Coca cola and their internation marketing strategies

Coca-Cola is one of the world leading and largest Company in the sector of beverages. It was established in 1886 by Dr. John Pemberton who was a pharmacist of Atlanta, Georgia USA. The brand has since become household drink in more than 200 countries across the world. Carbonate drinks are the single largest component in Coca-Cola Company which account for nearly 78% of the total volume sold in 2008. The company has more than 3000 products of beverages and has nearly 500 brands in its portfolio includes Coca-Cola or Diet Coke family, Coca-cola enterprise (CCE). Likewise, wide range of carbonates including Fanta, Lilt, PowerAde and sprite (Coca -Cola, 2008)

Company profile:

The Coca-Cola Company logo.svg

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Type

Public (NYSE: KO)

Dow Jones Industrial Average Component

Industry

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Beverage

Founded

1892 (1892)

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Headquarters

Atlanta, Georgia, United States

Area served

Worldwide

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Key people

Muhtar Kent (Chairman and CEO)

Products

Coca-Cola

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Carbonated Soft Drinks

Water

Other Non-alcoholic beverages

Revenue

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increaseUS$35.119 billion

Operating income

increaseUS$8.449 billion

Net income

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increaseUS$11.809 billion

Total assets

increaseUS$72.921 billion

Total equity

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increaseUS$31.317 billion

Employees

139,600

(Source: Coca-Cola Company profile 2010)

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Coca cola in UK

Coca-Cola first introduced in UK in 1900 when Charles Candler, son of The Coca-Cola Company founder Asa Candler, brought a jug of syrup with him on a visit from the US to UK. It was first sold in the UK on 31 August 1900. However, sale didn’t go on frequently until the early 1920s. (http://www.coca-cola.co.uk ).

The market of carbonate in the UK is normally dominated by relatively few companies. These are, in the main, subsidiaries of global corporation such as the Coca Cola Company and Pepsi CO. Mainly, the major brand of Coca -Cola Company is coke or simply Coca-Cola. Other major brands of Coca-Cola UK portfolio contains Diet Coca-Cola, Cherry Coca-Cola, Fanta , Lilt, Sprite, Dr Pepper and Schweppes. Dr Pepper has been on sale in the United Kingdom since 1982, is account to more famous among the young and teenagers peoples in the UK.

The operations of the Company in the UK are categorized among CCE and Coca-Cola Great Britain (CCGB), where CCE is the manufacturer and distributor, likewise CCGB belongs to the brands which have more responsibility in the field of marketing (http://www.coca-cola.co.uk ).

Coca cola in Nepal

At first Coca-Cola was introduced in Nepal in 1973, which was imported from its neighbour country India. Local production of Coca-cola in Nepal was started in 1979, with the establishment of Bottlers Nepal Limited (BNL). Coca-Cola Sabco was provided the right of bottling from the Coca-Cola Company to Nepal in 2004.

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BNL has two main distribution channels in Nepal, which are situated in the capital city Kathmandu and Bharatpur municipality. The Marketing, Sales and Distribution strategy for BNL is mentioned as ‘Refresh the Marketplace’ and contain a robust Consumer Response System to deal with the concerns, ideas and suggestions of the consumers.

BNL is also dedicated to support the community through different programmes, mainly in the sector of health. In relationship with the local community, BNL also support by providing a Free Health Check-up Clinic at Bharatpur municipality (www.cocacolasabco.com).

Company Strategy

The ‘Coca-Cola’ brand has been implemented the global marketing strategy. They are taking into account the whole world into the single market place and uniform marketing strategy was introduced by Coca-cola for many years, at present the trend is changing and various marketing campaigns are being prepared for the development of the Company in different regions of the world. Basically, decisions related to the Business are made on a domestic basis to fit in with the culture and needs of the domestic community. In 1919 Coca-Cola decided to expand its business in the global community. The Coca-Cola Company decided to take its operations around national boundaries and the research of its marketing was started in USA, china and other many countries of the global world. Due to the successful and efficient marketing research of Coca-cola, it was able to expand its business globally in different places of the global world (Source: www.thecoca-colacompany.com)

Advertisement

 If we consider on advertising perspective of Coca-Cola Company, advertising has more successful power to increase customers demand worldwide. Basically, advertising has to be in line with the domestic culture. An adapted marketing mix defines adjusting the mix with the established culture, geographic, cost-effective and other differences in different nations of the globe.

