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“Project Report on Coca-Cola Company and study of customer

preference for Coca-Cola brands with reference to Coca-Cola




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“Project Report on Coca-Cola Company and study of customer
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This report has been prepared with a specific purpose in mind. It outlines the
history and current scenario of the Coca-Cola Company globally and locally.
The first part of the study takes us through the present state of affairs of the
beverage industry and Coca-Cola Company globally.

The report contains a brief introduction of Coca Cola Company and Coca-Cola
India and a detailed view of the tasks, which have been undertaken to analyze
the market of Coca-Cola i.e. we have performed Competitive, PESTLE and
SWOT analysis of Coca-Cola Company and PESTLE and SWOT analysis of
Coca-Cola India in order to identify areas of potential growth for Coca-Cola.
We have also given a brief description of Trends and Forces that are affecting
Coca-Cola Company globally.

The main objective of this project report is to analyze and study in efficient way
the current position of Coca- Cola Company. The study also aims to perform
Market Analysis of Coca-Cola Company & find out different factors effecting
the growth of Coca-Cola. Another objective of the study was to perform
Competitive analysis between Coca-Cola and its competitors. Apart from these

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“Project Report on Coca-Cola Company and study of customer
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objectives this study is also conducted to understand the Customer preferences

towards various Coca-Cola products.


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“Project Report on Coca-Cola Company and study of customer
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Let reason go before every enterprise,

And counsel before every action

Research is a human activity based on intellectual investigation and is aimed at

discovering, interpreting, and revising human knowledge on different aspects of
the world.


Marketing research is the function that links the consumer, customer and public
to the marketer through information used to identify and define marketing

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opportunities and problems; generate, refine, and evaluate marketing actions;

monitor marketing performance; and improve understanding of marketing as a
process. Marketing research specifies the information required to address these
issues, designs the methods for collecting information, manages and
implements the data collection process, analyzes and communicates the
findings and their implications.

-American Marketing Association

Marketing research is about researching the whole company’s marketing


-Palmer (2000)


Coca-Cola, the product that has given the world its best-known taste was born in Atlanta,
Georgia, on May 8, 1886. Coca-Cola Company is the world’s leading manufacturer,
marketer and distributor of non-alcoholic beverage concentrates and syrups, used to produce
nearly 400 beverage brands. It sells beverage concentrates and syrups to bottling and canning
operators, distributors, fountain retailers and fountain wholesalers. The Company’s beverage
products comprises of bottled and canned soft drinks as well as concentrates, syrups and not-
ready-to-drink powder products. In addition to this, it also produces and markets sports
drinks, tea and coffee. The Coca- Cola Company began building its global network in the
1920s. Now operating in more than 200 countries and producing nearly 400 brands, the

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Coca-Cola system has successfully applied a simple formula on a global scale: “Provide a
moment of refreshment for a small amount of money- a billion times a day.”

The Coca-Cola Company and its network of bottlers comprise the most sophisticated and
pervasive production and distribution system in the world. More than anything, that system
is dedicated to people working long and hard to sell the products manufactured by the
Company. This unique worldwide system has made The Coca-Cola Company the world’s
premier soft-drink enterprise. From Boston to Beijing, from Montreal to Moscow, Coca-
Cola, more than any other consumer product, has brought pleasure to thirsty consumers
around the globe. For more than 115 years, Coca-Cola has created a special moment of
pleasure for hundreds of millions of people every day.
The Company aims at increasing shareowner value over time. It accomplishes this by
working with its business partners to deliver satisfaction and value to consumers through a
worldwide system of superior brands and services, thus increasing brand equity on a global
basis. They aim at managing their business well with people who are strongly committed to
the Company values and culture and providing an appropriately controlled environment, to
meet business goals and objectives. The associates of this Company jointly take
responsibility to ensure compliance with the framework of policies and protect the
Company’s assets and resources whilst limiting business risks.

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Fast Moving Consumer Goods (FMCG), also known as Consumer Packaged Goods (CPG)
are products that have a quick turnover and relatively low cost. Consumers generally put less
thought into the purchase of FMCG than they do for other products.

