The Coca Cola Company: Products, Competitors, And PEST Analysis Essay.

History of Coca Cola Company

Question:

Write an essay on the Coca Cola Company.
 

The Coca Cola Company is the largest beverage selling company of the world (Pendergrast, 2013). It has large number of product brands and it one of the most popular brands in the world. The company was founded in the year 1886 in the United States of America. The Coca Cola was originally launched as a patent medicine, but it was acquired by Griggs Candler, who led the soft drink brand to be a market leader in the 20^th century (Pendergrast, 2013). Coca Cola is one of the third most promising brands in the entire world, according to a survey in 2015 (Pendergrast, 2013). In the year 2008, the company took initiative of sponsoring big games and the online presence in social networking websites like Facebook (Pendergrast, 2013). The online activity of the company helped them to gather twenty two million admirers worldwide. The company has a long history of being a profitable company and it also undertakes active steps in the protection of the environment and the community.

The Coca Cola brand has a huge variety of products like Diet Coke, Coca Cola Vanilla, Coca Cola Cherry, Coca Cola with Lime, Coca Cola zero, Thumbs Up, Fanta, Sprite and others (Douglas & Craig, 2013). The main attributes of the products are different fruity flavors combined with the carbonated water, which gives each of the products a unique taste (Aaker, 2012). The Fanta, which was acquired by the Coca Cola Company in the year 1960, is a favorite among the people. The product is in the maturity stage of the product life cycle. The product is fast approaching to the decline stage.  

Core competencies

The Coca Cola is a world renowned company with a list of core competencies (Pfitzer, Bockstette & Stamp, 2013). The strong brand name of the company gives the brand a greater bargaining power. The company has a wide network and connections with the distributors and bottlers. The large number of distributors and contacts of the organization creates symbiotic relationships between them. The company has formulated innovative business level strategies, which makes them different from their competitors. The company undertakes innovative advertisements that are based on the local culture and traditions (Benard, Oketch & Matu, 2015). This advertisement promotes the brand name of the company and creates a differentiating factor. The company engages in extensive market research and believes in the construction of local offices in order to expand the customer base of the company.

The Coca Cola faces challenges from the market leaders like Pepsi and should develop differentiation strategies. There is a need to ensure more product diversification strategies, unlike Pepsi, which has number of products in the snacks segments such as Kurkure and Lays. The Coca Cola Company has not emerged in the health beverage sector, which is an emerging sector for the health conscious consumers.

The company does not believe in a specific segment of people for promoting its products. The main consumers of the Coca Cola products are the young generation in the 12-30 years age group (Kohli, Suri & Kapoor, 2015). The company considers each consumer as a target customer and the maximum potential for the product promotion are in the age group of 18-25 years. The brand considers the people with busy lifestyles and the youths as the most important target audience (Kohli, Suri & Kapoor, 2015). The target consumers are usually students as well as the family oriented people. The brand appeals to all the consumers irrespective of gender, lifestyle, social class and personality. The brand attracts the middle class and upper middle class families. The brand is considered as a status symbol for many people.

Product brands of Coca Cola Company

The major competitor of Coca Cola is Pepsi and the indirect competitors are Red Bull, Vitamin C, Mountain Dew, Lipton and others (Lemley & McKenna, 2012). The carbonation quantity of Pepsi is 1 gram less than that of Coca Cola. The marketing campaigns of Coca Cola use a classic appeal and are made for appeal of all sections of the consumers. The Pepsi take initiatives of capturing the attention of the younger generation by referring to the pop culture (Miller, 2014). Coca Cola has been accredited for creating some of the famous TV adverts as compared to Pepsi, who primarily focuses on the pop stars.

The Coca Cola is affected by the political factors like changes in laws or regulations, changes in the area of non-alcoholic business, political circumstances (especially international markets), ability to penetrate in emerging markets and others (Kwabo, 2014). The company takes note of the economic factors prevailing in the market and designs its policies accordingly (Karnani, 2013). For example, during recession the company utilized the loans for research on new products that can capitalize a strong economy. The social factors like the lifestyle of the people, time management, demographics of the target audience and others, affect the functioning of the Coca Cola Company (Jackson & Ahuja, 2016). The technological factors influence the functioning of the brand such as packaging design, new equipment, new set of factories and the effectiveness of the brand’s marketing, advertising and promotional initiatives (Moreira et al., 2013). These factors collectively represent the PEST analysis of Coca Cola.

