Unique Branding and Marketing Strategies by Coca Cola - Case Study Example

Heading: Marketing Plan Your name: Course name: Professors’ name: Date Introduction Coca Cola Company is one of the leading manufacturers of non-alcoholic beverages in the world. Dr. John Pemberton, a pharmacist in Atlanta invented the Coca Cola drink in 1886. The firm is successful and is an icon of the western and European countries. This essay seeks to explore some of the branding strategies of the company, as well as to suggest some of the action plans necessary for the achievement of the marketing strategies and objectives. a. Current marketing issues and potential market development Political issues Coca Cola faces strict rules and regulations as the nature of its products are in the food category. Nevertheless, little legal changes are likely to affect Coca Cola. Some of the factors include the fact that the company’s manufacturing activities have a negative influence on the environment. Legislation regarding environmental protection, strict rules, governmental changes, military takeover, and civil unrest can affect the firm’s production process. The company intends to minimize the effect through the improvement of its processes’ effectiveness and waste reduction. (Curd 2012). Economic issues A number of social factors influence the company’s performance in the Australian market. To start with, the country’s economic recession can adversely affect the firm’s sales. Secondly, certain macro economical variables like labor price and inflation can affect the company’s operations in the country. Thirdly, nations with high revenue per capita may have more to spend on products like beverages. Social issues The society considers soft drinks like Coke as detrimental to human health; hence, it encourages people to get health conscious. As conventional brands decrease, Coca Cola may introduce modern products in new classes. The company also faces opposition from social and cultural groups due to environmental concerns relating to its production (Curd 2012). Technological issues The company uses technology at each step at the Coca Cola’s value chain-bottling operations, storage in retail stores, and syrup manufacturing. The company is fast in embracing modern mediums like television, radio, and currently internet. Moreover, various packaging types help the company drive sales. Other than glass bottle, the drinks are available in cans and plastic bottles; hence, easy to transport and store. The use of the latest technology enables the firm to produce more effectively, with enhanced quality and in larger quantity. What is more, the drinks require to cooling before consumption (Curd 2012). Consumer issues The company has various consumers with different met and unmet needs. The clients are highly price sensitive and are of various tastes and preferences. Consequently, the company needs to segment its consumers and produce products that meet the needs of all the clients. Market, segment and category lifecycle stage and implications for brand strategies and plans Segmentation The company divides the consumers basing on the geographical segmentation, area of consumption, product type, and demographics. In terms of geographical segmentation, the company segments its global and local market into various groups. It also gives each of these divisions to manage the operations independently (Belohlavek 2008). Targeting The firm targets various marketing segments with distinct advertisements. The company’s main market is the young generation within the age bracket of 10 and 25 years. The clients within 25 and 40 years age bracket consist of the company’s secondary market. Cola products’ main target is the young people that need strong flavor, while the diet cola and non-cola products target the health conscious market. Positioning The Coca Cola Company positions its products as thirst quenching and refreshing. The company claims that the products bring joy, as apparent from Coca Cola’s modern tagline-“Little drops of joy.” it also associates the products with enjoying great time with family and friends and everyday life. It also markets its products as of high quality and consistency. Potential for growth As YouSigma (2008) says, the company’s ability to internal growth strategies rely on activities like employing more workers, increasing the consumer base, establishing new company-owned areas, or creating new products via internal study and development. In terms of external growth strategies, the firm focuses on attaining growth objectives through the establishment of connections with third parties like licensees, strategic-alliance partners, co-branding allies, and franchisees. Life cycle stage Saaksvuori and Immonen (2008) assert that a new product proceeds through a series of phases from introduction stage, growth stage, maturity stage, and decline stage. Life cycle is significant to a product as it affects its marketing mix and marketing strategy. Market introduction is a stage in which products costs are high, while its sales volume