The Indian FMCG industry witnessed significant changes through the 1990s. Many players
had been facing severe problems on account of increased competition from small and
regional players and from slow growth across its various product categories. As a result,
most of the companies were forced to revamp their product, marketing, distribution and
customer service strategies to strengthen their position in the market.

By the turn of the 20th century, the face of the Indian FMCG industry had changed
significantly. With the liberalization and growth of the Indian economy, the Indian customer
witnessed an increasing exposure to new domestic and foreign products through different

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media, such as television and the Internet. Apart from this, social changes such as increase in
the number of nuclear families and the growing number of working couples resulting in
increased spending power also contributed to the increase in the Indian consumers' personal
consumption. The realization of the customer's growing awareness and the need to meet
changing requirements and preferences on account of changing lifestyles required the FMCG

producing companies to formulate customer-centric strategies. These changes had a positive

impact, leading to the rapid growth in the FMCG industry. Increased availability of retail
space, rapid urbanization, and qualified manpower also boosted the growth of the organized
retailing sector.

HLL led the way in revolutionizing the product, market, distribution and service formats of
the FMCG industry by focusing on rural markets, direct distribution, creating new product,
distribution and service formats. The FMCG sector also received a boost by government led
initiatives in the 2003 budget such as the setting up of excise free zones in various parts of
the country that witnessed firms moving away from outsourcing to manufacturing by
investing in the zones.
Though the absolute profit made on FMCG products is relatively small, they generally sell in
large numbers and so the cumulative profit on such products can be large. Unlike some
industries, such as automobiles, computers, and airlines, FMCG does not suffer from mass
layoffs every time the economy starts to dip. A person may put off buying a car but he will
not put off having his dinner.

Unlike other economy sectors, FMCG share float in a steady manner irrespective of global
market dip, because they generally satisfy rather fundamental, as opposed to luxurious needs.
The FMCG sector, which is growing at the rate of 9% is the fourth largest sector in the
Indian Economy and is worth Rs.93000 cr. The main contributor, making up 32% of the
sector, is the South Indian region. It is predicted that in the year 2010, the FMCG sector will

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be worth Rs.143000 cr. The sector being one of the biggest sectors of the Indian Economy
provides up to 4 million jobs. (Source: HCCBPL, Monthly Circular)


In India, beverages form an important part of the lives of people. It is an industry, in which
the players constantly innovate, in order to come up with better products to gain more
consumers and satisfy the existing consumers.


The beverage industry is vast and there various ways of segmenting it, so as to cater the
right product to the right person. The different ways of segmenting it are as follows:

 Alcoholic, non-alcoholic and sports beverages.

 Natural and Synthetic beverages.
 In-home consumption and out of home on premises consumption.
 Age wise segmentation i.e. beverages for kids, for adults and for senior citizens.
 Segmentation based on the amount of consumption i.e. high levels of consumption
and low levels of consumption.

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If the behavioural patterns of consumers in India are closely noticed, it could be observed
that consumers perceive beverages in two different ways i.e. beverages are a luxury and
that beverages have to be consumed occasionally. These two perceptions are the biggest
challenges faced by the beverage industry. In order to leverage the beverage industry, it is
important to address this issue so as to encourage regular consumption as well as and to
make the industry more affordable.

Four strong strategic elements to increase consumption of the products of the beverage
industry in India are:

 The quality and the consistency of beverages needs to be enhanced so that consumers
are satisfied and they enjoy consuming beverages.
 The credibility and trust needs to be built so that there is a very strong and safe
feeling that the consumers have while consuming the beverages.
 Consumer education is a must to bring out benefits of beverage consumption
whether in terms of health, taste, relaxation, stimulation, refreshment, well-being or
prestige relevant to the category.
 Communication should be relevant and trendy so that consumers are able to find an
appeal to go out, purchase and consume.
 The beverage market has still to achieve greater penetration and also a wider spread
of distribution. It is important to look at the entire beverage market, as a big
opportunity, for brand and sales growth in turn to add up to the overall growth of
the food and beverage industry in the economy.

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Our Roadmap starts with our mission, which is enduring. It declares our purpose as a
company and serves as the standard against which we weigh our actions and decisions.

 To refresh the world...