The Porter’s five forces theories is applied to Coca Cola and interesting results has been drawn from it. The threat of new entrants poses medium pressure to the brand as Coca Cola is a brand itself (Kokwaro, Ajowi & Kokwaro, 2013). It has loyal customer base and increased market share for a long time. There is a threat of substitute products as Coca Cola lacks an absolutely unique flavor and its taste is very similar to that of Pepsi. The bargaining power of buyers is lessened by the brand loyalty of the consumers (Barreto, 2013). The bargaining power of suppliers is negligible as Coca Cola is the largest customer of its suppliers (Illy et al., 2013). The company’s main competitor of the company is Pepsi, which has a wide variety of beverage products. 

Strengths

The biggest strengths of Coca Cola are that the company is widely recognized across the world (Carroll, 2013). The brand can be easily recognized by its distinct logo, promotion, color and style. The consumers purchase the product not only because of the taste but due to the universal appeal of the brand. The company enjoys a dedicated base of loyal customers all over the world. The company enjoys higher brand equity, great company valuation, vast distribution network, vast global presence and the largest market share (Carroll, 2013).  

The Coca Cola undergoes a high level of competition from Pepsi, low product diversification, absence in the health beverage segment and others. The company has also faced certain water management issues in the past (Rani et al., 2012). They consume vast amount of water in water scarce areas, due to which several groups had raised lawsuits against Coca Cola in the recent past (Rani et al., 2012). The company also faced blame for mixing pesticides in the drinking beverage for removing the contaminants.

Core competencies of Coca Cola Company

The Coca Cola has innumerable opportunities in the food and health business (Ayub et al., 2013). The diversification strategies and the cross selling of their products would prove to be beneficial for the business. There are several opportunities for the company in the developing countries, as the consumers in the developing countries are becoming increasingly addicted to carbonated drinks. The packaged drinking water of the brand, Kinley, has huge potential for expansion (Kotler, 2012). There is a need to improve the supply chain operations of the Coca Cola Company, which is the backbone of the business. There are number of opportunities in the lesser selling products of the brand, which the company should promote on dedicated basis.

The Coca Cola Company faces a number of threats like raw material sourcing and the indirect competitors (Raja & Kumar, 2014). There is a rising water scarcity, which is the main ingredient of the Coca Cola. The rising coffee chain outlets like Café Coffee Day, Starbucks and others, give a tough competition to the company by offering substitute products to aerated drinks. 

PARAMETERS	APPLICATION IN COCA COLA
Strength	Popular, huge customer base, brand equity, global presence, largest market, vast distribution network
Weakness	High competition from Pepsi, low product diversification, water management issues
Opportunity	Food and Health business, diversification, cross selling, supply chain operations
Threat	Raw material sourcing, indirect competitors, rising water scarcity, rising coffee chain

Fig: SWOT analysis of Coca Cola

Source: Created by author

The segmentation, targeting and positioning strategies of the company helps the organization to determine the appropriate products for specific segments of consumer. The company has no specific market segments but customizes its marketing strategies by innovating new products. The company uses a mix of niche marketing and undifferentiated targeting strategies (Kotler, 2012). The main motto of the company is to drive sales and for this purpose it is important to perform segmentation and target strategies. The Coca Cola product is acceptable by all age groups, but there are some products which enjoy a niche target segment, such as Diet Coke. The target customers of Diet Coke are the health conscious clients. The company has implemented competitive positioning strategies to remain ahead of the competitors in the beverage segment (non alcoholic).

The Coca Cola Company has undertaken various segmentation strategies for the creation of competitive edge. The various factors of segmentation are- geographic, place of consumption, type of product, demographics and others (Kotler, 2012). The Coca Cola targets the various market segments with different innovative ads. The company uses the non aerated beverages in order to target the health conscious consumers. The brand usually targets the young population of the countries. The Coca Cola has made innovative positioning strategies and has positioned its products as thirst quenching and refreshing (Rani et al., 2012). The brand’s products are supposed to bring in joy to the consumers. The Coca Cola products are associated with spending a good time with family and friends. The products are positioned as high quality with a strong brand value (Kotler, 2012).

