Coca Colas Price, Place, Promotion and Product Development Strategy - Essay Example

?Introduction The Coca Cola Company is one of the leading soft drink manufacturing and distributing organizations around the globe. Throughout the years the organization implemented several unique and differentiated marketing strategies in order to gain significant competitive advantages to secure its leading position in global market place. Effective new product differentiation and business diversification strategy helped the organization to increase its market share and brand value. The essay will develop a consultant report for Coca Cola in which the competitive position of the organization and organization’s implemented marketing strategy will be evaluated. It will help the organization to develop effective future strategies in order to improve business performance. 4Ps of Marketing The 4Ps marketing mix framework will help to determine Coca Cola’s price, place, promotion and product development strategy. Product The Coca Cola Company is the leading manufacturers and distributors of soft drinks. The organization has wide range of differentiated and diverged product line. These strategies helped the organization to ensure significant competitive advantages over its competitors. Aggressive product development and continuous differentiation of products helped the organization to meet the needs and demand of target customers (Dost 14). Recently, the organization faced several legal and social issues regarding high pesticides and calories level in cold drinks. But, the organization started to introduce healthy, differentiated and calorie free soft drinks for target customers to maintain sustainability in business performance and business operation. Price The Coca Cola Company implemented advanced technology in each and every business operation processes. This strategy helped the organization to reduce business operation cost. Low business operation cost helped the organization to implement competitive pricing strategy. In addition to this, this competitive pricing strategy helped the organization to offer different product in economic price level that can help the organization to meet market demand. Place (Distribution) Coca Cola’s strong distribution channel is the major business growth driver of the organization. The organization has its own existing supply chain network that helps to reduce business operation cost. Most importantly, the Coca Cola Company always motivates is distributors and suppliers to follow the organizational policies (Peterson 29). It actually helps the organization to maintain sustainability. Promotion Coca Cola Company uses different promotional mediums in order to give adverts for existing products. Print and digital media advertisings help the organization to attract children and youths. In addition to this, effective social media advertising or online promotions help the organization to target mass target audience (Carmody 143). Moreover, giving sponsor to popular sporting teams, event and campaigns helps Coca Cola Company to create effective customer awareness. General Costs of Marketing The Coca Cola Company has become the leading organization within the industry due to effective adoption and implementation of brand extension and umbrella branding strategy. Slowly and gradually, the organization is increasing its product portfolio to increase market share meet current market demand. It is important for the organization to market this developed product portfolio successfully in order to avoid business losses. Truly, the organization spends a significant part of its business profit in the marketing activities. For example, the organization spent almost 2.9 billion US dollars in USA for promotion purpose. On other hand, the organization spent 2.3 billion Euros in UK to create significant customer awareness. The organization managed to get successful business outcome through these promotional marketing strategies which are aggressively backed by huge marketing cost. However, the organization failed to get success through few products due to limited acceptance of these products by the target customers. PEST Analysis and Organization’s Marketing Decisions This part of the essay will conduct a PEST analysis in order to determine the impact of external environmental factors on the business performance that can influence the decision making strategy of Coca Cola Company. Political It is known to all that Coca Cola Company operates within the food and beverage industry. This industry is considered as one of the most sensitive industry in which the organizations has to maintain effective quality control in order to avoid legal threats. Recently, several soft drink products of Coca Cola faced huge challenges due to high calories and pesticide that was affecting the health of people. Especially the kids and teenagers were suffering from obesity due to high consumption of soft drinks. Government banned the marketing activities of the organization due to these health issues. However, the organization tried \to implement product differentiation strategy to overcome these challenges, but still has not overcome yet. It is important to target health conscious customers by introducing healthy soft drinks to maintain high brand image and competitive market position. Economical Recent financial slowdown is forcing people to save more and purchase less. Soft drinks of Coca Cola cannot be considered as necessary products. It is a kind of refreshment product. People are trying to limit the consumption of soft drinks due to affected purchasing power. Therefore, it is important for the organization to implement economic pricing strategy in order to maintain its strong customer base. Social Demand of people is changing continuously regarding the consumption of soft drink products. Now-a-days, people are trying to consume healthy soft drink, such as fruit juices, energy drinks and calorie free lemonade drinks that can refresh people without hampering the good health. Therefore, it is important for the Coca Cola Company to think about new market demand and customer preference while implementing brand extension strategy. Technological Globalization and advanced technology motivated several leading multination organizations to implement unique business operation strategy. Technological development of country helped the Coca Cola Company to adopt advanced technology in entire supply chain process. It helped the organization to reduce business operation cost and time. In addition to this, the organization has able to reduce the work pressure and level of stress of its employees. Segmentation Method Coca Cola has implemented several segmentation methods in its marketing strategy. In terms of geographic segmentation, the organization used to manufacture, distribute and sell its products in global market. Its unique taste and assured quality attract people of different regions and