Case Study On COCA-COLA
Case Study On COCA-COLA
Case Study On COCA-COLA
Acknowledgement Executive summary Challenge ..................................................................................................................................... 1 New product category............................................................................................................... 1 Product line extension .............................................................................................................. 1 Incremental Improvement ........................................................................................................ 2 Introduction to the company ..................................................................................................... 2 Birth of Coca Cola ................................................................................................................ 2 Asa Candler .......................................................................................................................... 3 Death of the Soda Fountain - Rise of the Bottling Industry ................................................. 3 New Coke ............................................................................................................................. 3 Situation Analysis ....................................................................................................................... 4 Company Analysis .................................................................................................................. 4 Mission Statement ................................................................................................................ 4 Vision Statement .................................................................................................................. 4 Market Share ........................................................................................................................ 4 Customer Analysis .................................................................................................................. 5 Consumer Decision Process: ................................................................................................ 5 Competitors ............................................................................................................................. 6 Economic Effect Analysis ........................................................................................... 7 Political Effect Analysis ............................................................................................. 9 Technological Factors: ............................................................................................. 10 Social and Cultural Analysis ........................................................................................... 10 SWOT Analysis Of Coca Cola............................................................................................. 11 Strengths ............................................................................................................................. 11 Weaknesses......................................................................................................................... 11 Opportunities ...................................................................................................................... 12 Threats ................................................................................................................................ 13 Market Segmentation ............................................................................................................... 14 Behavioral base ...................................................................................................................... 14 Cognitive base ........................................................................................................................ 14 Selected Market Strategy ......................................................................................................... 14 Product.................................................................................................................................... 14
Branding ............................................................................................................................. 15 Product line......................................................................................................................... 16 Packaging ........................................................................................................................... 16 Price ........................................................................................................................................ 17 Prices of different bottles:................................................................................................... 17 Discounts ............................................................................................................................ 18 Placement/Distribution Channel ............................................................................................. 18 Indirect distribution ............................................................................................................ 18 Direct distribution ............................................................................................................... 18 Promotions.............................................................................................................................. 19 Conclusion ................................................................................................................................. 20 Suggestions ................................................................................................................................ 21 Bibliography.............................................................................................................................. 22
Acknowledgement
Working with this report has been very interesting. We are forever indebted to all those who gave us valuable suggestions, stimulating ideas, constructive comments and encouragements throughout this report writing. We are indebted to our respected teacher Mr. Sanjeeb Shrestha whos indispensable and intricate comments on various aspects conjoined with motivation made us come forth holding such a project.
Executive summary
Purpose of this project is to study the strategies which Coca cola is doing in Nepali market for its product Coca cola. Coca cola International is a world renowned brand. It is a very well organized multinational company, which operates almost all over the world. In Nepal It also has proved itself to be the No.1 soft drink. Now days Coca cola is recognized as Nepalis National drink .Coca cola's greatest rival is Pepsi Cola. Coca Cola has an international recognized brand. Cokes basic strength is its brand name. But Coca cola with its aggressive marketing planning and quick diversification in creating and promoting new ideas and product packaging, is successfully maintaining is No.1 position in Nepal. Coca cola is operating in Nepal, through its more than 12 bottlers all over Nepal. These bottlers are Coca cola's strength. Coca cola has given franchise to these bottlers. Bottlers, produce, distribute and help in promoting the brand. We also did analysis of the soft drink industry in Nepal and worldwide. The soft drinks set to become world's leading beverage sector. Global consumption of soft drinks is rising by 5% a year.
Challenge
Coca cola is doing new product development on frequent interval of times. The purpose of which is to refresh the brand. By new products and innovative ideas consumers can easily be attracted. In following ways Coca cola is doing new product development. New product category Coca cola which is mainly a company of soft drinks after establishing a brand in Nepal. Coca cola came into several new product category. Fanta, Sprite and Aquapure, fast food restaurants are the examples of new product category. Product line extension Mountain dew is the most recent addition in the product line of soft drinks which is very popular especially among the youngsters. However Coca cola launch its several variants with a minor difference on frequent interval of time. There have been many Coca cola variants produced over the years, including, Coca Cola raspberry,Coca Cola zero,Coca Cola M5, Coca Cola black cherry vanilla, Coca Cola black, Coca Cola citrus,Coca Cola light sango, Coca Cola orange, Coca Cola diet etc. Line Filling Coca cola claims that they are doing mass marketing but there was an unfilled gap in the consumers. The diabetic patient cant use the regular Coca cola because of the sugar. So Coca cola had introduced diet Coca cola to fill the gap in their drinks as of then onwards even diabetic people became their consumers.
