Acknowledgementwe are pleasured to dubmit this presentation studied in vivek vidyalaya college of commerce (m.com)

we would like for humbled attempt to thank all those people who helped us to make this project. First it is our pleasure to principal of vivek college anf project in charge for granting us the opportunity to present our project

The Coca Cola Company

MARKETING STRATEGY

Contents

Introduction and Summary of the Company ............................................................................................ Environmental Analysis ........................................................................................................................... Political ...............................................................................................................................................

Economic.............................................................................................................................................

Social...................................................................................................................................................

Technological ......................................................................................................................................

Customer analysis – STP analysis ............................................................................................................. Segmentation ......................................................................................................................................

Targeting .............................................................................................................................................

Positioning ..........................................................................................................................................

Competitive Analysis ...............................................................................................................................

SWOT Analysis.....................................................................................................................................

Strengths .........................................................................................................................................

Weaknesses.....................................................................................................................................

Opportunities ..................................................................................................................................

Threats ............................................................................................................................................

Porter’s Five Force Analysis ...............................................................................................................

Competition...................................................................................................................................

Threat of new Entrants ..................................................................................................................

Threat of substitute products.........................................................................................................

Supplier power ..............................................................................................................................

Buyer Power ..................................................................................................................................

Strategic approach and competitive advantages....................................................................................

Channel analysis....................................................................................................................................

Communication – Innovative advertising ...........................................................................................

Distribution .......................................................................................................................................

Conclusion.............................................................................................................................................

References ............................................................................................................................................

INTRODUCTION AND SUMMARY OF THE COMPANY Coca Cola is known as soft drink of the world (Bell, 2004). It was invest by Dr John Pemberton,who was a pharmacist in Atlanta. The drink did not have bubbles at that time and started sellingat soda fountains. The first slogan for the new drink was “Delicious and refreshing”

The company has been hugely successful over the last century and has become an icon ofAmerican culture. Coca Cola is not involved in all the processes that see its products go to thehands of consumers. According to the company website, Coca Cola has entered into partnershipwith bottlers around the world. The website says, “Our Company manufactures and sells

concentrates, beverage bases and syrups to bottling operations, owns the brands and isresponsible for consumer brand marketing initiatives. Our bottling partners manufacture,package, merchandise and distribute the final branded beverages to our customers and vendingpartners, who then sell our products to consumers.”

The company posted revenues of US$ 35 billion and net income of US$ 11.8 billion in 2010.Total number of employees on payrolls of the company during the period was 139,600 and thecompany sells its products in more than 200 countries (Form 10K: The Coca Cola Company,2010).This report looks at various marketing techniques used by Coca Cola to become one of the bestknown brands of the world.

If we consider business to be akin to war, then perhaps there is no better starting point than the writings of Sun Tzu [circa 400-320 B.C.]. ‘The Art of War’ is the oldest formalised writing focusing on the concepts and principlesof warfare and military strategy. Written over two millennia ago, it is still validin the modern world, not only in military terms, but also in business.

“Generally, he who occupies the field of battle first and awaits his enemyis at ease, and he who comes later to the scene and rushes into the fight isweary. And, therefore, those skilled in war bring the enemy to the field of battle and are not brought there by him. One able to make the enemy comeof his own accord does so by offering him some advantage. And one able tostop him from coming does so by preventing him. Thus, when the enemy isat ease, be able to tire him, when well fed, to starve him, when at rest tomake him move.” Sun Tzu, The Art of War, The Oldest Military Treatise InThe World

ENVIRONMENTAL ANALYSIS

PEST analysis is valuable while analyzing external environment where a business is conductedor where an organization is planning to start a business (Henry, 2008). This section studies theenvironmental factors that have an impact on operation of Coca Cola.

Political

Coca Cola is subjected to strict regulations since its products come under food category.However, few changes in law are expected to impact Coca Cola. Following are some suchfactors:-The issue of negative impact of Coca Cola manufacturing plants on environment hasbeen highlighted in many countries. Laws for environment protection and stringentregulations in this regard can impact the production process. Coca Cola can work towardsminimizing this impact by improving the efficiency of its processes and reducingwastage.-Government changes, civil unrest, military takeover and other disturbances in a countrycan affect sales and operations of Coca Cola in that country.-Expansion to a new country depends on the political conditions of the area. Cokeabstained from Israel for many years because it wanted to protect the Arab market, whichwas quite large.