The company should use more differentiated products, which can appeal to more number of target audiences (Kotler, 2012). The company should launch innovative products as well as innovative supply chain mechanisms. 

Products        

Coca Cola has a wonderful marketing mix consisting of products, place, price and promotion (Raja & Kumar, 2014). The Coca Cola Company has a wide range of products in the beverage industry. There are a large number of products like beverage, juices, packaged drinking water and others. The company has its market presence in more than 200 countries. The Coca Cola is the no 1 brand in the non aerated beverages.

Target audience of Coca Cola Company

The pricing strategy of the Coca Cola is done in an intelligent manner. The price segments are done according to the geographic segment and the market segment (Kotler, 2012). The company adopts different pricing strategies for different countries, which best satisfies the local customer preferences. The sub brands of Coca Cola brand have different pricing strategy, which is primarily based on the prices of the competitors (Rani et al., 2012). The beverage market is considered as oligopoly market, which indicates that there are few sellers and a large number of buyers. It is important to maintain a mutual balance between the pricing strategies of different sellers. 

The Coca Cola brand and its products are the favorite brands across the people of the world. The distribution strategies of Coca Cola are similar to the distribution patterns of FMCG (Fast Moving Consumer Goods) category (Rani et al., 2012). The Coca Cola possess a strong network of distribution channels, which makes it possible for every consumer at each corner of the world, to enjoy the taste of Coca Cola. The company has also embarked on the distribution of non aerated drinks as well as carbonated beverages in the rural areas. The Coca Cola has bulk delivery channels in large supermarkets, club stores and mass merchandisers.  The company has also smaller distribution channels like drug stores, convenient stores, small supermarkets and others (Rani et al., 2012). The company has also erected dedicated vending machines at important destinations like airports and railway stations.

The Coca Cola brand believes in the active promotional campaigns in order to gain higher visibility in the market (Rani et al., 2012). The brand engages in several advertising and promotional techniques so that they could create an increased demand in the market. It associates the product with behavior and lifestyle of the consumers (Rani et al., 2012). The company believes in value based advertising (Carroll, 2013). The company uses a lot of celebrities and famous personalities for the purpose of the promotion of the products. The company believes that marketing is an excellent tool for gaining the emotional benefits of the consumers (Carroll, 2013). The company allows attractive price discounts and various kinds of allowances to the retailers and the distributors.

The Coca Cola brand should try to launch products in the health beverage sector. There are an increasing number of health conscious clients (Carroll, 2013). The launch of products in this sector would ensure that the company enjoys higher sources of revenue. 

The marketing mix of the Coca Cola Company should be revised and improved as per the market needs. The company should try to capture new market segments and should use one of the many tactics of venturing into a new market. The different strategies are franchising, licensing and exporting. The company should use innovative promotion strategies like eye catching positions, sales promotion, acquiring shelves, under the crown scheme and others. There should be increased focus on the indirect sales channels, which involves engaging more number of agencies and wholesalers to cover their individual areas. There is a lot of competition in the market, which makes it essential for the brand to apply innovative tactics for enjoying higher market share. The company should strive to provide more infrastructures for providing more facilities to the customers. The Coca Cola Company should customize their products as per the local needs of the customers. The company should bring in some products for the older age group in order to broaden the target audience base of the company. The company should also take initiatives for greater access in the rural areas. The company should strive to launch newer innovative products for better market access. 

Competitors of Coca Cola Company

Conclusion

The Coca Cola brand has been widely accepted by the audience. The consumers are aware of the high brand value of the Coca Cola brand. The consumers prefer to stay loyal to the Coca Cola brand. The products are competitively priced and are usually at the higher price ranges. The company engages in the extensive promotion strategies so that there is greater brand awareness. The company also engages in a number of events including recreational activities and sports. The company should venture in new markets as it would mean higher revenues for the company. The Coca Cola Company should engage in greater marketing activities so that there is profit maximization of the brand. The greater marketing would lead to greater visibility in the target market, which means the company would be more popular and successful.  

References

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