The Coca-Cola Company: A Multinational Leading Beverage Corporation

The Coca-Cola Company, commonly referred to as Coke, is a leading multinational beverage corporation headquartered in Atlanta, Georgia. This Wilmington-Delaware-incorporated firm is a manufacturer, retailer, and marketer of nonalcoholic drinks.  Most people know this company for its flagship product, Coca-Cola, that pharmacist John Stith Pemberton invented in 1886. Asa Griggs bought the company in 1889 and incorporated it in 1892. The company produces and sells non-alcoholic beverages with the support of various bottlers across the world.  Some of these products are Fanta, Sprite, Coca-Cola Zero, Coca-Cola Life, and Coca-Cola in cans and bottles (Brands n.d.).

Coca-Cola’s advertising strategy is among the most outstanding in marketing history.  Its logo, bottle design, and brand image are known across the world. The Coke’s mission is to inspire moments of optimism and happiness and also create value.  Its roadmap begins with its mission. Coke expected to be a workplace where workers are inspired to resourceful, quality beverage brands are produced, there is a winning network of customers and suppliers, create structures that guarantee the existence of sustainable communities, and be a lean and fast-moving company. Coca-Cola’s values are leadership, diversity, quality, passion, collaboration, integrity, and accountability (Mission, Vision & Values n.d.). Coca-Cola uses a diverse range of integrated marketing communication and considers all touch points that prospective consumers have with the brand as great channels to market its products.  

The non-alcoholic beverages industry is viable and is controlled by Coca-Cola. However, time has changed, and consumers are looking out looking for healthier alternatives. Coca-cola is expected to continue dominating the market due to its effective marketing strategies.

Coca-Cola has several strengths, weaknesses, opportunities and threat.  Brand awareness is one of its strengths. This brand is widely recognized across the world and remains the clear leader in the industry (Mijovic 2011).

The company also has resources. Its annual advertising spending in 2015 was US$3.976 billion, and that accounted for 6.9 percent of its total revenue.  Coca-Cola boost of having a reliable distribution network. This network helps to ensure the products are accessible to consumers in over 200 countries (Mijovic 2011).

Coca-Cola, however, faces some challenges. It needs to get better sources of water, which is its main ingredient and is critical for the production of agricultural products on which it relies. For the company to get clean water in some parts of the world, it has to incur extremely high costs. Inability to deal with foreign currency fluctuation is also a problem. Fluctuation in the value of the U.S. dollar against other world currencies has a negative impact on its balance sheet items. Pepsi is also growing stronger, and the company has not been able to increase its market she significantly over the last ten years (Mijovic 2011).

Coca-Cola has several opportunities such as diversification. According to Stopford (2011), the company has purchased 16 percent of Keurig Green Mountain.  It also recently acquired 17 percent shareholding  in Monster Beverage, which enables the company to have higher chances of reaching a popular energy drink growth segment.

The company may also have an extended reach in the coming days as the population of people in many countries continues to grow at a historically high rate. Due to this, Coke can expect to increase sales in China and India. Developing countries are also developing strategies that will soon make clean water accessible to all (Stopford 2011).  

However, Coca-Cola must be careful to overcome the threat of indirect competition from companies such as Starbucks and Dunkin’s Brands.  Many people are opting for natural and organic products due to their nutritional value. The desire of federal regulators to place excess taxes of sugary soft drinks and soda also threatens the business (Stopford 2011).

The Coca-Cola Company is working on having a better understanding of the impact of its business along with its whole value cycle and work closely with its customers to provide the best solutions. The company’s customers include large international chains of retailers, medium sizes and businesses, and independent individuals. Coca-Cola partners with them with the view of creating mutual benefit (Stopford 2011; Gehani 2016).   

The suppliers of Coca-Cola are governed by principles that communicate its values and expectations, putting considerable emphasis on the significance of responsible environment and workplace policies and practices. The policies are in agreement with laws about forced labor, discrimination, working hours and overtime, collective bargaining, abuse of labor, and  freedom of association (Supplier and Customer Partnerships n. d.).

Coca-Cola’s also partners will create a large network of bottling partners over 200 countries. The company works closely with its bottling partners through account management teams to be able to offer support and services tailored to its customers’ needs. The company also partners with Coca-Cola Retailing Research Councils to conduct research on matters affecting the retail food industry (Supplier and Customer Partnerships n. d.).

