Coca-Cola Corporation is the world’s leading soft drink Company that produces billions of fizzy drinks to the world population. Based in Atlanta Georgia, Coca-Cola is the most recognized brand in the world. By creating innovative and unforgettable advertisements and making sure that every shop or food stand in the world has a Coca-Cola product from china to Europe to India and Africa.
Coca-Cola’s mission is to provide products that are easily recognized by everyone. Products that are produced close to the consumer. A product that is transported and well packed and a product that is refreshing to drink and is easily purchased by everyone. As a leader in the soft drinks market Coca-Cola’s market environment that consists of the company’s suppliers, distributors, dealers and customers as well as the broad environment that consists of demographic environment related to the population, economic environment, natural environment, technological environment and social cultural environment.
Coca-Cola has managed to become a success because of designing a marketing mix that enables them to create a product that the customer wants at that very moment. The four P’s that include the price of the product, the product itself, the place where the product is sold and the communication or promotion of the product are very important to the company’s goals. The variety of products in the Coca-Cola range include the famous Coca-Cola drink, Dasani bottled water, natural fruit drinks and a wide variety of packed food products.
The quality of the product and the design are the same all round the world. The packaging and brand name is also similar so that everyone gets the same Coca-Cola experience. Coca-Cola products are refreshing because of the ice cold concept. During summer or in hot weather Coca-Cola products will always be served ice cold with every Coca-Cola stand having a Coca-Cola refrigerator. The distribution of Coca-Cola product is fast and efficient due to a good relationship with retailers, wholesalers and distributors that have a large number of trucks to ferry the products from the factories to the consumers.
Automation of factory activities has made production easier and more in line with the demands of the customers. During high seasons there is more demand for the same products and the marketing team that has a close relationship with retailers will relay this message to the production team. The marketing mix of Coca-Cola also includes an offering mix of products, services and prices and a promotional mix of sales promotion, advertising as well as a sales force to promote the product. The price of the product will depend on many variables but most importantly for the Coca-Cola marketing team is that the carbonated drink or bottled drink can be bought by the widest range of people all over the world.
The price is also displayed prominently on every display stand so that customers are aware of the recommended retail price. Wholesalers work with the Coca-Cola marketing team to provider the retailers with the best prices as relates to the location of their shop. Prices vary in relation to the location of the outlet with products being sold at high prices in up market areas. Discounts are offered to distributors and wholesalers as well as retailers. Coca-Cola uses a four tire distribution system that enables efficiency in delivery. Payment periods are friendly to the seasonal demand situation and credit terms are offered especially as the festive season arrives depending on what part of the world Coca-Cola is being sold.
Promotion is an important part of the Coca-Cola marketing mix and takes in large part of the company’s expenses. The promotional mix of sales promotion, advertising, sales force and the internet enable Coca-Cola to reach the trade channels and the target customers. The sales team will work with retailers and the advertising team to design attractive display boards and conduct sales promotions, competition and events for their target market, the range from kids below nine years, preteens, teenagers and adults and the elderly. Most sales promotion coincide with major sports events such as the Super bowl, the Olympics or the World Cup, Religious events such as Ramadhan, Diwali, the Chinese New Year and Christmas. By connecting happy events with taking the Coca-Cola brand home, the company has managed to become a daily fixture of households.
Eye catching adverts has made Coca-Cola become the most recognized brand in the world. A lot of time is taken to create unforgettable advertisements for every region of the world. Every year a theme such as ‘Life is good’ and ‘the Coke Side of Life’ is chosen and the advertising team creates an advert around the theme as well as attractive display posters and banners. Adverts will target different demographic and psychographic sectors of the target market. The ‘Sprite’ adverts targets older teenagers and young adults by promoting sports and the hip-hop lifestyle. The company goes further by promoting basketball tournaments from Beijing to Alabama to Nairobi.
