Mecca Cola World Company - Essay Example

Mecca Cola Background The company Mecca Cola World Company has its origins in France but currently the business is established in the United Arab Emirates. 2002 was the year when an emtrepreneur looking at the potential of the market created by alternate cola brand in Iran ‘Zam Zam Cola’ launched his own brand by the name of Mecca. Mecca is the holiest of city for Muslims located in Saudi Arabia where million of pilgrims visit round the year as a religious duty. Meeca is the birth place of Prophet Mohammad and it is the place where Prophet Abraham built the house of Allah(God). It is also the place for annual pilgrimage of Muslims callled Hajj. The city is highly venerated by all the Muslims. Zam Zam Cola is also named after a well in Mecca which has a lot of religious significance to Muslims. Klein argues that this kind of branding emerged when manufacturers discovered “what brands mean[t] to culture and to peoples lives". (p.7) Zam Zam Cola not only succeeded in Iran but also established itself in Saudi Arabia & Bahrain. The entrepreneur Tawfik Mathlouthi wanted to negotiate a deal of distribution contract with Zam Zam but did not succeed. So, he decided to launch a new brand catering specifically to the Muslim world. Hence, despite its origins in France the brand has established itself in certain parts of Muslim dominated areas in Europe, Asia, and Africa apart from the Middle East. The company is also well known for philanthropic causes in Palestine.The Mecca Cola has also paved way for other brands Qibla Cola in Britain and Muslim Up in France. Competitive Scenario When we talk about cola industry then the names of arch rivals Pepsi & Coca Cola come to mind. Coke and Pepsi have been fighting the cola war for decades. According to the Pepsi Web site, Pepsis total market share was about 31.7 percent in 2004, while Cokes was about 43.1 percent in the United States. Coke has been a leader in the soft drink industry but Pepsi Corporation has been successfully attempting to challenge this lead. They both have been targeting younger market segments aggressively. Both Pepsi and Coke have been in a tug of war. Some times Coke gets an edge while sometime Pepsi seems to be leading. Pepsi has an edge in the sense that it has also been targeting people who currently dont have a cola preference or those who stick to other drinks like tea or even plain water. 9/11 & Resulting Scenario ‘War on Terror’ is the phrase that has been used and abused since Americans were attacked on their soil on September 11 in New York’s Twin Towers. The attack on twin towers made America vulnerable and they had to wage a war against unknown and hidden enemies. War on terror started on all fronts and formally started with the attack on a Muslim country Afghanistan. Later America also decided to go on war in Iraq. The War mostly involved Muslims as the blame of 9/11 attacks was also on mostly Arab Muslims. Some elements used the moves of the US and its Western allies to portray a picture of West as an imperialist invader. Anti-American sentiments ran high in most of the Muslim countries. In many countries violent protests were witnessed in which protesters raised slogans again America and burnt it sfalgs and effigies of President Bush. Some even called for the boycott of American product and companies. American fast food restaurant felt the sudden slump in their sales while their outlets were even attacked and burnt in certain countries. Middle East Israel & Palestine conflict has also been going on for a long time and is a source of tension in the Muslim & Arab world. This is where the entrepreneurs like Mathlouthi played their role. Boycotts The boycott of American or Western goods has a long history in the Arab world. Its biggest example came when Certain Arab countries took advantage of their position and imposed embargo against the United States and a few other nations during 1973-1974. Arabs have been demanding Israeli pulling out from the Arab territories it occupied in 1967. Arabs tried to put the pressure on the United States by the embargo so that US in return could pressurize Israel. Oil was used as bait for fulfilling the demands. The Middle East situation remained grim for years and always resulted in anger against the United States over its support for Israel. The same feeling got ignited in the Arab world in particular and Muslim world in general because of Palestinian intifada. A movement was launched to shun American products throughout Arab countries. These boycotts have resulted in the decline of imports in countries like Saudi Arabia. “Advertising agency McCann-Erickson is advising its American multinational clients to play down their country of origin. The boycotts and the surrounding avalanche of negative publicity are a storm warning of what may lie ahead. Eight of the worlds top 10 global brands -- Coca-Cola, Microsoft, IBM, General Electric, Intel, Disney, McDonalds and Marlboro -- are American, worth an estimated cumulative $337 billion” (Hutton, 2003). The boycott of Coke is also not a new phenomenon. The company also faced severe criticism I the Muslim Arab world when it opened the first franchised soft drinks plant in Israel in the 1960s. Later Coke countered the criticism and even opened a plant in Ramallah in Palestine. Amidst recent boycotts Coke and other American brands also face a threat especially in predominantly Muslim populations. Capitalizing on Anti US sentiments