Marketing plan for COCA COLA - Essay Example

? MARKETING PLAN FOR COCA-COLA ………………………………. …………………………………. …………………….. Table of Contents Table of Contents 2 ExecutiveSummary 4 Introduction 5 Coca-Cola: Company Overview 5 Environmental Scan 6 Internal Analysis 6 Mission, Vision, Objectives and Growth strategies 6 External Analysis 7 Economic Environment 8 Social Environment 8 Ecological Environment 8 Technological Environment 9 Competitor Analysis 9 SWOT Analysis of Coca-Cola 9 Strengths 10 Weaknesses 11 Opportunities 11 Threats 12 Marketing Objectives 12 Developing Marketing Strategies 13 Marketing Mix Strategy 13 15 STP Strategy 16 Segmentation Strategy 16 Targeting Strategy 16 Positioning Strategy 17 Implementation and Controlling of the marketing plan 17 Marketing Budget 17 Action plan 18 Implementation and Control 19 Conclusion 20 References 21 Executive Summary Building customer relationship based on customer value and satisfaction is at the very heart of modern marketing, because marketing, more than any other business function, deals with customers (Armstrong & Kotler, 2005, p. 5). From the economic perspective, marketers create utility or benefit in forms of time, ownership, place etc (Boone and Kurtz, 2009, p. 5) that produce the want satisfying power for the ultimate users of the products or services in the market. The contemporary marketing environment is highly complex and dynamic due to the influence of technology, competition, and globalization and so on and therefore no marketer would be able to succeed in its market landscape unless it plans better for the future. In order to identify marketing potential and threats for a particular product or service, the marketer has to foresee how different marketing variables can impact its business. Marketing plans in recent years have attracted wider attention of business organizations, because these are found to have helped marketers establish a stronger competitive stance and maintain long term profitability through sustainable competitive advantage. This paper presents a detailed marketing plan for Coca-Cola Company, comprising of major marketing analyses and environmental scan of the company. This paper gives relevant description of marketing objectives and marketing strategies of Coca-Cola, and presents SWOT analysis to analyze both internal and external environments of the company. Introduction Coca-Cola means much more to people than merely something to drink. It has emerged as an American icon with rich tradition and cultural impact among people worldwide (Armstrong & Kotler, 2005, p. 8). A company that started in 1883 has long been successfully keeping its brand relevant for more than 100 years and one among Fortune 500. Coca-Cola has dominated world market for soft drinks and the extent of its brand success can be recognized from the fact that it is recommended instead of normal water in many countries (Johansson, 2009, p. 64). This report presents a marketing plan for Coca-Cola. Planning is an extremely significant element to successfully implementing and performing a marketing activity. The main objective of marketing is to sell products or services to the potential customers and therefore a marketing plan should virtually be a strategy to help the marketer gain an advantage over other providers of the similar goods or services in the market (Carpenter and Sanders, 2009, p. 10). Coca-Cola: Company Overview The Coca-Cola Company is world’s largest beverage company that manufactures, distributes and markets non-alcoholic beverage concentrates and syrups. The company licenses and markets more than 500 non-alcoholic beverage brands, mainly sparkling beverages with variety of beverage products such as waters, enhanced waters, juices, juice drinks, ready-to-drink tea and coffee, sport drinks etc (Datamonitor, 2011, Annual Report, 2011). The company owns most famous four brands in beverage, Coca Cola, Diet Coke, Fanta and Sprite. The Coca-Cola Company, headquartered in Atlanta, USA, is operating in more than 200 countries and employs more than 139,000 people (Datamonitor, 2011). The company reported the revenue of $ 46, 542 million in the financial year ended up in December 2011, recording an increase of 32.5 % increase from the revenue of 2010. This increase was primarily driven by as highly as 84 percent increase in the net revenues of North America’s operating segment (Company Profile, 2012). As of company’s value belief, Coca-Cola‘s success depends on its ability to connect with consumers worldwide by providing them with variety of options to meet their desires, wants and life-style choices (Annual report, 2011). The company always gained an unbeatable market leadership in beverage industry worldwide. As of 2010 global market share in the beverage industry, Environmental Scan Internal Analysis Mission, Vision, Objectives and Growth strategies Planning for future marketing activities should primarily be based on the mission, vision and objectives of the company. As Armstrong and Kotler (2005, p. 42) pointed, a mission statement is one that clearly defines the routes of marketing