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Coca-Cola Advertisements in Nepal

Radio Nepal. (Because it is accessible in most of the area in Nepal.

Wall advertisement in rural area.

Promotional activities such as sponsoring in a class football clubs of Nepal and organising International Cricket Tournament.

Regional F.M. Station targeting young people in urban area of Nepal.

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(Source: www.cocacola.com.np).

Advertisement of Coca Cola in Rural Area of Nepal.

Coca Cola Advertisement in Rural Area of Nepal, Wikimedia Commons

Figure: 1.1

Source: www.commons.wikimedia.org

Advertising Strategy

Coca-Cola realised that the communication media used in cities and urban areas would not work in villages because of low penetration of conventional media.

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The company ensured that all its rural marketing initiatives were well-supported by mouth to mouth publicity.

Coca-Cola Advertise in UK

Coca cola follow integrated marketing communication theory in developed and advance country. In UK TV advert carries a particular logo, images and message, then all newspaper adverts and point-of-sale materials should carry the same logo, images or message, or one that fits the same theme. Coca-Cola uses its familiar red and white logos and retains themes of togetherness and enjoyment throughout its marketing communications.

Don caster Rovers Coca Cola Advert – Piccadilly Circus – London

http://farm3.static.flickr.com/2046/2498475157_81d809fede.jpghttp://t2.gstatic.com/images?q=tbn:ANd9GcRnypilTFEvNz8lmRIDNxCtmxwqa8WXszPAZwr0mIw5bx7BE5uFmAhttp://t2.gstatic.com/images?q=tbn:ANd9GcRnypilTFEvNz8lmRIDNxCtmxwqa8WXszPAZwr0mIw5bx7BE5uFmA

http://t2.gstatic.com/images?q=tbn:ANd9GcRnypilTFEvNz8lmRIDNxCtmxwqa8WXszPAZwr0mIw5bx7BE5uFmAhttp://t2.gstatic.com/images?q=tbn:ANd9GcRnypilTFEvNz8lmRIDNxCtmxwqa8WXszPAZwr0mIw5bx7BE5uFmA

Figure: 1.2 (Source: www.flickr.com)

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This place is the most popular and historical place in the London. More than 100,000 people visit it each day. Marketing affects perception of customer. This type of advertisements has direct effect on customer perception from multinational and multicultural tourist in UK. They have different advertisement and different type of product in the base on different demographic and behaviours people. When we compare the coca cola and other carbonate soft drinks advertisements in this time we can get totally different between each other. Coca cola only highlight its name rather than other things, the product promote itself. Coca- Cola brand image and it’s perception between the competitors helps to mouth publicity all over the world.

Marketing Communication theory and Coca-Cola

Marketing communication is the systematise relationship between business and its potential market where the marketer assembles a wide and different variety of ideas, massage, designs, forms, media shape and colours both to communicate idea to and to stimulate a particular perception of Coca-Cola Company by individual people who have been aggregated in to their target market Coca-Cola use the number of Marketing communication tools for assemble such as personal selling, sale promotion , public relationship and advertisement.

(Source: Smith, Berryet al, 1997)

Communication strategy and business process in rural area in Nepal

Coca Cola lunched simple wall Advertisement in Rural Area of Nepal. This has one of the simple communications strategies of Bottlers Nepal Limited. People who live in the rural area t haven’t any equipment of media such as TV, FM, Internet and good facilities of transport. Coca cola provides coke freeze to their consumer for selling their own product and they have strongly motivated to sell only their product.

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The model of Simple communications shows a correspondent sending a message to the receiver who receives and understands that message. Actually, real life is not simpler – many messages may very difficult to get sense, fail to arrive or, are simply ignored. By understanding the needs of audience, as well as emotions, interests and activities it is vital to ensure the truthfulness and relevance of any kinds of message.

Marketing System

Input

Processing

Output

Feedback

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Figure: 1.3: Marketing communicates process in rural place of Nepal.

Market Segmentation in Nepal :

In the past the market of Nepal was generally practiced the approach of mass marketing with variety of product. Due to the changes in socio-economic field and developments in transport and communication field Nepalese marketers are conscious in market segmentation. Such type of realization has reinforced by the marketing strategies of global Companies such as Coca Cola.