 To inspire moments of optimism and happiness...
 To create value and make a difference.
Our vision serves as the framework for our Roadmap and guides every aspect of our business

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by describing what we need to accomplish in order to continue achieving sustainable, quality

 People: Be a great place to work where people are inspired to be the best they can be.
 Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate
and satisfy people's desires and needs.
 Partners: Nurture a winning network of customers and suppliers, together we create
mutual, enduring value.
 Planet: Be a responsible citizen that makes a difference by helping build and support
sustainable communities.

 Profit: Maximize long-term return to shareowners while being mindful of our overall
 Productivity: Be a highly effective, lean and fast-moving organization.
Our Winning Culture defines the attitudes and behaviours that will be required of us to make
our 2020 Vision a reality.


Our values serve as a compass for our actions and describe how we behave in the world.
 Leadership: The courage to shape a better future.
 Collaboration: Leverage collective genius.
 Integrity: Be real.
 Accountability: If it is to be, it's up to me.
 Passion: Committed in heart and mind.
 Diversity: As inclusive as our brands.
 Quality: What we do, we do well.
 Focus on needs of our consumers, customers and franchise partners.
 Get out into the market and listen, observe and learn.
 Possess a world view.

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 Focus on execution in the marketplace every day.

 Be insatiably curious.
 Act with urgency.
 Remain responsive to change.
 Have the courage to change course when needed.
 Remain constructively discontent.
 Work efficiently.


 Be accountable for our actions and inactions.
 Steward system assets and focus on building value.
 Reward our people for taking risks and finding better ways to solve problems.
 Learn from our outcomes -- what worked and what didn’t.
Inspire creativity, passion, optimism and fun.
The prototype Coca-Cola recipe was formulated at the Eagle Drug and Chemical Company, a
drugstore in Columbus, Georgia by John Pemberton, originally as a coca wine called
Pemberton's French Wine Coca. He may have been inspired by the formidable success of Vin
Mariani, a European cocawine.

In 1886, when Atlanta and Fulton County passed prohibition legislation, Pemberton
responded by developing Coca-Cola, essentially a non-alcoholic version of French Wine
Coca. The first sales were at Jacob's Pharmacy in Atlanta, Georgia, on May 8, 1886. It was
initially sold as a patent medicine for five cents a glass at soda fountains, which were popular
in the United States at the time due to the belief that carbonated water was good for the

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health.[9] Pemberton claimed Coca-Cola cured many diseases, including morphine addiction,
dyspepsia, neurasthenia, headache, and impotence. Pemberton ran the first advertisement for
the beverage on May 29 of the same year in the Atlanta Journal.

By 1888, three versions of Coca-Cola — sold by three separate businesses — were on the
market. Asa Griggs Candler acquired a stake in Pemberton's company in 1887 and
incorporated it as the Coca Cola Company in 1888. The same year, while suffering from an
ongoing addiction to morphine, Pemberton sold the rights a second time to four more
businessmen: J.C. Mayfield, A.O. Murphey, C.O. Mullahy and E.H. Bloodworth. Meanwhile,
Pemberton's alcoholic son Charley Pemberton began selling his own version of the product.

John Pemberton declared that the name "Coca-Cola" belonged to Charley, but the other two
manufacturers could continue to use the formula. So, in the summer of 1888, Candler sold his
beverage under the names Yum Yum and Koke. After both failed to catch on, Candler set out
to establish a legal claim to Coca-Cola in late 1888, in order to force his two competitors out
of the business. Candler purchased exclusive rights to the formula from John Pemberton,
Margaret Dozier and Woolfolk Walker. However, in 1914, Dozier came forward to claim her
signature on the bill of sale had been forged, and subsequent analysis has indicated John
Pemberton's signature was most likely a forgery as well.

In 1892 Candler incorporated a second company, The Coca-Cola Company (the current
corporation), and in 1910 Candler had the earliest records of the company burned, further
obscuring its legal origins. By the time of its 50th anniversary, the drink had reached the
status of a national icon in the USA. In 1935, it was certified kosher by Rabbi Tobias Geffen,
after the company made minor changes in the sourcing of some ingredients.