activities in terms of satisfying the basic needs and wants of its customers. The mission of Coca-Cola is to ‘refresh the world, to inspire moments of optimism and to create value to make a difference’ in the market. This mission declares Coca-Coal’s purpose as a company to serve the public with greater quality that it can enhance. It is vision serves as a framework to guide almost all its aspects of doing business with a view to achieve sustainable and quality growth (The Coca-Cola Company, 2012). Coca-Coal’s vision comprises of six ‘P’s; people, portfolio, partners, planet, profit and productivity. People are always inspired to be the best so as to make them high performing and highly productive. It attempts to bring a portfolio of quality beverage brand to anticipate and satisfy people’s desires. The company creates mutual and network relation of partnership with customers and suppliers. Coca-Cola is a responsible citizen of the planet to help building sustainable communities. It looks at maximizing profit for better returns to shareholders and to becoming highly effective in terms of its productivity (The Coca-Cola Company, 2012). With a view to continuously thriving as an innovative business over next ten years, Coca-Cola company focuses on needs of its customers, gets out in to market to listen, observe and learn, possesses a world view, focuses on execution in the market place almost every day and to be insatiably curious about modern market dynamics. Its growth strategy is to get ready for tomorrow today itself. This growth strategy helps the company create a long term business objective for business sustainability and growth and provides the company with a roadmap to stay longer in the marketplace (The Coca-Cola Company, 2012). External Analysis Economic Environment Coca-Cola doesn’t market necessities. There are wider and less expensive choices for people to accomplish the goal of staying hydrated than going for expensive Coca-Cola products. In recent years, especially after the 2008 recession, people in the US and around the world are highly concerned about spending. Many reports and studies have proved that Americans in recent years became quite frugal about spending of their hard-earned money (BBC News, 2008). Consumers in different countries across the world may at any time of financial crisis become concerned and frugal about spending for carbonated beverage drinks that meet the need of getting hydrated which otherwise could be met by normal tap-water. It means that the economic environment poses greater challenges on Coca-Cola. Social Environment People beliefs, values, attitudes and perception about a company’s products and services would certainly affect its marketing potential. Young generation, especially by the awareness programs of government authorities, is becoming much concerned about health issues such as obesity. Social attitude may change at any time and thus social factors will certainly affect the business of a company. As Annual Report (2010) reported, obesity and health concerns among public people are becoming a risk factor affecting the marketing of Coca-Cola. Moreover, health advocates and dietary guidelines are discouraging people from using consumption of sugar-sweetened non-alcoholic beverage products. Ecological Environment As Annual report (2010, p. 13) noted, water scarcity and poor quality of the available water are becoming major threats to the company affecting its overall system of production and capacity. Poor resources would return poor quality for the final output. Among the environmental concerns are pollution, limited water supply and, poor management of available resources etc and these in turn are affecting company’s production system. As Global Water organization found, over one billion individuals do not have safe drinking water and therefore they cannot live healthy (Global water, 2012). Technological Environment Technology is both a challenge and an opportunity. It is updated almost every day and in order to adapt to the changes, companies are required to invest heavily on technology. As far as Coca-Cola is concerned, the technology it uses now for bottling, manufacturing, marketing, transportation etc are getting updated and needs to heavily spend on all these. Competitor Analysis Ireland, Hoskisson and Hitt (2007, p. 162) stressed that competitor analysis is critically important step to planning the market, because a firm has to predict the extent and nature of the competitive rivalry in order to find how stronger and competitive they are in the industry. For Coca-Cola, PepsiCo is a strong competitor, being the second largest to share the beverage market. PepsiCo is a very successful multinational brand operating in more than 150 countries by employing more than 135,000 employees. It is a world leader in snacks and food related beverages. SWOT Analysis of Coca-Cola Strengths Weaknesses Stronger brand portfolio Better and innovative manufacturing and distribution capabilities Strong global presence Advanced bottling partnership Product quality matters and frequent recalls