Coca Cola Company marketing project
Instructions:-
Your marketing program report MUST be about one of these brands
Lancome,
Coke, or
Apple.
Product
a) Identify the product types they sell.
For example, for Frito Lays Inc. some of the products they sell are potato chips, corn chips, and tortilla chips.
b) Discuss where you think their products are in the product life cycle and explain why.
c) Identify the master brands. For example, Doritos, Lays, Fritos, Cheetos etc.
d) Discuss if their strategy is multi product branding, multi branding, or private branding and explain why.
e) Discuss and give examples of their line extensions or brand extensions.
f) Discuss if they have product placements. Chapter 13
Price
a) Identify the price point ranges for each product type.
b) Discuss why or why not you feel their strategy is penetration pricing or skimming.
c) Discuss if they segmented the market by price or some other segmentation approach.
Place
a) Indicate which channels and which retailers they sell their product.
b) Discuss if their distribution strategy is intensive, selective, or exclusive.
Promotion (Advertising)
a) Discuss the types of advertising and promotions they have implemented and the message appeals (chapter 6).
How have they achieved source credibility and attractiveness in their advertising. (chapter 6)
b) Discuss their use of broadcast, print, and support media.
What are some of the advantages of them advertising their particular product on television or magazines?
Which of the 4 major forms of outdoor advertising have they utilized? Chapter 13 Provide pictures if available.
c) Discuss the advertising appeals and executions they use.
d) Discuss which of the 6 Public Relations tools you found evidence of them implementing.
Appendix: (not included in the word count)
Include any supporting information, articles, and numerous
photos / images of logo, products, packaging, in store displays, print ads etc. and the links to where you found the items
Solution
Coca Cola Company marketing project
Introduction
As the most famous soft drink brand, the Coca-Cola Company was founded in 1886 in Atlanta, Georgia, United States. Over the years, the company has witnessed unprecedented growth, spreading over to virtually every country in the world and is arguably the most recognizable soft drink brand in its category. Although its popularity has waned over the recent past with the growing shift towards health drinks it still commands the largest market share, with revenues hitting $42 billion in 2016. The company’s goal remains to utilize its assets i.e. its brands, global reach, strong distribution channels and financial strength to become more competitive while at the same time creating value for the shareholders. In the sections that follow, this paper discusses the company’s marketing mix, highlighting what the company continues to do to attain its marketing goals. Various elements of the company’s marketing mix, commonly known as the 4p’S of marketing (product, price, place, promotion) shall be discussed.
Product strategy
Coca-Cola prides itself as the leading soft drinks producer in the world, followed by its archrival in the industry, Pepsi. The company is famous for the production of a wide range of products such as regular Coke, Fanta, Sprite, Coke Zero, Diet Coke, Minute Maid, Dasani, Coke Life, Fresca, Honest Tea, Powerade Zero among many others. In total, the company produces a total of over 3500 beverage drinks and has over 500 brands in the soft drinks, soy-based Coca-Cola and energy drinks etc. These products come in various sizes and packaging’s. Its leading brand, the regular Coca-Cola simply known as Coke, for instance, is sold in packages of 200ml-2litre glass bottles, cans and plastic bottles commonly known as pet which comes in different shape and color depending on the product and brand.
Due to its large number of products, it’s difficult to determine where all the Coca-Cola are in their life cycle. However, the Coca-Cola, Sprite, and Fanta have a very large market share in their respective segments although their growth is either stagnant or in the declining phase. As anchor brands, the impact of their stagnation or decline is clearly felt in the company’s overall decline in revenues from $46 billion in 2014 to $44 billion in 2015 and finally $42 billion in 2016 (The Coca-Cola company annual report, 2016).
The company Coca-Cola a multi-brand strategy in which it markets its various brands under different and even unrelated brands. For instance, Coca-Cola, Sprite, Fanta, Stoney, Krest, Dasani etc are different brands marketed by Coca-Cola. The main advantages of this strategy are that it leaves little space for competitors’ products by saturating the market since it fills all quality and price gaps and also keeps product and brand managers in competition with their peers which results in greater sales. Under these brands are many extensions with the Coca-Cola brand, for instance, being a family of Coca-Cola regular, Coca-Cola Lite, Coca-Cola Zero, etc while the Fanta Brand encompassing Fanta Orange, Fanta Pineapple, Fanta Black currentCoca-Cola etc.
Distribution channels
In its more than 130 years legacy and with operations in over 200 countries, the company has developed a very extensive distribution network which is very complex. The company produces its beverages using a secret formula in its Atlanta plant and then transports it to its various bottlers all around the globe. These bottlers include Coca-Cola Femsa in Mexico; Coca-Cola European Partners for the European region, Coca-Cola HBC AG, Arca Continental and Coca-Cola Isecec .A.S. Apart from the secret formula, the company also ensures that all bottles used in its packaging are standardized for each brand in all markets. Bottlers utilize the approved Coca-Cola manufacturing technology to process these drinks, package them in the various bottle sizes and transport them to stockists, then to appointed distributors and finally to retail merchants from where final consumers can access them.
The company employs a very extensive distribution network that ensures that its products are available in most of the supermarkets, hotels, food joints and retail shops across the globe. Unlike most consumer goods, coca cola products are in most cases distributed by the wholesalers to retailers on a need basis. Due to the nature of the glass packaging, the company has a reverse distribution strategy that allows collecting all leftover bottles from the retailers for recycling hence reducing costs of production. It also trains its retailers and wholesalers on various aspects of their products such as preservation and cooling so as to ensure that the product reaches the final consumer in great quality.
