Marketing Analysis of Coca-Cola Zero - Case Study Example

 Coca-Cola-Zero a Marketing Analysis Coca-Cola Zero a Marketing Analysis Introduction Satisfaction is closely associated with the word marketing, or to say that satisfaction and marketing have the same meaning will be accurate and exact. In fact, marketing links with the standard of living and more important the life of a common person. Quality is a key word, whenever attributes of product or services are. To maintain a continuous quality through total quality management is one of the major goals of a marketer. Firms who strive to achieve total quality management and sustain it over time are successful in the open market competition. Main aim of this paper is to select a product, and analyze it methodically and systematically from marketing perspective, as to recognize and value the significance of marketing activities. The choice for product made for this paper is the world-renowned brand ‘Coca-Cola’. In order to make an analysis for one of the favorite, victorious, and winning brand, a general awareness of the product is to be created. (Bell. L., 2006). It could help in making a better marketing analysis. Activities of the product were started as a ‘one man show’, more than a century before. A pharmacist named as Dr. John Pemberton in 1886, May 8, 1886 to be exact invented Coca-Cola (Coke). Initial formula of Coke comprises a mixture of some leaves of coca and seeds of a plant from Brazil. At the later stage, there was an addition of carbonated water to this formula and thus formed a beverage, which has become one of the top brands in the world as of date. A close friend of Dr. Pemberton, named as Frank Robinson, gave the brand name to the beverage. Frank was the person who made initial sketch for the logo of Coke. Dr. Pemberton sold the company to a person, Asa Candler, due to health and financial constraints in two thousand three hundred dollars. Coke formula was patented in the year 1893. Major accomplishment of Candler was the bottling of Coke at a huge scale in the year 1899. Candler initiated heavy promotional activities that actually formed the basis to enhance the awareness of brand. Our targeted vantage brand of company is Coca-Cola Zero that took the sales graph by storm and placed its achievements on highest possible standards. “Coca-Cola Zero has been one of the most successful launches in our history and accounted for nearly one third of Trademark Coca-Cola Zero growth in 2006. As of third quarter 2007, the brand is available in 51 countries.” (Witzel, Michael, 2006) There are almost three hundred brands in the nonalcoholic beverages, including some of the world- renowned brand. In order to meet short-term goals and long- term objectives, effective strategies are adopted and implemented by Coke. A huge promotional campaign is always in progress with the intention to enhance general awareness level of consumers. This successful strategy results in achieving the objectives of the company, which is to maintain and enhance the market share in nonalcoholic beverage industry. There are more than fifty thousand employees of Coke. These employees are termed by the high-ups of company as main assets. They in fact play a significant role in the accomplishments of Coke. Corporate culture is present among the environment of company. The management of company formulates such human resource policies, which induce better working conditions in the company. The sustainability of quality over long time is not easy. Companies strive and survive on the quality aspect. Coke, in order to sustain and achieve a better market share focuses on the quality aspect. They foresee their opportunities and exploit them absolutely, convert their threats into opportunities thereby facing competition effectively to maintain the positioning of the carefully maneuvered image. An ideal corporate culture supports the employees of Coke to construct and utilize their serviceable knowledge to achieve objectives of the firm. For making an intensive marketing analysis of Coke, we have to recognize the marketing activities of Coke in the purview of marketing concept. It is pertinent to mention that we should not ignore the all- important factor of observing the norms of society be getting involved in the social activities, in order to return some of the profit back to society, from where the earnings of Coke are formed. The activities of any company involved in the societal marketing concept are mainly focused on its target market. It is important to define the target market with the intention to understand the needs of the target market and serve it in the most appropriate manner. Target Market- Geographic The management and employees of Coke are cognizant of the worth of business. Their accomplishment depicts and an inside study reveals that they have defined their target market in a most appropriate manner. (Witzel, Michael, 2006) They are aware of the market they penetrate and make the best use of their resources to market their products. Target markets are divided into different segments. The needs of each segment to be understood and addressed by tailoring the product accordingly. Coke started its operation in United States, and then they expanded their marketing activities to Canada. Focus was then made on the South America by selecting the target market of Mexico. To manage a sale over one billion, a day requires a carefully selection of target market on geographical basis. The number of geographic groups in which the company is