Advertising and Marketing Strategy of Coca-Cola Company - Case Study Example

Table of Contents Introduction 2 Target Market 2 Advertising and Marketing Strategy 4 Distribution Strategy 6 Brief Summary of Key Findings 6 Recommendations 7 Conclusion 9 References 10 Appendix 11 Responsible Marketing 11 Introduction For any business organization to be successful in its ventures, it should have processes that will allow it to concentrate and focus its limited resources on the greatest chances to increase its sales so as to achieve a competitive advantage in the market (Kochan, 1997). Such a plan will require a business to have an effective marketing strategy so that it can be able to penetrate and sustain the market. This calls for the business organization to have marketing plans that are designed to help it realize its marketing objectives (Miles, 2003). The business organization that will be reviewed in this report is the Coca-Cola Company. This report will focus on the current marketing practices of the Coca-Cola Company, suggesting how improvements can be made to its marketing activities so as to improve its overall performance. The report will focus on the target market of the Coca-Cola Company, highlighting its advertising and promotional strategy. The report will also discuss Coca-Cola’s distribution strategy and give recommendations as to how the marketing practices of the company can be improve. The Coca-Cola Company is the largest beverage and soft drink marketer, retailer and manufacturer in the world. The company was founded in 1886 and has its headquarters in Atlanta, Georgia. As of 2010, the company’s total revenue stood at US $ 35.119 billion (Kochan, 1997). The company currently has over 500 different brands and it operates in more than 200 countries across the world. The company has remained highly successful in global marketing and market specialists attribute this success to product adaptation and variation (Miles, 2003). Target Market A market consists of all the potential and actual buyers of a service or product. Therefore, a target market may be defined as a set of buyers who share common characteristics and needs that a business organization decides to serve and satisfy (Miles 2003). A leading organisation like Coca Cola selects its target market by determining where the money and the potential consumers are (Miles, 2003). The organization has a primary target market and a secondary target market. The primary target market is made up of consumers from all nations who thirst for high quality soft beverages from a reputable company such as itself. The secondary market of the Coca-Cola Company is focused on very specific psycho-graphic characteristics such as consumers who are really conscious about their health and wish to consume products that will support their lifesyle (Kochan, 1997). According to the Coca-Cola, the company takes every thirsty customer as a target who has potential of consuming the company’s products. The products it produces are generally meant for all types of consumers. However, the company also has specific brands that are targeted at specific consumers (Kochan, 1997). For example, it has a variety of diet soft drinks that are targeted at older consumers who fall between the ages of 25 and 39 years or those who need a small intake of sugar because of health reasons. Children between the ages of 5 and 12 years old are also targeted for some of its products such as Winnie the Pooh sipper cap juice drink (The Coca-Cola Company). The company has segmented its market in terms of age, gender, lifestyle, family, occupation, nature and socio economic status. In regard to age, the largest age group that the Coca-Cola Company targets is the youth. For example, in the Pakistan region, it has segmented its market with a percentage ratio of 42% males and 58% females (Kochan, 1997). Those with busy lifestyles and have very little free time are also targeted by the company. They are considered the mobile generation. The company also targets families by having soft drinks in two-liter bottles (Miles, 2003). Advertising and Marketing Strategy One marketing theory that is used by the company is the marketing myopia theory. According to this theory, a company focuses on the market by looking and modifying its products accordingly so that they can satisfy the needs of the customers. With this theory, the company does not look at itself and its potential before catering for the market. This theory proposes that the interests of the market should be given first priority. One way in which the company uses this strategy in its advertising and marketing procedures is through advertising to potential customers of all nationalities, lifestyles, ethnicities, incomes, genders and ages. The company does not discriminate in its advertising since all persons who are potential customers are considered in the advertisements. The company identifies the unique needs of these markets before coming up with strategies to advertise and promote its products to them (Kochan, 1997). When advertising its products, the company differentiates its products from those of other companies so as to have a competitive advantage over its competitors. Advertising through mass media is the main method used by the Coca-Cola Company to increase consumer awareness about its products (Kochan, 1997). According to the Coca-Cola Company website, the television is one of the greatest advertisements and promotional tools. The Coca-Cola Company has many television advertisements that are used to create awareness to the customers about the existence of the company’s products. The company has had many television advertisement campaigns such as the “You know you want it”, “The Coke that refreshes”, “Coke is it”, “I’d like to buy the world a coke” and the “If you drink it, you get better of life” advertisements. The company also uses the radio as a tool to advertise its products. The radio