Marketing of Coca-Cola Beverage Company - Assignment Example

Running Head: DISCUSS WITH (K4B) Discuss with (K4b) [Writer’s name] [Institution’s name] Discuss with. (K4b) Part 1 Introduction International business can be traced back to many of the earliest civilizations and the Egyptians, Greeks and Romans were all to a great extent involved in trade across their borders. Nevertheless, due to different driving forces globalization has had a huge effect on the world (Yip, 1992). This has had an intense effect on the economy and caused many businesses to become internationalized and then globalize. Whereas the internationalization has not hit every company, some companies prefer to keep the process slow as they do have much experience of the international market. When their home market becomes restricted they may be forced to enter the realm of globalization. In this situation it has been necessary for the company to attempt to reduce uncertainty by exporting to neighbouring markets. Limited resources may make the company enter the market forcefully, and thus that company will have little financial back up. Nevertheless, since the past two decades, companies have started getting involved in international activities on unpredictable basis. The globalization of the market behaviour has affected the market so much that no businesses take complete advantage of the opportunities so that they can fulfil the needs of the global customer. Because of the competitive situation it may also have been essential to launch products at a rapid speed in the marketplace or launch products at the same time in a number of different markets. Many researchers have started to research the effect of globalization on marketing Thus this paper will be based on how globalization has affected internal marketing and what the outcomes maybe. It will also include an analysis of an organization which ahs taken advantage of globalization, in order to enhance their growth. Analysis Globalization has affected the market so strongly that if the market gives a business chance to take advantage of their competitive advantages the speed of change has greatly increased in the last decade. The reason behind these changes is an increased globalization and the business environment is greatly effected by the economic as well as political factors. Along with the changing economic environment social attitudes and consumer value have also changed, this is due to the marketing management of companies all around the world (Evans, etal 1996 p45). Due to globalization new technology has also affected marketing. Every organization will have to develop their own marketing plan according to their company's own abilities and experience, apart from this they will also have to keep the competitive environment of globalization in mind. Globalization is not a phenomenon. It is not just some passing trend. Today it is an overarching international system shaping the domestic politics and foreign relations of virtually every country, and we need to understand it as such." (Friedman 2000, p.24) As stated as above by Friedman, "we" refers to the managers of today. Globalization has taken the world of business to yet another phase, a phase where it requires the understanding from managers to take opportunity of it. As the buying and supplying of products and services are becoming more global in the sense of business, the concept of markets that are separated nationally are no longer relevant, except the point where strong differences in consumer preferences and taste exist. As a result from that, the competition amongst the suppliers is intensifying. The challenge of globalization is the restructuring of domestic marketing operations to compete internationally, which, in effect, complicated all aspects of the traditional 4Ps of the marketing mix (Denison & Mcdonald 1995, p.54). Everyday there is a new development in the economic and technological field; these developments are forcing companies to enter the global marketplace. Due to globalization the current economic changes have made international trade easier to access and increased technology has made long distance communication more possible, the problem of successfully implementing international marketing strategy has become something to ponder over. If companies want to implant a successful marketing strategy they have to a good understanding to globalization and its process. The rapid speed of changes taking place in the global economy has driven marketing managers to take into consideration a few factors when developing a global marketing strategy. Because globalization organizations have made a fixed scale of their budget from a market size which is unrestricted and may be accessible to the organization. Increased market size leads to an increase in production, which in turn helps companies to attain sizeable cost savings by means of this newly developed scale. These kinds of scales help firms in to exploiting their cost savings either by means of a low-cost strategy, or by sustaining a market price strategy, which helps them to attain considerably higher profits than their competitors. (Lancaster & Massingham 1999 p12) In marketing because of globalization organizations are using the same campaign in different markets; organizations in this way are successful in spreading fixed costs which may lead to savings in their marketing budget. Just think of the cost savings that might have been made by Unilever if they had just utilized the brand name Radion in both countries Austria and Germany. on the whole marketing strategy costs due to globalization have reduced by regulating the product as well as advertising for or using the same plan in two similar countries , rather than bearing the costs of producing two different products and two different promotional campaigns for the products (Richard 1994 p3) . While managers realize all aspects of global marketing strategy cannot be standardized, each component of the strategy that is standardized produces increased cost savings. Global competitors must have the capacity to think and act in complex ways. They must understand and accept the fact that this is an era of competition and only those who are competitive will remain in the race. They must, therefore, design their