divided is five. The diversification in activities allows the company to exercise its control firmly on each group. Concentrating on the geographic limits, Coke operates in almost two hundred countries. (Dent. J.A, 2006). The structure of company is decentralized. Management in each of the five groups sets their own objectives. Coke is operating in almost two hundred countries and seizes a large market share, it has started to acknowledge the fact that in order to sustain the earning of healthy profits they should expand their operations in other geographical areas. Its presence is found in almost all major countries including the greater geographical markets of Europe, China and India. Target Market- Demographic There are several aspects, which form the basis of Demographic, some of them being age group, gender, income group etc. market size of Coke is too large and there could be certain disadvantages of this aspect, unless proper strategies are not designed. Coke has to sell its products to a variety of demographic of persons. Since Coke operates globally and holds a high market share, its policy of decentralization helps achieve the aim to serve the needs of market. Think globally-act locally, is the policy they have implemented worldwide. As far as the age factor is concerned, an aggressive strategy is being adopted in most of the areas with targeting the group of younger people age between fourteen to twenty eight years demographic. Another policy is to concentrate on the demographic people whose preference is not Coke or any cola. The company is divided into different regions, which supports them to tailor the product according to the needs of their target market. Target Market- Behavioristic Similar to demographics, behavior factor comprises many attributes. To comment on the behavioristic aspects, some of the factors are discussed so an insight can be provided into the strategies adopted by Coke to define and cope with the needs of target market. One of the main elements is education. In the local society, education has a significant impact. Coke acknowledges the importance of education by setting up of different education centers even at their own manufacturing plants. Most of the units are indulged in the activities by managing student tours in the plants to provide an insight right in the operational activities being performed. These tours also aim at providing the necessary experience of the practical world Target Market- Psychographic Coca-Cola Zero is everywhere. People in the markets they operate cannot spend a day without having listened or seen the world Coke. It is the most acknowledge and familiar brand. Its logo is recognized more than any other is. To understand the needs of target people, their psychology is to be understood so better ways can be adopted for satisfaction of those needs. The corporate culture of coke enables them to follow different steps. Coke understands the fact that the market is just like an ‘animal’-it always hangs about. Therefore, the people should be aware of the product at all times. Communicating with them continuously keeps Coke its market aware and ensures the right persons receive that right message. Coke is always in search of new venues to expand its market share and at the bottom line to maintain it. ( Hagstrom, R, 2007) The psychology of the people is to be understood. For example, a study of the fact is to be made in target market, at what time of the day, week or month the sales are high. During some specific season, the sales are high and the attitude of people on holidays. Environment- Technology Study shows that Coke is committed to various programs with specific objectives of reducing the impact; an industry has on the crucial societal factor of environment. Coke tries to collaborate with other companies and firms to contribute to the best available applications. There are some interesting examples, in this aspect (Rosen R., 2006). Hundred percent of the cans used by Coke, bottles made up of glass and plastics are recyclable. As such, the glass bottles are made up of components, which comprise about forty percent of the glass, which is recycled. Coke always strives to implement effective strategies constantly aim to search for changes in technology. These adaptations of these changes affect the product itself, the combined services that are offered, distribution network etc. Coke employs technology, which is in the limitation of their website and for practicing it on commercial basis. The expectations of customers are growing with the ever-increasing usage of internet. Coke makes use of media to present an image of friendliness. Coca-cola is in the process of adopting such technology through which vending machines can offer the consumers more buying options. With the collaboration of MasterCard Coke is developing a technology, which will enable the consumers to buy Coca-Cola just by tapping their Master Cards at the Pay pass system implemented in some machines. Environment- Competition Quite a few generic products of soda are trying to steal the profits of Coke by making holes. In some of the colas, the cost is too low as compared to Coke, as such, they are able to set lower price than Coke. The intention is to compete with the main brand and gain as much market share as possible. The marketing strategy used by these competitors of Coke is penetration strategy, which aims at setting up a price lower levels in order to penetrate market in depth. Fortunes favors brave, as these brands are not famous enough to