Coca-Cola - Internationalization Theory Process - Case Study Example

Coca Cola Table of Contents Introduction 3 Marketing Mix 3 Conclusion 8 Internationalization Theory Process 9 Introduction The context of this reportis based on international marketing strategies, which have been followed by a well-known brand in the top 100 global brands. The company that has been chosen i.e. Coca-Cola, which is ranked 3rd in 2014 in top global brands (Bestglobalbrands.com, 2014). The main motto of this report to analyze the strategies, which being followed by Coca Cola to sustain into the global market. Coca-Cola is leading brand among the beverage industry, which deals with carbonated soft drink and serves over the millions of restaurants, retail stores, hypermarket and vending machines throughout the world. The marketing strategies and policies of the company makes them a favorite brand into the world market. The company has wide range of products such as soft drinks, 100% fruit juices, water, green tea, coffee and many more. The company has a huge product line extension for the consumers of the world’s market. The most important factor of Coca-Cola is different marketing strategies for the different nations of a market. This unique strategy aids the company to beat their rivals. The motto of this report to critically analyze the strategies which being adapted by Coca-Cola across the international market. The analysis of Coca-Cola will be based on the marketing mix and it plans for the international market, and whether the strategies of Coca-Cola are appropriate or not. Marketing Mix Product Coca-Cola is the most mainstream and greatest offering soda ever, and in addition, the best-known brand on the planet. Coca-Cola may owe its inceptions to the United States, yet its notoriety has made it all inclusive. Today, you can discover Coca-Cola in all aspects of the world. These days, Coca-Cola Company has given numerous sorts of Coca-Cola products, for example, Diet Coke: otherwise called Coca-Cola Lite, is a sugar- and without calorie soda pop with a scrumptiously fresh taste that provides for you a light support in your occupied day. Today, Diet Coke/Coca-Cola light is one of the biggest and best brands of The Coca-Cola Company, accessible in excess of 150 business sectors far and wide (Galician, 2004). Coca-Cola Zero: was made in light of adolescent grown-ups and offers extraordinary Coke taste, elevating refreshment and zero sugar. In Vietnam market, Coca-Cola Classic and Diet Coke (Coca-Cola light) is prevalent than Coca-Cola Zero. In Vietnam market, Coca-Cola Classic and Diet Coke (Coca-Cola light) is prevalent than Coca-Cola Zero. In augmentations, Coca-Cola Vietnam has kept doing exploration and creating more products to serve Vietnamese shoppers: Coca-Cola Company recognized that Vietnam is a various market, so Coca-Cola was situated its products into the adolescent section (with advanced style, energy and eagerness). That was the right heading of Coca-Cola when it was fruitful andories welcomed by the young a ton. In addition, Coca-Cola likewise centered around geographic attributes in Vietnam and concentrated on neighborhoods in point of interest (Gupta, 2011). The organization has the most extensive portfolio in drink industry containing 3300 products. Drinks are partitioned into diet class, 100% tree grown foods juices, products of the soil beverages, water, caffeinated beverages, tea and espresso and so forth. According to Nielsons information, Coca-Cola is the No.1 mark in shining drinks, squeeze, and retail bundled water in 2010. Coca-Cola has its market vicinity around 200 nations. Coca-Cola marks in India are Fanta, Maaza, Thums up, Nimbu crisp, Minute Maid, Nested frosted tea and so on. Price: Coca-Cola Company set price for products focused on the quality got of clients. It understood that the purchasers quality discernment is more critical than the using expense of dealers, so this organization based the prices rely on upon the clients apparent worth. Coca-Cola Company products went for a moderately low entrance when entering Vietnam business sector to trust that it will pull in an extensive number of clients and addition the piece of the overall industry (Being delicious and being happy, 2006). Evaluating by products: Coca-Cola Company has given numerous products, so they are distinctive in structure, size, materials, and afterward they are priced at diverse scales. Here are the quantities of contrasting a sort of item in Vietnam market. Right now, the price of Coke products in Vietnam business is higher than the relating products of the same kind; however, the distinction in price is not high (Richter, 2002). Because of the accessibility of extensive range products, the evaluating is carried out as per the business sector and geographic section. Each one sub-brand of coca cola has diverse valuing method. Their estimating methodology is focused around the contenders; Pepsi is the immediate contender to coke. Drink business sector is said to be an oligopoly showcase (few merchants and vast purchasers), consequently they structure into cartel