is slow. Here, there is less or no rivalry, and the company attempts to create demand for its products. Moreover, the company prompts the clients to try its products, and focuses less on generating money. The second stage of the PLC entails the growth stage whereby costs of production decrease because of economies of scale. Additionally, there is a potential of increased sales volume, and profit increase. A company increases public awareness and competition increases and reduces prices due competition (Saaksvuori and Immonen 2008). The third stage of PLC involves maturity stage in which the company reduces lowers its costs due to increased production volumes. The company’s sales volume peaks, whilst reaching market saturation. Moreover, it is here that the company’s faces many competitors, and tends to lower its prices because of abundance of competing products. More so, the industrial profits decline, and the company focuses on feature diversification and brand differentiation to enhance market share (Niemann 2008). Saaksvuori and Immonen (2008), demonstrates that the fourth PLC stage entails saturation and decline stage. Here, a firm’s costs get counter-optimal, and its sales volume decreases. Additionally, the company’s profitability and prices decreases, while profit gets more challenging than increased sales. With respect to Coca Cola, each product has its own life cycle. Generally, the brand is presently in the maturity stage, a stage that takes a longer time compared to other stages. This is evident in the stiff competition that the company faces, and price regulations the company conducts to maintain its customer base and sales volume. In this stage, products commonly undergo a slowdown in its sales growth. Competitive actions and future behavior, relating to brand strategies and plans First, Coca Cola has a strong brand throughout the world. This is one of the leading products of the world, and the company has other beverages like Sprite, Fanta, and Diet Coke. The company invests a lot time and money in building brand, which is the most recognized and has high client recall. Second, the company economies of scale are effective in that it is the leading producer and marketer of non-alcoholic drinks in the globe. Moreover, the Coca Cola System, which is the supply chain and bottling system forms one of the firm’s strengths. This enables the company to target different global and local markets, as well as to extend fast to new markets. It produces more than 400 brands of soft drinks, which include carbonated and non-carbonated drinks like coffee drinks, ready-to-drink juices, bottled water and tea drinks. In the more than 400 brands, the company has over 3000 various beverage products (Lagos, Schirf, & Smith 2001). Potential and future competitive advantage strategies for the brand Application of Porter’s diamond theory Michael E. Porter’s diamond theory has four models including factor conditions, demand conditions, related and supporting industries, firm, structure, and rivalry. These factors are influential in the analysis of Coca Cola Company’s potential and future strategies for competitive advantage. Factor conditions refer to production factors including land, capital, infrastructure, labor, and natural resources. Coca Cola has a strong brand with huge capital; hence the potential of investing in various products. It also has highly skilled workforce that helps in the quality performance and attainment of competitive advantage. The company also has appropriate infrastructure for effective operations all over the country. The brand is also widespread in the world, and its branches in Australia have reliable supply of raw materials. The favorable weather conditions, accessible natural resources, and adequate capital enable the company to carry out its operations effectively; thus, giving it a competitive advantage. Secondly, demand conditions also affect the company’s marketing and branding strategies. Market demand enhances the industry’s development in the country. In Australia, consumers focus on both the product’s taste and nutritional value. This is advantageous for Coca Cola, as it has tasty and healthy products. Although there are occasional issues regarding the products health implications, the company remains a market leader in the non-alcoholic drinks market. The positioning of this product helps it draw a variety of consumers, mostly in the youth category. Thirdly, Porter’s theory analyses a brand’s competitive strategies by focusing on related and supporting industries. This involves those firms that work in conjunction with a specific company in one way or the other. According to the theory, it is difficult for a firm to function on its own, as it needs other companies like suppliers. For instance, Coca Cola Company needs the existence of other related firms or supporting industries in order to succeed in its operations. With respect to the firm’s raw materials, it requires the presence of other industries like sugar manufactures, as sugar is one of its raw materials. In