Coca-Cola as the Company with Foreign Subsidiaries - Research Paper Example

Introduction: The Coca Cola Company is one of the world’s largest beverage companies which manufactures, distributes and markets non-alcoholic beverages and syrups. The company is popularly known for its premium brand, Coca Cola, and therefore also shares the same name. Besides its namesake Coca-Cola beverage, Coca-Cola currently offers more than 400 brands in over 200 countries or territories and serves 1.5 billion servings each day. (Press Centre: Coca-Cola) MISSION STATEMENT The mission stated by Coca Cola declares its purpose as a company and serves as a standard against which its actions and decisions are weighed. To nourish the world To inspire moments of optimism and happiness... To generate value and spark difference (Our Company: Coca-Cola) The ultimate objectives of its business strategy are to increase volume, expand its share of worldwide nonalcoholic ready to drink beverages sales, maximize its long-term cash flows, and create economic value added by improving economic profit. (Khan) PRODUCTS Coca Cola Company offers a portfolio of more than 3300 products in over 200 countries. (Our Company: Coca-Cola). There are different brands of the Coca Cola Company, which are currently in use throughout the world. This company not only deals in the carbonated drinks but also other drinks. While launching its product, the marketing team considers the culture of the country. (Khan) MAJOR BRANDS OF COCA COLA COMPANY Coke Sprite Fanta Diet coke Coke classic Minute Maid Kinley These are some of the most widely known brands that are commonly available all over the world. In 2009, Coke Zero was launched and it was the most successful product launch and within a span of few months, the drink was widely available in more than 130 countries. (Brands:Coca-Cola) DISTRIBUTION STRATEGY Former CEO Robert Woodruff’s goal was to make Coke available wherever and whenever consumers wanted it, “in arm’s reach of desire.” (Khan). This formed the basis of their distribution strategy. The Coca Cola Company emphasized on employing locals within each country and followed a global brand strategy of “think local, act local.” The Coca Cola Company uses a different model than the other FMCG companies. The company, through its subsidiaries actually sells only the concentrate that makes the soft drink. This concentrate is one of the primary ingredients of the product. Coca Cola also has numerous bottlers around the world, which procures the concentrate from the company and prepares the liquid soft drink under strict supervision of Coca Cola. Some major bottlers of Coca Cola also control most of the distributing operations. These bottlers are called Anchor Bottlers, i.e. Swire Group, F&N, SABCO etc. Coca Cola’s efficient distribution system distributes the drinks round the globe. In some nations, the bottlers are distributors while in others they are separate. The master distributors in a territory appoint sub distributors and through its Direct Store Distribution (DSD) method distributes the products to all the retail channels. Among various channels that are used by coke company are, retail outlets, HORECA, vending machines, fountains etc. (Manzoor, 2006) PRICING STRATEGY Price is a major component that determines the market share of the product. When price goes beyond certain exact price whether it comes down or goes higher, it effects the consumption of soft drink. Because when the price goes higher people go for the substitute of “coke” i.e. Pepsi. And when price goes down they think that there is must be something wrong in it. In other words everything is directly dependent on the customer. (Khan) TRADE PROMOTION Coca Cola Company gives incentives to middle men or retailers in a way that they offer them free samples and free empty bottles, by this these retailers and middle man push their product in the market. They do agreements with a shop keepers and stores to exclusive sale in those stores. These stores are called as KEY accounts in their local language. (Khan) Also, company’s major sale is from restaurants like McDonalds, Subway, etc. It offers them trade discounts providing them an incentive. SEASONAL PRICE CHANGE Sometimes Coca Cola Company changes their product prices according to the season. Winter is considered an unprofitable season for cold beverages industry in Pakistan. Therefore, in winters they reduce their prices to maintain their sales and profit. (Khan)Coca Cola has maintained its image as luxury brand with the help of efficient pricing strategy. In India, Coca Cola wanted to penetrate in the rural market. It’s average cost was Rs. 10 and an average day’s wage was around Rs. 100. This made Coke a luxury brand which not many could afford. In their bid to penetrate deeper in the market, they launched a campaign named, the Accessibility Campaign. Through this campaign, a 200 ml bottle was launched whose price was cut to half at Rs. 5. The pricing strategy thus helped close the gap between Coke and other refreshments such as lemonade and tea. (Coca Cola India) COCA COLA PAKISTAN Competitive Environment In Pakistan, closest competitor of Coke is Pepsi and often, consumers don’t even think before taking any of them. They are indifferent to their tastes. Brand is differentiated by its brand image, its market presence and its acceptance in the market. In Pakistani culture, where togetherness and family life is appreciated, Coke’s marketing campaigns gives a feel of closeness and is therefore, referred as “US” brand. On the other hand, Pepsi is more of a “ME” brand and promotes individuality. Despite the brand image, Pepsi’s taste is more widely appreciated in Pakistan because of its sweetness. Target Market In general, its beverages are for all consumers. Coca-Cola is the beverage that provides deep down refreshment for the mind, body and spirit because only ice-cold Coca-Cola makes the moment more special by combining the unique Coca-Cola sensation with what’s real and genuine, providing a source of enjoyment in everyday life. (About Coca Cola) Communication Strategy Coca Cola Company communicates with its target audience through different mediums which include: Print Media POS Material TV Commercials Billboards And Holdings (Khan) Works Cited About Coca Cola. (n.d.). Retrieved September 22, 2010, from Coca Cola Amatil: http://www.coke.co.nz/assets/img/aboutcocacola/aboutcoca-cola.pdf Brands:Coca-Cola. (n.d.). Retrieved September 22, 2010, from The Coca Cola: http://www.thecoca-colacompany.com/brands/index.html Coca Cola India. (n.d.). Retrieved September 22, 2010, from Turk School of Business at Dartmouth: http://mba.tuck.dartmouth.edu/pdf/2004-1-0085.pdf Khan, S. U. (n.d.). Coca-Cola Marketing Strategies. Retrieved September 22, 2010, from Scribd: http://www.scribd.com/doc/10552013/Coca-Cola-Marketing-Strategies Manzoor, M. (2006, February 4). Distribution Channel of Coca Cola. Retrieved September 22, 2010, from MarketingProfs Know-How Exchange: http://www.marketingprofs.com/ea/qst_question.asp?qstID=11922 Our Company: Coca-Cola. (n.d.). Retrieved September 22, 2010, from The Coca Cola: ttp://www.thecoca-colacompany.com/ourcompany/mission_vision_values.html Press Centre: Coca-Cola. (n.d.). Retrieved September 22, 2010, from The Coca Cola Company: http://www.thecoca-colacompany.com/presscenter/nr_20080402_timing_of_first_qtr_earnings.html Read More