Marketing Mix of Coca-Cola - Case Study Example

International Marketing Assignment Contents International Marketing Assignment Contents 2 Introduction 3 Marketing mix of Coca Cola 3 Product 4 Price 4 Place 5 Promotion 5 Coca Cola in Malaysia 6 Coca Cola in India 6 Coca Cola in USA 7 Internationalization Process Theory of Coca Cola 8 References 11 Introduction I am working for ‘Global Marketing Solutions plc.’ as a senior marketing consultant. In this report of International Marketing I have chosen Coca Cola as the global brand. International marketing defines the implementation of marketing principle and theories in more than one country. With the development of the technology and communication the company expands its business in many countries of the world and creates a huge consumer of its products. For this advancement in business the main credit goes to the advancement of the international trade. From 1951 to 2010 the volume of international trade increased by 33 times. In this trade the product and brands that are originating in one country are gladly accepted by the people of other countries. One of the popular brands in International marketing is Coca Cola. In mainly manufacture soft drinks, bottled water and other health drinks the company has a global business which operates in large scale in the local areas. It has created the global reach by focusing the local people and area (Belohlavek, 2008). The company has more than 250 bottling partners throughout the world. It has adapted different plans, strategies, marketing models, business policies etc for becoming one of the top companies in the world (Onkvisit and Shaw, 2009). Marketing mix of Coca Cola The key element of Coca Cola to establish its business in the international market is marketing mix. This model includes four factors of the business: product, price, place and promotion. The company’s main focus in the international market is to use the marketing mix strategies for strengthening its business. However the company has also used some external analysis theories in building its marketing mix strategies (Doole and Lowe, 2008). Marketing Mix Model Product Coca Cola is involved in the business of beverage. Its wide portfolio comprises of 3300 products. Its beverages are divided into fruit juices, diet soft drinks, energy drink, bottled water, coffee, tea etc. it has became the number 1 brand in juice, sparkling beverage, bottled water. Its market is present over 200 countries of the world. The company has made its product packing outlook in such a way that it easily attracts customer. It uses three strategies for building the product image: packaging, labelling and branding (Schindler, 2011). Price Coca Cola has done the pricing of its wide range of products according to the geographic segment and the market. Each and every sub-brands of the company are having different pricing strategies which are based on pricing of the competitor products. In the international scenario the beverage market has large buyers and few numbers of sellers. So it can be said as an oligopoly market. Therefore Coca Cola has to maintain a balance in price with its competitors. The long term pricing strategy of the company is value oriented. It maintains the affordable price of its product to become popular in the middle class market and to face its strong competitor Pepsi. This pricing strategy give importance to risk involved in any beverage company for adopting some strategies related to price. The pricing strategy affecting the demand of Coca Cola’s product in international market is influenced by the factors like elastic and inelastic demand. In the elastic demand the product price was sensitive which increased the sales volume in a significant level with the reduction of price. In inelastic demand the product does not have any decrease, increase correspondingly with the rise or fall in price (Gelder and Woodcock, 2003). Place Coca Cola’s product is available all over the world. The company follows the distribution pattern of FMCG. Its distribution network is very effective that it has almost destroyed middle and small level players in the beverage market. For example in India, Coca Cola has made extensive distribution even also in the rural market which eroded the market of local soft drinks. It adopted many measures for entering into various foreign markets like franchising, licensing and direct exporting. To overseas companies and distributers, Coca Cola directly exports its products. It also does licensing the bottlers internationally and supply them the syrup which is required to manufacture the product. The total distribution process of the company in international market is done in a very strategic way. It sells it product in many different ways (Cheverton, 2005) Promotion The company develops many promotional and advertising strategies in its international market for increasing its demand all over the world which is associated with the behaviour and life style of its targeted audience. It individualized its ad for particular message or festival according to different country. The company also used CSR in its marketing activity for gaining emotional benefit in the mind of the consumer. Coca Cola gives price discount and allows the retailers and distributors for pushing its more products in the international market. It applies Pull strategies in campaigns and advertisements and push strategies in promotion. It invests a huge amount of money every year for ad and promotion of its product around the world for maintaining its leadership in the market. Social media, online and magazine ads are also been used by the company in promoting its products. Coca Cola does sales promotions at the stores for driving revenues (Franzen and Moriarty, 2008). Coca Cola in Malaysia First marketing strategy used by Coca Cola in Malaysia is for its product. Its soft drink is very famous in the Malaysian market. It provides a wide range of product in Malaysia with attracting packaging & labelling. Here the company uses a packaging of slightly red in colour. It is seen on the surface of the product. The product labelling done in this market is to identify the materials and ingredients used in the product. It also shows that the product is confirmed as Halal drink in Malaysia. Coca Cola set fair and normal price in the Malaysian market to attract the customers. The company is very sensitive regarding the price changes in this market because many other soft drinks are present in this market which compete Coca Cola (Batey, 2012). Coca Cola in India Coca Cola was launched in India in 1993 in Agra. From that time onward it became a very popular drink in India. The company then launched Thumbs Up, Fanta, Mazza, lemon drinks, sprite, diet coke and Bisleri in the following years. It faces a strong completion with Pepsi in India. Coca Cola promotes and advertises its product related with some major issues, festivals, social objectives etc which easily touches the heart of the