Products destocking due to consumers’ shift to value products Opportunities Threats Growing demand for functional and healthy beverage Acquisition of major bottler in north America Growing non-alcoholic ready-to-drink beverage Regulations affecting sales at certain POS Scarcity of water resources and poor quality of water Evolving consumer preferences . Strengths Coca-Cola Company, with over $ 35, 119 million revenues, has emerged as the largest beverage brand of the world. It is the largest marketer of sparkling beverages, juices and juice drinks and ready-to-drink tea and coffee. With extensive investments in technology and research, Coca-Cola has established strongest brand equity. It owns four of the world’s top five non-alcoholic brands, namely Coca-Cola, Diet Coke, Sprite and Fanta. The manufacturing and marketing operations of the company are supported by robust infrastructure across its companies all over the world. In North America, the company owns around 65 beverage production areas that are using the concentrates and syrups to produce finished beverage products. These robust manufacturing and distribution capability and systems are major strengths of Coca-Cola Company (Datamonitor, 2011). Coca-Cola has been successful to build stronger global footprint gaining more presence in relatively matured markets of North America and Europe and similarly in developing Asian countries. Its strong bottling partnership is another reason for Coca-Cola’s organic growth. Coca-Cola company manufactures and sells the concentrates and beverage base to its bottling partners who then manufacture, package and merchandise final branded beverages to various customers (Company Profile, 2012). Weaknesses It is reported that Coca-Cola Company was involved in some product recalls in recent years. For instance, Coca Cola in North America recalled SmartWater and PET Bottles in 2010 since these bottles were not up to the standard of FDA’s quality guidelines. Similarly, Coca-Cola in Israel recalled bottles of Diet Cola and Coca-Cola in 2009 since traces of benzenes were found in the drinks. Another major weakness of the company was that many customers across the world are concerned about value products and that they prefer them too (Datamonitor, 2011). Opportunities Consumers in recent years are also found to have positive attitude towards more functionality from their food and beverage products. New-health concerned generation and youngsters are looking for cholesterol-free drinks and those that may boost more energy. Health is thus a major theme both consumers are concerned about and marketers are to take care of. Another opportunity for the company was that Coca-Cola recently acquired a major bottler in North America, Coca-Cola Enterprises. The non-alcoholic ready-to-drink beverage items are getting better demand from customers across the world and it is reported that this industry is expected continue growing on an average of 6 percent a year (Company Profile, 2012). Threats Coca-Cola Company sells various drinks that contain high level of sugar and artificial sweeteners that are not considered to be good for health. These essences are capable of giving overweight and obesity and therefore there are regulations for selling of these kinds of goods at certain point of sale areas (Company Profile, 2012). Moreover, increasing awareness of the public about obesity and other health issues associated with sweeteners and other artificial ingredients make people evolve preference towards other drinks and thus pose a challenge on Coca-Cola. Furthermore, the company faces challenges of poor water quality and limited water resources. Global water consumption is almost doubling each year and more of the available water resources are getting contaminated (Datamonitor, 2011) Marketing Objectives The main marketing objective of Coca-Cola Company is to continually provide quality beverage drinks with supreme quality services to its customers. Normally, marketing objectives need to be defined and described while preparing a marketing plan because marketing objectives control the business plan, help individuals within the firm reach the pre-determined destination of the goal and ensure a focus for all organizational functions. When it comes to the objectives of Coca-Cola Company, it proposes to ensure supreme quality of beverage products being offered to the customers, gain considerably more than 30 percent of the total industry market share, to achieve 20 or more percent of return on capital employed by 2015, to integrate newer ideas and innovation in manufacturing, designing and developing the products so that bringing new customers to Coca-Cola, and Ultimately focus on the needs of its customers. Developing Marketing Strategies Marketing Mix Strategy The Company now produces more than 500 products in beverages in more than 200 countries. Apart from these brands, the company proposes to generate most effective and highly dynamic business idea to convert them to profitable products. ‘idea’ in business world is an extremely important investment, perhaps a less costly one. Apart