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Coca Cola was founded in the year 1886 in America as, and remains a public limited company. It is headquartered in Atlanta, Georgia State, USA. The Coca cola company has employed more than 123,200 from across the world and had acquired total revenue of about US $ 44.294 billion in the year 2015 according to Collier (2014). It is the leading company in the beverage industry worldwide and deals in production and selling of branded packaged drinking water and/or beverages such as Maaza, Coke, Coke-zero, Kinley, Sprite and Fanta Nordist Mist, Sprite light, Fanta light, Minute Maid, Burn, Tab, Fanta Verdia, Powerade, Splash, Aquabona among others(Saraç 2015).
The company’s mission is to “refresh the world in mind, body and spirit. To inspire moments of optimism and happiness through our brands and actions” (Collier, 2014). The company’s vision include its aim of offering a portfolio of branded satisfying drinks to the world while nurturing a network of partners that is success oriented. The coca cola company has a number of subsidiary companies operating in over 200 countries according to Wang (2015). Its brand plays a major role in the success of the company. One of the roles is that the Coca cola brand is renowned all over the world and therefore its products are already fully advertised.
Secondly, the brand has already an established customer loyalty which gives the company an advantage even while introducing new products into the market(Elmore, 2013). Further, the brand attracts different partners, suppliers and among other collaborators to trade with the company and this boosts its sales both directly and indirectly. Further, the Coca Cola brand gives its products an advantage over the rest of the products of its competitors in the soft drink industry. Due to its long-term presence in worldwide markets, the company’s brand has gained customer loyalty and thus its products preferred across the world. In essence the brand contributes mainly to a higher segment in terms of market share with the competitors across the world.
1. The 5CS of Coca Cola
a. Company
The Coca Cola Company has external and internal factors that determine its success in the beverage industry across the world. In regard to strengths, the company has a good public image and gained the loyalty of customers across the world due to the good taste of its products. In fact, the company’s soft drinks have been shown to have the best taste when compared to other soda brands (Collier, 2014). The company has a huge distribution network across the world and this gives it an upper hand in reaching the rest of the world with its products unlike its competitors. Having the largest market share is also a strength aspect as it ensures that the company’s profits remain steady to withstand any external and internal negative business environment.
In terms of weaknesses, some of the company’s products are considered unhealthy and a contributing factor to obesity across the world. Political instability in some parts of the world among other policies has minimized the company’s reach to potential customers. For instance, the company has no presence in both Cuba and North Korea due to these particular reasons(Elmore, 2013).
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In terms of opportunities Coca Cola enjoys the ever improving supply chain across the world; the expansive market in developing countries, the improvement of road networks due to infrastructure development worldwide which eases distribution among others. A few threats facing the company include the increasing influence of competitors around the world such as Pepsi, Dr. Pepper Snapple Group, and Big Cola and; the changing preferences for its products including health concerns over the consumption of the company’s products. It thus needs to settle on more health-inclined products.
b. Collaborators
The Coca Cola company has different collaborators among them; the suppliers, distributors and partners. The main suppliers include the Coca-Cola U.S which makes and sells the secret blend of products to bottlers to prepare different Coca Cola products. The company is also allied to the McDonald’s and the CARE with which they corporate in the sale of its products(Elmore, 2013). It partners with different bottling companies around the world who purchase the secret blends of its products for sale in their local markets. Distributors on the other hand take part in promoting locally and internationally the branded products while ensuring a continuous supply of the products to the consumers.
Customers
The company offers a wide variety of soft drinks to its customers. This variety of products is effective as it gives chance for choice among customers who vary in terms of preferences, age, health condition (e.g. obesity). For instance, potential customers who do not want to grow obese can choose Diet Coke(Collier, 2014). The company ensures that there is product information posted on web sites, at events, media among other social networks. Its products can be consumed by people of all ages and religion.
The customers enjoy a simple buying process where the products are just simply bought at any store. In regard to the frequency of purchase, Coca Cola soft drinks are purchased at any time depending on an individual customer’s choice, in any preferred quantity. The retailers can sell the Coca Cola products to consumers in supermarkets, shops or even during events(Saraç 2015). Among the motivating factors that make a lot of customers prefer Coca Cola products is because of their value as a refreshment, energizer and for health reasons(diet coke); and the low price which is affordable across the world.
Competitors
The Coca Cola companies faces competition from three major companies apart from soft drink companies that compete it locally in their home countries. The three major companies competing Coca Cola internationally include the Dr. Pepper Snapple Group, the Big Cola Company and the Pepsi Corporation (Saraç 2015). Pepsi is the lead competitor of the Coca Cola Company whose market segment however is way lower than that of the later. For instance between January 2016 and January 2017, Pepsi had made sales of about of about 37% as compared to Coca Cola’s 62%. This means that the remaining competitors only had a market share of 1% collectively. These include Nestle, Big Cola, and Pascual among others. In regard to positioning, the Coca Cola Company comes first due to its marketing strategies and its renowned brand in the market worldwide.