contract to guarantee a common adjust in valuing between the dealers. Promotion: To get the incredible achievement in Vietnam market, Coca-Cola Companys advertisers have utilized specialized instruments adequately. They comprehend the brain science of customers, and understand that promotion movement is one of the best instruments to advance the picture of any products. Coca-Cola Company has propelled numerous promotions to draw in purchasers, pick up the piece of the overall industry, and even get the agreeing from clients in social obligation part (Smarandescu and Shimp, 2014). Coca-Cola embraces different promoting and promotional techniques to make an expanded request in the business by connecting with the way of life and conduct and fundamentally focusing on worth based publicizing. You are more prone to see a Coke commercial individualized for a particular celebration or in with a general positive message. Coca-Cola utilizes CSR as its showcasing device to addition passionate profits in customer’s personality. The current promotions through CSR incorporate "Help my school" crusade with NDTV. It has numerous brand representatives like Shahrukh Khan, Ghambir, Aamir khan and so on and has marked contract as of late with Imran Khan. Place: In 2001, Vietnam Government consented to consolidation these manufactories under unified administration structure, with the principle chief part of CCBV in Hochi Minh City. Three manufactories in three sections of Vietnam (Northern, Central and Southern) help Coca-Cola Company stretch the appropriation system, which is the most critical part of the offers of organization, in district and dependably give products enough to the retailers (grocery store, minimart, bistros, restaurant) in those territories. Since Pepsi is greatest adversary of Coca-Cola and entered into Vietnam showcase in the recent past, so Pepsi has arrived at a larger number of retailers than Coca-Cola. So organization frequently concentrate on extend and draw in more retailers by giving help exercises, for example, gifting, help for beautifying store, monetary backing, and so on (Yuvaraju, Subramanyam and Rao, 2014). The Coca-Cola applied global standardization approach in Vietnam marketing strategies. Global standardization strategies can be applied in a global business, where it provide a uniform consistency throughout the market mix. It is a situation where a company enters a foreign market with the same mission and objectives in its business operation. From the above Coca-Cola’s marketing strategies in Vietnam, the company is selling the same brand with the same strategies compared to its operations in the homeland. Since the major competitor Pepsi is also a multinational company, Coca-Cola has approached the market with the aim of maintaining its real global image. Therefore, the same products such as coke diet, coke zero, fanta are available for consumers here, same as global products. Packaging and distribution channels used in Vietnam are also similar to that used globally. The pricing strategy is somehow adapted to best suit the locals, the locals demand of the product is higher, but the economic status of the country and the presence of the major competitor in the market Pepsi is used to regulate the Coca-Cola products in Vietnam. Product promotion is also adapted to target the larger consumer groups who are majorly young population. For example promotion through CSR incorporates “help my school” through NDTV is focused on this particular unique market group. Coca-Cola is the worlds most loved brand and is accessible everywhere throughout the world. The appropriation arrangement of Coca-Cola takes after the FMCG circulation design. The compelling appropriation system of coke has just about disintegrated the little and center level players in the business. In India, they have caught even the rustic market by far reaching conveyance and have dissolved the piece of the overall industry of Bovonto, Kalimark and so forth Conclusion The organizations viability and benefit are apparently decently backed by their solid aggressive position and piece of the pie in their essential item advertise – Coca-Cola. Different brands like Diet Coke, Sprite and Fanta, have additionally been globally perceived and beneficial. Its worldwide achievement is accomplished by the organizations technique and strategies, which supplement one another and work in concordance giving the ideal return limited by effectiveness. The organization is flourishing as it is both successful (doing things right)and effective (making the best choice). Coca-Cola is utilizing various methodologies. At first, it used the Market Penetration Strategy and got to be secured in its home market by expanding piece of the pie and item use. At that point, it utilized a Market Development Strategy by growing its operations into remote markets. Later, it created new products, both at a national and universal level and after that began operations in the carbonated sodas market. This additionally guarantees that Coca-Cola has an exhaustive item collection in each one business, improving the probability