Pricing Strategy
The company’s long-term pricing strategy is best described as value-oriented. Although the company leads in most market segments, it faces fierce rivalry from its main competitor Pepsi, which has over the years forced the company to maintain very affordable prices in order to attract and retain its customer base (Belch and Belch, 2007). Although shareholders at some point felt that the company’s prices were too low, the company’s pricing strategy was instrumental in helping it to weather the effects of the economic recession that hit the United States. Its sheer size and global brand, however, allows it to afford periods of price drops or price promotions which has been instrumental in maintaining its market share.
The company’s global pricing strategy for any new product has been penetration pricing where it attempts to undercut competitors to gain market share (Doole & Lowe, 2008). When it introduces a new product, Coca-Cola puts a lower introductory price so as to gain customers from its perceived competition which has been instrumental in ensuring that company attains success in most of its products. Its leading products for instance retail at a lower price than that of its competitors in most market segments. For instance, a 330ml can of Pepsi in New York goes for $ 0.93 while that of Coca Cola goes for $0.75
The company also employs second-degree price discrimination in its pricing policy. This means that they charge different prices for their products in different market segments. For instance, a 2 little bottle of coca cola retails at $2.28 in New York while the same bottle would retail at % $1.5 in Kenya. Since the soft drinks and beverage markets are considered an oligopoly with Pepsi and Coca-Cola as the main products, Coca Cola charges its products depending on what their competitors charge (Howard, 2011). In the event that coca cola prices are much higher than those of their competitors, then the company runs the risk of having its customers shift to their competitor products especially in those markets such as developing countries where consumers are very price sensitive. The company, however, offers a quantity discount on bulk purchases or even offering bundling of products in order to encourage bulk purchases and drive sales.
Advertising and Promotion
The company invests billions of dollars in promotion and advertising activities around the world in their effort to increase or maintain its market share and leadership over its key competitor, Pepsi. With a war chest of more than $4 billion annually (The Coca-Cola company annual report, 2016)., the company’s global promotional strategies focuses on aggressive marketing campaigns using media such as television, social media and other online media, print and sponsorships. Over the years the company has been involved in major sponsorship campaigns, sponsoring many events such as American Idol, Fi Fa World cup, Olympic Games, NBA, BET Network, NCAA all of which are broadcast in the media etc. Currently, the company is running the ‘taste the feeling’ television advertise which reminds customers of the joyous and memorable moments that Coca-Cola continues to bring to their lives. The main advantage of television advertising is that it’s able to reach the millions, even billions of people at the same time, unlike other forms of advertising which may have a much lesser reach.
Besides media advertising, the company has invested in various outdoor advertising platforms such as billboards, buses, stadia branding, mobile billboards, street furniture such as kiosks and shades etc. This is an effective marketing effort which ensures that it creates lasting memories of their brand as it supports other advertising efforts such as print and broadcast. The main advantage of outdoor advertising is that it is more lasting and cheaper compared to other forms of advertisement such as print and broadcast media advertisement.
Coca-Cola also provides special incentives to its distributors and retailers to reward them for their efforts in pushing the coca cola products (Hassan, Amos & Abubakar, 2014). The company also provides refrigerators and coca cola branded name advertisements that help in marketing the coca cola brand in their stores. The company also engages supermarkets and convenience stores where it ensures that special emphasis is given to their shelf space which allows for more visibility of its various products. The company is also involved in various socially responsible activities across the globe such as environmental conservation which has been helpful in creating loyalty for the brand.
Besides the company’s marketing and promotions programs, the company, through agreements and on a discretionary basis, provides marketing and promotional services to its bottlers through the development of new products, packaging and equipment that assist all stakeholders involved in the product supply chain leading to increased sales for their products. In total, the company provided $6.6 billion to bottlers, resellers and other clients of its products for the participation in marketing and promotional programs in 2016 (The Coca-Cola company annual report (2016).
References
The cocacola company annual report (2016). Available at: http://www.coca-colacompany.com/content/dam/journey/us/en/private/fileassets/pdf/investors/2016-AR-10-K.pdf
Rink, D, and Swan, J (1979) Product Life Cycle. Research: A Literature Review, Journal of Business Research, Vol. 7, Issue 3:219–42.
Howard, T (2011) Coke finally scores another winner, USA Today, 4 November 2011. abcnews.go.com/Business/story?id=3788224.
Hassan,D.N., Amos, A.A, & Abubakar, O.A (2014) An evaluation of marketing strategies undertaken by Coca Cola Company as a multinational corporation in Nigeria
Available at: http://www.iosrjournals.org/iosr-jef/papers/vol3-issue2/Version-2/B03220510.pdf
Belch G.E. and Belch, M. A (2007) Advertising and Promotion. An integrated marketing communications perspective. Seventh edition
Doole, I & Lowe, R. (2008) international marketing strategy analysis, development, and implementation. Fifth edition
Appendix 1
Figure 1: Some of Coca Cola’s range of products
Figure 2: One of the current TV adverts by Coca Cola: Taste the feeling!
Figure 3: A Coca Cola billboard for the Christmas season
Figure 4: One of the Coca Cola branded fleet of trucks