Australia, Coca Cola enjoys a competitive advantage created by the continued existence of these supporting and related industries. Fourthly, the theory states that rivalry, structure, and strategy of a firm can affect its performance. This implies that local circumstances influence a company’s marketing and branding strategy. Structure and strategy is influential in determining the types of industries in which a company can excel. At a certain stage, a firm may require little competition, but might need more rivalry in order to engage in innovative activities. Rivalry is crucial in motivating a company to enhance its production and minimize costs effectively. Specific strategies Overall product strategies In this marketing plan, the Coca Cola Company attempts to achieve various objectives including: To change Coca Cola’s brand reputation and image into a more local and global responsible attitude To provide its target audience with information about the benefits and benefits of its new products To increase sales bases on the foreseen overtaking of carbonated drinks by healthy drinks by 2015 To design a new packaging for its products to enhance the customer base and sales volume To reconstruct its production by using environmental friendly raw materials in its packaging Growth strategy The company’s growth strategy involves the use of both internal and external growth approaches. In terms of internal strategies, the firm relies on actions including employment of workers, establishment of new locations, new products, and increasing customer base. With external strategies, Coca Cola uses third parties like licensees and franchisees (YouSigma 2008). Brand strategy Siddiqui (2011), currently, the company employs various brand strategies in order to achieve a wide market share. For instance, recently, the company developed content branding approach, which involves content excellence. For about 10 decades, the company used another brand strategy known as creative excellence. Content excellence is presently the company’s substance and matter of brand engagement. Moreover, the company associates its brand with a sense of joy and togetherness. It emphasizes on events that link people through culture, family, happiness, music, and sports. Because its philosophy is to achieve the sophistication on its customers, Coca Cola goes viral on social media like Twitter and Facebook. The company uses the aforementioned strategies in order to maintain a strong brand image, and build a large customer base. Competitive strategy Coca Cola’s current competitive strategy lies majorly on its market leadership and management expertise. In addition, the company’s brand is hard and expensive to imitate; hence giving it a strong competitive advantage. Furthermore, the company has a powerful and unique trademark compared to its competitors. It also focuses on managerial experience via several management-training sessions to facilitate the development of the executives’ abilities experience, and knowledge. It also has a strategic market and planning, as well strong, and favorable brand image (Lagos, Schirf, & Smith 2001). Product strategy According to Curd (2012), Coca Cola deals in the manufacture of carbonated drinks. Its actual brand name is Coca Cola. It plans to create new packaging for its products in order to enhance the number of consumers. In order to achieve this, the company sets to reconstruct its production by use of environmental friendly materials in Coca Cola packaging. For instance, the company plans to employ biodegradable plastic, as well as the re-usable glass containers. Additionally, the previous characteristics of the Coca Cola products include carbonated water, sugar, caffeine, phosphoric acid, caramel color, citric acid, natural flavor, and high fructose corn syrup. To enhance its products the company intends to incorporate new features that include less natural coloring, carbonated water, natural ingredients to substitute sugar cane, citric acid, natural flavor, and phosphoric acid. Place and distribution strategy Curd (2012) says that the company sells it is products in various parts of the country. It does this through distributing its products to the various, convenient stores all over the country, such as, clubs and bars as its product is among the mixers utilized in alcohol mixing. Moreover, the company indirectly distributes its products to supermarkets chains like Safeway. Pricing strategies Since Coca Cola has a big market share as compared to its competitors, it has a high consumer price sensitivity imposed by the competitor pressures. The company’s wide market share also accounts for the high sales volume and a subsequent high profit margin, as the company products are fast selling consumer goods. As a result, there is a need for a penetration strategy. In this case, penetration entails the process in which a company sets low instead of high prices for its products in order to acquire a leading market share. This is only achievable when there is a highly flexible demand for the company