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Climate or Context
The Coca Cola Company has faced different impacts of the prevailing political, regulatory and economic environment not only in the USA but in the individual states with its presence. In terms of economic environmental impacts, the company faced a challenging period in the year 2009 in the wake of the economic recession in the US and the world at large. At this time the economy made consumers record a low score in terms of confidence apart from the development of a poor bottling partner relationship(Elmore, 2013). The company today still faces the accusations that its soft drinks contribute to the problem of obesity in the United States of America.
Several other governments across the world also discourage the consumption of the Coca Cola products in schools as part of their campaign against obesity. Even so, the development of Diet Coke among other healthy soft drinks by the company has boosted its market in terms of providing a variety that is acceptable on grounds of healthy living. Other economic factors that affect the Coca Cola Company include inflation and/or interest rates. These factors indirectly impact company by reducing its profit margin, including that of its distributors(Saraç 2015). In terms of the socio-cultural environment most people drink coca cola products despite their cultural inclination. This is because it is a basic need and forms part of individual’s and group diet in many cultures across the world.
2. How Coca Cola Collects Information for Market Analysis
The Coca Cola company collects information on its 5Cs using several methodologies. These include mainly, primary research through surveys and secondary research where it relies on existing information sources to establish market trends; such as published special reports, articles, and internet content(Wang, 2015). While carrying out primary market research, the Coca Cola Company uses two approaches. First, it carries out a quantitative research where it collects information through extensive sample surveys. This is done especially when the company wants to determine its product appeal among its worldwide audience(Lackman & Lanasa, 2013).
The second primary data collection approach is the qualitative research procedure where the company uses focus groups to obtain detailed information. It is useful in obtaining information on small groups of the company products’ typical consumers(Elmore, 2013). In this exercise, the consumers can taste the products and comment on their preferences and further describing their experience after using different products of the company. Qualitative research is important in the sense that despite the fact that its results do not represent the views of the whole population in general, it helps in providing a greater insight in regard to the reasons as to why customers think what they think towards the product(Lackman & Lanasa, 2013).
It involves interviews between the marketing researchers and the focus group members. The company also uses quantified continuous rolling studies with their consumers including the analysis of electronic data from points of sale across the world to obtain information on the aspects of company positioning, customer preference, climate and context, collaborators and competitors. These approaches make Coca Cola to track its market performance across the world.
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3. Market Segmentation, Target & Positioning
a. Potential Market Segment
The Coca Cola Company uses the multi-segment targeting strategy in its positioning across the world in the face of its few international competitors. These include geographic, demographic and psychographics segmentation Elbaz (2011). Therefore the company does not only rely on the marketing segment available to it worldwide despite its huge impact. In terms of geographic segmentation, the company makes higher sales in summer as compared to winter (60% vs. 40% respectively(Wang, 2015). Therefore, Coca Cola pays so much attention to hot areas around the world in order to reach the high number of customers.
Geographically, the company has presence in more than 200 countries, the highest number when compared to its competitors. Thus, its geographical market segmentation is larger than its competitors and quite strategic(Collier, 2014). In terms of demographic segmentation, the company’s products are meant to suit customers with demographic variations. The company for instance, has products that can be sold to customers earning high income and at the same time sell to low income earning individuals using returnable glass.
The products are affordable to people with demographic variations and offered in varieties to ease the customers’ choice. Coca Cola also relies on psychographics segmentation which positions it better than its competitors in the beverage industry Elbaz (2011). This means for instance that a lot of people across the world are conscious about the Coca Cola brand and therefore will most likely drink its products due to its fame and credibility.
b. Target Market
The Coca Cola Company already targets virtually everyone in every given population to be its customer. For instance, its products can be sold to people of different ages all over the world. Those who prefer different flavors, tastes and color of a product are all targeted as the company gives its goods in varieties to these markets(Wang, 2015). To maximize sales, marketers ensure that their products suit a wide range of potential consumers.
Coca Cola performs very well in this strategy as it can sell anywhere without any major economic, social-cultural and political barriers(Collier, 2014). Those who are keen on their diet can chose Diet Coke while diabetic patients can still drink the company’s Coke Zero with minimal sugar content but still experience a refreshing effect after. Further, the company sells its products to individuals with different habits, lifestyles and occupation. The company should focus on entering Cuba where it has not had a presence before, a move that will see its sales volume go higher.
c. Positioning
Positioning requires the need to mainly choose a particular line of product and exclusively concentrate on performance against competitors. The Coca Cola Company is well positioned in the soft drink trading industry in the world. The company ensures that it challenges its own position in the market by coming up with new products that are in line with the changing customer preferences(Wang, 2015). For instance, the company has developed healthier drinks including tea and Diet Coke to suit the incessant demands for non-obesity-contributing drink.