The points which are given below describe the practices of market segmentation in the context of Nepal.

1. Non-systematic: generally, segmentation of marketing is not based on the research of systematic market. Previous experiences, management feeling and strategy of competitors have inclined marketing segmentation.

2. Variables for Segmentation: Different types of variables mainly applicable for consumer market segmentation are as follows.

Geographic

Demographic

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Psychographic

Behavioural

3. Lack of Information: Generally, Nepalese marketers require complete information about the characteristics of consumers. They lean to regard research of marketing as a “wasteful cost”. This has embarrassed the effective evaluation of marketing segmentation in terms of their attractiveness and suitability. Risks are not research properly.

4: Government Policy: Policy of government in Nepal is not very supportive for marketing. They do not observe businessman as collaborators for development. Limitations for movement of goods and controls have discouraged the segmentation of market.

5: Lack of Ethical Considerations: considerations on environmental and welfare are generally disregarded for market segmentation in the context of Nepal.

Points which are mention above clearly indicate that the concept of market segmentation is at a preliminary stage in Nepal. The importance of market segmentation is expected to enlarge in the coming years.

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Target market of Coca-Cola in Nepal

Coca-cola targets the 15-40 age groups and is consumed by both men and women. It is really famous in young generation in Nepal and enormous chance of showing off your coolness attitude towards the opposite sex. It is also famous and widely used in restaurant, parties and social occasions.

Market share and sub product of Coca-Cola in Nepal

According to the Bottlers Nepal, it is planning to make the investment nearly $10m in the next three years to increase its operations of bottling and commence a brand of mineral water for the market. The bottler of Coca-Cola product in Nepal will use the resources to modernise its bottling plants in the capital city Kathmandu and Bharatpur municipality.

Coca-Cola Sabco, one of the bottling partners of Coca-Cola Company, has invested nearly $45m in the last five years, and produces more than one million bottles of carbonated soft drinks every year. According to global marketing research firm ACNielsen Coca-Cola has a 67.8% market share in the field of carbonated soft drinks business of Nepal.

Market segmentation in UK

Beverages items of the coca-cola Companies are generally for all customers. Generally, there are some products, which are targeted to the specific customers. For example, diet coke and soft drinks are targeted to the customers who are older in age, normally between the age of 25 and 39. PowerAde sports water aim those who are fit, healthy and do sport. Winnie the Pooh sipper cap Juice Drink aim to those children whose age is between 5 to12.

Positioning

Positioning is the method of generating the image the product holds in the mind of customers, relating to competing products. Coca cola and Pepsi cola both of them make soft drinks, Pepsi cola may try to compete but they will still be seen as down market from coke.

Coke has been situated on the process of positioning by direct evaluation and has located their products to promote their target markets. Most of the people produce an image of a product by comparing it to another product, thus evident through the famous battles between Coca-cola and Pepsi cola items.

Product life cycle:

While concerning to each and every product or service ever positioned before the consumer i.e. in the long term basis all the existing products and services are quiet. So most of the product may bear, grows, matures and dies. So in the business-related market place products and services are produced, started and introverted in a process which is known as Product Life Cycle.

To be able to market its product perfectly, a company should be conscious with the product life cycle of its product. Normally, the standard product life cycle should have five steps which are development, introduction, growth, maturity and decline. In the case of Coca-Cola presently it is in the stage of maturity, mainly it is supported by the fact that they have a large number of loyal groups of regular customers.

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Coca-Cola presently in the maturity stage in UK but it has still growth stage in Nepal.

C:Documents and SettingspoudelnDesktopimages[3].jpg

Figure: 1.4; Product life cycle

Financial Market share of Coca -Cola Company in UK

Coca-Cola Company has calculated strong second-quarter profits. In 2010 total profits was $2.37 billion up 16 percent from a year ago and closely above forecasts of $2.3billions. The share price of beverage maker was reached 2.3 percent in the first fifteen minutes of New York trading. Total revenues growth up 4.8 percent to $8.67 billion. Between them the best growth markets was Brazil, where as total sales volumes were up 13 percent, and India, up 22 percent since 2009.