pose a serious threat to Coke. Although the strength in brand is enjoyed by Coke, but an all time alertness is required so if there is a swing of market forces in favor of any or some of these brands, it should not come as a surprise. Although Coke but the Pepsi factor enjoy the major share of market and it cannot be ignored in terms of competition. In fact, Pepsi had always been the competitor of Coke, as there is not much difference in the age of companies. Both firms are competing in the global scenario for controlling the world market. Environment- Economic Conditions Contribution of Coca-Cola Zero Company in the economies of the world, where they are operating is marvelous. Only in the British economy the goods and services, that Coke buys is about five hundred million pounds per year. Although the economic conditions within the company is not depicting a healthy trend. It is experiencing a drop in sale some nations, or the profits are stagnant. (Detlef V, 2006). The long-run viewpoint of Coke is positive. In the stock market, investors are interested in securities of Short term. But the fact that Coke is operating and attaining a large share in world market is at the basis, that not only in developed countries, in developing countries also people can easily afford Coke. Environment- Socio Cultural Norms of the society are to be respected by every marketer. Firms do not survive to make profits, but to serve the society. Factors, which obtain from the values and approach of people, have an effect on the strategy of any firm. The socio cultural forces form a major part in the macro environmental factors. A firm has to pay back from its earnings, some part back to the society. Coke acknowledges the voice of socio cultural forces and responds to it in many ways. By responding positively they adapt market environment more effectively. Coke also manages Different sports, locally through out world. Coke emphasizes the significance to support the communities, where it operates, without making an exception that their activities are focused on the people who work for Coke or the members of society as a whole. Their aim is to create a fair citizenship from everyday operations in business globally. Environment- Political-Legal National as well as local governments affect firms’ operations. Since the governments do purchase large quantity of products. A calculated estimation is that governments around the world are on fifth purchasers of the total products being sold. Polices of governments on commerce and industry impose direct effect on the operation of any organization. Coke admits that their success is dependent on their capability to penetrate the market in depth and create new avenues, which could benefit organization in the long run. This success is dependent also on the political and legal conditions of the market where they operate. The capability of Coke to obtain and construct business associations with the local firms is necessary for the enhancement of infrastructure to manufacturing facilities. The variation of political and legal situations in different regions suggests that there is no guarantee for the success of Coke in all developing markets, as acknowledged by Coca-Cola. (Detlef. V, 2006) Industry Trends The slogan of ‘Always Coca Cola’ affirms that Coke is a nourishing soft drink, which is enjoyed by millions and trillions of people across the world. Coke is everywhere and anywhere. Its recognition is established at around ninety percent globally. Whether it is print media or electronic, its presence is felt everywhere. The brand image of Coke is well recognized and familiar. Strategies of the firm, decentralized in nature have enabled Coke to present such image, which entirely overwhelm the cultural differences. The industry trends shows, that the competition faced by Coke is growing intensely. The most targeted culture is the American culture. The trends in industry are favoring Coke but decline in the profits in some regions suggests that issues regarding growth in almost every area are addressed properly. (Detlef. V, 2006) Recent Developments Advancements in technology and arrival of innovations have initiated every organization in the world for adaptation of such progression. One of the reasons of Coke in keeping its number one position in the beverages globally is to tailor its product according to the dynamics of market. The frequency of visit by consumers to restaurant is quite high. Coke ensures that the visiting consumers in restaurants and such places feel presence of Coke and drink it, the chains as Burger King, Pizza Hut etc. Coke is in the process to introduce an innovative plastic cup in the well-known Coca-Cola Contou. Another recent development is the curved can. Coke and One 2 One, combined together, are developing a promotion, which will be called ‘Collect and Connect. Future Direction for the Firm and Industry To assess the future direction for the firm in general and industry in particular, the preparation of particular training programs and the approaches, which are necessary for the development, are to be made. This preparation enables Coke to address the future needs of the business. For instance in South Africa, Coke supports university students to experience and learn business talents and abilities. These kinds of programs help firm to move in the right direction. Marketing Mix- Product, Price, Distribution, Promotion To obtain response from target market, a set of tools are used by the marketer which are called marketing mix. We