from the already available beverage non-alcoholic drinks of Coca-Cola, the company is looking ahead to discover newer marketing opportunity for new kind of drinks so as that it can design, develop, manufacture and market newer variants of products to attract wider population. Customers in different countries and in regions demand for different brands of Coca-Cola drinks. Packaging of its products also varies from 300 ml, 500 ml, 600ml, 1.25 ml, 2 liters etc. The Company has potential to still modernize its packaging so as to attract kids, school-going children and youngsters who may wish to get Cola drinks for small treats. Reputation is a powerful asset. The company therefore requires to increase the reputation through customer loyalty programs and convert these customers to be long-term profitable assets for the company. As shown in the depiction above, Coca-Cola products prices are genuine and customers never feel them to be higher than they actually worth. Its products have already gained higher demand across the world and this makes its prices always meaningful. The company is thus responsible to maintain the demand and further increase the same to survive against market fluctuations. Coca-Cola products are available anywhere at any time. Its soft-drink bottles are available at travelling-terminals, POS, parks, large malls, small or bigger cities, trains, aircrafts, sport-grounds and any time on the go too. In order to eliminate middlemen costs and inventory handling, Coca-Cola Company is planning to start its own-store retailing through which the company will be able to attract large numbers of customers. Own-store retailing will be as successful as direct marketing strategy since both these are helpful to avoid middlemen costs and inventory handling risks. Apart from its prevailing distribution system, Coca-Cola Company will initially launch five big-stores in major five cities of America for ‘market test’. All these stores will provide best-in-class direct customer services in supreme quality hospitality atmosphere wherein customers will be able to entertain with food, drinks, dance, gaming, and seminar and so on. As part of its promotion, Coca-Cola plans to use Integrated Marketing Communication by integrating various modes of advertising and promotions. Though the company has long been using different advertising, it often lacked better integration. IMC would certainly help the company maintain consistency in brand communication and thus in effectively communicating the brand message. IMC is a program that a company implements as part of its marketing communication strategy to help it achieve competitive advantage, improve efficiency in operation and accelerate returns by aligning communication objectives (Schultz and Schultz, 2004, p. 3). IMC is a marketing strategy that can be used for designing and developing a coordinated, systematic and measurable brand communication program by integrating various methods of advertising and promotions to ensure both short and long term benefits (Belch and Belch, 2007, p. 11). With IMC, the company will be able to establish brand equity, brand loyalty and thus to maintain long-term profitability of the firm. STP Strategy STP strategy or STP marketing refers to a strategic marketing process to concentrate on right segmentation, right targeting and right positioning. STP strategy suggests that the mass market consists of some numbers of relatively homogeneous groups, each with unique needs, wants and propositions. STP strategy implies identifying these market segments, targeting them with activities to satisfy their requirements and position their product offerings so as to appeal to the targeted customers (Kotler and Keller, 2006, 310, Sturman, Corgel and Verma, 2011). Segmentation Strategy Segmentation is done by breaking down the totality of the market in to sub-groups (Lancaster and Reynolds, 2001, p. 68). Coca-Cola concentrated on mass-marketing strategy, because it has more than 500 different brands and covers almost all segments of the people around the world. Its drinks variants are acceptable to kids, children, youngsters, adults, 30 above and 50 above, irrespective religion, region, caste, gender and ethnicity. Targeting Strategy Lamb, Hair and McDaniel (2008, p. 220) pointed that a marketer requires to target a group of people by designing, implementing and maintaining as special marketing mix in a way the company can meet needs and wants of that specific targeted group. Coca-Cola company will invest heavily on conducting marketing research to find out how different segments view about the value propositions and usefulness of Coca-Cola drinks. As Ferrel and Hartline (2008, p. 178) noted, a company will adopt any or more of different targeting strategies from 1) single segment strategy, 2) mass marketing strategy, 3) selective targeting, 4) product specialization and 5) market specialization. Coca-Cola’s targeting strategy is mass targeting because it produces and will continue to manufacture more different kinds of drinks and will target whole market with all these different