Economic

Following economic variables can impact Coca Cola-Economic downturn in a country is going to have a negative impact on sales of CocaCola. The impact on the company would be specially huge since its products are nonessential.-Various macroeconomic factors such as inflation and labor price would impact operationsof Coca Cola.-Countries with high income per capita would have more to spend on products such asbeverages.SocialThe Coca Cola Company can be impacted by following social variables-Soft drink beverages are considered unhealthy and people are getting health conscious.This is both a threat and an opportunity for Coca Cola. While sales in traditional brands

might go down, Coca Cola can introduce new products in new categories-The company has witnessed opposition from social groups in some countries due to theenvironmental issues surrounding its production.-Social and culture of a country has a huge impact on food habits of its citizens and thiswould impact the portfolio that Coca Cola can introduce in the country

TECHNOLOGICAL

Technology is used at every step of Coca Cola’s value chain – syrup manufacturing, bottlingoperations and storage at retail shops. Following technological factors have an impact:-

Coca Cola’s strength is marketing and new marketing and advertisement channels have abig impact on the company. Coca Cola has been quick to embrace new mediums thathave developed over the years – radio, television and now internet. It is important for thecompany to connect to the customers through different channels.-

Different type of packaging has helped Coca Cola drive sales. Apart from the originalglass bottle, the beverages are now available in plastic bottles and cans. These are easierto store and transport.-

New machines and processes impact the manufacturing operations. Adoption of newtechnology allows a company to manufacture more efficiently, with better quality and ingreater quantity.-

The beverages need to be cooled before consumption. Therefore, consumption is limitedto the places that can provide the facility of cold storage

CUSTOMER ANALYSIS – STP ANALYSIS

This section looks at how Coca Cola views it customers and the way it designs the consumerstrategy. STP (segmentation, targeting and positioning) analysis is used to study customers.SegmentationAccording to Weinstein (2004, pp4) market segmentation is the process ofportioning marketinto groups of potential customers with similar needs and/or characteristics who are likely toexhibit similar purchase behavior.Objective of such a process is to analyze and understandmarket, identify opportunities and use or develop competitive edge to capitalize on thoseopportunities.The Coca Cola Company segments the customers based on the following criteria-Geographic segmentation: Coca Cola has segmented the worldwide market on the basisof geographies. There are various divisions created for major regions of the world andheads of each division report to the parent company. Lot of autonomy is given to eachdivision to run the operations.-Place of consumption: Coca Cola segments the market on the basis of the place ofconsumption of the beverage. Most of the consumption takes place on premise such ascinemas, railway station, restaurants etc, while rest of it takes place in homes.-Product type: Coca Cola segments the market on the basis of the type of productsbought by customers. The market is divided into Cola products and non cola products.Cola products currently provide majority of the revenues, but the proportion of non colaproducts is increasing.-Demographics: Coca Cola segments the market on the basis of demographics. Thesegmentation is on the basis of age as well as income.TargetingCoca Cola target different segments with different ads. Primary market of Coca Cola is youngerpeople in the age bracket 10-25 with people from 25-40 comprising of secondary market. Colaproducts are targeted towards people who want strong flavor, while diet cola and its variants aretargeted towards the sub segment that is health conscious.Coca Cola uses non cola beverages to target the health conscious segment of the market. Some

of the products such as Sprite specifically target teens and college going youth while others suchas Limca target young working population.

Positioning

Coca Cola position its products as refreshing and thirst quenching. The products are said to bringjoy, as apparent from Coca Cola’s latest tagline – Little drops of joy. The products are associatedwith having a good time with friends and family and enjoying everyday life. The products arealso marketed as consistent and of high quality.

COMPETITIVE ANALYSIS

This section discusses the strategic capabilities that Coca Cola has built over the years, and howit has helped the company in creating sustainable competitive advantages.