Incremental Improvement Coca cola jumbo is an example of incremental improvement made by Coca cola. It was 2.25 liter bottle introduced few years ago in Nepal. The purpose of this packing is to offer the Coca cola to a family for one or two time meals. Price of this pack is also kept low so that is can be affordable easily by the consumers.
Asa Candler In 1887, another Atlanta pharmacist and businessman, Asa Candler bought the formula for Coca Cola from inventor John Pemberton for $2,300. By the late 1890s, Coca Cola was one of America's most popular fountain drinks, largely due to Candler's aggressive marketing of the product. With Asa Candler, now at the helm, the Coca Cola Company increased syrup sales by over 4000% between 1890 and 1900. Advertising was an important factor in John Pemberton and Asa Candler's success and by the turn of the century, the drink was sold across the United States and Canada. Around the same time, the company began selling syrup to independent bottling companies licensed to sell the drink. Even today, the US soft drink industry is organized on this principle. Death of the Soda Fountain - Rise of the Bottling Industry Until the 1960s, both small town and big city dwellers enjoyed carbonated beverages at the local soda fountain or ice cream saloon. Often housed in the drug store, the soda fountain counter served as a meeting place for people of all ages. Often combined with lunch counters, the soda fountain declined in popularity as commercial ice cream, bottled soft drinks, and fast food restaurants became popular. New Coke On April 23, 1985, the trade secret "New Coke" formula was released. Today, products of the Coca Cola Company are consumed at the rate of more than one billion drinks per day.
Mission Statement
To be the world's premier consumer Products Company focused on convenient foods and beverages. We seek to produce healthy financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.
Vision Statement
To be the world's best beverage company. contented and happy with their products. To increase the value of their shareholders investment through sales growth, cost control and wise investment of resources. Being the best means providing
outstanding quality, service, cleanliness and value, so that their every customer is
Market Share
Coca-Cola, imported from India, was first introduced into Nepal in 1973, with local production of Coca-Cola beginning in 1979. Bottlers Nepal Limited (BNL) is the only bottler of Coca-Cola products in Nepal, and has two bottling plants; namely Kathmandu (Bottlers Nepal Limited BNL) and Bharatpur (Bottlers Nepal (Terai) Limited,) which is 160 km from Kathmandu, its capital. Coca Cola enjoys 67.8 percent share in Nepals carbonated soft drinks market, according to ACNeilsen, a global marketing research firm. The multinational brand valued at $70 billion has presence in 200 countries.
Customer Analysis
There are three types of customers 1. Consumer 2. Business 3. Government Coca cola main focus is the consumers which are the end users. Coca cola has to make its marketing strategies keeping in view the consumer buying behavior. To forecast the behavior of the consumer is a business problem. Physical aspect of the consumer can be satisfied but it is difficult to satisfy the consumer psychologically. Consumer buying behavior is affected by certain factors like Cultural factors, Social factors, Personal factors and Psychological factors. So the producer should keep these factors in Mind while promoting their product so that they can acquire the customer and increase their market share. There are different consumers in a society whose behavior is not the same. Every consumer has a different perception of different products. Some consumers are impressed by one quality of the product which may be in the view of other consumer not that impressive. So to deal with different consumers in a society one should know about the consumer buying behavior process which may help in making a true picture of their product in the mind of the consumers.
Information Search
He will search as to what will satisfy his thirst the most. Evaluation of Alternatives
He will now evaluate from the wide range of beverages available to him that which one of them is suitable to him in terms of quality, taste and is pocket friendly. Selection
It is the experience that the consumer gets after using the product. He will use the product again if he feels that his satisfaction after use is more or equal to the price of the product. After looking at above mentioned example, we can get an understanding that a product should be so desirable that whenever a person identifies his need, he selects our product among various substitute products and he feel satisfies so that he retains the use of that product.