Coca-Cola was sold in bottles for the first time on March 12, 1894. The first outdoor wall
advertisement was painted in the same year as well in Cartersville, Georgia. Cans of Coke
first appeared in 1955. The first bottling of Coca-Cola occurred in Vicksburg, Mississippi, at
the Biedenharn Candy Company in 1891. Its proprietor was Joseph A. Biedenharn. The

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original bottles were Biedenharn bottles, very different from the much later hobble-skirt
design that is now so familiar. Asa Candler was tentative about bottling the drink, but two
entrepreneurs from Chattanooga, Tennessee, Benjamin F. Thomas and Joseph B. Whitehead,
proposed the idea and were so persuasive that Candler signed a contract giving them control
of the procedure for only one dollar. Candler never collected his dollar, but in 1899
Chattanooga became the site of the first Coca-Cola bottling company. The loosely termed
contract proved to be problematic for the company for decades to come. Legal matters were
not helped by the decision of the bottlers to subcontract to other companies, effectively
becoming parent bottlers. Coke concentrate, or Coke syrup, was and is sold separately at
pharmacies in small quantities, as an over-the-counter remedy for nausea or mildly upset

On April 23, 1985, Coca-Cola, amid much publicity, attempted to change the formula of the
drink with "New Coke". Follow-up taste tests revealed that most consumers preferred the
taste of New Coke to both Coke and Pepsi, but Coca-Cola management was unprepared for
the public's nostalgia for the old drink, leading to a backlash. The company gave in to
protests and returned to a variation of the old formula, under the name Coca-Cola Classic on
July 10, 1985.

On February 7, 2005, the Coca-Cola Company announced that in the second quarter of 2005
they planned to launch a Diet Coke product sweetened with the artificial sweetener sucralose,
the same sweetener currently used in Pepsi One. On March 21, 2005, it announced another
diet product, Coca-Cola Zero, sweetened partly with a blend of aspartame and acesulfame
potassium. In 2007, Coca-Cola began to sell a new "healthy soda": Diet Coke with vitamins
B6, B12, magnesium, niacin, and zinc, marketed as "Diet Coke Plus”. On July 5, 2005, it was
revealed that Coca-Cola would resume operations in Iraq for the first time since the Arab
League boycotted the company in 1968.

In April 2007, in Canada, the name "Coca-Cola Classic" was changed back to "Coca-Cola."

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The word "Classic" was truncated because "New Coke" was no longer in production,
eliminating the need to differentiate between the two. The formula remained unchanged.

In January 2009, Coca-Cola stopped printing the word "Classic" on the labels of 16-ounce
bottles sold in parts of the southeastern United States. The change is part of a larger strategy
to rejuvenate the product's image. In November 2009, due to a dispute over wholesale prices
of Coca-Cola products, Costco stopped restocking its shelves with Coke and Diet Coke.


In 2009, the company generated revenues of $31 billion with $6.8 billion net income. An
increased consumer preference for healthier drinks has resulted in slowing growth rates for
sales of carbonated soft drinks (abbreviated as CSD), which constitutes 78% of KO’s sales.
KO’s profits are also vulnerable to the volatile costs for the raw materials used to make
drinks - such as the corn syrup used as a sweetener, the aluminium used in cans, and the
plastic used in bottles. Furthermore, slowing consumer spending in Coke's large North
American market compounds the challenge of increasing costs and a weak economic
environment. Finally, Coca-Cola earns approximately 75% of revenue from international
sales, exposing it to currency fluctuations, which are particularly adverse with a stronger U.S.
Dollar (USD).

Despite these challenges, Coca-Cola has remained profitable. Though the non-CSD market is
growing quickly, the traditional CSD market is still large in terms of both revenues and
volume and highly lucrative. The size and variety of KO’s offerings in the CSD category,
coupled with the unparalleled brand equity of the Coca-Cola trademark, has allowed KO to
maintain its share of this important market. KO has also responded to consumers’ changing
tastes with new, non-CSD product launches and acquisitions such as that of Glaceau in 2007.
Strong international growth has also more than offset a weak domestic market.