of a buy of a Coca-Cola Company marked item. This portfolio is overseen and empowers the best fit between the organizations qualities and shortcomings to the opportunities found in the environment. In considering the substantial focus position of the firm in an exceedingly alluring business, it is proposed that Coca-Cola ought to Protect its Position. It can be accomplished by focusing endeavors on keeping up its current quality by contributing to developing at greatest absorbable rate. Internationalization Theory Process Internationalization is a potential approach that is applied by business firms to expand company’s operations, increase their revenues, and widen the business market share. Internationalization is a major concern for most firms that develops into international operations. Company’s global entry is an important step for any business organization currently; therefore internationalization process theory is vital for any company targeting international market entry. IPT, therefore, is useful for a firm in the acquisition, and use of information about foreign markets and operations (Dicken, 2007). Company’s global operation is possible when it posses unique operational advantages to other competitors. Coca-Cola as unique advantages like technology, brand name and benefits of scale that provide higher revenues compared to its competitors in the foreign market. The good coca cola’s product image is one of its major strength in entering the global market. A Coca-Cola operation in Vietnam was facilitated by the availability of resources and market. Coca-Cola Company uses Non-Equity based methods for internalization on its international market entry. In this type of internationalization, the company sells technology or do business in form of intellectual property rights where the company issue license for operators to trade under its trademarks and copyrights. The non-equity method of internationalization includes licensing, franchising or other contractual agreement. (Wall and Rees, 2004). Coca-Cola Company applied the franchising methods to capture the international market, where the company uses franchisee to operate in the foreign land. The Coca-Cola company sold its operations rights to a franchisee, where franchisee undertakes business activities using the coca cola name and trademark. The method has enabled the company to establish its foreign business operations in the short time with little direct moderate direct investment and has created a global image for its product, through standard marketing method. The approach allowed the factory a high degree of business control and enables it to understand the local taste and preference for the local consumers. Franchising method has facilitated the Coca-Cola Company to compete Pepsi in Vietnam. The company is still expanding its franchises territories and replacing local inactive local franchises with more active and market- driven sellers. The franchising method has been successful due to the company’s strategy for engaging the locals who also employ the locals. Involving the locals has supported its operations due to affordable labor and operational sustainability. Equity based methods for internationalization such as Foreign Direct Investment (FDI) is another useful theory in entering a foreign market. Coca-Cola used FDI in other international markets, for example, in Europe, the company constructed new bottling plants to lower production cost, conducted marketing strategies to gain the product recognition required for growth, and introduced operational facilities to minimize market delivery time. This internationalization strategy has contributed to the company’s global market operation in more than 200 foreign countries. Approximately 94 percent of world’s population know the name Coca- Cola, an indication of the good global image. References Adler, E. and Pouliot, V. (2011). International practices. Int. Theory, 3(01), pp.1-36. Being delicious and being happy. (2006). Strategic Direction, 22(7), pp.27-29. Bestglobalbrands.com, (2014). 2014 - Best Global Brands - Interbrand. [online] Available at: http://bestglobalbrands.com/2014/ranking/ [Accessed 28 Nov. 2014] Dicken, P. (2007). Global Shift: Mapping the changing Contours of the World. 5th Edition. London: Sage. Walls, S., and Rees, B. (2004) International business. 2nd Edition. England: Pearson. Galician, M. (2004). Harry Potter, Coca-Cola, and the Center for Science in the Public Interest. Journal of Promotion Management, 10(1-2), pp.227-231. Gupta, S. (2011). MIR talks to Stan Sthanunathan, Vice President of Marketing Strategy and Insights, Coca-Cola Company. GfK Marketing Intelligence Review, 3(1). Richter, T. (2002). Marketing mix standardisation in international marketing. Frankfurt am Main: Peter Lang. Smarandescu, L. and Shimp, T. (2014). Drink coca-cola, eat popcorn, and choose powerade: testing the limits of subliminal persuasion. Mark Lett. Yuvaraju, D., Subramanyam, D. and Rao, P. (2014). Advertising Strategy of Coca-Cola at Coca-Cola Beverages Pvt.Ltd. IOSR Journal of Business and Management, 16(6), pp.122-131. Read More