Competitors
Company who directly target your customers. The marketing concept states that to be successful, a company must provide greater customer value and satisfaction than its competitors do. The Coca-Cola Company's main rival in the soft drink industry, is usually second to Coke in sales, and outsells Coca-Cola in some markets. RC Cola, now owned by the Dr Pepper Snapple Group, the third largest soft drink manufacturer, is also widely
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available. There are different types of competitor in the market. Some of them in which our product lies are discussed below: Close Competitor Coca cola and Pepsi are close competitors. It means that both have direct competition in the market, their products are close substitutes for one another. Both the products can influence the market share of one another through effective strategies made to cope up with their competitors. In Nepal Coca cola is the market leader and Pepsi Cola is its competitor. The Coca cola makes defense strategies so that it can maintain its position in the market. While is a challenger and it makes attack strategies so that it can become the market leader.
Payment Mod As the use of plastic money is increasing the consumption pattern of the people are increasing. Although it will have a low affect on the consumption of Coca cola. Employment Opportunities As employment opportunities increase the living standard of the people increase and the people consume more. Aggregate Demand In case of Coca cola, aggregate demand of the product increases in the season of summer as the hot weather makes the consumers want to drink more. Aggregate Supply In summer season to cope up with the increasing demand they have to increase the aggregate supply of their product. Economic Policies Some of the economic policies which can affect the market of Coca cola are discussed below: Fiscal Policy It is the policy of taxes. If heavy tax is levied on Coca cola then its price will rise having negative effect on its consumption. Monetary Policy Monetary policy is made to restrict or increase the supply of money in the market. If policies are made to restrict the flow of money in the market, inflation can be controlled hence increasing the real income of the people which will ultimately affect the consumption of Coca cola.
Price Policy If price of Coca cola is increased its demand will decrease and vice versa. Income Policy If income of the people will increase their purchasing power will increase and hence increasing the market share of Coca Cola.
Technological Factors:
Research and Development Through research and development quality of the product can be improved or better techniques or machinery can be developed which can increase the production. When technology is advance the supply of the product increase hence the company experiences growth in their business.
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emerging economies but it will prove weak as the world is fighting obesity and is moving towards consuming healthier food and drinks. Undiversified product portfolio. Unlike most companys competitors, Coca Cola is still focusing only on selling beverage, which puts the firm at disadvantage. The overall consumption of soft drinks is stagnating and Coca Cola Company will find it hard to penetrate to other markets (selling food or snacks) when it will have to sustain current level of growth. High debt level due to acquisitions. Nearly $8 billion of debt acquired from CCEs acquisition significantly increased Coca Cola's debt level, interest rates and borrowing costs. Negative publicity. The firm is often criticized for high water consumption in water scarce regions and using harmful ingredients to produce its drinks. Brand failures or many brands with insignificant amount of revenues. Coca Cola currently sells more than 500 brands but only few of the brands result in more than $1 billion sales. Plus, the firms success of introducing new drinks is weak. Many of its introduction result in failures, for example, C2 drink. Opportunities Bottled water consumption growth. Consumption of bottled water is expected to grow both in US and the rest of the world. Increasing demand for healthy food and beverages. Due to many programs to fight obesity, demand for healthy food and beverages has increased drastically. The Coca Cola Company has an opportunity to further expand its product range with drinks that have low amount of sugar and calories. Growing beverages consumption in emerging markets. Consumption of soft drinks is still significantly growing in emerging markets, especially BRIC countries, where Coca Cola could increase and maintain its beverages market share. Growth through acquisitions. Coca Cola will find it hard to keep current growth levels and will find it hard to penetrate new markets with its existing product portfolio. All this can be done more easily through acquiring other companies.
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Threats Changes in consumer tastes. Consumers around the world become more health conscious and reduce their consumption of carbonated drinks, drinks that have large amounts of sugar, calories and fat. This is the most serious threat as Coca Cola is mainly serving carbonated drinks. Water scarcity. Water is becoming scarcer around the world and increases both in cost and criticism for Coca Cola over the large amounts of water used in production. Strong dollar. More than 60% of The Coca Cola Company income is from outside US. Due to strong dollar performance against other currencies firms overall income may fall. Legal requirements to disclose negative information on product labels. Some Coca Colas carbonated drinks have adverse health consequences. For this reason, many governments consider to pass legislation that requires disclosing such information on product labels. Products containing such information may be perceived negatively and lose its customers. Decreasing gross profit and net profit margins. Coca Colas gross profit and net profit margin was decreasing over the past few years and may continue to decrease due to higher water and other raw material costs. Competition from PepsiCo. PepsiCo is fiercely competing with Coca Cola over market share in BRIC countries, especially India. Saturated carbonated drinks market. The company significantly relies on the carbonated drinks sales, which is a threat for the Coca Cola as the market of carbonated drinks is not growing or even declining in the world.