Marketing Principles and Practices
According to Elmore (2013), any given product/service must have desired features for customers to purchase the product and any deviations in these features can bring about negative impact on the volume of sales. In this regard, the Coca Cola Company offers basic food products as soft drinks which form part of a person’s basic need. The company understands that customers have varying preferences and thus has developed variety of brands for customers to choose. These come in different flavors and the lately Coke Zero with no sugar and the Diet Coke have been made to be taken by customers who are health conscious and don not want to be obese(Collier, 2014).
Different marketing mix models emphasize the need for companies to consider how, when and where a product can be used, its appearance (size color), and how customers find it. Coca Cola products can be purchased from any local store and shop anywhere and consumed at any given time by customers. The products come in different colors, tastes and quantities for customers to pick their own favorite flavor. The different names and brands give each individual soft drink an identity which makes it saleable. The Coca Cola brand and the design of the packaging materials such as special bottle designs and the company image on them make the product different from those of other companies like Pepsi.
b. Place
A business must choose wisely, the place where their services and/or products are to be sold in order to maximize profits while minimizing the cost of production Elbaz (2011). Coca Cola’s products are strategically accessible and sold at convenient venues for customers. Sale points include restaurants, stores, retail shops, supermarkets, gas stations, in vending machines among others. Customers can acquire Coca Cola products everywhere and at every other time they wish. It is important also to consider the access of distribution channels that are effective while deciding on the place of product presentation to customers. Coca Cola has had a long term presence in over 200 countries around the world and thus has well-established independent distributors of its products. Distributors reach out all over the local markets in their own individual countries, making sure that they sell products to consumers.
c. Price
The price of an organization’s product/service depends on the value it has to the buyer. The Coca Cola Company sells its products in different quantities and its pricing strategy varies from country to country, factoring the issue of individual national pricing policies. Even so, most of its products are packaged in amounts that are affordable by people from all economic classes. Marketing mix models emphasize the need to consider how sensitive customers are on the prices of a firm’s products/services(Saraç 2015). It is evident that Coca Cola’s product prices have a sensitive effect on the customers. An increase in the prices can most likely lead to a case where passengers forego the products and choose cheaper alternative drinks to suit preference.
Therefore, an increase in the price can reduce the market share as competitors can offer cheaper products to suit the same use. Even so, the huge market share the company enjoys might earn it huge profits if it makes any minute increase in price which however should not make customers sensitive (Wang, 2015). Further, there is need to compare the price of a company’s goods/service with that of its competitors.’ Pepsi being Coca Cola’s main international competitor offers products that are slightly more expensive than its counterpart. Even in cases where Pepsi charges affordable amounts on its goods, it pegs its prices at levels similar to those set by Coca Cola in order to attract its goods goods/services.
d. Promotion
Service/product promotion refers to the different strategies aimed at making the products/service saleable to potential customers. It involves the provision of information on the product/service including the varieties sold, the taste, flavor, price, and location of purchase; to the customers. In choosing promotion strategies, businesses must consider the place/cite where they can pass their marketing messages across to the targeted market (Wang, 2015). The Coca Cola Company reaches a worldwide audience to advertise its goods through the use of online advertising, the media (i.e. TV, and radio), billboards, magazines, newspapers and even on social networks.
The company also utilizes celebrity advertisement and uses local languages in advertising its goods across the world(Elmore, 2013). It is important to also choose the right time to advertise goods while considering market seasonality and environmental issues that influence the timing of promotions. For adverts aired on television and radio, the company strategically ensures that its adverts are run before, along and after the most watched/listened-to programs. This assures the company that its products’ information has reached a wide audience even when it advertises during special events.
References
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.
Elbaz (2011) Ch. 8 – Segmenting and Targeting Markets, Blogger. Retrieved 22 June 2017. <https://elbaz-coca-cola.blogspot.com.au/2011/11/ch-8-segmenting-and-targeting-markets.html>.
Elmore, B. (2013). Citizen Coke: An Environmental and Political History of the Coca-Cola Company. Enterprise and Society, 14(4), pp.717-731.
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Saraç Uslusoy, B. (2015). Cultural Hybridity Analysis: Coca Cola Tv Commercial Case. International Peer-Reviewed Journal Of Communication And Humanities Researches, (9), Pp.157-157.
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