Coca-Cola controls 40 percent and Pepsi 20 percent of the market. Albanese (2001) says competition has led to the reduction of Coke’s operating margin from approximately 25 percent to about 20 percent since 2000 to date.  Indirect competition from companies such as Starbucks and Dunkin’s Brands Group threatens to take a share of Coca-Cola’s market.  They offer healthier, unique alternatives (Stopford 2011).  

Marketing Strategies

Governments are concerned about the health impact of Coca-Cola’s products. The U.S. federal regulators and other global authorities are keen on placing excess taxes of sugary soft drinks as they want their citizens to go for healthier alternatives. There is also concern over the company’s usage of water (Water, Coca-Cola, and the Strategic Power of Collaboration 2015; Gertner & Rifkin 2017).

Coca-Cola and its affiliate partners use a variety of ways to collect information about the 5Cs.  In many cases, the company or its affiliates collect personal information about consumers through their sites.  When a consumer makes a purchase or signs up for a newsletter, the company gets crucial information that they keep safely and use as market intelligence.  It can also get the information offline, for example, when a consumer contacts the company’s customer service (Privacy Policy n.d.).

Coca-Cola relies on other sources such as joint marketing partners, public databases, social media platforms and other thirds parties as well. They are crucial sources of marketing information.  For example, consumers who have the social media connected to their websites have certain aspects of their personal information from the social media account shared with the public.  The Coca-Cola Company uses these pieces of information to know consumer preferences and the influence of its competitors in particular regions (Privacy Policy n.d.).

Mobile usage helps Coca-Cola to gather credible data.  If the company is able to identify their potential customers as users of a particular mobile app, it may, for instance, link their activity with its brands to one of the mobile applications of Coca-Cola. For those consumers who have downloaded one or more mobile applications of the company, they can opt into location sharing to gain more from the applications.  A good illustration is geo-location that uses the latitude and longitude of the device to enable them to receive information and offers. At the same time, if a person can access an in-store location through his phone’s Bluetooth signal or other technologies such as LED light chip, they can detect products that are near them and provide more information including the availability of real-time offers. People can use these devices and share their information with Coca-Cola at will. When one wants to opt out of sharing their location with the company, they can go the Settings sections and turn off the relevant icons (Privacy Policy n.d.).

The Coca-Cola Company, to the extent of the applicable law, can combine the personal information and other information that people provide through its site and the sites of its affiliates. Other pieces of information that the public offers to it through both offline and online means and use them to craft an appropriate marketing strategy are also critical (Wilson 2009).

SWOT Analysis

Other than personal information, the Coca-Cola Company also collects other information that does not reveal consumers’ personal identity such as aggregated information, App usage data, server log file information, location information, demographic information, and browser and device information (Wilson 2009; Kotler & Keller 2016).

The company can gather critical information through the use of an App. Whenever an individual downloads and uses an App, Coca-Cola, and its service providers can track and gather information regarding the usage of the App. The information gather is critical for determining the type of services that interest that particular user (Wilson 2009).

The company also depends on volunteers. When it wants some information such as gender, hobbies, interest, birth, and consumption habits, the company can collect these pieces of information from people who voluntarily provide it.  The company can use the data to know the number or percentage of users who have come from a particular region. This information if not combined with personal information does not identify the individual (Privacy Policy n. d.).

Coca-Cola targets the whole market instead of just a few segments. However, it also uses differentiation strategy to meet the needs of people in different segments as well. The company also has demographic segmentations. It targets people of all ages and gender and people at different income levels. By using returnable glass bottles, for example, it is targeting low-income earners, the “more for less” group. Coca-Cola Zero is made for teens that want the taste of the original Coca-Cola but do not want calories. Diet Coca-Cola, on the other hand, targets individuals between the ages of 30 to 50 who want the taste but are health conscious (Target Markets n. d.).

