Marketing Strategy-Recipe for Success
Coca cola is the world’s fourth most valuable company and is recognizable all across the world. The 131 year old company with it’s headquarter at Atlanta, Georgia, United States is headed by James Quincey. Coca Coal and its products are available all across the world including Cuba and North Korea which are known as the grey markets (Gattorna, 2017). The brand needs no introduction, it was initially intended as a patent medicine, eventually in the 19th century, the carbonated drink was developed and with the brilliant marketing tactics of Asa Griggs Candler the company soon became popular in rest of the world. The name Coca cola is derived from two of its derivatives Kola nuts and Coca leaves. The current formulae of Coca cola are a trade secret with a lot of speculation in and around its trade secret. Coca cola Zero, DASANI, Diet Coke, Fanta, Minute Maid & Sprite are some of the brands which operate under the brand umbrella of Coca Cola. The success of Coca cola can be attributed to a lot of contributing factors, but primarily its leadership, marketing strategy, supply chain and distribution strategy are the pillars of its business sustainability and constant growth (Grant, 2016).
The purpose of the assignment here is to identify the success strategy of the company which gives it a competitive edge over its competitors. Analyse the factors behind its success strategy and to give recommendation to further enhance its growth.
The company focuses on building and improving the community relationships and puts in efforts to increase their happiness, which reflects on their public image which results in customer acquisition and retention and increase in its profits. Coca cola’s marketing strategies is one of the most comprehensive marketing strategies the world has ever seen (Quirke, 2017) The marketing strategy can be understood under the following heads:
Pricing Strategy
In today’s world, a lot of start-ups are using the penetration pricing strategy, wherein they give the products initially for free or at a very low price to make people fall in love with the products and eventually increase the prices. Coca Cola has been quite unique in its pricing strategy, the company from 1886-1959 did not change the price of the drink and it was available at the same price for 73 years, which hooked the customers to its refreshing taste. In the present day, due to Coca cola’s biggest rival Pepsi, the company has to keep its price competitive, change in price will make any of the brand suffer. Thus, the price today is more or less same to its rival (Collier, 2014).
Supply chain analysis- Space X for Success
Coca Cola Logo
The absolutely refreshing red logo of the company has been same since 1923, when it was normalized for the company for the very first time, the company decided to keep its logo the same just like the drink’s recipe. Coca cola has been doing it to have a high brand recall, recognition and reputation around the world (Flint, 2018).
Sponsorship
Coca Cola spends big money on sponsorship, the company has been an official sponsor of some of the biggest sporting events, television shows and industry shows across the globe. Some of its prime sponsorship includes Olympic Games, American Idol and Prime sponsor of NASCAR (Sinha & Sheth, 2017).
Social Media marketing
Social and digital marketing has turned the entire world into one big village which is connected via the Internet. Coca cola has one of the largest followers on Facebook, Twitter, Instagram and Google+, the company’s strategy is to create the rand awareness regarding its future business strategies and advertisements. The company does a lot of social listening and is believes in driving conversation and engagement around the brand (Pullizi, 2014).
Advertising
Coca-Cola’s advertisement are designed to create an impact on the minds of consumers, besides drawing awareness about the brand and increasing the sales, the company creates campaign for its CSR activity as well. Coca cola has been a revolutionary organization which taught the world how to create engaging advertisements. Some of its best advertisement includes; Twist the bottle, life is good, Coke is it and I would like to buy the world a coke (Bakan, 2016).
