Factors Contributing to Coca Cola's Success in the Beverage Industry - Essay Example

?Coca Cola of the of the of the Section Introduction Coca Cola is a type of effervescent soft drink that is sold or distributed in restaurants, stores and various vending machines all over the world (“Brands”). Coca Cola, which is also known as Coke, is manufactured by Coca Cola Company. The company is headquartered in Atlanta, Georgia. It was intended to be used as a medicine. It was found in late 19th century by John Pemberton, a pharmacist in Columbus, Georgia. John Pemberton died within two years of invention and the brand was then purchased by Asa Candler in 1889. The beverage was initially sold at 5 cents for each glass in Jacob’s Pharmacy. The company expanded its operations mostly within 1900 to 1920. The marketing strategy of Asa Griggs Candler has helped the product to lead the market of soft drinks all throughout the twentieth century (“The Chronicle of Coca-Cola: The Candler Era”). The Coca Cola Company manufactures concentrated coca cola or coke. This concentrated product is sold to all the licensed bottlers of Coca Cola who sell these products all over the world (“Overview”). The bottlers have territorial contract with Coca Cola Company and they produce the finished products of the company in bottles or cans from their initial concentrated state and then sell them all over the world. Occasionally there are other cola drinks available which are sold under the same brand name of ‘Coca Cola’. The most common drinks in this form are Caffeine free Coca Cola, Coca Cola Cherry, Diet Coke Caffeine free, etc. The Coca Cola brand has been ranked as the most valuable brand in the world on the basis of Interbrand’s best global brand in the year 2011. Section 2: Customer Research and Trends Customer preference towards Coca Cola Market offers an opportunity of gaining success to those brands, which can cope up best with the environment and deliver products and services to the customers according to their needs and preferences without any delay. This study would analyze the customer preference towards buying coca cola. It has been found that the color and taste of the brand acts as the key drivers in stimulating its demand in the market. According to the customers, the color intensity and flavoring are two important factors while consuming soft drinks. Moreover, the reason behind choosing coca cola is its unique taste and saltiness (“Family, Food and Coca Cola”). However, presently it has been seen that the customer preferences towards non alcoholic drinks like Coca Cola is changing because of the increasing health concerns, demand of other alcoholic competitive products in the market and changes in the life style of the consumers (“The Five Mega-Trends Shaping Tomorrow's Customers”). The five mega trends of the customer’s preferences would be driving the beverage industry. They are: mass urbanization, aging population; rise of the middle class globally, changing technology and concern of people related to sustainable society (“COKE CEO: These Five Consumer Mega Trends Are Changing the World”). Among all top beverage producing companies PepsiCo is having huge demand among the consumers. Thus, Coca Cola faces high competition from PepsiCo. There has been increasing demand of Coke Zero product of the Coca Cola Company in the market in order to satisfy the health conscious customers (“How Coca Cola Keeps Up with Shifting Consumers Demands”). This product is found to have higher penetration in the market because of men rather than women. However, it has also been found that the college students have great affinity towards varieties of Coke like Diet Coke, Coke Zero and Coca Cola Classic. The next portion of the study would be conducting a primary open ended survey by means of an interview of the potential customers of the brand ‘Coca Cola’. The customers who were focused while conducting the research belonged to the young age group. Primary Research Do you think that packaging, taste and calories are three important factors taken into consideration while choosing soft drinks? Customer 1: Yes, all three are important factors while choosing the soft drinks. I frequently have soft drinks while travelling and ‘taste’ is one of the most important factor based on which I choose the brand. Customer 2: Yes, taste, calorie content and packaging are equally important while choosing the brand. Taste is one of the primary factors. Moreover, in recent days the increasing health problems have resulted in considering ‘calorie content in soft drinks’ as an important factor while choosing the brand. Finally packaging gives an impression about the product which makes it an equally important factor to be taken into consideration while choosing the brand. Customer 3: Yes, according to me all the three factors are very important while choosing the brand. What do you think about the brand ‘Coca Cola’ on the basis of its taste, packaging and calorie content? Customer 1: Coca Cola is one of the most renowned brands of beverages in today’s world. Thus, there remains no question related to the quality and taste. Obviously, it is the taste of the drink, which has made it so well known