SWOT AnalysisSWOT analysis would give a good insight of the strategic capabilities and resources availableand the way these capabilities strengthen the competitive advantage as well as allow thecompany to exploit new opportunities (Kotler, 1991). SWOT framework analyzes both internalfactors (strengths and weaknesses) as well as external factors (opportunities and threats) thatdefine the market environment as well as capability of a firm to respond to the marketconditions. At the same time, distinction is also made between positive factors (strengths andopportunities) and negative factors (weaknesses and threats).StrengthsThe Coca Cola Company enjoys the following strengths that has seen the company become themost recognized one in today’s world-

Brand: The Company has a very strong brand across the globe. The brand has beenrecognized as one of world’s leading brands by various studies conducted by Interbrand,Businessweek and other experts. Apart from Coca Cola, the company owns other topbeverages brands such as Fanta, Sprite and Diet Coke. The Company has spent hugeamount of money over more than a century to build a brand that has a high customerrecall and is the most recognized one. It also allows the Company to go for brandextensions and introduce various types of beverages.-

Economies of scale: The Coca Cola Company is the largest manufacturer and marketerof non alcoholic beverages in this world. The company sells its products in more than 200countries. The large scale of operations ensures that the company is able to invest in new

markets and reap benefits when the business grows profitable there.-

The Coca Cola System: The whole supple chain of Coca Cola and its bottling system isa big strength for the company. It allows the company to target various markets globallyand take the bottlers’ help to gain knowledge about the local market. It also allows thecompany to expand rapidly to new markets without a big upfront investment.WeaknessesThough the company has been hugely successful, there are various weaknesses that need to beaddressed by the company. These are:-Criticisms regarding health and environmental issues: Products of the Coca ColaCompany are considered to be high in calories and harmful for health. Various groupshave advocated healthier drinks over carbonated ones. In 2006, the Company wasinvolved in a controversy in India when government agencies alleged that Coca Colacontains pesticides and is dangerous for health. Such negative publicity can cause a lot ofdamage to the company, especially in international and growing markets.-

Dropping sales in several countries: In recent years, the company has witnessed zero ornegative growth in various key markets. The performance of the company has been weakin North America, which is its largest market, in last few years. The company’sperformance has been weak in Japan, Latin America and South East Asia as well. Thiscould prevent Coca Cola from being aggressive in marketing and prevent the companyfrom higher growth overall.

Opportunities-Inorganic Growth and Acquisitions: The Coca Cola Company has been acquiringvarious local beverages companies aggressively over the last decade. Also, the companyhas increased its stake in major bottling operations. This has given the company morecontrol over the entire value chain and allows it to align the goals of these bottlingoperations with those of the company. The company acquired other companies in almostall major markets around the world. These acquisitions gave head start to Coca Cola inthe international markets and allowed the company to diversify its revenue stream.-

Growing healthy drinks and bottled water:The market for carbonated drinks is gettingsaturated in many Western countries and the trend is to move towards healthier drinks.Also, the market for bottled water is increasing fast globally. Coca Cola has developedand acquired various brands catering to these two segments. Coca Cola can use its strongbrand position in carbonated water to increase its presence in other beverages categoryand take advantage of these growing markets.Threats-

Changing trends:In carbonated drinks, Pepsico is the only real competitor of CocaCola. But the trend is to move towards healthier drinks and there is a big threat ofsubstitution facing Coca Cola. Possible substitutes include coffee, tea, milk, juices andenergy drinks. The company has already taken steps to address this issue by launchingproducts in the category of healthy drinks.-Dependence on third party bottling partners:The Coca Cola system of bottlingpartners, which is a strength for the company, is potentially a threat as well. The companydoes not have the ownership in most of the bottling operations and makes money byselling syrup to these bottling companies. The interest of The Coca Cola Company can bedifferent from the bottling companies as each of them try to maximize their profits. The

major dependence on independent third party vendors is a major risk to the company.This threat is being addressed by vertical integration as well as entering into long termpartnerships with the bottling companies.-Competition:Pepsico competes fiercely with Coca Cola in most cannot let down itsguard.

PORTER’S FIVE FORCE ANALYSIS

This analysis would give us a good idea of the competitive environment that the companyoperates in (Porter, 2008). The following factors define the competitive landscape for Coca ColaCompetitionThe largest competitor for Coca Cola is Pepsi Co. They compete in almost all the marketsworldwide. Coca Cola has higher sales worldwide, though Pepsi Co dominates the US market.There are other players in various beverages category, but none of them as large as Coca Cola orPepsi Co. The new competition in the industry is to increase the product portfolio and introducenew variants of carbonated drinks and non-carbonated drinks.Most of the strengths and weaknesses of Pepsico are similar to those of Coca Cola. Pepsicoenjoys good brand value as well as economies of scale. At the same time, it also has come undercriticism for health and environmental issues. While Coca Cola operates almost exclusively inbeverages segment, Pepsico derive a big share of total revenues from non-beverages categorysuch as chips and oats. This can potentially provide opportunities to Pepsico to take advantagesof synergy among various products. While Coca Cola is enjoyed by people from various agegroups, Pepsico mainly targets young people.Threat of new EntrantsThreat of new entrants is very low in this industry and the following factors are responsible:-