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Market Segmentation
It means that you divide the target market in to different groups. Market consists of buyers and buyers differ in one or more ways. They may differ in wants, resources, locations and buying practices. Through market segmentation companies divide large, heterogeneous markets into smaller segments that can be reached more efficiently and effectively with products and services that match their unique needs. Segmentation is done on basis of the previously mentioned external factors and the following: Behavioral base It is how people perceive a specific product, in short psychological analysis of a product. Coca cola all over the world is recognized as a quality drink and therefore people drink it without any hesitation whenever they are thirsty or otherwise. So marketers of Coca cola have made it a drink for all people and for diabetic people they introduced diet Coca cola. Cognitive base It pushes and pulls the consumer. If the outlook of Coca cola bottle is desirable and it attracts the consumer, he will buy it even if he isnt thirsty.
In marketing, a product is anything that can be offered to a market that might satisfy a want or need. Until unless the product of the company is not strong in the market it cannot survive in the longer run. Coca cola has a product line comprised up of carbohydrate drinks, Lays and many other products in Nepal. Coca colas product line satisfies consumer needs because Coca cola produces different types of soft drinks for different consumers. Branding Consumer view a brand name as an important part of the product and branding can add value to the product. A name, term, sign, symbol or design or a combination of these intended to identify the goods and services of one seller or group of seller and to differentiate them from their competitor Logo Logo is what establishes a brand name in the consumer mind. It is the brands identify, signature, image and more often it is a logo that makes of breaks a product logo plays a very effective role to improve the product or brand.
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Product line SODA WATER JUICES Minute Maid Coca cola Aquapure
Fanta
Aquarius
Packaging Packaging is a part of product planning in which a firm researchers, designs, and produces its packaging. The physical container may be a cardboard, metal, plastic or wooden box; a cellophane, wax paper, or cloth wrapper; a glass, aluminum, or plastic jar or can; a paper bag; styro foam; some other material; or a combination of these products frequently have more than one physical container. But packaging depends upon the product nature as well as structure means either it is liquid, semi liquid or solid. In case of Coca cola Cola, they take the packaging designs by considering what is better for company and what is better or convenient for the transportation. For protecting the syrup, Coca cola Cola uses the glass as well as plastic bottles of different quantity.
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Price The amounts of money charged for a product or service, or sum of the values that consumers exchange for the benefits of having or using the product or services. As price gives us the profit so this P is very important for business price of product should be that which gives maximum benefit to the company and which gives maximum satisfaction to the customer. Following factors Coca cola kept in mind while determining the pricing strategy. Price should be set according to the product demand of public. Price should be that which gives the company maximum revenue. Price should not be too low or too high than the price competitor is charging from their customers otherwise nobody will buy your product. Price must be keeping the view of your target market. The price of Coca Cola, despite being market leader is the same as that of its competitor Pepsi. Sometimes, Coca cola places its customers into some psychological pricing strategies by reducing a high priced bottle and consumers think that they save a lot of money from this.
Prices of different bottles: Regular bottle = rupees 20 Non Returnable/disposable= rupees 55 1.5 Liter Bottle= rupees 125 2.25 Liter Bottle= rupees 145
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Discounts Coca Cola offers various discounts to those retailers who have the maximum sales of Coca cola products on daily, monthly and on seasonal basis. Seasonal Discount: Following are discounts offered by Coca cola. Coca cola also offers seasonal discounts schemes by reducing price in Dashain and Tihar. Coca cola also offers trade in allowance for retailers.
Placement/Distribution Channel
The Coca cola uses the following two channels for the distribution of their products. Indirect distribution Indirect distribution involves agency holders e.g. Bottlers Nepal Limited (BNL). The Marketing, Sales and Distribution strategy for BNL is titled Refresh the Marketplace and includes a robust Consumer Response System to address any consumer concerns, ideas and suggestions. Direct distribution The factory vehicles operate on direct routes in Kathmandu and other cities selling nonreturnable bottles Litter, Pet and Can.