all over the world. Customer 2: There is no about the taste of ‘Coca Cola’. Packaging makes it much more attractive to the customers. Moreover, presently there is large variety of coke products available in the market mainly diet coke, coke zero and coca cola classic, which focus on the calorie content and health fitness highly. Thus, Coca Cola is rated as one of the top brands while considering all the three factors. Customer 3: Yes, Coca Cola is my favorite brand, considering all the above factors, and I am satisfied consuming coke products. How often do you drink coca cola? Customer 1: I drink coca cola almost every day while travelling long distance. Customer 2: I have coca cola in every weekend while I hang out with my friends. Customer 3: I do not have it regularly. Once or twice in the month I drink Coca Cola. Customer segmentation In order to communicate to the customers with the existing product, it is very important to target the customer segment. Segment Age Group Annual Income Level Psychology Education 1 18-24 >$ 35000 This age group is generally driven by the social trends. They have no knowledge about ethical trading. High school or College (education) 2 25-35 $35000 - $70000 This age group understands the advantages of ethical trading and they remain willing to buy quality products for high prices. College or masters level (education) 3 36-65 >$ 70000 This age group buys products in order to portray their self image to the peer group. Educational level has no influence on the purchasing behavior of this age group. It is evident from the above target customer segmentation as well as primary research that customer segment 1 is the most suitable target segment for the Coca Cola soft drink. The young generation customers follow social trend and have high affection towards having soft drinks. Thus, the company should focus on the young age group while implementing the marketing strategy. Section 3: Use of Internet Although online marketing has become one of the most important marketing tool in today’s world, but it would not help the consumers while choosing Coca Cola. The consumers can gather information about the product from internet, but cannot have an idea about the product, its quality and taste until it is being consumed by them. Thus, influencing the purchasing decision of the customers via internet would not act as an effective marketing strategy in the beverage industry. Section 4: Competitor Analysis/ Comparative Analysis The biggest competitor of Coca Cola is PepsiCo (“Top Competitors for the Coca-Cola Company”). Distribution pattern of both the companies PepsiCo’s Distribution: It makes exclusive contracts with the franchisee bottlers, various retailers and independent distributors. It has also gone into agreement with its competitors like Starbucks, Unilever etc. Coke’s Distribution: It makes exclusive contracts with the independent bottlers. However, PepsiCo has a variety of items in the food product segment like Quaker oatmeal, potato chips. SWOT Analysis Strengths Pepsi Global Brand Recognition, High Profile, leading soft drink selling brand. Coke High profile, topmost brand in the beverage industry. Weaknesses Pepsi Carbonate market is declining. Coke The present distribution system is inefficient for non carbonates. Opportunities Pepsi Growth in the beverage industry in the international market. Coke Soft drink volume is forecasted to increase in the Asia Pacific region. Threats Pepsi Various health conscious Coke products are increasing competition for the PepsiCo brand. Coke Growing health consciousness of the common public is increasing demand of innovation in the products thereby providing an indirect threat to the brand. Conclusion Coca Cola has been the leading brand in the beverage industry. The company changes its marketing strategy along with the changes in customer preferences in order to satisfy them. It is expected that the company will maintain its position as a leader in the market in the coming years as well. Works cited “Brands.” Coca Cola. The Coca Cola Company, 2013. Web. 13 September 2013. “COKE CEO: These Five Consumer Mega Trends are Changing the World.” Business Insider. Business Insider, Inc., 2013. Web. 13 September 2013. < http://www.businessinsider.com/coca-cola-ceo-muhtar-kents-five-consumer-mega-trends-2012-6?IR=T>. “Family, Food and Coca Cola.” Coca Cola. The Coca Cola Company, 2013. Web. 13 September 2013. “How Coca Cola Keeps Up with Shifting Consumers Demands.” Food Navigator USA. William Reed Business Media, 2013. Web. 13 September 2013. < http://www.foodnavigator-usa.com/Suppliers2/How-Coca-Cola-keeps-up-with-shifting-consumer-demands>. “Overview.” Coca Cola. The Coca Cola Company, 2013. Web. 13 September 2013. “The Chronicle of Coca-Cola: The Candler Era.” Coca Cola. The Coca Cola Company, 2013. Web. 13 September 2013. “The Five Mega-Trends Shaping Tomorrow's Customers.” BBC News. BBC, 2013. Web. 13 September 2013. < http://www.bbc.co.uk/news/business-18503627>. “Top Competitors for the Coca-Cola Company.” Hoovers. Hoover’s Inc., 2013. Web. 13 September 2013. < http://www.hoovers.com/company-information/cs/competition.The_Coca-Cola_Company.3f8a006eaf87d773.html>. Read More