Brand name: It has taken these companies decades to build their brand and it’s not easyfor a new company to emulate that.-

Distribution channel:The two existing companies have wide distribution channel acrossthe world and it’s difficult to match up to that.-

Huge initial investment:The high cost of setting up manufacturing plants, transportationchannel and distribution channel is a big barrier for new entrants.-

Economies of scale:Both the existing companies enjoy large economies of scale thathelp in keeping the costs down. A new entrant would not be able to match the cost of thebiggies and would be forced out of the business.

THREAT OF SUBSTITUTE PRODUCTS

The threat of substitution is high for soft drink industry with products like bottled water, juices,tea and coffee readily available. To take care of this, The Coca Cola Company has increased itspresence in these sectors as well. For people who take soft drinks for its caffeine, tea and coffeecan be easy substitutes. In some cases, alcoholic beverages such as beer can be a substitute aswell. It costs nothing for a customer to substitute a soft drink with another drink and hence thereis a high threat of substitution. Many people are moving towards healthier drinks and substitutingsoft drinks with juices etc.Supplier powerSupplier power is low in case of Coca Cola. Following are the suppliers for the company:-Raw materials such as sugar and water are standard and the suppliers can be easilyreplaced without any problems.-Bottling equipment manufacturers are suppliers for Coca Cola since the company ownsstake in many bottling units. These equipments can be supplied by many companies andhence they have low bargaining power.- Other factors such as labor, power etc would not be a problem for the company.For all the inputs, Coca Cola has higher bargaining power since it enjoys economies of scale andorders in huge quantities from the suppliers.Buyer Power

In case of The Coca Cola Company, the bottling units are the buyers since the company sells thesyrup to them and rest of the activities are undertaken by them independently. But the companyowns many of the bottling plants and in such a case, buyers are the retail outlets.-

Bottling partners have low degree of bargaining power with Coca Cola. Though thecompany is dependent on bottlers for selling their product to the end consumers, they canreplace the bottling partners. To start the business, the bottling company has to invest alot and this creates a lock in for them, reducing their power.-

The power of mass retailers is moderate. On one hand, the brand of Coca Cola is verystrong and the retailers have to store the product to satisfy the customers. On the otherhand, the retailers can switch to other drinks without any cost and stop storing theproducts of Coca Cola.

STRATEGIC APPROACH AND COMPETITIVE ADVANTAGES

The Coca Cola Company is known for its marketing expertise and the company has alwaysfollowed a great marketing strategy that is responsible for bringing the success to the companyfor over a century. The biggest strength of Coca Cola is its brand. It has taken a lot of effort andgood strategy to create the widely known brand. Apart from this, there are various strategies thatCoca Cola has followed over the years in order to achieve competitive advantage using itsstrategic capabilities. These strategies include:-

Marketing and branding strategy:

Healey (2008) defines a brand as a promise ofsatisfaction and emphasis that good branding reinforces reputation, generates loyalty andassure quality. Few companies in this world have developed a brand as strong as CocaCola. The company has used its marketing resources to create a brand that is widelyknown and has become the biggest competitive advantage for the company. Coca Colahas been successful in creating brand loyalty among its consumers. This is a result ofsustained marketing efforts starting from early 20th century. Coca Cola has adoptedinnovating marketing techniques right from the times of Candler and Robert Woodruff.Apart from usual advertising through bill boards and newspapers, Coca Cola focused onorganizations, universities and colleges and this increased sales while promoting thebrand name.-Coca Cola’s glocal strategy:

Coca Cola has used its organizational capability to adopt aglocal strategy Gay et.al. (2007) – using a mix of central and local marketing functions inorder to achieve maximum marketing and distribution effectiveness. Using this, CocaCola maintains the strong global brand while introducing the local elements in themarketing to make sure that the product image is in harmony with the local culture.