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Promotions
In Nepal Coca cola is the most liked soft drink especially by young generation so the Coca cola company has devised such marketing strategy which attracted them. For this reason they started monitoring the habits of the generation. What they saw was that the students were crazy about football and usually liked to idealize them so in order to increase their sales the Coca cola Company paid high amounts of money to the footballer to act as their spokes men. Coca cola Cola Company has also become official sponsors of Nepal cricket and has sponsored a number of series. Also Coca cola has donated a lot to the earth quake victims and has launched a number of prize schemes to attract new customers As a result of this marketing strategy Coca cola has become the largest seller of soft drinks in Nepal and is slowly forming a monopoly in drinks market. Frequency of the Coca cola ads varies from time to time. When the season is on Coca cola do heavy advertisement especially in Dashain and Tihar but this advertisement not remain consist. We can hardly see the ads of Coca cola now as there is winter season.
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Conclusion
Coca cola is a well renowned company and it has maintained its position well by understanding the client psychology, by ensuring quality, by introducing ingenuity in products, by enlarging its product base, by keeping economic factors in view and by intense and jazzy advertisements. Whenever and where ever there is a spotlight event, Coca cola must figure in, like the one day international cricket matches between India and Nepal many other such occasions. The key word for success in the Marketing World is to remain in the spotlight and that is what Coca cola is doing.
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Suggestions
The marketing world is full of surprises. Who could imagine that Coca Cola would be overtaken by Pepsi? If Pepsi could be overrun by Coca cola, it would be no wonder that Coca cola might be overtaken by some other beverage. The need then is to combine quality with ingenuity. Along with that, the reputation of the company has to be kept robust. Today we live in a fast moving world where novelty and newness count a lot. One cannot rest on ones laurels. Fresh efforts, newness of approach must remain the cardinal principles of a well orchestrated marketing strategy and the campaign must be relentless. A continuous bombardment in advertisement would convince the clients that Coca cola is a part of their lives. In order to live with style, Coca cola ought to be an essential ingredient of ones life. The Coca cola is at its maturity stage and the sales of company are not growing very rapidly. Company is doing a lot of promotional activities to let the product remain in the market. It holds a large share of the market and whenever the sales state declining, the company can improve it by different promotional activities. Marketers of Coca cola can try to improve sales by improving one or more marketing mix elements. They can cut prices to attract new users and competitors customers. They can also launch a better advertising campaign or use aggressive sales promotion to improve the sales. Thus, Coca cola is at its maturity stage.
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Bibliography
The following are the reference material where the information is collected. Online References: i) ii) http://en.wikipedia.org/wiki/Coca_cola http://www.ekantipur.com/the-kathmandu-post/2010/04/01/Business/CocaCola-promotion--campaign-launched/206780/ iii) iv) http://www.bluechiplist.com/coca-cola/ http://www.ktm2day.com/2010/05/01/coca-cola-set-to-expand-market-innepal/ v) vi) http://www.studymode.com/essays/Coca-Cola-Nepal-1149300.html http://www.ukessays.com/essays/marketing/coca-cola-and-their-internationmarketing-strategies-marketing-essay.php vii) http://www.cocacolasabco.com/Territory.aspx/Show/Nepal
Other References:
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Frederick Allen. Secret Formula: How Brilliant Marketing and Relentless Salesmanship Made Coca-Cola the Best-Known Product in the World. New York: HarperCollins. 1994. 500pp. Michael Blanding. The Coke Machine: The Dirty Truth Behind the World's Favorite Soft Drink. Penguin. 2010. 375pp. Mike Cheatham. "Your Friendly Neighbor": The Story of Georgia's CocaCola Bottling Families. Mercer University Press. 1999. 187pp. Elizabeth Candler Graham; Ralph Roberts. The Real Ones: Four Generations of the First Family of Coca-Cola. Barricade Books. 1992. 344pp. David Greising. I'd Like the World to Buy a Coke: The Life and Leadership of Roberto Goizueta. Somerset, NJ: John Wiley & Sons. 1998. 334pp. Constance L. Hays. The Real Thing: Truth and Power at the Coca-Cola Company. Random House. 2004. 398pp. E. Neville Isdell; with David Beasley. Inside Coca-Cola: A CEO's Life Story of Building the World's Most Popular Brand. Macmillan. 2011. 272pp. Ely Jacques Kahn. Big Drink: The Story of Coca-Cola. Random House. 1960. 174pp.
Kathryn W. Kemp. God's Capitalist: Asa Candler of Coca-Cola. Mercer University Press. 2002. 312pp.
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