products. Moreover, the company can attain this if demand for its products is price-sensitive, there is no acquisition of the new consumers, and that the existing clients buy many products due to low price. An appropriate penetration pricing strategy can cause huge volumes of sales, as well as wide market shares (Curd 2012). The strategy can also enhance complimentary products. The company can have the major product priced lowly in order to attract sales. The approach will work effectively in boosting the re-use of Coca-Cola packaging through a beverage holder purchased and refilled. The possible limitation of this strategy is the probability of competitors doing a similar thing through lowering their prices; thus destroying any benefit of reducing prices (Curd 2012). Promotional strategy As Curd (2012) reports, Coca Cola Company in Australia communicates its retailers and consumers about its products in various ways. The information regarding the company and its products is accessible through the direct mailings, internet, and in person. The firm’s communicational strategies attempt to differentiate products from its competitors’ products. Furthermore, the company sets to employ advertising approach in order to promote its products. Here, the company has a wide range of advertising options including billboards, TV adverts, street or public furniture, online advertising, and newspaper and magazines. In terms of online advertising, the company can use social network services like You Tube, Yahoo, Google, Twitter, Facebook, and MySpace. This is beneficial in that it will attract as many clients as possible, as the internet reaches out to various target markets all over the world. Coke is a big worldwide brand with great brand awareness. The focus of advertising will be on TV campaigns through company website, and spreads virally on social video like YouTube. The avert must gain cult reputation and in theory the intended market will spread virally on the website. Accessing the intended market via more sport sponsorships will also boost the product’s lifestyle reputation and the new healthy product. In addition, Curd (2012) asserts that the company can also use personal selling to enhance its amount of sales. The sale force requires a communication with the present distribution channels for the company. Currently, Coca Cola Enterprise distributes vending units and cooler fridges to sport halls, shops, and community centers. The company can also use sale promotion forms including short-term price reduction. It can also use loyalty programs, in which customers gather miles, points, or credit for making purchases and later exchange them for rewards. Coupons are useful in the company’s marketing strategy, as they are accessible online. Here, customers can print them and present them in to the company stores. The firm may also use contest, games, and sweepstakes in the selling promotion. In terms of public relations, the company will build good connections with its different publics through obtaining positive publicity, develop a favorable corporate reputation, and head or handle unacceptable stories, events, and rumors. The company intends to use temporary incentives to motivate sale or purchase of a service or product. Coca Cola Company may use press releases to communicate to its retailers and customers. Direct marketing is another possible marketing strategy that the company can use. Here, direct communications together with targeted individual customers to get an instant response and develop long-term relationships (Curd 2012). b. Brand marketing action plans and tactics Specific actions and activities devised to meet brand objectives and strategies Overall brand action plan To achieve its marketing objectives, the company ought to implement its strategies effectively and appropriately. To begin with, the company will change its brand image and reputation into a more local and global attitude by differentiating its products from its competitors’, as well as making them meet all the customer needs, both locally and international. Secondly, the company will provide the intended market with sufficient information about the benefits of its products through extensive marketing and promotional activities. Here, the company will use advertising, personal selling, direct marketing, and public relations. To increase its sales volume on its products by 2015, the company will conduct marketing and promotional campaigns to increase market’s awareness of the need to consume its Coca Cola products. Furthermore, it needs to design modern packaging for its products to improve their purchasing behavior by using convenient, environmentally friendly, and portable materials. This will help in the easy access and carrying of the products by the clients. Still on packaging, the company will use materials that are easily recognizable by the intended clients. Consequently, The Company will acquire new and retain the existing clients, and in turn, increase its sale volume and profit margin (Curd 2012). Furthermore, the company