Marketing Mix and Internationalization Process Theory for Coca-Cola - Coursework Example

MARKETING MIX AND INTERNATIONALISATION PROCESS THEORY FOR COCA-COLA By Location Marketing Mix and Internationalisation Process Theory for Coca-Cola The marketing mix is in most cases used in reference with a blend of factors that a business organization can control in order to influence that choice of consumers to favour their brand. Marketing mix is particularly very important for business organizations that want their brands to do well in the global markets. It can also be used in reference to the tactical actions that a business organization is used in the promotion of brand and product in the market. It is always referred to as E. Jerome McCarthys 4P with reference to: product, price, and promotion. Businesses usually adjust the four elements to the point at which the most appropriate combination is attained to serve the wants of consumers while at the same time earning the business organization maximum profit. This paper aims at critically analysing the extent to which Coca-Cola marketing mix is standardized and/or adapted across international markets. The Coca-Cola Company produces carbonated soft drinks that are sold all over the world. The company has its headquarters in Columbus, Georgia, USA. It is the most successful carbonated beverage seller in the world. This is in terms of both popularity and sales volume. Coca-Cola is among the most consumed soft drinks globally. The distribution system that has been used by the company over the past years has proved to be effective and efficient. The brand has been performing extremely well that it has always withstood every competition that is brought its way. For example, in the year 2010, the Coca-Cola brand was studied by a research to have outshined the closest brand, Pepsi by far in terms of their market performances in the global market. The company produces soft drinks, fruit juice, bottle water, and sports drinks (Paracha, Munam, Waqas, Raza Khan & Ahmad 2012, p. 12). However, it is their emphasis in production of soft drinks that has definitely contributed to their popularity. The pricing strategy that has been used by Coca-Cola over the years can simply be described as value oriented. Despite the fact that they have been the leading brand in the market, fierce competition from brand such as Pepsi has made them maintain the relatively low prices in order to remain appealing to the middle class consumers. However, each sub brand has its own pricing strategy with the strategies also varying geographically (Eldred 2008, p. 45). Because of the oligopoly nature of the beverage market, there has been the formation of cartel contracts involving the sellers to make sure that there is a mutual agreement of their pricing. The marketing mix generally refers to the process by which products by a certain business organization get to their consumers. Coca-Cola has a distribution system that is believed to be an important aspect of their marketing mix. The Coca-Cola products are available in retail outlets all over the world in bottles and cans. In addition to this, they also supply for fountain drink in a number of restaurants. The company has also increased the accessibility of their products by selling them through pop vending machines that are found in public buildings. The Coca-Cola Company makes use of FMCG distribution pattern in the distribution of their products. The quality of their products is also standard globally with some variance being noted in the amount of sweetener that is used in some regions (Moses & Vest 2010, p. 245). The variance in the amount of sweetener used is usually dependent on the preference of the consumers in that particular region. The Coca-Cola Company makes use of a number of advertisements and promotional strategies in order to build up demand for their products. Their advertising and promotional programs are always based on lifestyles and behaviours and are in most cases value based. It is most likely that they would make an advertisement for a given season or having a generally positive massage. The company uses CSR as a marketing tool that enable them to appeal to their consumers emotionally. One of the media that is most used by Coca-Cola company in advertising and promoting their products is the television. They have also used print media, radio adverts, and online or internet marketing. Previously the company would a single advertisement and promotional strategy all over the world, but this has changed with the change in the nature of the global market (Kühn & Gallinat 2013, p. 8). The marketing mix that has been adopted by Coca-Cola Company can be said to be very effective in that they have enabled the company to conquer the globe. With the products that they produce it can be clearly seen, that they have taken into consideration the fact that the tastes of human beings are diverse. By availing a variety of product they are able to make sure that everyone has a product with which they can be satisfied. With such diversity, the company has been able to remain appealing to a majority of the soft drink consumers globally (Bowman & Gatignon 2010, p. 64). This can be used to explain the fact that Coca-Cola is the most popular beverage brand in the world. A majority of people in the world does have average income. By making their products relatively affordable, the Coca-Cola Company has been able to make sure that their products remain to be affordable by anyone. The fact that the pricing has always been done in relation to their sub brands has also helped them in making their pricing in accordance to the social group that find particular sub brands appealing (Kerin & Oregan 2008, p. 78). The fact that they do their pricing on geographical basis has also helped them in making their pricing appropriate for specific geographical areas, thus remaining the most appealing brand to all the parts of the world (Richter 2012, p. 102). The availability of Coca-Cola products all over the world has positively contributed to their popularity and increased incomes. When consumers have products that they love within their area of access they happen to have more trust on the product and begin getting attached to the products. It is obvious that customers will not buy products if they are not available. Given that beverages