On February 25, Coca-Cola Company announced its plan to buy Coca-Cola Enterprises
(CCE) for $12.3 million.[7] Since spinning of Coca-Cola Enterprises (CCE) 24 years ago, the
soft drink market has changed dramatically with consumers buying fewer soft drinks and
more non-carbonated beverages, such as Powerade and Dasani water. Under the new deal,

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Coca-Cola Company will take control of the bottler's North America operations, giving the
company control over 90% of the total North America volume. In return, Coca-Cola
Enterprises will take over Coke's bottling operations in Norway and Sweden, becoming a
European-focused producer and distributor.

In March 2010, Coca-Cola Company entered into discussions to buy the Russian juice
company, OAO Nidan Juices. The company is 75% owned by a private equity firm in
London and 25% by its Russian founders and controls 14.5% of the Russian juice market. If
successful, the purchase would add to Coca-Cola's 20.5% market share, passing Pepsi's 30%
market share. The Russian juice market is estimated to be $3.2 billion dollars, and estimates
of Nidan's purchase price are between $560-$620 million.

In April 2010, Coca-Cola Company purchased a majority share of Innocent, the British fruit
smoothie maker. Last year the company bought an 18% share of the company for more than
$45 million, and recent purchases of additional shares increased Coke's stake to 58%.

In June 2010, Coca-Cola Company agreed to pay Dr Pepper Snapple Group (DPS) $715
million for the continued right to sell their products following the company's acquisition of
Coca-Cola Enterprises (CCE). The deal covers the next 20 years with an option to renew for
an additional 20 years.


 The Global Economic Recession Threatens Overall Demand:

In 2008 and 2009, the global economy has fallen into a recession. Not just the United States
but countries from all over the world have felt the impacts of the 2008 Financial Crisis. This
may be a problem for Coke, which derives approximately 75% of its sales from outside North
America. Still, the company has positioned itself well in international markets both
organically and through acquisitions, such as that of Chinese juice maker Huiyuan for $2.4
billion. However the company was unsuccessful with its purchase of Huiyuan as it broke

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antitrust laws in China. On March 5, 2010, Coke's CEO said that emerging markets are
bouncing back quicker than more developed markets.

 New Aversion to Soda Threatens Main Business:

74% of the Coca Cola Company's products are classified as carbonated soft drinks, making it
particularly sensitive to changes in demand for CSD. Consumer demand for CSD has been
negatively affected by concerns about health and wellness. This is true across most of KO's
markets. There has been an increase in the number of regulations regarding CSD in the
United States in response to the heightened desire for healthy food consumption.

In 2006, many state public school systems banned the sale of soft drinks on their campuses.
The Centre for Science and Public Interest proposed that a warning label be placed on all
beverages containing more than 13g of sugar per 12-oz serving. This proposal would affect
all non-diet, full calorie drinks produced by KO. These factors have driven a shift in
consumption away from CSD to healthier alternatives, such as tea, juices, and water.

Within the CSD segment consumers have been moving away from sugared drinks, opting
instead for diet beverages, which do not generally contain any sugar or calories.

Though KO has been somewhat slow to respond to this shift in consumer preferences, it has
recently begun to increase its development of both diet CSD and non-CSD beverages. KO is
faced with the task of balancing the risk of new innovations with the low growth rates of
established brands, a predicament for manufactures throughout the beverage industry.

 Integrated Bottler Strategy Increases Flexibility:

After CEO Neville Isdell was brought out of retirement in 2004 to revive the then flagging
beverage maker, one of the first areas that he targeted for improvement was KO's frayed
relations with its extensive network of bottlers. Since consolidating all company-owned
bottlers into the Bottling Investments division, Isdell has continued to increase KO's interest
in its bottlers through stake purchases or outright buyouts. This strategy represents a

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weakening of the division between KO's production and distribution operations. Isdell
believes that by combining production and distribution operations the company will have
enhanced its ability to quickly respond to changing market conditions. In KO's 2007 Q3
Analyst call, Isdell credited the outright purchase of Coca-Cola Bottlers Philippines (CCBPI)
for double-digit volume growth in that country. Additionally, KO has signed new agreements
with many of its bottlers which allow them to distribute drinks produced by other companies.
For example, Coca-Cola Enterprises (CCE) now distributes Arizona, a ready-to-drink tea
made by Ferolito, Vultaggio & Sons, an American iced-tea company. Isdell sees these
agreements as another way of taking advantage of the rapidly growing non-CSD market.