will comply with the country’s legal regulations in order to improve its operations and performance. To overcome the social challenges regarding production of healthy soft drinks, the company will ensure that it uses products and materials that are harmless to the human health. It will also take the responsibility of educating the public on healthy eating and drinking habits in order to avoid any association of poor health to Coca Cola products. The company also intends to make its operations to bring economical advantages to itself, country, and the society, through creation of job opportunities and involvement in development activities (Curd 2012). Product action plan To improve its products the company intends to integrate new features including minimal natural coloring, carbonated water, natural ingredients to substitute sugar cane, citric acid, natural flavor, and phosphoric acid (CTTC 2011). This means that the company will apply Porter’s theory forces to differentiate their products from the competitors. Pricing action plan There is a need for a penetration strategy, which entails setting low prices for its products to acquire a leading market share. As a result, the company’s will be using Porter’s forces to differentiate its products in the market, and create competitive advantage. This is only achievable when there is a highly flexible demand for the company products (CTTC 2011). Place and distribution action plan The company intends to sell it is products in various parts of the country. It will do this through distributing its products to the various, suitable stores all over the country like clubs and bars as its product is among the mixers utilized in alcohol mixing. Moreover, the company indirectly distributes its products to supermarkets chains (CTTC 2011). Promotion action plan In order to improve its sales volume, customer base, and differentiate its products from the competing products, the company sets to conduct massive and extensive promotional activities and activities. Some of these activities include use advertising, public relations, direct marketing, and personal selling (CTTC 2011). The table below shows a detailed outline and description of the company’s action plans regarding the achievement of its objectives and strategies. Action plan Date of commencing Date of completion Action Person in-charge Launching of the new product plan 2013 2-4 months upon release TV advertising, billboards, street furniture, magazines, newspapers, radio, Online advertising Use of social media like You Tube, Facebook, and Twitter Brand manager 2013 3 months upon release Public relations like press release Personal selling Marketing manager Launching the product 2013 4-5 months upon release Sales promotion like use of loyalty programs, online couponing, coupons, price deals, contest, games, sweepstakes, and online interactive game Brand manager 3 months after release 4-5 months upon release Marketing manager Conclusion Coca Cola Company has a strong brand that gives enhances its customer base, sales volume, and profit margin. Despite the stiff competition from its competitors like Pepsi companies, it is one of the market beverage leaders in Australia. To maintain its position in the market, the company developed various marketing and branding strategies and objectives. Certain political, economical, social, technological, and consumer issues greatly affect company’s performance and operations. The company also uses Porter’s strategies to maintain its market leadership in the Australian market. These factors also have a serious implication on the overall product, and the marketing mix like product, price, promotional, and distribution and place strategies. The plan shows that the company needs to implement the strategies through some action plans, such as, advertising, personal selling, direct marketing, and public relations. References Belohlavek, P 2008, Unicist Marketing Mix-2nd ed., The Unicist Research Institute, Blue Eagle Group. Pp.11-30 CTTC 2011, 5-Year Strategic Marketing Plan, Pp. 1-132. http://industry.visitcalifornia.com/media/uploads/files/editor/CTTC%205-Year%20Strategic%20Plan%20FINAL.pdf Curd, M 2012, Marketing Plan: Coca-Cola in 2015. Pp. 1-12. http://www.nice-cuppa tea.co.uk/marketingplan.pdf Hunt, S 2010, Marketing theory: foundations, controversy, strategy, resource-advantage theory, M.E. Sharpe, Armonk, N.Y. Pp. 400-450. Lagos, T, Schirf, L, & Smith, V 2001, Analysis of the Coca-Cola Company. Pp. 1-15. http://web.mit.edu/wysockip/www/535/MIT2001/Cocacola.pdf Niemann, S 2008, Design of Sustainable Product Life Cycles, Springer, Berlin. 2008. Saaksvuori, A & Immonen, A 2008, Product Lifecycle Management, Springer, Berlin. Pp. 50-80. Siddiqui, H 2011, Unique Branding and Marketing Strategies by Coca Cola. Retrieved on July 7, 2012 from http://hammadsiddiquiblog.com/unique-branding-and-marketing-strategies-by-coca-cola/ YouSigma 2008, Coca Cola’s (Coke) Strategy, Retrieved on July 7, 2012 from http://www.yousigma.com/benchmarking/coca-colasgrowthstrategy.html Read More