NEW PRODUCT INTRODUCTIONS

: Coca Cola follows out to in approach while developingnew products. Coca Cola has always preferred taking note of customer preferences anddesigning its products according to them, instead of taking an internal approach – theprocess of taking stock of internal assets and expertise and using them to producesomething that customers would buy. Based on these, the company either introduces anew product or acquires a company producing the suitable product. This is essential tosurvive in the changing market and to change the product portfolio according to customerrequirements

CHANNEL ANALYSIS

This section looks at the communication and distribution strategy of Coca Cola.Communication – Innovative advertisingThe company has used every medium available for advertisement and has been on the edge oftechnology for it. Use of radio has been one of the oldest medium of advertising and with theadvent of television; the company became one of the first major advertisers through the medium.Coca Cola always presents itself as a pleasurable and refreshing drink. The Company hassuccessfully launched many famous campaigns such as “The Coke adds life” and “Have a cokeand smile” in 1970s; “can’t beat the feeling” and “Coke is it!” in 1980s; “can’t beat the realthing” in 1990s and “always life” in 2000s.The company sponsors major sporting events around the world and hires top sportspersons topromote the brand. The company also hires top models and movie stars as their brandambassadors. The company always portrays itself as the number one and has the best productsavailable. With the advent of internet, the company has been advertising online to connect withthe online population.DistributionCoca Cola has developed its distribution network all over the world. It follows two types ofdistribution strategy:-Direct selling: In this method, Coca Cola supply various products to retailers. Theseretailers may be retail stores, restaurants, cinema halls etc. The company uses its ownvehicles to deliver the products. Direct selling brings in only small part of the revenue.-Indirect selling: Most of the revenue comes from this channel. Coca Cola gets intopartnership with various distributor agencies. The company supply products to thesedistributors, who then make them available to the retailers.

In the traditional model, products are transferred from bottling plants to large distributors. Thesedistributors then transport the products to retailers or smaller distributors. Small distributor nodeis added in case of rural areas or areas with low density population. The small distributors thensupply the product to retailers. Most of the bottlers are under contract with Coca Cola. At thesame time, the Company has direct contract with big retailers such as Wal-Mart.

Coca Cola Company has introduced an innovative distribution mechanism in African countriesto help the local economy thrive. According to the company’s report,“Our unique distributionmodel allows the Coca Cola system to build relationships with small enterprises, creatingeconomic opportunity and wealth creation at the community level in developing markets. These micro distribution businesses, commonly known as Manual Distribution Centers (MDCs), arerun by local small-scale entrepreneurs who employ local workers to deliver our products tosmall retailers in their neighborhoods. They typically reach consumers in dense urban areas inthe developing world where traditional truck delivery is not feasible.”

The creation of MDCs has been going on under the initiative led by UNDP (United NationsDevelopment Programme). This programme calls on companies to identify the steps that can betaken to reach Millennium Development Goals (MDGs). This model ensures availability of CocaCola’s product in difficult to reach places while contributing towards development of the region.

CONCLUSION

Coca Cola is a truly global company with presence in multiple countries. The company’s biggestcompetitive strength comes from the strong brand that has been developed over 125 years ofconsistent marketing efforts. Economies of scale and the network with suppliers and distributorsalso contribute to the success.

Marketing and advertising has been the most important function that has taken Coca Cola to newheights. The company has adopted innovating marketing techniques right from the times ofCandler and Robert Woodruff. Apart from usual advertising through bill boards and newspapers,Coca Cola focused on organizations, universities and colleges and this increased sales whilepromoting the brand name.

GLOBAL MARKETING STRATEGY, STANDARDISATION OR/AND ADAPTATION

Many have written on topics related to global strategy, but only a limitednumber of conclusions have been reached.Mesadag (2000) argues that global marketing is a particular form of international marketing which – in its truest form does not exist. Its essenceis that it covers a broad spread of the world’s countries and that it strives toconsciously standardise its marketing strategy between those countries.Svensson (2001), comments that a company’s global strategy is closelyrelated to its corporate strategy.

The corporate strategy guides theperformance of a company’s overall business activities and the allocations of resources to achieve established business goals.Others state that when a company pursues a global strategy, it looks atthe world market as a whole rather than at markets on a country-by-countrybasis (Jeannet and Hennessey, 2001).Levitt (1983) argues that the optimum global strategy is to produce asingle standardised product and sell it through a standardised marketingprogramme. The challenge for the global corporation is to achieve low costoperations and also to produce products of a high standard. This strive for low cost through standardising products is key and will result in growth for thecorporation. Companies that dominate small domestic markets will graduallybe eased out by the low cost producing global corporation.Kogut (1985) in his perspective of global strategy, emphasises strategicflexibility, whilst Collis (1991) has summarised global strategy in the following4 points:

A global strategy is required whenever there are importantinterdependencies among a business’s competitive position in differentcountries. The acid test is whether a business is better off in onecountry by virtue of its position in another.