is used because it is much cheaper and it reaches a much wider audience. The company advertises its products in between programming so as to catch the attention of its potential and actual customers as much as possible (The Coca-Cola Company). Billboard advertising is another strategy used. This is because it is huge and eye-catching, targets a large and diverse market, easily registered information, increased frequency of consumer exposure, and guaranteed audience. Another advertising and promotion strategy is the use of sponsorships. The Coca-Cola Company has been a key sponsor of the Olympic Games for many years now. This is a good strategy because the company gets exclusive advertisement rights and is able to market and promote its products through the games. The company is also allowed to sell its products at the Olympic Games and its brand name is usually used as a theme for the Olympic Games (Kochan, 1997). This has been an effective promotional and advertisement strategy because billions of people from all over the world watch or attend the Olympic Games. The company is therefore likely to reach a very wide target audience by being part of such popular games. Apart from the Olympic Games, the company also advertises and promotes its products such as the English Football Premier League from 2004-2005, the 2010 FIFA World Cup in South Africa, NRL, NASCAR, PGA tours, NBA and NCAA Championships among others (Miles, 2003). Personal selling is also used. This is a good strategy because the company represents itself well to the retailers. The company has demonstrated that this promotional strategy is very effective and it has been using it to maintain product loyalty. The company creates publicity by advertising its products using different forms of media such as television, radio, billboards and its web site among others means (Kochan, 1997). Distribution Strategy It is important to note that the Coca-Cola Company is distributed in more than 200 countries across the world. The distribution strategy of the Coca-Cola Company is influenced by its marketing strategy, resources, objectives and market structure. The company first sells its products to canning and bottling distributors, operators, fountain wholesalers and fountain retailers. These distributors then distribute the same products to other smaller outlets that are more likely to interact with the customers because they are located near them (Kochan, 1997). One major distribution channel of the Coca-Cola Company is the use of retail stores such as convenient stores, supermarkets and shops. The company stocks it products in these retails stores and consumers have the chance to come and buy the products (Miles, 2003). Retailers e.g.7-Elven use vending machines and self service slot machines as means or channels of distribution of the product. These machines are usually located in educational institutions, malls, business premises, offices and other miscellaneous business outlets that have many people (The Coca-Cola Company). The company also distributes its products through entertainment zones such as parks and other popular partnerships with entertainment organizations such as Disneyworld and video game joints or arcades where people come to play video games. Generally, the industry supplies its products through to wholesalers, chain stores and retail store (Kochan, 1997). Brief Summary of Key Findings One marketing theory that is used by the company is the marketing myopia theory. According to this theory, a company focuses on the market by looking and modifying its products accordingly so that they can satisfy the needs of the customers (Kochan, 1997). With this theory, the company does not look at itself and its potential before catering for the market. This theory proposes that the interests of the market should be given first priority (The Coca-Cola Company).. The Coca-Cola Company has segmented its market according to various characteristics such as age, gender, lifestyle, family, occupation, nature and socio economic status. These factors influence the type of products that the company produces and the ways through which it promotes these products (The Coca-Cola Company). Recommendations Even though the Coca-Cola Company has effective marketing practices and strategies, a lot more can be done to improve its overall performance. In regard to the target market, the Company strives to segment its market into more distinct groups of consumers. As a result I vouch for the company for focusing on age groups as a strategy that will its increase the revenue. The company can segment its market into smaller age groups, for example, products for those aged 12-14, 15-17, 18-20, 21-23, 24-26 and so on. By doing this, the company can be able to focus on the unique needs if each and every age group of its consumers, therefore attracting and retaining more customers (Kochan, 1997). The Coca-Cola Company can improve and secure relationships with suppliers using a few tactics such as strategic alliances. The best possible method would be to use backward vertical integration and purchase a supplier e.g. Owning a large portion of McDonalds shares. The results of such a strategy would allow the company to keep profits that used to be earned by the supplier, save on costs, and have a reliable source of supplies. The company should also differentiate it products more distinctly. For example, it was established through a blind test that most people could not differentiate between Coke and Pepsi (The Coca-Cola Company). Pepsis is the main competitor to the Coca-Cola Company. The two companies produce almost similar drinks and this may sometimes confuse consumers. The Coca-Cola Company should therefore seek to differentiate its products from those of its competitors so as to remain unique (Miles, 2003). In regard to the advertisement and promotion strategies used by the Coca-Cola Company, it should diversify its means of