strategies such that they manage the cost and revenue simultaneously (Svensson 2002 p580). Globally competitive firms now have to keep in touch with the changes of life style of the consumer today. Globalization has forced these firms to keep updating their marketing plan. These firms will now have to implement combinations regarding the pervious and present marketing plan. The marketing managers are devoted to careful analysis of the barriers they have to face due to globalization. The company’s strength and competitive advantage both have to be kept in mind while the marketing plan is developed so that they can be exploited before it is implemented in the international marketing strategy. Marketing has to be based on economic, cultural, political, and environmental terms, as they are interconnected and all these terms combine to form globalization. Such interconnections are known as globalization. Globalization has made the entire the world into a place where information is accessible. The world has become associated t by means of technological development and the interdependence of economic growth. Marketing has started to play an extremely important role , the whole world ahs turned into a global village .Globalization made a strict distinction between the rich and poor .thus this distinction has caused the marketing managers to make campaigns which fit the economic status. Organizations cost have doubled as they have to increase their marketing budgets for two economic classes. Globalization is being driven by five major factors: customers, markets, technology, competition, and costs. The global marketplace exposes retailers to an unprecedented number of customers. The relaxation of trade barriers, creation of trade blocs, and opening of new markets has presented the world's retailers with the option of going global Marketing managers have to assess the appropriate strategy for implementation through the evaluation of the product's relative level of technology and market size (Stanley 1998p20). Like when microwave ovens were first introduced in the market they were thought to be high-technology products which were extremely expensive. However marketing played a major in it and price reductions, were made thus increasing the competition and the marketing budget. This was however and other innovation which globalization bought about in the field of marketing. Due to globalization now multinationals are have to develop regional and international marketing strategies. As globalization becomes a wide spread concept of the market, and products development becomes less technologically advanced in their own product categories, marketing plans may be able to be standardized. The marketing strategies changes are most are likely to occur due the way the product will be positioned as well as the rapid speed of increasing globalization. Therefore, the basis of standardization potential remains within the arena of classical economic demand theory. However, as the wave of globalize swept through management, many became enamoured with the idea rather than with the foundations of the concept. It seems as if a lot of markets are satisfied with globalization and are trying to look for the most suitable marketing strategy for their . This concept has arisen in the minds of marketing managers as they have the burden on their shoulders implement a success strategy. Theodore Levitt (1983), had created a strong influence on globalisation, and since then this term has been on every individual's lips. When his article, "The Globalisation of Markets" was published in 1983, many companies such as Coca-Cola, McDonald's and Walt Disney had followed his view of having a standardised consumer product. Supposedly, a standardised approach would foster mass production hence achieving economies of scale. With a standardised marketing plan, sales would escalate as a product image is created across the globe. However, Levitt's assumptions are invalid because not everyone shares the same taste, culture, customs and traditions. Furthermore, he assumes that customer needs and interests have become homogeneous worldwide, but he had failed to recognise that adaptation of the marketing mix is vital so as to satisfy the needs of the consumers in each region. People around the world still want to preserve their own heritage and culture by purchasing local products. Thus, the companies that have gone global have changed their strategy. Levitt mentions that Coca-Cola is a global company; however its failure has forced the company to "go global but act local". No doubt the core product is the same but the company adapts its pricing, distribution and advertising to suit each market segment and it has 200 other brands that are popular in different countries Conclusion The rationale here was not to pinpoint the exact set of rules for implementation of different marketing strategies, but to give a clear understating the globalization process which controls the pace of the entire marketing strategy. More importantly, this part of the paper was based on the positioning of a product in the global market which gives the basis marketers a chance to depend on it as they are trying out new ideas in order to develop an effective marketing strategy which can be implemented in the global market . Part 2 This part of the paper will describe how globalization, affects the marketing of Coca-Cola Beverage company. In a time when globalization is at it’s height Coca-Cola needs innovation to keep their sales high and to continue to give the people what they desire. Some examples of innovative ideas Coca-Cola has come up with are as follows; C2 is a new low carbohydrate, low calorie soft drink that was invented to appeal to dieters that want to lower their carbohydrate intake . Another example of innovation for Coca-Cola is their buy one get one free Astroworld coupons that can be found on the back of any Coke can. This was a brilliant idea to appeal not only to children but to parents as well (Marconi 2002 p58). Parents save money with this promotion and children get entertainment for half the price, and lets face it, we are living in an era where everyone is trying to save a buck. Therefore, Coca-Cola is most likely on top of the market with their cleaver innovative