Coca cola is one of the most recognizable company of the world and as much as 98% of the 7 Billion people recognize the brand, undoubtedly the marketing strategy of Coca Cola is the biggest factor in its success and high brand recognition(Holt, 2016)
Coca Cola’s supply chain is one of the largest in the world and the prime driver for its success; it is its supply chain management which makes the products of the brand available all over the world even in the remote location. At a macroscopic level, the supply chain of Coca Cola is more or less similar to that of any other beverage company, but to understand the customization the company does to its supply chain strategy, one has to get to a very microscopic level (Lee & Vachon, 2016). The supply chain activities are divided into the following three layers:
Operations
Upstream activities
The upstream activities of Coca Cola are limited to the manufacturing of its concentrate. The formulae to make the drink is a highly guided secret and is locked in Sun trust’s bank of Atlanta. Carbonated water, sucrose and sugar syrup are the major ingredients of the drink, but no one is aware of the proportion in which the three key ingredients are mixed to bring out the refreshing taste of Coca Cola (Goodier, 2015).
Downstream activities
Coca Cola works on an exclusive Franchise distribution model, the company provides only the syrup concentrate which is sold to the different bottlers across the globe that holds an exclusive territory. It has been said that the local bottlers produce almost half of the Coca cola sold in the entire world (Fernie, 2014). Bottlers have been advised to sweeten the drink according to the taste and preference of their country, thus giving them a power of customization with the drink. However, the company reserves the rights to create the marketing campaigns, product related advertising program and sells syrup to the local bottlers (Marshall, McCarthy, McGrath & Harrigan, 2016).
Coca cola is a commodity and the company follows an intensive distribution system where it partners with local bottlers across the globe. Most of the bottlers have exclusive rights of distribution in their geographic areas (Lambert & Enz, 2017). The company however has set up basic guidelines for the business conduct, in terms of the operational procedures, customer relationship management and query management, some of the bottlers have been given the rights to create their own standard operating procedure for the delivery, fleet management and forming credit cycles. Coca Cola Export Corporation also called as TCCEC is the body which is responsible for selling the concentrate to different bottlers around the world. TCCEC and its regional offices which are located around the world create partnerships with the local bottlers who then manufacture the drink using the highly guarded syrup and then distribute it in their respective territories (Bowers, Petrie & Holcomb, 2017).
As mentioned above, Coca Cola gives a set of guidelines for the bottlers across the globe to bring standardization in its operation policies and procedures, this way company executes a high level of centralization in its organization and thousands of its bottlers and distributers across the globe. The regional offices of Coca cola serve as the headquarters for its various bottling partners which serve in their geographic regions. An amazing insight into this structure is that, the bottler’s head office links the production plant with different distributors’ sales centres and numerous trade zones to complete the supply chain system. Once the bottlers receive the concentrate from the company, they send it to their manufacturing plants, wherein they add rest of the ingredients to prepare the drink. It is from there; the product is send across its distribution channels and reaches every corner of the world, covering the entire spectrum of the distribution channels. The company uses SAP to handle its operation process and keeps a check on the production capabilities of partner bottlers (Wisner, Tan & Leong, 2014)
Distribution
It is from the production plants, the beverage is sealed in bottles and cans and sent across the distribution and sales centres across the country. It is the responsibility of the distribution centres to stores and manages the inventory according to the strategic Kiosk unit and dispatches them to different retailers. The distribution centre has the following department to aid the sales of the company:
Sales and Dispatch
Customer service and query management
Logistic department
Fleet department
Storage and warehousing.
Even the biggest and the best supply chain management of Coca cola have some troubles, TCCEC is doing efforts to maximize its operational efficiency and further improve its 130 year old process.