The sources of these interdependencies can be identified, includingscale economies (Levitt, 1983), accumulated international experience,possession of global brand name, a learning curve effect (Porter,1985), and the option value or cross-subsidisation (Hamel andPrahalad, 1985) that a multi-market presence confers.

The critical issues that a global strategy must address include theconfiguration and co-ordination of the business’s worldwide activities(Porter, 1986).

The organization structure should be aligned with and derived from theglobal strategy.

 

DEMETRIS VRONTIS AND IAIN SHARP

The question of whether to standardise or modify overshadows all the tacticaldecisions that are required from a strategist/international marketer. Itrepresents a very real tension between the profitability promised through costeffectiveness, which is greater when activities are controlled centrally, andthe market effectiveness that is promised if the offering is differentiated tomeet the needs of each geographic segment. 

Medina and Duffy (1998) are proponents of adaptation and define it as theprocess of extending and effectively applying domestic target-market-dictatedproduct standards - tangible and/or intangible attributes - to markets inforeign environments.The Marketing Mix (Product, Price, Place, Promotion, People, PhysicalEvidence and Process Management) is a “tactical toolkit” with which anymultinational company can implement efficient and effective strategy. Eachelement within the marketing mix can therefore be adjusted in order to gainoptimum environment fit and consequently meet customer diverse needs andwants.Levitt (1983) takes the opposite view and suggests that the globalcompetitor will seek constantly to standardise his offerings everywhere. He will digress from this standardisation only after exhausting all possibilities toretain it and he will push for reinstatement of standardisation whenever digression and divergence have occurred. He argues that the most effectiveworld competitors incorporate the same kind of products sold at home or inthe largest export markets.Vrontis (2003), the main supporter of integration, argues that the debateon adaptation and standardisation is a huge one and suggests that theexclusive use of either approach is too extreme to be practical.

The truth liesin neither of these two polarised positions. Both processes,internationalisation and globalisation, coexist and the decision onstandardisation or adaptation is not a dichotomous one between completestandardisation and adaptation. Rather it is a matter of degree and there is awide spectrum in between that the international marketer should be aware.The international marketers should have to search for the right balancebetween standardisation and adaptation and therefore determine the extentof globalisation in a business and adapt the organisation’s responseaccordingly. This is illustrated below in figure 2 in the Vrontis’ Framework of  AdaptStand Integration (Vrontis 1999).We have developed Vrontis’ AdaptStand Framework further, adding thefollowing calculations, to illustrate a subjective view of where Coca-Cola ispositioned on the continua. Figure 3 illustrates the elements of the marketingmix (7P’s) for Coca-Cola in international markets. It also reveals its level of standardisation and adaptation with number zero describing completeadaptation and number five complete standardisation. Any other number liesin the middle of the continuum.

PORTER GENERIC STRATEGY GRID

The use of a differentiation strategy is where the firm attempts to be diversefrom its competitors by adding something to its product that will provide aunique value to its customers. There are also various ways a firm candifferentiate depending on the industry it is in, however the costs of thisdifferentiation policy must be lower than the additional pricing the firm canobtain. Differentiation for Coca-Cola is achieved through perceived superior quality product, which surpasses their nearest rivals, and high brand imageand recognition.

The company has also used their promotion and packagingas a means of further differentiation, for example, the Coca-Cola bottle,which has become an internationally recognised symbol. The decision in1999 to revitalise the contoured bottle design was Coca-Cola’s first globalmarketing priority (Boutzikas, 2000). They capitalised on a resource thatnone of their competitors had or have as an asset. They can, therefore,adopt a premium pricing policy in many markets where economic conditionsallow.It should also be noted that Coca-Cola is positioned in the CostLeadership quadrant. 

Aaker (1998) points out that there are several approaches a firm can taketo become a low cost producer, which can be used in isolation or as acombination. The most basic way to a low cost is to remove all the ‘extras’from the product and produce a no frills offering. The danger in this strategyis that the way is paved for a feature war. The design or make up of theproduct can create cost advantages, for example, the use of alternativematerials. The production and operational processes a firm employs can alsoreduce costs. Another example would be the efficient use of distributionnetworks, manufacturing systems or the use of low cost labour and productinnovation.