are not a basic need and the fierce competition from companies such as Pepsi, laxity in ensuring that their products are accessible globally would be very costly (Vasudeva 2006, p. 92). It can be said that by making their products available, they have denied their competitors the chance of overturning their dominance in the soft drink market. This has really helped them in remaining as the worlds favourite despite there being tough competition in the soft drink market globally. The promotion and advertisement strategy that Coca-Cola Company has been using has so far been effective in increasing their dominance. Soft drinks are lifestyle related products and the only way to make them appealing to customers is by coming up with lifestyle related advertisements and promotions (Codita 2011, p. 123). The fact that they have been using festive based strategies has also helped them because the consumption of their products has been evidently higher during these seasons. For instance, the advertisement that they made linking the brand to Christmas festivals was very effective in increasing the consumption of these products during these seasons. The regionally based advertisements and promotional strategies such as “Africa lets go crazy” has been able to increase the consumption of their products in these regions. The sales of Coca-Cola products were recorded to have increased significantly increased in Africa as a result of the “Africa lets go crazy” campaign. The Internationalization Process Theory that has been adopted by Coca-Cola company can be simply described are franchised. Franchising can be referred to as a type of business involvement under which a business allows or sell the right of usage of a business organization’s model. This is always used as an alternative to setting up chain stores. Franchising is seen as a way in which business organizations that wish to go global can avoid the liabilities that are associated with direct investment in the global markets. In most cases, the success of the franchise always depends on the success of the franchise. Given the level of success of the Coca-Cola company, it Franchisors will definitely be attracted to it with the aim of sharing in this success (Mok, Dai & Yeung 2002, p. 44). Franchises are believed to have higher incentives when compared to direct employment due to the fact that they always have a direct stake in the failure or success of the business organization. These are some of the factors that can be used to explain the reason as to why the Coca-Cola Company settled for franchising for their internationalization process (Werther Jr & Chandler 2005, p. 322). The production and distribution model used by Coca-Cola can easily pass for franchising. They do this by producing a syrup concentrate that they distribute to all the bottlers that produce their products globally. Their franchises are always in charge of a region or more and use the syrup concentrate that is distributed to them by the Coca-Cola Company to produce the final products that are always sold to the consumers. They do so by mixing the syrup with water and sweeteners that is always the ingredients for the final products. The franchise then carbonates the drinks, then bottling them ready for consumption. The franchisees have the responsibility of distributing the final products to the retailers and making sure that the products can be accessed at vending machines and restaurants. The Coca-Cola Company has a minority of shares in some of the biggest franchises that they use. For the independent bottlers, they can be allowed to use the sweetener in accordance with the taste of the local market. Independent franchisee makes more than half of the total franchisees that work with the Coca-Cola Company (Pride & Ferrell 2006, p. 157). The Coca-Cola Company has also worked hard to make sure that they regulate the use of the controversial ingredient in their franchise dealings. Looking at the case of Coca-Cola Company it is clearly evident that franchising is the most appropriate internationalization model that they could use in their global marketing activities. The first reason as to why franchising is the most appropriate model is the nature of the global beverage market. Given that various parts of the world would have different preferences franchising makes it easy for the company to focus on the market environment of specific geographical areas all over the world (Yoffie 2002, p. 87). Another reason would be that franchising is less costly as compared to other models such a putting up production bases in all the regions in the world or getting the products to the consumers through exportation. All the company has to do in this case is to make sure that the syrup concentrates gets to the franchisees. Apart from the lower capital requirement, franchising also has the advantage of low liabilities. Just like the company has to share the profits with the franchisees they also share the liabilities that are involved in the business processes (Luthans & Doh 2012, p. 22). The fact that franchisees have more incentives in comparison to direct employees it can be said to be away in which the Coca-Cola Company has made sure that their global productivity is maximized. It is clearly evident that the marketing mix that has been adopted by the Coca-Cola Company has been highly effective for the company. This can be seen in the way the company’s brand has been successful in the global market. Despite there being competition in the beverage market, they have remained to be the most popular and profitable beverage producers in the world. A look at each aspect of their marketing mix, someone will notice that both the interests of their global consumers and that of the company and its shareholders are well taken care of. The company continues to fulfil the expectations of their customers while at the same time earning profits. The choice of franchising as an internationalization model has also helped them in making sure that their international markets involvements are all successful. Franchising helps them in minimizing what they invest internationally while at the same time limiting the liabilities that are involved in the internationalization of business organizations. All these factors have led to its global success. 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