Coca-Cola products are also included in other products such as McDonald’s happy meal that includes a fizzy drink or a Dasani water bottle. The happy meal target young children between ages of three to nine years. The company is able to compete effectively with its competitors such as Pepsi, Red bull, Natural fruit juice drinks and other brands by constantly creating new products or new variations of existing brands such as Coca-Cola lite from Coca-Cola to compete with Pepsi lite that targets the health conscious market. Identifying with role models for the youth market the company has built a relationship with sports stars, music superstars and movie stars so as to promote their products. As the world sets to be a global village, more young people (that comprise over 60% of the world’s population) are able to see the same thing at the same time. The youth relate to the same influences in music, movies and dressing especially through the internet.
The internet is the new frontier for advertising as more people move to mass media as their choice of interacting and communication. Coca-Cola as well as its competitors intends to use such social networking sites such as my space and face book to promote their products. It has been a policy of the Coca-Cola Company to be part of the community and made corporate social responsibility part of the marketing activities of the corporation. Ranging from small events in towns to major fundraising activities in Africa to provide food for every purchase of a Coca-Cola product, providing relief food to Katherina and Tsunami victims, Coca-Cola is part of the global community and local community. The sales force of the company is easily recognized with their eye catching T-shirts, caps and aprons. Every sales person from Coca-Cola Company is trained and motivated towards marketing the Coca-Cola brand. The sales team is able to quickly identify new trends and changing buying patterns and increasing competition.
Channels are important so as to reach the consumer. The manufacturing unit is located where distributors can quickly transport the products to the wholesalers who will store the goods in warehouses and use their inventory to identify their retail outlet partners their and needs. Inventory is important for all channels, therefore I.T has become important part of each distribution point. The marketing department can then communicate directly with their sales persons who have hand held digital devices and communicate marketing activities to the head office. Coca-Cola sales best at geographical locations that have more sunny days and longer summers and therefore do not sell well during winter but new Coca-Cola products targeting winter seasons have made inroad to the markets. Other than drinks, items have been developed for different geographical locations and for new markets such as military packs. Coca-Cola main competition is Pepsi that has a major stake in the carbonated drinks in the Americas. In each region, there is a competing brand such as Mecca cola. The main competition has shifted to providing to the customers the best products at the best prices.
Computers and other digital devices have become an important part of the marketing, manufacturing part of the company. Automation in the manufacture of the products reduces the work force, brays efficiency and therefore reduces the overall cost of production that will affect the final cost of the product. In more developed markets such as Tokyo Japan dispensing machines are how compatible to purchases by mobile phone and credit cards. Retailers are able to communicate directly to the Coca-Cola marketing team by way of the company website and internet connection. The company is able to create a social network where by its website; its marketing team interacts with the task environment of consumers, distributors and retailers so that they can identify the direction Coca-Cola is headed to.
Coca-Cola marketing environment
The Coca-Cola Company deals with mass distribution of its products to vast environments that pose marketing challenges that it has to deal with. We have two types of environments that is, the internal and external environments. To begin with, the internal environment factors are those factors that deal with the strengths and weaknesses of the products of Coca-Cola. This comes down to the marketing elements and employees or labor motivation factors. Coca-Cola has to make good decisions in the areas of marketing in the internal environmental factors and manipulate them to achieve marketing objectives i.e. they high or low variable for each factor. i.e. Coca-Cola produce good quality products and set it at a price that is a bit lower than the competitor brands and to make sure that it uses a marketing leader strategy, The Coca-Cola company employs the method of intensive distribution of its products. Once the company identifies a potential market, it ensures that all products of the company reach to all potential customers of the market.
They ensure that they produce products that are highly standardized to meet the consumers needs, i.e. a bundle of benefits of satisfaction. Consumers buy cold drinks in order to satisfy a certain need or avoiding a certain negative factor. Hence Coca-Cola offers its products to customers because they already know what they want and because it deals with fats moving consumer goods, that is why they employ the mass marketing of their goods. The price of the products also helps to deal with the internal environment. Coca-Cola Company knows that price can affect the sales of its products i.e. increase or decrease of its price will affect the way people will look at the products. Coca-Cola knows that most of the customers especially in Africa love bargains, they love prices that are lower than normal and hence they adopted promotional pricing and hence the Coca-Cola company uses special events to draw customers and they also use the is-was strategy.
