in foreign markets due to consumer preferences for packaging and formulations that differ between domestic and foreign markets, which may also result in different product pricing in relation to the foreign country’s economic status (Sugden, 2013). One risk lies with loss of goodwill in the domestic market due to differently packaged or constituted goods entering the market, despite them being authentic. In addition, gray markets could also damage the relationship of the company with its distributors that have to compete against lower-priced but authentic products (Sugden, 2013).

Finally, the company may suffer profit margin and sales volume decline as authentic products purchased cheaply abroad undercut their sales in the domestic market.ReferenceSugden, D. R. (2013). Gray markets: Prevention, detection, and litigation. New Providence, NJ: LexisNexis