 Bottled Water Falling Out of Favour:

In Q3 2009, Dasani bottled water's revenues fell by double digits; this decrease is emblematic
of the bottled water industry as a whole. In August 2009, the Wall Street Journal reported that
sales of bottled water had fallen for the first time in five years. The combination of the
recession and upper class consumers' increased environmental consciousness has lead many
customers to cut back on bottled water in favour of tap water and reusable containers.

ing this trend, at least one town in Washington state and one in Australia have outlawed the
selling of bottled water within their city limits. In 2008, bottled water was the third most
popular beverage (behind soda and milk), but compared to 2007, Americans consumption
declined for the first time, down to 8.7 billion gallons from 8.8 billion gallons. Although this
is a seemingly small decrease, industry experts don't expect bottled water to bounce back
anytime soon.

 Dollar Affects International Performance:

Another trend affecting Coca-Cola is the relative strength of the U.S. Dollar (USD). Although
the company is based in the US, KO derives about 75% of its operating income from outside

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United States. Because of this, the company is very sensitive to the strength of the dollar. As
foreign currencies weaken relative to the dollar, goods sold in foreign markets are suddenly
worth fewer dollars back in the US, lowering earnings. Thus, if the dollar strengthens (as it
did in the second half of 2008 and 2009), it has a negative effect on KO's earnings. Coca-
Cola executives expect currency fluctuations to adversely affect 3Q09 operating income by
10-12% and 4Q09 operating income by high single digits.

KO has broad exposure to foreign currencies and actively hedges a large portion of these to
avoid wide swings in earnings from currency fluctuations. Although this hedging insulates
from the potential downside of a strengthening dollar, it also limits larger gains from drastic
downswings in the dollar's value.

 Commodity Cost Fluctuations Affect Margins:

The Coca-Cola Company’s profitability can be affected both directly and indirectly by the
costs of various production inputs. KO itself is responsible for purchasing the raw materials
used to make its concentrates and syrups. Variations in the prices for these goods can affect
the company’s total cost of production as well as its profit margins. Changes in the
production costs of bottlers can also impact KO’s profitability, though in a more indirect way.
If the raw materials necessary for bottling become more expensive, the bottler may be forced
to drastically raise prices to compensate.

uch a price increase would likely hurt KO, given the competitive nature of the non-alcoholic
beverage industry, and provide a possible incentive for consumers to switch to other
companies’ beverages.

Aluminium, corn, and PET resin are three examples of such production goods used by
bottlers that could have significant bearing on the Coca-Cola Company’s profit margins. In
2007, the prices of these commodities rose drastically with general commodities bubble and
dramatically pressured margins. They receded in 2008, but the possibility of another

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significant rise in Commodities represents a constant threat to profits.



The greatest competition that Coca-cola faces is from the rival sellers within the industry.
Coca-Cola, Pepsi Co, and Cadbury Schweppes are among the largest competitors in this

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industry, and they are all globally established which creates a great amount of competition.
Aside from these major players, smaller companies such as Cott Corporation and National
Beverage Company make up the remaining market share. All five of these companies make a
portion of their profits outside of the United States.

Though Coca-Cola owns four of the top five soft drink brands (Coca-Cola, Diet Coke, Fanta,
and Sprite), it had lower sales in 2005 than did PepsiCo (Murray, 2006c). However, Coca-
Cola has higher sales in the global market than PepsiCo, PepsiCo is the main competitor for
Coca-Cola and these two brands have been in a power struggle for years (Murray, 2006c).
Coke has been more dominant with a 53% of market share as in 1999 compared to Pepsi with
a market share of 21%.

According to Beverage Digest's 2008 report on carbonated soft drinks, PepsiCo's U.S. market
share has increased to 30.8%, while the Coca-Cola Company's has decreased to 42.7% due to
Pepsi marketing schemes still the higher large gap between the market share can be attributed
to the fact that Coca-Cola took advantage of Pepsi entering the market late and has set up its
bottler's and distribution network especially in developed markets.