people. The company gives a huge marketing support to Thumbs Up until it strikes the four major metro cities of India. Price of its products is affordable. The company used many superstars to advertise its product in a very interesting way in India (Keller, 2008). Coca Cola in USA The company started its business in Atlanta, Georgia of USA. The company was formed in 1892. From that time the company operated in a franchise distribution system to place its product in the market. Continuously the company keeps on improving its product package and varieties in its products. People of US became very health conscious day by day so the company introduced diet coke to maintain its customer base. The company also does many social activities in USA to maintaining the product and company popularity in the country (Assael, 2005). All the marketing mix strategies used by Coca Cola in different parts of the world are helping the company to develop its international market. The pricing policies of the company are fixed in such a way that its competitor doesn’t get any advantage from it. Coca Cola promotes its product by very touching and innovative advertisement (Hastings, 2013). According to this model Coca Cola posses a brand salience which helps the brand to stand out of the crowd and create awareness among the people. It also tries to ensure the perception of the brand clearly among the mass. In brand performance Coca Cola defines how well its product serves the requirement of its customers. Coca Cola in Brand imagery explains how its product meets the psychological and social level. Customer response and feelings gives judgment about the company, its product and how they feel. In brand resonance Coca Cola experiences a deep, psychological bond with the customers (Codita, 2011). Internationalization Process Theory of Coca Cola It is one of the biggest brands in soft drink industry. Coca Cola can also be called as the market leader of the beverage industry. The company follows many process of internationalization for developing its market throughout the world (Richter, 2012). These methods are as follows: Methods based on export Most of this method for internationalization is accounted in equity based method for internationalization. These methods are divided into indirect and direct export. In indirect export Coca Cola itself does not do any international activities but operates the international activities through different intermediaries like the buying house, export house and conforming houses of different countries. Export house purchase product from Coca Cola and sells it in international market on its own account (Paul, 2008). The conforming house works for the foreign buyer. It brings the buyer and seller into direct contact .It confirms the payment of the buyer to the exporter. The same function is performed by the buying house in a more active way. In the process of direct exporting Coca Cola distribute and sells its own products into the international market. This is a long term process for a selective international market. Here the firm chooses the local needs that are required to develop for establishing local pricing policies and local market researches (Ashurst and Hargitt, 2009). Coca Cola has its wholly owned subsidiaries in many countries. It is owned totally by the company. It sets up operation this those countries where it has its subsidiaries. These gives the company a strong control on its operations in different places. This is required for engaging strategic coordination throughout the world (Dost, 2006). It is also known as Greenfield investment. This venture of Coca Cola in foreign countries helps the company to build the specific type of subsidiary it wants. It is less risky for Coca Cola. Acquisition is also done by this company like acquiring 17% stake in Monster Beverage of USA. By this process the company builds its position and place quickly in the targeted foreign market. The company has approximately 275 bottling partners all over the world. They manufacture as well as pack the beverage, distribute it to the vending partner and the customers. Maximum bottling partners are3 not owned by the company. For its internationalization process Coca Cola have to depend on the government policies of the different countries. In its expansion process Coca Cola and World Wildlife Fund (WWF) are working together for the purpose of advancement of the sustainability stewardship of the Coca Cola System. They announced the new and bold goals for global environment and about the expanded global partnership. This goals focus on the sustainable management of energy, water and packaging used for its product. The partnership of these two organizations is a successful one. They are extending their efforts in achieving new performance target and ambitions (Marquardt, 1999). They are also promoting the amalgamation of the natural values in decision making processes. It influences its partner to solve the problems of environmental challenges faced globally. Coca Cola also does franchising. It is a specialized way of licensing where the franchisor of Coca Cola sells the product and insists the franchisee to maintain the rules of its business. The franchiser of Coca Cola gets a royalty payment. By this process Coca Cola is relieved of many risks and costs associated with the opening of business in international market. It also assumes risk and costs which creates good incentives for the Coca Cola franchisee for making profitable operations quickly. Coca Cola’s franchisee represents the company. They get full support from Coca Cola in terms of training, set up & marketing (Shachman, 2004). All this internationalization process is adopted by Coca Cola for expanding its business globally. The company is running its business for past 127years. Within these years the company has made several changes in their policies, structure, processes for establishing itself in the international market. The struggle of this company is successful as it has made its brand popular throughout the world by its different marketing strategies (Twomey and Jennings, 2010). References Ashurst, P., and Hargitt. R., 2009. Soft drink and fruit juice problems solved. London: Elsevier. Assael, H., 2005. Consumer behavior.  New Delhi: Dreamtech Press. Batey, M., 2012. Brand meaning. USA: Psychology Press. Belohlavek, P., 2008. Marketing mix.  UK: Blue Eagle Group. Cheverton, P., 2005. Key marketing skills: Strategies, tools and techniques for marketing success. Great Britain: Kogan Page Publishers. Codita, R., 2011. Contingency factors of marketing-mix standardization. Germany: Springer Cross, F., and Miller, R. 2011. The legal environment of business: text and cases: ethical, regulatory, global, and corporate issues. Cambridge: Cengage Learning. Doole, I., and Lowe, R. 2008. International marketing strategy: analysis, development and implementation. Canada: Cengage Learning Dost, C., 2006. 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