advertisement by using other means such as advertising through branding of shops that sell its products. The company can also increase the frequency of its television and radio adverts so that it is likely to reach more people through its adverts (Miles, 2003). The company should also advertise its entire range of products instead of simply focusing on the already popular products. There are some products of the company that are not well known by many people in many countries. There are other products that are only popular in particular countries but not in others. For example, Coca-Cola with lime is only available in Canada, Singapore, Netherlands, the United States and the United Kingdom. Other products of the Coca-Cola Company that are not very popular include the Coca-Cola zero, the Coca-Cola blak, the Coca-Cola orange (US, German, Austria and Switzerland only), Coca-Cola light sango (France only) and the Coca-Cola citra (Japan, New Zealand, Herzegovina and Bosnia only). These brands should be popularized in all the other regions of the world that the Coca-Cola Company operates in. there are no issues of culture that are likely to take occur as coca cola company are refreshment drinks unlike beers and wines. In regard to distribution strategies used by the Coca-Cola Company, there can also be some changes that can improve the overall performance of the company. For example, the company should try increasing the number of bottlers in various countries so that retailers, wholesalers or distributors can have access to the company’s products without having to go far way to access them. The more the bottlers, the easier it would be for the distributors to access the products of the company. This would also increase the profits made by the company (Kochan, 1997). Conclusion The Coca-Cola Company has remained a leading manufacturer, marketer and distributor of soft drinks as a result of its marketing strategies and efforts. The company has managed to thrive, communicate and convince the entire world that it is simply the best soft drink company in the entire world. Apart from advertising, promoting and marketing its products, the Coca-Cola Company seeks to make a difference in the entire world, especially in the countries that it operates in. This is seen through its corporate social responsibility efforts that see it supporting efforts to protect and preserve the environment and the overall health of people. The company targets its market well and has effective advertisement, promotion and distribution strategies. However, the advertisement, promotion and distribution strategies can be improved by following the recommendations that have been given in this report. References Kochan, N 1997, The world’s greatest brands: an international review by inter-brand. New York University Press, New York. Laermer, R & Simmons, M 2007, Punk marketing, Harper Collins, New York. Miles, R 2003, Organizational strategy, structure, and process, Stanford University Press, Stanford. The Coca-Cola Company. Homepage. 09 Jan 2012. www.thecoca-colacompany.com Appendix Appendix 1 Responsible Marketing The Coca-Cola Company is steeped in history and tradition, where heritage is honored and values are respected. We are a global family of people working together to bring your family a wide array of beverage choices to meet your beverage needs every day. We are honored that for over a century, we have been invited to be a part of your everyday lives; from your simplest routines to your social celebrations. You have trusted our products and brought them in to your home to be enjoyed by the whole family. The Coca-Cola Company respects and supports your role as a parent and a caregiver. We also acknowledge that as an informed parent or caregiver, you are best equipped to make the right dietary choices for your children. We believe that by providing you with easy-to-access nutritional information both on our product labels and online, as well as providing you with portion control sizes for all occasions, you have the necessary tools to make informed choices.View product nutritional information for a variety of our products. Your guidance in helping your children make appropriate choices during the many occasions of their day, will enable them to make more informed choices for themselves in the future. Learn answers to children's health questions and the role of beverages. The Coca-Cola Company is dedicated to offering safe, quality beverages, marketing those beverages responsibly and providing information consumers can trust. The Coca-ColaCompany has always taken seriously its commitment to market responsibly, across the globe, across all advertising media, and across all of our beverages. We have a global Responsible Marketing Policy that covers all our beverages, and we do not market any products directly to children under 12. This means we will not buy advertising directly targeted at audiences that are more than 35% children under 12. Our policy applies to television, radio, and print, and, where data is available, to the Internet and mobile phones. In 2010, we evolved our global Responsible Marketing Policy and redefined the appropriate audience threshold for children's programming from audiences that are more than 50% children younger than 12 years of age to audiences that are more than 35% children younger than 12. This means we will not buy advertising directly targeted at audiences that are more than 35% children younger than 12. Our policy applies to all of our beverages and the media outlets we use, including television, radio and print and, where data is available, Internet and mobile phones. The Coca-Cola Company is committed to monitoring and measuring our adherence to this policy across all the markets we serve, and has established a Children's Review Process to help guide our policy. We will publish compliance findings within our 2010/2011 corporate sustainability report. Read More