"The Coca-Cola Company" is the largest soft drink company in the world. Every year
800,000,000 servings of just "Coca-Cola" are sold in the United States alone. Bottling plants

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with some exceptions are locally owned and operated by independent business people who
are native to the nations in which they are located. Coca-Cola manufactures, distributes and
markets non-alcoholic beverage concentrates and syrups, including fountain syrups.

It supplies concentrates and beverage bases used to make the products and provides
management assistance to help it's bottler's ensure the profitable growth of their business.
This has put Pepsi at a significant disadvantage compared to US market. Overall, Coca-Cola
continues to outsell Pepsi in almost all areas of the world. However, exceptions include India,
Saudi Arabia and Pakistan.

By most accounts, Coca-Cola was India's leading soft drink until 1977 when it left India after
a new government ordered, The Coca-Cola Company to turn over its secret formula for Coke
and dilute its stake in its Indian unit as required by the Foreign Exchange Regulation Act

In 1988, PepsiCo gained entry to India by creating a joint venture with the Punjab
government-owned Punjab Agro Industrial Corporation (PAIC) and Voltas India Limited.
This joint venture marketed and sold Lehar Pepsi until 1991 when the use of foreign brands
was allowed. PepsiCo bought out its partners and ended the joint venture in 1994. In 1993,
The Coca-Cola Company returned in pursuance of India's Liberalization policy. In 2005, The
Coca-Cola Company and PepsiCo together held 95% market share of soft-drink sales in
India. Coca-Cola India's market share was 52.5%.

In Russia, Pepsi initially had a larger market share than Coke but it was undercut once the
Cold War ended. In 1972, Pepsi Co Company struck a barter agreement with the government
of the Soviet Union, in which Pepsi Co was granted exportation and Western marketing
rights to Stolichnaya vodka in exchange for importation and Soviet marketing of Pepsi-Cola.

This exchange led to Pepsi-Cola being the first foreign product sanctioned for sale in the

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U.S.S.R. Pepsi, as one of the first American products in the Soviet Union, became a symbol
of that relationship and the Soviet policy.

Brand name loyalty is another competitive pressure. The Brand Keys Customer Loyalty
Leaders Survey (2004) shows the brands with the greatest customer loyalty in all industries.
Diet Pepsi ranked 17th and Diet Coke ranked 36th as having the most loyal customers to their
brands. The new competition between rival sellers is to create new varieties of soft drinks,
such as vanilla and cherry, in order to increase sales and getting new customers.

Pepsi is however trying to counter this by competing more aggressively in the emerging
economies where the dominance of Coke is not as pronounced, with the growth in emerging
markets significantly expected to exceed the developed markets, rivalry in international
market is going to be more pronounced.

Pepsi advertisements often focused on celebrities, choosing Pepsi over Coke, supporting
Pepsi's positioning as "The Choice of a New Generation." In 1975, Pepsi began showing
people doing blind taste tests called Pepsi Challenge in which they preferred one product over
the other. Pepsi started hiring more popular spokespersons to promote their products.

In the late 1990s, Pepsi launched its most successful long-term strategy of the Cola Wars,
Pepsi Stuff. Consumers were invited to "Drink Pepsi, Get Stuff" and collect Pepsi Points on
billions of packages and cups. They could redeem the points for free Pepsi lifestyle
merchandise. After researching and testing the program for over two years to ensure that it
resonated with consumers, Pepsi launched Pepsi Stuff, which was an instant success.

Tens of millions consumers participated. Pepsi outperformed Coke during the summer of the
Atlanta Olympics, held at Coke's hometown where Coke was the lead sponsor for the Games.
Due to its success, the program was expanded to include Mountain Dew into Pepsi's
international markets worldwide. The company continued to run the program for many years,
continually innovating with new features each year.