 

THE STRATEGIC POSITIONING OF COCA Cola either approach too extreme to be practical and urges multinationalmarketers to search for the right balance between standardisation andadaptation.Coca-Cola’s core ‘global’ brands are mainly standardised, but with anumber of adaptations taking place. Although the company may strive for acompletely standardised strategic approach, drawing on the associatedeconomies of scale, in reality they are following the Integrated AdaptStandapproach as advocated by Vrontis (2003).The company’s effectiveness and profitability is obviously well supportedby their strong competitive position and market share in their primary productmarket – Coca-Cola. Other brands like Diet Coke, Sprite and Fanta havealso been internationally recognised and profitable. Its’ international successis achieved by the company’s strategy and tactics, which complement eachother and work in harmony providing the optimum return bounded byefficiency.

The company is thriving as it is both effective (doing things right)and efficient (doing the right thing).Coca-Cola is adopting Differentiation and Cost Leadership strategies(Generic Strategies). In terms of Differentiation, the firm attempts to bediverse from its competitors by adding something to its product that willprovide a unique value to its customers. This is achieved through well-designed and managed marketing activities resulting to perceived superior quality product and high brand image and recognition. Further, CostLeadership is achieved not only through economies of scale, but also throughlearning,

knowledge and experience in production and operationalprocesses, and through effective/efficient distribution networks andmanufacturing systems.In relation to Ansoff, Coca-Cola is using a number of strategies. Initially, itused the Market Penetration Strategy and become established in its homemarket by increasing market share and product usage. Then, it used aMarket Development Strategy by expanding its operations into foreignmarkets. Later, it developed new products, both at a national andinternational level(Product Development) and then started operations in thecarbonated soft drinks market (Diversification Strategy).

This also ensures that Coca-Cola has a comprehensive product portfolioin each market, increasing the likelihood of a purchase of a Coca-ColaCompany branded product. This portfolio is well managed and enables thebest fit between the company’s strengths and weaknesses to theopportunities found in the environment.In considering the strong competitive position of the firm in a highlyattractive market, it is suggested that Coca-Cola should Protect its Position(Mckinsey Matrix). This can be achieved by concentrating efforts onmaintaining its existing strength by investing to grow at maximum digestiblerate.Coca-Cola should maintain its marketing orientation not only in itsstrategic approach but also in its tactical day-to-day operations. It shouldconstantly undertake market research

MARKET SEGMENTATION Instead of trying to identify teen segments by specific demographics, this campaign will appeal to youth with several types of attitudes, perceptions and lifestyles to give it the sense of unity it is looking for.

PRIMARY MARKET (13-to-15 year olds)

This segment is important to consider because it is influencing its parents’ decisions as well as its friends’ decisions. Throughout the next few years this age group will be transitioning from decision-influencers to decision-makers. Currently, they are doing what older segments are doing, buying the products they are buying and mimicking their styles and trends.

16-to-18 year olds:

This older segment is making its own decisions. They are driving, which means they are going to the store on their own. stopping at gas stations, stocking up dorm rooms and buying soft drinks for social events. For the first time they feel a sense of independence and are excited to make their own branding choices.

SECONDARY MARKET (21-to-24 year olds)

Coke must retain those who have chosen Coke as their primary soft drink brand by this point. At the same time, Coke must make switchers out of those who have not chosen a specific soft drink brand through social events, which are a priority for this segment.

ICONIC BRAND

“The Coke Side of Life” campaign takes on the most recent cultural contradiction in the youth segment by addressing its widespread desire to be viewed as expressive individuals and alleviating anxiety created by misrepresentations in reality television. Using Holt’s theory,The Stalwart Group will position

Coca-Cola Classic – an already iconic brand – as a product that accepts and promotes individuality, expression and realism as the solution to the false representation of truth in reality television.

The truth is, you are often a product of your environment – a combination of everything you surround yourself with. Our target market is slowly accepting what reality television portrays as genuine. From make-up to friendships, teenagers keep everything very near to the surface – just in case a new trend or belief comes along and changes what is considered “cool.” Individuality lies underneath the surface and is not invited by society to shine through. The Stalwart

Group’s integrated marketing communications campaign will break through reality television’s chokehold on today’s youth by addressing and resolving the cultural contradiction that youth experiences on a daily basis.

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