(Source: bbc.co.uk/news/business, 2010 report)

Competitors Analysis

Coca-Cola Enterprise is known as the subsidiaries of the Coca-Cola Company. In 2008

carbonate of UK was esteemed nearly £6billion; in which Coca-Cola hold nearly 60 percent value in the sector of retail and on-trade. According to mintel (2008), Britvic soft drink recognized as UK subsidiaries of PepsiCo and is known as the main competitor was 2nd place in the field of market shares of 15 percent retail sales. Flagship products of PepsiCo in soft drinks categories are Pepsi, Pepsi Max, Diet Pepsi, Gatorade and Mountain Dew, and the company of Coca-Cola also owns Tropicana and Dole, the world’s leaders in fruit juice. GlaxoSmithKline PLC, a giant in the sector of healthcare brands, is the 3rd largest carbonate drink and is also on a different level from most drinks companies in UK. Likewise, the company also focused in medicines and oral care, also on other three famous drinks items such as Lucozade, Ribena and Horlicks.

Coca-Cola Enterprises had a turnover of £1.43billion in 2006. Likewise Britvic PLC recorded total branded revenues of £716.3m, up by 5.7 percent on 2006. John Sicher (2009) stated that Coca-Cola was the number one brand with nearly 42.7 percent in 2008. Similarly, PepsiCo was 2nd, with 30.8 percent; therefore these market shares for both of them have quietly decreased from the end year 2007 to 2008. The volume of Coca-Cola was also decrease by 1.0 percent since 2007, whereas the volume of PepsiCo products was increased by 0.3 percent. Zero coke is also one of the most significant products of KO’s new innovations. Such types of beverage items are marketed like as calorie-free version of Coca-Cola model, by omitting the label of diet.

(Source:www.ivythesis.typepad.com)

Top ten Companies of Soft Drinks in 2009 by market share are given below.

Coca-Cola (& bottling partners)

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PepsiCo (& bottling partners).

Nestle.

Suntory.

Dr Pepper Snapple.

Red Bull.

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Danone.

Kirin.

Asahi Breweries.

Ito En.

(Source: www.financenews.co.uk)

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Coca-Cola Company has taken its spot as No 1 Company in annual ranking of the ‘100 Best brand of the global world’ followed by the different Companies like IBM, Microsoft, Google and GE.

The report prepared by the Inter brand which was uses by making combination of analysts’ projections, company financial documents and its own qualitative and quantitative analysis to arrive at a net present value of the year 2010 approximate that Coca-Cola brand value at about $70.5 billion, up by 2% since 2009,

Top 5 Global brands in 2010

Ranking

Name of the Companies

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Total Brand Value ($)

1

Coca-Cola

70.452 millions

2

IBM

64,727 millions

3

Microsoft

60,895 millions

4

Google

43,557 millions

5

GE

42,808 millions

(Source: The Himalaya Times, 2011)

Figure Source: 1.5: (Top 5 Global brands in 2010)

In most of the countries of the global world the market share of Coca Cola and Pepsi cola might be 50-50, but in the case of Nepal, the structure of the market share would be 3:1. Then the actors which are credited for this data of the market share of the Coca Cola Company may not be determined easily. As far as we know, those factors should be the management and the quality it has maintained. (Source: www.ktm2day.com).

In the case of Nepal quantity of production and distribution of Coca-Cola product was not constant before a couple of years because of the political situation of the country. Political parties and the workers went on for a strike all over Nepal in Bottler’s Company which was directly affected to the distribution and production.

On the other hand, In the case of United Kingdom the market of the carbonate is dominated by relatively few companies which are subsidiaries of global corporations such as the Coca Cola Company and Pepsi Co. In fact, Coca-Cola, BSD and own label alone report to make fit over two thirds of the carbonates market volume in the United Kingdom.

Market share of Coca cola by area

Area

NORTH AMERICA

LATIN AMERICA

EUROPE &MIDDLE EAST

ASIA

AFRICA

Volume

30%

25%

22%

17%

6%

RANKING

1

2

3

4

5

Figure: 1.6

(Source: Business plan on coca-cola 2010)

Financial objectives

Coca Cola Enterprises announced long term financial objectives on 7th September 2010 are given below.