The product is considered by the West a tool to fan the Anti-US sentiments prevalent in different sections of the Muslim society. The product has been successful in cashing in on anti-American sentiment around the world. They want to create the impression that Coca-Cola is the icon of American capitalism while portraying that Mecca Cola is not the alternate rather the soft drink of choice for Muslims. Critics say that instead of protesting and damaging goods and properties physically Mathlouthi has used his product to protest against American foreign policy. Mecca Cola is touted as a political product with a political marketing strategy. Mecca Cola represents what Naomi Klein calls a sense of belonging. In her book, No Logo (2000) Klein argues that companies are no longer selling brands. They are selling a sense of community or belonging and that is exactly what Mecca Cola is capitalizing on in almost the same manner as Starbucks did. (134-135) The Packaging The packaging of a bottle of Mecca Cola is not much different from the two giants in the cola industry. The Cola takes its color inspiration fro the original Coca Cola. Red is used in the packaging and Coca Coal is also written on the label with a twirl imitating the famous cola brand. The colors red and white remind consumers of its similarity to the original cola yet the brand has tried to create a difference with an ideology. The color of the drink is also essentially black. The resemblance is created to define that the product is similar to the one churned out by the Western company yet it is different. They are conveying a meaning that they are not completely anti Western and accept Western ideas but they do not agree with the politics and policies. Mathlouti on various occasions has confirmed that his war is not against American cultural rather it is against American/Zionist policies. Apart from the main cola product company also has fruit-flavoured soft drinks in its product line. The Slogan To support its political and pro-Muslim ideology, they also crafted a slogan that can be considered provocative. "No more drinking stupid, drink with commitment" and "Dont shake me, shake your conscience" reflect the ideology and strategy of the brand. These slogans hardly talk about the product. They do not even associate themselves with a certain lifestyle rather they bank on conscience of Muslim populace with their inflammatory words. They are trying to win over a large part of Muslim population who favor cola drinks but are not really concerned with the company or its origins. Charity Philosophy Mecca Cola right from the commencement attached itself to the philosophy of charity. Most companies once get them established than they move to corporate social responsibility. In Mecca Cola’s case the company ingrained charity as a part of its mission and as they pledge to give 10% of the profits to charities operating in Palestinian territories and 10% to European NGOs. Palestine is the main region of conflict in the Middle East and Mecca Cola associated itself to the cause of Palestine to win the sympathies of its target market of mainly Muslims. The help of Palestinian children in particular is the main aim of this 10% charity. The other 10% is allocated to NGOs based in Europe who are working to advance peace around the world or local charities in the countries where the sales originate to deal with the criticism being hurled at the company and its ideology that it trying to exploit the political situation. By contributing to Europe they are actually dispelling the myth of only Muslim association and that they also care for the rest of the world including Europe. The money raised from the profits being sent to charities raised concerns regarding the aid of terrorist outfits. Mecca Cola denies all such allegations and refutes them with the stance that they hardly ever give money to the NGOs. “When asked how the company ensures that the money it provides to Palestinians does not get channeled into terrorist activities Mr. Mathlouthi says the aid is never given directly as cash. ‘We give help by providing clothes and goods, or by paying the costs of the construction of schools there,’ he said. ‘If we give money we give it to UNICEF,’ the United Nations Childrens Fund, he added” (Murphy, 2003). The Demand The brand initially targeted predominantly Muslim neighborhoods in France but later on entered Middle East market. Ever since, Mecca Cola has created a demand for its products. The owner of Mecca Cola has made statements regarding phenomenal demand of the product. “To date, Mathlouti has sold 14 million 1.5-liter bottles in supermarkets and grocery stores in Europe, the Middle East and even some African nations, and he said he has orders for 600 million liters through the end of December. A new Mecca Cola factory in the Moroccan city of Casablanca is due to go into full production in June” (Cahen, 2003). Mecca Cola is also into new market development and has been making inroads into new regions. Company also has US under its target as it has been in negotiations with distributors in various U.S. states. The company also targeted Britain where anit US protests after War in Iraq and Afghanistan were strongest and has a big Muslim population. “Mathlouthi described Britain as ‘a huge market for us, which will soon be bigger even than France. We have just signed a contract to send 20 lorries a month - thats about 2m bottles - to Britain, and are even now setting