concepts. Innovation impacts the four functions of management a great deal. First you have to come up with new plans and ideas to draw the public to your product. Secondly, you have to organize these ideas and decide how to present them to the consumer. Next, you have to take the lead and get your ideas into advertisement to reach the people. Lastly, Coca-Cola has to keep control of the market by being the best at appealing to the public. Ultimately, every company needs new ideas and new promotions so they do not get left behind in the fast pace world of advertisement that we are experiencing today. Coca-Cola is everywhere and has set the standard for globalization. Coca-Colas' success at marketing a product to everyone, everywhere has established them as one of the leading companies to take a local product and make it the most internationally known trade mark in the world. This expansion into other regions of the world began with careful planning and strategically organized goals by the then president of Coca-Cola, Robert Woodruff. Mr. Woodruff made a promise to the troops during World War II that every soldier would be able to have a bottle of Coca-Cola for 5 cents, regardless of where he was stationed and regardless of cost. This promise was the stepping stone for Coke to create international production facilities, In both Europe and Asia in 1947, and gain distribution into markets where soft drinks consumers had not been marketed. Another contributing factor to this industrial icon is the leadership skills Coca-Cola maintains in providing a superior product at a price everyone can afford. From poor to rich alike, all can drink Coca-Cola and enjoy the refreshing taste (Allen, 1994 p19). Strict controls ensure that every precaution is taken to provide consumers what they expect every time they open that refreshing drink in the red and white can! By monitoring the quality of every product created and distributed by this company, Coca-Cola is determined to maintain a high quality item for consumption. Along with a large number of brands in the beverage market and new brands are increasing unceasingly due to globalization, the market becomes more and more competitive. Facing with the situation, Coca-Cola realized that it can not maintain its competitive advantages if there is only choice of their products for customers (Allen, 1994 p30). Therefore, Coca-Cola Company has tried to find out what customer want with researching in the market and produced different flavours of soft drinks. Moreover, due to the trend of being in pursue of health and natural for people, the development and growth of carbonated soft drinks is stagnant, Coca-Cola has been concentrated on innovating new products such as non-carbonated beverages. Also, Coca-Cola introduced drinks with low or zero calories into market in order to meet the needs of customers who are concerned about their body, especially for women. As can be saw above, Coca-Cola has stated that it intends to address customers’ need states rather than adopt traditional segmentation Beyond its workforce, Coca Cola Company has amplified their community-based initiatives through considerable leadership and financial support to hundreds of community programs. The Coca-Cola Company has developed partnerships with key community-based organizations that focus on education and youth development, including The American Indian College Fund, Hispanic Scholarship Fund, The College Fund/UNCF, Korean National Grocers Association and the National Council of La Raza. Through these extraordinary organizations, The Coca-Cola Company provides scholarship assistance, program support and assistance with youth development initiatives. The community response to these initiatives resulted in more than 20 prestigious honours and recognitions in 2002. The Coca-Cola Company’s has a developed a strong fixed scale of their budget from a market size which is unrestricted and may be accessible to the organization. Advertising for every carbonate brand is regarded as a vital tool. It was always successful and remarkable when Coca-Cola promoted its products by various advertising medium in the past (Pendergrast 2000 p15). Customers are always attracted by its lively advertisements and its logo and packaging design which base on attractive red has been remained in every customer’s memory. Advertisements by Coca-Cola usually give the power and energy for audiences in a positive way, and are related to out daily life, take instants, Coca-Cola has a tradition of developing iconic Christmas campaigns and following the popularity of football matches every year, Coca-Cola offer fans the chance to win a share of a £10 million transfer fund for a Football League or Scottish Premiership club (Pendergrast 2000 p12) Coca-Cola cares about consumers and focuses on integrating itself with them in their daily life by providing many promotional activities (Oliver 1986 p34). Obviously, it has already had a superior and positive brand image and its success is a universally recognized fact. The Coca-Cola Company’s marketing plan seems to be for both the international and local market. It needs two different plans as it has extremely diverse customers and if it wants stay on the top it has to fulfil their needs. Globalization has made coca cola consider the needs of people all around the world. To conclude it can be said that globalization is an important element in the marketing plans of the Coca-Cola Beverage Company. Globalization seem to be the secret of the Coca- Cola’s success. Coca-Cola was one of the first American beverage companies to realize the potential of expanded their company to a new market of clients over seas. Expanding to reach all parts of the world, and recognizing the different needs of each region is needed for all organizations to continue growth. Reference Allen, Frederick. (1994); Secret Formula. New York: Harper Business pp19-30 Denison, J.H., McDonald, M.H.B. (1995), "The role of marketing past, present and future", Journal of Marketing Practice, Vol. 1 No.1, pp.54-76. Evans,M. Moutinho,L. and Raaij,W.F.V.(1996) Applied Consumer Behavior, Harlow, Longman p45 Friedman, Thomas L. (2000); The Lexus and the olive tree: understanding globalization. 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