brands. Positioning Strategy A brand being communicated must be well positioned in consumers’ mind. Coca-Cola is always an illuminating example for how successful a positioning can be. The name ‘Coca-Cola’ is strongly positioned with values of belief, trust, quality, flavor experience, culture, and life-style and so on. In years to come, Coca-Cola will not only have to maintain this positioning, but also to reach more new customers with unique values and thus to influence their minds for the best- quality drinks. Implementation and Controlling of the marketing plan Marketing Budget Item Date expected for Completion Cost in $ 000 Measure of Success Idea generation and innovation, R& D Feb 15, 2013 $ 300 Market Modeling based on ideas generated Modernizing the packaging March, 15, 2013 $ 320 Market test for new packages Focus on increasing reputation Till 2015 $ 180 Customers feedback and survey Launching own-store retailing Oct, 2014 $ 1500 Direct market test Integrated Marketing Communication Oct- 2014 $ 610 Measuring the communication efficiency from customers Developing STP strategy Jan 2013 $ 60 Strategy evaluation Research on STP Jan 2013 $ 170 Research findings Segmenting the market Feb 2-13 $ 160 Effectiveness of the segmentation Mass targeting strategy Feb 2013 $ 500 Test marketing Focus on positioning Till 2015 $ 200 Customer feedback TOTAL (approximate) $ 4,000,000 Action plan Action 2013- I st qrt 2013- II qrt 2014- I st Qrt 2014- II nd qrt 2015- I st q 2015-II nd q Bringing newer ideas for drinks Jan to Feb - - - - - Modernizing the packaging Jan- to- march - - - - - Focus on increasing reputation On-going, from Jan 2012 to the end of 2015 Launching own-store retailing 1st one in New York Remaining 4 in other major cities before Oct-2014 Integrated Marketing Communication On-going process till 2014 Television, newspaper and other advertisements Starts from June 2013 Seasonal promotions March Oct Event marketing Aug- Football Aug- Football Developing STP strategy Jan Research on STP Jan Segmenting the market Feb Mass targeting strategy Feb Focus on positioning On-going process On-going review On-going process Implementation and Control At the implementation phase of a marketing plan, the marketer should a) obtain resources required for implementing the plan, b) design the marketing organization, c) develop schedules and d) execute the marketing programs as planned (Kerin, Hartley & Berkowitz, 2005, p. 47) The marketing plan of Coca-Cola Company comprised of certain marketing strategies. They are mainly Marketing-mix strategy and STP strategy. Marketing mix involves bringing newer ideas in to practice, widening the brand reputation, integrated marketing communication and own-store retailing to be launched. The STP strategy involves segmentation, targeting and positioning strategy. Following are major steps involved in implementing these strategies. Study the strategies and its effectiveness in terms of the environmental weaknesses and strengths of Coca-Cola Company. Find relevant resources to be used for implementing these strategies, Ensure involvement of people, process and technology, and integrate between these with careful coordination of marketing activities, and Evaluate the strategy to be implemented, and ensure smooth functioning of the strategy. Conclusion This report has presented a brief marketing plan for Coca-Cola Company to market its non-alcoholic drinks for the coming years in a way to achieve sustainable competitive advantage and to function effectively devoid of challenges posed by technology, politics, economic and social factors. The environmental analysis part has dealt with analyzing the present situations of the firm, both internally and externally. The SWOT analysis given in the report is meant to provide both internal and external strengths, weaknesses, opportunities and threats of Coca-Cola Company. This report developed few marketing strategies that Coca-Cola Company may implement for its future. These strategies and marketing activities include generating newer ideas for designing new drinks, modernized packaging, integrated marketing communication, own-store retailing, and segmentation, targeting and positioning strategies. A detailed action and budget plan are also included in the report to help identify time, cost and functional requirements for the marketing activities planned to be executed. References Annual Report, 2012, The Coca-Cola Company, United States Securities and Exchange Commission, thecoca-colacompany.com, Retrieved from http://www.thecoca-colacompany.com/investors/annual_other_reports.html Annual Report, 2010, The Coca-Cola Company, United States Securities and Exchange Commission, thecoca-colacompany.com, Retrieved from http://www.thecoca-colacompany.com/investors/annual_other_reports.html Armstrong, G & Kotler, P 2005, Marketing: An introduction, Prentice Hall, Pearson Education Inc BBC News, 2008, UK Spending power in heavy fall, BBC News, Retrieved from http://news.bbc.co.uk/2/hi/business/7488613.stm Belch, G. E and Belch, M. 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