Coca-Cola has also a good distribution network. Majorly, it has given franchise for its company processes that are used universally. Procedures used to manufacture the cocacola drinks are universal hence the same drinks found in Australia are same as those in Africa. The movement of its products from the manufacturer to the consumer uses the longest distribution channels and channels of distribution also helps the company because the channels used by competitors for example tend to be saying something about the entire distribution system of the company. Coca-Cola also ensures that it uses a distribution system that is less expensive.
In promotion, the Coca-Cola Company uses the promotional mix very well around all the cities of the world where it offers its products for sale. Good promotional strategy ensures that the Coca-Cola Company has a good way of promoting or communicating. Product features of its main products that are Coca-Cola, Fanta, and Sprite. The Coca-Cola Company has stood on as the only company that has managed to use the promotional mix well in the world. This is because there is evidence that most tools of promotion have been used by the company. There are various considerations that the company is keen to see when coming up with promotional message. These are like its customers position, the geographical areas of the customer. Each group of buyers dictates which promotional mix variable to use. Because Coca-Cola targets household users, then the have realized that they have to use advertising through the media, bill boards and also personal selling through use of sales men who are carefully selected.
Coca-Cola Company takes great care on the P.E.S.T- Political, Economic, Social and Technological environment in order to achieve good sales of its products. This is because this will influence a great deal the degree of freedom Coca-Cola will have in the particular part of the world it operates from. If Coca-Cola wishes to expand to Africa, then it has to adhere to the PEST.
The political government influences product decisions in several ways, i.e. some countries can ban the trade between them and other countries. Coca-Cola has to produce products accountable by the quality standards of other countries. Political government also influences the promotional decisions especially the media and movement of commodities across borders in order to protect products in their home countries. Economic environment is a key measure because it deals with income and Coca-Cola or any company’s main objective is accumulation of wealth of most countries where Coca-Cola operates is different and hence the company has to carefully make good decisions in regard to the economic environment. In some countries, pattern of distribution is triangular where few citizens command huge incomes and hence they have to come up with products that are targeting the disposable income of the citizens. Countries such as Africa where these goods are seen as luxuries, they are not bought unless a lot of sales promotion is done. Coca-Cola produces products of different sizes and features to deal with the needs of all the people in the economy and consumer demand like buying power, speeding behavior like motivation, learning attitudes and personality. Economic factors affect marketing of Coca-Cola products. Income levels of people affect potential demand and saving. Another factor that affects purchase of Coca-Cola products is unemployment which leads to establishment of uneconomical retails store.
Socio-economical environment is also a major challenge of Coca-Cola because they need to understand the practices of people. In vast cultures and influences of culture, customers, ethnic differences, attitudes and personalities of these communities. In tropical Africa, for example, different societies attach relevance to color and that is green is accepted in Egypt but it is not a good color in Kenya hence Coca-Cola has to adopt different strategies to make sure that these two perceptions of color are accepted. Coca-Cola has to produce products that are acceptable to taboos of different societies in Africa. Cultural factors, customs and taboos influence not only marketing activities of Coca-Cola but also packaging, advertising, e.t.c.
Nearly half of world have broadband Internet connections in their homes, according to the annual survey by the Pew Internet & American Life Project in July 2007. The number of home broadband users worldwide now equals the total number of people with any type of Internet connection in 2000, the first year the survey was conducted. Four out of 10 African-American adults have broadband access at home, compared to 15% two years ago. Nearly one-third of rural Americans have home broadband connections, compared to about half of Americans living in urban areas and the suburbs. According to Pew, income and race are becoming less important differentiators in US broadband adoption.
Also, according to a May 2007, 67% of US consumers favor making purchases upon perusal of internet. Some 69% said they used the Internet to comparison products, and 58% said they go online to locate items before going to the store to make a purchase. Only 13% said the Internet had not improved their shopping experience. The conclusion is that, instead of replacing brick and mortar stores, the Internet is an extension of consumers’ in-store shopping experience, providing a resource to research product and price. When asked what the most powerful influencer was concerning purchasing decisions, 60% said word of mouth, followed by advertising (47%) and online information (43%). In view of the technological trend of consumers being reliant on the Internet for information, coca cola has a website that markets their brand and upon perusal you are able to see the product description their sweetness.
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