Marketing Strategy for Coca Cola - Case Study Example

of the Marketing Strategy for Coca Cola The objective of this marketing strategy is to review the current marketing strategy and environment of Coca-Cola and prepare recommendations to improve Coca-Colas market share and competitive advantage and to utilise the results of the audit to create new marketing objectives for Coca-Cola. Having examined the political, economic, social and technological trends, useful information was generated for a strategy formulation, at Coca-Cola. The following represents a summary of the findings: Manufacturers of soft drinks are increasingly guarded by legislation affecting health and safety. (Coke Homepage, 2005) It is now mandatory that ingredients must be clearly labelled and an increasing amount of additives are not allowed. Coco- Cola must adapt to meet changing legislative requirements. There has been increased focus on using international standards and benchmarks such as standards developed by the International Organisation for Standardisation (ISO).Significant economic growth in non-traditional or developing markets has taken place, economies such as China, Russia and Latin America. (Dibb, 50) The economic environment impacts on the purchasing power of consumers. For example, when the average income decreases a consumer has less buying power and vice versa. Additionally, there have been increases in the minimum wages in several jurisdictions. (Coke Homepage, 2005) The population is becoming more educated on health issues; greater emphasis is now placed on healthier lifestyles, increasing demand for, healthy beverages. Globally, the greatest concern to which the food and beverage industry must respond is the rise in obesity. Additionally, issues of global warming and other environmental concerns are receiving more attention. Pressures for reducing waste and using environmentally friendly products give rise to the need for using more recyclable material. Increasing consumer awareness of ethical responsibilities in manufacturing and distributing, food and beverages requires responsiveness by Coca-Cola. Advancing technology has Paved the way for new techniques in microbiology, allowing opportunities, to develop previously difficult, new product formulations. Conceived new ideas and methods in marketing and advertising that can capture wider markets, such as, e-marketing using the internet. Changed business boundaries, making it more practical and money-making for businesses to spread out their operations internationally. The SPICC Analysis (suppliers, publics, intermediaries, competition and customers) analysed the companys immediate environment and their competitors. The following is a summary of the findings: Suppliers Coca-Cola is heavily dependent on its supplier base. These relationships need to be properly managed to assure that the required inputs are available and accessible on demand. Coca-Cola key suppliers are the producers of carbonated water, kola nuts, concentrated juice syrups, caffeine, sugar and water. Publics: The company publics consist of its shareholders and other stakeholders who include the government, media, community, financial organisations, employees and its consumers. These groups should be properly segmented to identify their needs, thereby enabling Coca-Cola to satisfy those needs and deliver a superior investment through consistent increases in profits and sales volumes. Intermediaries: Coca-Cola intermediaries consist largely of their bottlers. Coca-Cola has constructed a worldwide bottling network; consisting both privately and jointly owned bottling operations. Banks and insurance companies are critical intermediaries. These relations must not be overlooked in the new market strategy. Customers Coca-Cola has approximately 1.4 millions customers throughout its countries. These customers range from small, independent retailers to large international supermarkets and restaurants chains. (Kotler, 90) The changing needs and requirements must be continually assessed so that Coca-Cola can adapt and remain relevant. Market Structure The market structure of the beverage industry consists mainly of bottlers, consumers, retailers, wholesalers, marketing alliances, manufacturers and franchise holders. Products Coca-Cola offers over four hundred brands of products to meet the taste and needs of varying consumers. The non alcoholic portfolio includes: Carbonated soft drinks Waters Juices Ready- to- drink teas and coffees Sports and energy drinks Place Although Coca-Cola was first sold in the United States in 1886, it is presently sold in more than two hundred countries worldwide. The company operation is segmented in five main geographial areas: North America, Latin America, Asia, Africa and "Europe, Eurasia and Middle East." Coca-Cola operates four hundred and twenty eight (428) production and distribution facilities. The company has been successful in marketing its products to various counties through its successful bottling process, which has vastly increased its market exposure. This distribution strategy is effective, however there are some emerging markets requiring exploration. In supermarkets and convenient stores Coco-Cola products are readily identifiable making it a viable and preferred option to a large segment of the consumer base. Price Coca-Colas value based pricing strategy works well. Just as their products differ in size and price compared to its competitors the ability to control cost and maximise on the economies of scale creates consumer perception of better quality. McKinsey 7s Framework The McKinsey Seven -S framework was used to review seven key interrelated areas that affects Coca-Colas organisational ‘performance namely- strategy, structure, systems, style, skills, staff and shared value’(Kotler, 85) the business strategy of the company requires review if Coca-Cola is to widen its customer base and increase market share. Greater emphasis on consumer information is needed especially as it relates to their changing needs and expectations. The CEO s current management style is appropriate to achieving short-term success, however a more participative and empowering leadership style is desirable for sustainability of results. Systems- Coco-Cola has embraced the use of technology in its operations4 to full potential. Also, by inserting user-friendly services, Coco-Cola is better able to connect with consumers. Systems for production of products appear very robust. (Carmichael, 2005) 4Ps OF Marketing Product: The new product developed is going to categorise as Coca-Cola new line of Health products, which focuses specifically on Health Drinks and Snack Bars. Pricing: A method of Competition- Driven Pricing6 and Psychological Pricing7 mechanism could be adopted. Over the next six months vast research has to be conducted on competitors prices and evaluating if odd-even pricing actually affects customer buying power example will customers be more apt to purchasing something that cost $5.99 or $6.00. Promotions The SWOT analysis revealed that one of Coca-Cola main strengths is its promotional and advertising capabilities. The company should continue making maximum use of this capability. Place Coca-Cola has a vast market share, the Health Line is going to be specifically targeted to its current market share and vast markets such as India and China that has not been fully explored. Works Cited Carmichael E. (2005) Coca- Cola Marketing Strategy News :( WWW) http:/www. evancarmichael.com /marketing-strategy/coca-cola marketing strategy Coca-Cola (2005) Annual Report Coca-Cola Enterprise Inc. (WWW) http://www.cokece.com (10 May, 2006) Coca-Cola (2005) Interesting Facts about Coke: (WWW) http:/www. cfo. com / article. cfm (10 May, 2006) Coke Homepage (2005) Interesting Coca- Cola Facts (WWW) http:/www.yip. org/coke/facts.htm (15 May, 2006) Dibb S, et al (2001) The Marketing Casebook: Cases and Concepts, London Thomson Learning, pg 45-60 Kotler et al (2003) Principles of Marketing, Upper Saddle River, NJ: Prentice Hall, Pg 80- 120. News Target (2005) Soft Drink Company Marketing Tactics: the expert sound off. (WWW) http://www.newstarget. Com/003914.html (20, May, 2006) Read More