can define marketing mix as different tools used in marketing by an organization, which help the firm to achieve objectives in target market. Product: comprise beverage concentrates and different syrups. The final product is finished beverages. Coke possess about three hundred brands of beverages globally, main brands are Coca-Cola (now added with the recent one Coca-Cola Zero), Sprite, Lift and Fanta. As far as packaging is concerned a variety of sizes comprising two liters, one and a half liter, six hundred ml and three hundred ml. Brand Coca-Cola is familiar to twenty four percent of the people globally. Price: Prices vary according to size and brands. Since Coke operates in almost two hundred countries the regulations of every country has to be taken into account to set the prices. Products of Company are normally soled in convenient stores, retail outlets and gas stations etc. Different pricing methods are used. In competitive environment price is set as per competition. Discount prices are offered in different promotional schemes and sale stage. Distribution: A wide range of wholesalers and retailers are indulged in the sale of Coca-Cola Zero products. The wholesalers distribute the products to retailers, corner stores, gas stations, hotels; restaurants etc. strategy used by Coca-Cola Company is intensive in nature. Every outlet ranging from schools to vending machines is used. Promotion: The main promotional tool used for Coca-Cola Zero is advertisement. It is used mainly due to increase the general awareness at the local level and in the global market. Mostly television is used in advertisement campaigns (Detlef V., 2006). A large volume of audience can be accessed through this medium. Company possesses the asset of high professional team of sales person. They act as agents of the company. This tool helps company to sustain and retain loyal customers. Market Share of Coca Cola Zero: Coca-Cola Zero presents no doubt a strong and accurate diet concept to its mother company’s core Coca-Cola. Coca-Cola declared a better-than-expected quarterly profit recently in year 2007 as the growing introduction of Coke Zero is boosting sales in many countries and now there is no concept that software business was got stagnant few months back. “Shares of Coca-Cola rose sharply after the company reported strong gains in emerging markets like Russia, China and Africa and moderate gains in developed markets like Japan and the European Union, offsetting an expected decline in North America. Coke, like its rival PepsiCo, has suffered amid an industry wide slowdown in the North American market as health-conscious consumers avoid soft drinks in favor of bottled waters, teas and energy drinks. While Coke’s chief executive, E. Neville Isdell, acknowledged that weakness yesterday, he delivered an optimistic message.” (Coca-Cola Co) “We continue to expect 2007 to be weak,” he said in a conference call with analysts. “But we do expect to begin seeing sequential improvement in the second half of the year as we execute against our key goals.” Mark Swartzberg, an analyst at the investment firm Stifel Nicolaus, called the results “the best evidence yet that a nearly three-year turnaround is working and that the company’s long-term targets are sound and being achieved.” Mr. Swartzberg said that his earnings estimated and priced target on Coke shares: “The company, based in Atlanta, said net income for the first quarter, which ended March 30, rose 14 percent, to $1.26 billion, or 54 cents a share, from $1.11 billion, or 47 cents, a year earlier. Excluding items like a charge from an asset write-off involving a Philippines bottler and gains on the sales of an equity interest in a Brazilian bottler, the company earned 56 cents a share, beating analysts’ average expectation of 53 cents a share on that basis.” (Coca-Cola Co) According to new company announcements, net operating revenues of company raised from 12 to rose 17 percent, which is $6.10 billion, a crucial measurement in the beverage industry, grew 6 percent. It is clear that results for the world’s No. 1 beverage company are taken in account by by strength of non-carbonated beverages like Dasani bottled water, Minute Maid juices and Powerade sports drinks. Accordingly, Coke declared that declining soft drink sales in USA for last two years are not rose to 5% during recent quarters and that is a great achievement and Coca Cola Zero is the main factor behind that big change. References Witzel, Michael. (2006). The Sparklling Story of Coca-Cola: An Entertaining History Including Collectibles. Forbes, Feb 2006, page 78 Detlef. V (2006) Between Marx and Coca-Cola: Youth Cultures in Changing European Societies. Berghahn books, rev. edn 2007 Hagstrom, R. (2007). The Essential Buffett: Timeless Principles for the New Economy. John Wiley and Sons, April 2007- 3 (weekly) Rosen. R (2006) Coca-Cola Culture: Icons of Pop. Rosen Publishing Group, Journal of Marketing and Management The Coca-Cola Company. "Facts, Figures, and Features." Atlanta: The Coca-Cola Company, 1996. Bell, L. (2006). The Story of Coca-Cola, Black Rabbit Books Dent. J.A. (rvd edn. 2006). Enamel softening with Coca-Cola and re-hardening with milk of Saliva. Corporate Communications at Coca-Cola Europe, p-36 The Coca-Cola Company (2007). Facts, Figures, and Features. Atlanta. The Coca-Cola Company. Journal 224-7/p36 Coca-Cola Co. profit tops estimates; shares up http://in.ibtimes.com/articles/20071018/coca-cola-pepsico-glaceau.htm, www.coca-cola.co.uk www.coca-cola.com Read More