up two UK companies, Mecca-Cola UK Ltd and, with a partner in Birmingham, Mecca-Cola Distribution’” (Henley & Vasagar, 2003). Other than Britain the company has also entered markets in Germany, Belgium, Italy and Spain. It started out with small ethnic shops in Muslim areas while later on large superstores also started stocking the brand in all these countries. Since Mecca Cola has a political agenda therefore it has keen interests in markets where anti-US sentiments run high. They need not be specifically Muslim dominated areas or regions. Hence they have their targets set on Latin America & specifically countries like Venezuela and Argentina. Reaction of Competitors Now companies like Coke and Pepsi have to rethink their strategies especially in the Middle East and other regions where pro-Muslim cola brands have made their name. Coca Cola strategists harshly criticize Mecca Cola for its political strategy and consider it total exploitation of the political situation in the Middle East. They call it crass commercialism in its worst form. They vocally disassociate themselves from the any religious and political affiliations. The Coca Cola and Pepsi decline to accept any significant impact of these brands on their sales but insiders reports suggest that they have already made dents in the profits of Coca Cola especially in the Middle East. The final call and decision definitely rests with the consumer. One company does not talk about the taste or the drink rather they talk about origins and causes while others are trying to capitalize on their years of brand equity and monopoly in the world cola market. Mecca Cola aims to end the reign of Pepsi & Coke but it would not be easy for the new brand. Though they have made some dents but they have not been able to completely shake the giants of Cola industry. Ethics & Political Marketing Marketing gurus consider this kind of strategy unprecedented. Some considered it a passing trend while others think that these completely new kind of marketing techniques will stay for a long time. Some call the ethics of marketing in question when it comes to the political marketing of the product. The company refutes by calling in question the ethics of based on the exploitation of other nations. They also call into question the ethics of criminal and racist ideology of Israels government. Thompson in his book, Teach Yourself Ethics, aptly points out “It is one thing to have universal principles, another to apply them to individual cases.” (Chapter 4) This means that while general principles of ethics of marketing are known by everyone, they are not so easy to apply to individual cases. Mecca Cola is not just criticized by Westerners and marketing and management gurus but some sections of the Muslim society also criticize Mecca Cola for commercially exploiting the sacred name of the Holy place. Some Muslims find it hard to imagine the name of the most sacred place on a cola bottle. The fact of the matter is that Mecca Cola is only exploiting a situation and is trying to make commercial success out of it. This is where the question of ethics comes into the equation again. We can say that the personal values or ethics of the manufacturers of Mecca Cola must have an impact on their selection of this name for their brand. (Smith-Quelch, 1992, p 780) Conclusions Mecca Cola that started out in France has now become a brand in certain regions predominantly Muslim. The Mecca Cola brand name became so accepted in the Muslim World that Summit of the Organization of the Islamic Conference (OIC), held in Malaysia in 2003 made it the official drink of the summit. The brand has established itself by exploting the poitical situaion in the Muslim World but it can not be called a resoung or thumping succes. In some Muslim countries, Pepsi & Coke countinue to keep strong hold in the market while in some Mecca and other simialr brands have made a dent. The political marketing became a new phenomenon witnessed by the marketing world. The ethics of political marketing is challenged by different sectors of the market yet it continues to make its presence felt particularly in the Cola market. References Mel Thompson, Teach Yourself Ethics. Hodder Education 2000 Hunt S.D. & S.J. Vitell (1993), The General Theory of Marketing Ethics: A Retrospective and Revision, in N.C. Smith & J.A. Quelch (eds.), Ethics in Marketing, p.775-784, Irwin Inc, Homewood. Klein, Naomi. No Logo (London: Flamingo, 2000). Henley, J & Vasagar, J. (January, 2003). Think Muslim, drink Muslim, says new rival to Coke. Retrieved on March31, 2007 from The Guardian Website: http://www.guardian.co.uk/international/story/0,3604,870413,00.html Murphy, V. (2003). Mecca Cola challenges US rival. Retrieved on March31, 2007 from BBC Website: http://news.bbc.co.uk/2/hi/middle_east/2640259.stm Hutton, W. (April, 2003). Goodbye, Coke. Hello, Mecca Cola. Retrieved on March31, 2007 from Washington Post Website: http://www.washingtonpost.com/ac2/wp-dyn/A54023-2003Apr18?language=printer Cahen, E. (April, 2003). Soft Drink Politics: Mecca Cola Takes Off In France. Retrieved on March31, 2007 from CNN Website: http://www.cnsnews.com/ViewForeignBureaus.asp?Page=%5CForeignBureaus%5Carchive%5C200304%5CFOR20030430e.html ‘Coca Cola’ Retrieved on March31, 2007 from Wikipedia Encyclopedia Web site: http://en.wikipedia.org/wiki/Coca-Cola ‘Mecca Cola’ Retrieved on March31, 2007 from Wikipedia Encyclopedia Web site: http://en.wikipedia.org/wiki/MeccaCola Read More