Growth of revenue will be 4% to 6 %;

Operating income growth of 6% to 8 %;

Income of per share growth will be in a range of high single-digit.

Return on invested capital improvement should be on 20 basis points or more per year.

Marketing Strategy

Marketing strategy of Coca Cola enables to be the responsible company to gain goodwill of the customers of the global words. When we ask anyone who are living at any part of the global word they know and test coca- cola or not, they will say ‘yes’. Coca- Cola products are determined not only to make great drinks, but also to contribute to those peoples who are living around the global world, through its Commitments in the sector of education, health and safety, wellness, and diversity. Coke strives to be a good national, constantly shaping the decisions of business to improve the quality of life in the neighbourhood in which they do their business.

Processes of Communication of coca-cola in UK.

The processes of communication in Coca-Cola are given below:

Message conceived – decision can help to send message and provide reasons why. Message encoded – information for notice and what type of layout should be more reliable and most useful etc. Communications medium selected – in this type of notice. Message decoded – language and knowledge should be used to send out the original message. Message interpreted – which deals with meaning of notice, different ideas of recipients. Feedback supplied – feedback should be supplied to sender, for example opinions, response etc.

The diagram given below shows the sample of the process of communication of coca-cola.

N

N

Message . Feedback

Figure: 1.7: Process of marketing Communication (source: Schramm 1955)

Recommendation an online strategy (for promotion)

Form the above study and e-market research; I would to like recommendation for coca-cola company, which might be key point for success on future

Website Design: E-marketing is the new and important way to build customer perception over the brand, it is important to develop attracting, informative and encouraging website page to the customers for any brand. While, the use of internet in Nepal is increasing dramatically, it is good idea for Coca-Cola Company to develop their own web site with different kind of information, ideas, promotion tools, and opportunities etc. It has multiple advantages such as; E-commerce is available 24 hours and 7 days a week, which can be used for product information and promotion. It is easy to locate merchandise and easy to change its layout in low cost and time.

Face book and yahoo in Nepal is being popular day by day, it might be good idea if the Coca-Cola Company Nepal, add there advertisement in Face book web page. It will really helpful to promote their product in Nepalese market.

Salesforce.com

The Sales Cloud and the Service Cloud, our applications for sales and customer service (also known as customer relationship management or CRM.

Force.com, our cloud platform for building and running business apps ,

Chatter, our enterprise collaboration application.

Salesforce.com is the website which helps to manage the customer service database by establishing social and business networking with its stakeholders.

E-couponing and group on

Addition Recommendation for Coca-Cola

Coca Cola Company should try to give more priority on its infrastructure in the market to facilitate their consumers.

As the conclusion of the study conducted by the international firm Nepalese people

Coca Cola Company should produce coca cola product according to the local demand and different age groups.

Marketing team who are devoted for the development of Coca Cola Company should focus to increase the availability of Coke in rural areas.

Most of the young generation like to drink coke two regular bottles at same time, so to provide more satisfaction to them Coca Cola Company should introduce disposable bottle of half litre.

Conclusion

Coca-Cola is one of the words famous and largest company in the world, which was established in 1886 by Dr. John Pemberton, More than 200 countries, near about 3000 products of beverages and has nearly 500 brands in its portfolio, includes Coca-Cola or Diet Coke family, Coca-cola enterprise (CCE). Introduced in UK in 31 August 1900, import from US. However sale didn’t go on frequently until the early 1920s Coca-Cola was introduced in Nepal in 1973, which was imported from India. Local production of Coca-cola in Nepal was started in 1979. They are taking into account the whole world into the single market place and uniform marketing strategy was introduced by Coca-cola for many years. Coca Cola lunched simple wall Advertisement in Rural Area of Nepal, Coke realised that the communication media used in cities and urban areas would not work in villages because of low penetration of conventional media. The company ensured that all its rural marketing initiatives were well-supported by mouth to mouth publicity, Coca-Cola has a 67.8% market share in the field of carbonated soft drinks business of Nepal, Face book , yahoo and other online activities as might be helpful to promote their product in Nepalese market

The marketing communication system is more complicated in Nepal rather than other developed country like UK. Coca cola and Pepsi cola both of them make soft drinks, Pepsi cola may try to compete but they will still be seen as down market from coke

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