 The main goal of the Coca-Cola Company is that every family should have a bottle of coke on their lunch table. Its secondary objective is to be operationally excellent. Based on the above analysis, the specific positioning of the brand attributes positioning. For the company to achieve this, it should market its products as unique, sweet, fresh, and tasted. The next category is benefiting positioning. This category fits because the company promises happiness.  The other category is competitor positioning. Coca-Cola is a global leader in the industry and needs to remain on top.  The specific position of this company should, therefore, be the best quality and unique taste, the happiness, best value for money, and most prestigious.  The best segment for Coca-Cola to focus on is the “more for less” group given that it is a massive leader store product. Individuals in this group want to get value for money, get happiness, and lead a healthy life.  Coca-Cola should have a value positioning that implores its market segments to buy from the company because it gives them unique experience and happiness (Waal 2013; Altshuler 2017).

Opportunities and Challenges

For teens that want the taste of the original Coca-Cola but do not want calories, the company can tell them “Coca-Cola Zero is your best option, contains very little calorie, go on, have fun.” The company positions itself as refreshing when targeting the youths that like fun and are upwardly mobile. So this class of youth will be able to have fun while drinking this healthy beverage. When targeting adults between the ages of 30 to 50 who want the unique taste but are health conscious, the company should say “Diet Coca-Cola is your perfect brand if you want to enjoy a brand that has fewer calories than Coca-Cola.” The position has four main elements.  It targets the health-conscious consumer who would ordinarily have a soft drink with a friend. The positioning is meant to make the brand to appeal to the health conscious people (Wang 2015; Altshuler 2017).

The point of benefit is low calorie, and the brand only targets the segments that value this aspect. The frame of reference is the “best option” and the “perfect.’ Therefore, people in these segments should believe in these two brands is because the company makes fun inclusive without putting health at risk. Wang (2015) says Coca-Cola has developed its positioning strategy around emotional experience and quality.  The company claims that these products are the most refreshing and fun time drink.

For the above marketing strategy to be effective, the Coca-Cola Company has to develop a comprehensive marketing mix. The 4ps are adequate to understand what the company needs to do (The Olympic Sponsor Case Study 2015).

The Coca-Cola Company has the largest portfolio in the industry consisting of 3,300 products. The company divides its beverages into fruit drinks, water, tea and coffee, diet category, 100 % fruit juices, and others. Coca-Cola is considered to be the leading brand among sparkling beverages. Other products are Fanta, Nested iced tea, Thumps Maid, Sprite, Maaza, Limca, and Minute Maid (Banerjee 2007).

The product cycle of both Coca-Cola Zero and Diet Coca-Cola show that they are viable products. These products are relatively new in the market but have already gone past the growth stage and matured. Currently, the demand for healthy beverages is incredibly high, and this makes the products to be at the maturity stage. As has been indicated above, new companies are also producing products for this market segment, which makes these two products to come closer to hitting the decline stage. At the current stage, therefore, Coca-Cola should add value to these beverages so that the product cycle can start afresh, as part of its intensive growth strategies (Palmatier & Sridhar 2017).

Customer Research

The pricing of Coca-Cola Zero and Diet Coca-Cola should be done depending on the condition of the market from time-to-time and the geographic segment. Each of them must have a different pricing strategy, which is based on the pricing of its competitor. The beverage industry is an oligopoly market, so it needs to ensure there is mutual balance in pricing between the Coca-Cola and Pepsi. Coca-Cola can put high prices when it introduces a new product in the market. However, it must bring down the prices when the competition producers alternatives and begins to sell them at lower prices (Albaum 2010).

Since Coca-Cola is the most favorable brand in the beverage industry, it can sell these two products using its established distribution system. The existence of a good distribution infrastructure makes the work easy (Kotler & Keller 2016).

For Coca-Cola to successfully sell the two products, Diet Coca-Cola and Coca-Cola Zero, it can adopt its usual advertising and promotional strategies. Through value-based advertising, it will be able to increase the demand for these products. With an increase in Coke ad individualized for particular festivals, the demand would increase further. To gain the emotional benefits in consumers’ minds, Coca-Cola should use CRS and allow price discounts. The use of both push strategy through promotions and pull strategy through advertisements is essential (Yuvaraju et al. 2014; Kotler & Keller 2016).

Conclusion

The Coca-Cola Company is well known for its effective marketing strategies. While the company has maintained its position as the leader in the beverage industry for many decades, things might change soon if it fails to adopt more aggressive marketing tools. Pepsi and other companies are producing alternative products healthy. Coca-Cola should do a proper value propositioning and develop a market sensitive market mix for Coca-Cola Zero and Diet Coca-Cola to be able to remain competitive.

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