The simple understanding of positioning is where the product stands in relation to others offering of similar product and services in the marketplace and in the minds of customers. Mind map is a tool which depicts how one thinks about the company on hearing or watching the name. The mind map of Coca Cola can be constructed as:
Refreshing Drink
Trust
Relationship
Great advertisement
Amazing promotional campaigns
Red Logo
Diet coke
Better than Pepsi
Attractive designing of the bottle
The company has positioned itself strategically in the marketplace, although the company has understood and adopted the principle of “ Think Global and act local”. The reason for adopting the principle of Think global and act local is to adapt to the local needs of the consumers. The company uses strategic positioning to keep its brand image same across all markets, Coca Cola is a daily part of lives of people across the globe. The first thing which comes in the mind of consumers on hearing the word Coca Cola is fun and entertainment. USP of coca cola is its ability to create a positioning in the minds of consumers which says “Live the Coke side of life”, which is related to joy and happiness. The perception of the people about Coca Cola leads to high purchasing decisions and high brand loyalty. The drink is highly popular among all age groups and in a number of markets Coca Cola is treated as the symbol which brings joy and happiness to the families. The company has changed its position in the recent few years, now the company is focussing on enriching the customer experience in their transactions with the brand. It has recently added a journey section to its website where people are allowed to share their favourite Coca Cola experience. It is focussing on building large communities in and around the world and give everyone a taste of the world’s best refreshing drink.
Conclusion
Coca Cola which has been the symbol of success and integrity of over 130 years has been focussing on building great communities around the brand. The company has a well-guarded recipe secret and log which it has kept unchanged for a lot of time. The company with its brilliant advertising campaigns and highly targeted marketing campaigns try to keep the engagement and conversation high in and around the brand. Although, the company has been doing terrific jobs by reaching to the world’s 98% of population, the company can certainly do a few more things to ensure the momentum in its business. Company seems to be very less active on Facebook, they sent out a post once in a week, which is extremely low in comparison to what its competitors have been doing. Hence, it is advised that the company should leverage the world’s biggest social media platform to increase the engagement and build a community with its target audience. Another thing the company should do to ensure the success is by bringing new products in the market, in the present day cold pressed juices are the first choice of millennial, which is a big section of the society. The company has to ensure that it does not lose out on health conscious generation and design products which keep their interest high in the company’s product offering.
References
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Bowers, M.R., Petrie, A. and Holcomb, M.C (2017). Unleashing the Potential of Supply Chain Analytics. MIT Sloan Management Review, 59(1), p.14.
Collier, K (2014). A Case Study on Corporate Peace: The Coca-Cola Company: Coke Studio Pakistan. Business, Peace and Sustainable Development, 2014(2), pp.75-94.
Fernie, J (2014) 02 Relationships in the supply chain. Logistics and retail management: Emerging issues and new challenges in the retail supply chain, p.35.
Flint, S.W (2018). In response to ‘Are Big Food’s corporate social responsibility strategies valuable to communities? A qualitative study with parents and children’by Richards and Phillipson. Public Health Nutrition, pp.1-2.
Gattorna, J (2017). Introduction. In Strategic supply chain alignment (pp. 15-21). Routledge.
Goodier, R (2015). Supply-side motivation: getting soft drinks or medicine into people’s hands requires a value chain. Mechanical Engineering-CIME, 137(7), pp.16-17.
Grant, R.M (2016). Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Holt, D (2016). Branding in the age of social media. Harvard business review, 94(3), pp.40-50.
Lambert, D.M. and Enz, M.G (2017). Issues in supply chain management: Progress and potential. Industrial Marketing Management, 62, pp.1-16.
Lee, K.H. and Vachon, S (2016). Supply Chain Sustainability Risk. In Business Value and Sustainability (pp. 245-280). Palgrave Macmillan, London.
Marshall, D., McCarthy, L., McGrath, P. and Harrigan, F (2016). What’s Your Strategy for Supply Chain Disclosure?. MIT Sloan Management Review, 57(2), p.37.
Pulizzi, J (2014). Epic content marketing: How to tell a different story, break through the clutter, and win more customers by marketing less (p. 5). McGraw-Hill Education.
Quirke, B (2017). Making the connections: using internal communication to turn strategy into action. Routledge.
Sinha, M. and Sheth, J (2017). Growing the pie in emerging markets: Marketing strategies for increasing the ratio of non-users to users. Journal of Business Research.
Wisner, J.D., Tan, K.C. and Leong, G.K., (2014). Principles of supply chain management: A balanced approach. Cengage Learning.
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