places to consume this drink. In terms of demographic segment, Coca Cola is popular among people of all ages. The soft drinks of Coca Cola are popular among the youths and children. The organization generally target more young individuals than the older. Its economy and family packs helped the organization to develop popularity among the households (Kotler 170). Different packaging label and size has been introduced by the organization for the people of different income group. In terms of behavioral segment, Coca Cola segments its soft drinks for different occasions and festivals. Coca Cola has become the event identity of culture in many countries due to high brand identity. Targeting Strategy The Coca Cola Company developed target market strategy based on age, income or socio-economic status and gender of people. In terms of socio economic status, the Coca Cola Company used to target the people who are busy in daily life. The office busy goers, business executives and people with significant qualification background are the target customers of the Coca Cola’s soft drink. Children, kids, young college students and busy young office executives are the major target customers of the Coca Cola Company (Reid and Bojanic 144). People of middle and higher income groups are being targeted by the organization as the prior target customer. Proposed New Segment It is clear from the above discussions and facts that the organization already has segmented its differentiated products according to the characteristics of target audiences. It has identified from the discussion that the organization is facing serious issues regarding the quality of products. Therefore, it is important for Coca Cola to develop new market segment strategy to meet current market demand. Test and preference of people is changing at a continuous rate. Now-a-days each and every individual wants to maintain good and secure health. It is true that high carbonated regular soft drinks of Coca Cola are facing legal issues due to inadequate quality of the drinks. Havoc consumptions of these high carbonated soft drinks can affect the health of human beings due to presence of high level of calories, sugar and pesticide. Looking into these issues and serious facts, people are becoming cautious and are trying to avoid the consumption of these soft drink products. Slowly and gradually, these individuals are shifting to several substitute brands that used to offer healthy energy drinks and fruit juices. It is the real market and growth opportunity for the Coca Cola Company to tap this market segment and develop appropriate marketing strategies accordingly. Coca Cola is trying to enter in this specific market, but finding it difficult to grab the market share due to presence of several leading substitute brands. Coca Cola should try to change its brand image. They need to reform themselves to the provider of healthy soft drinks rather that refreshment drinks. In addition to this, effective promotional strategy need to be implemented in order to newly developed strategy. Coca Cola needs to establish a strong research and development team in order to ensure the high quality of newly developed products for new segmented target market. It is important for the organization to develop a good and valuable reputation among the target customers from initial time period. As the market environment has become highly competitive, the organization has to ensure the competitive economic pricing of products in order to support the affordable purchasing behavior of people. Buyer Behavior Affects sales of Company Buying behavior of consumers changes due to change in new product development, change in social needs and change in economic environment. Coca Cola faced several issues in recent past due to poor quality of the soft drink products. Slowly and gradually, the potential target customers started to switch from Coca Cola to other brands. People started to prefer healthy soft drinks in order to maintain good health. Throughout these long years, the Coca Cola Company tried to segment the products according to age, income and culture of people. But, the time has come for Coca Cola to think differently as the target customers prefer health centric food products. If Coca Cola sticks to its basics, then the changed consumer buying behavior can affect the sales growth of the organization. Slowly and gradually, significant groups of target customers are shifting towards other brand due to change in buying behavior (Schmitt 19). It can affect the entire customer base of Coca Cola is the organization does not think about new segmentation strategy. Differences between B2C and B2B In B2B marketing, the organizations generally work hard to streamline the buying process as it helps to save money, time and effort. On the other hand, in B2C marketing organizations need to implement more aggressive and broad marketing strategies to increase the number of loyal and potential customers. In case of Coca Cola, it can be stated that the organization got success through effective adoption and implementation of B2B marketing strategy, Distributers, retailers, hotels, resorts, restaurants and several types of hospitality organizations are major business clients of the organization. Coca Cola motivates and encourages the distributers and retailers to increase the sales volume by providing several discount or commission facilities (Ferrell and Hartline 59). The organization never believes in B2C business model and it is right to do so depending on its differentiated broad product portfolio and operating areas. However, the supply chain network and agency or distributorship concept need to be more streamlined as it will help the business clients to perform more effectively without any burden or pressure. Conclusion It is clear from above discussions and findings that the buying behavior of consumers and social \trend is changing dramatically which can affect the business performance of the Coca Cola Company. The organization has to think about new market segment as the soft drink industry has become highly saturated and people within the society prefer for healthy soft drinks rather that carbonated high calories drinks. The proposed new segmentation and target market strategy will help the Coca Cola Company to maintain its competitive position in global market place. Work Cited Carmody, Bill. Online Promotions. London: Kogan Page, 2004. Print. Dost, Christiana. International Marketing Strategies. London: Routledge, 2006. Print. Ferrell, Odies, and Michael Hartline. Marketing Strategy. Stamford: Cengage Learning, 2008. Print. Kotler, Philip. Principles of Marketing. New Jersey: Pearson, 2010. Print. Peterson, Chris. Event marketing. London: Sage, 2012. Print. Reid, Robert, and David Bojanic. Hospitality marketing Management. New Jersey: John Wiley & Sons, 2009. Print. Schmitt, Brend. Experimental Marketing. New York: Simon and Schuster, 2005. Print. Read More