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Coca-Cola and Pepsi engaged in a "cyber-war" with the re-introduction of Pepsi Stuff in 2005
& Coca-Cola retaliated with Coke Rewards. This cola war has now concluded, with Pepsi
Stuff ending its services and Coke Rewards still offering prizes on their website. Both were
loyalty programs that give away prizes and product to consumers after collecting bottle caps
and 12 or 24 pack box tops, then submitting codes online for a certain number of points.
However, Pepsi's online partnership with Amazon allowed consumers to buy various
products with their "Pepsi Points", such as mp3 downloads. Both Coca-Cola and coke
previously had a partnership with the iTunes Store.


New entrants are not a strong competitive pressure for the soft drink industry. Coca-Cola and
Pepsi Co dominate the industry with their strong brand name and great distribution channels.
In addition, the soft-drink industry is fully saturated and growth is small. This makes it very
difficult for new, unknown entrants to start competing against the existing firms.

Another barrier to entry is the high fixed costs for warehouses, trucks, and labour, and
economies of scale. New entrants cannot compete in price without economies of scale. These
high capital requirements and market saturation make it extremely difficult for companies to
enter the soft drink industry therefore new entrants are not a strong competitive force.

Capital requirements for producing, promoting, and establishing a new soft drink
traditionally have been viewed as extremely high. According to industry experts, this makes
the likelihood of potential entry by new players quite low, except perhaps in much localized
situations that matter little to Coke or Pepsi. Yet, while this view may reflect conventional
wisdom, some industry observers question whether a new time is coming, with 'new age'
beverages selling to well-informed and health-informed and health-conscious consumers.
This issue was beginning to grab the attention of both Coke and Pepsi in the summer of
1992, when they both were not able to explain a drop in their June 1992 sales.

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Numerous beverages are available as substitutes for soft drinks. Citrus beverages and fruit
juices are the more popular substitutes. Availability of shelf space in retail stores as well as
advertising and promotion traditionally has had a significant effect on beverage purchasing
behaviour. Overall total liquid consumption in the United States in 1991 included Coca-
Cola's 10% share of all liquid consumption.

“For years the story in the non-alcoholic sector centred on the power struggle between Coke
and Pepsi. But as the pop fight has topped out, the industry's giants have begun relying on
new product flavours and looking to noncarbonated beverages for growth.”

Substitute products are those competitors that are not in the soft drink industry. Such
substitutes for Coca-Cola products are bottled water, sports drinks, coffee, and tea, juices etc.
Bottled water and sports drinks are increasingly popular with the trend to be a more health
conscious consumer. There are progressively more varieties in the water and sports drinks
that appeal to different consumer's tastes, but also appear healthier than soft drinks.

In addition, coffee and tea are competitive substitutes because they provide caffeine. The
consumers who purchase a lot of soft drinks may substitute coffee if they want to keep the
caffeine and lose the sugar and carbonation.

Blended coffees are also becoming popular with the increasing number of Starbucks, Barista
and CCD stores that offer many different flavours to appeal to all consumer markets. It is also
cheap for consumers to switch to these substitutes making the threat of substitute products
very strong (Datamonitor, 2005).

The growth rate has been recently criticized due to the market saturation of soft drinks.
Datamonitor (2005) stated, “Looking ahead, despite solid growth in consumption, the global

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soft drinks market is expected to slightly decelerate, reflecting stagnation of market prices.”
The change attributed to the other growing sectors of the non-alcoholic industry including tea
& coffee is 11.8% and bottled water is 9.3%. Sports drinks and energy drinks are also
expected to increase in growth as competitors start adopting new product lines.

Profitability in the soft drink industry will remain rather solid, but market saturation has
caused analysts to suspect a slight deceleration of growth in the industry (2005). Because of
this, soft drink leaders are establishing themselves in alternative markets such as the snack,
confections, bottled water, and sports drinks industries.

In order for soft drink companies to continue to grow and increase profits they will need to
diversify their product offerings. So in order to compete with the substitutes industry, coca-
cola has diversified from just carbonated drink industry to other substitute and so have other
brands like Pepsi, Dr pepper/Snapple.


Individual consumers are the ultimate buyers of soft drinks. However, Coke and Pepsi's real
'buyers' have been local bottlers who are franchised -or are owned, especially in the case of
Coke- to bottle the companies' products and to whom each company sells its patented syrups
or concentrates. While Coke and Pepsi issue their franchise, these bottlers are in effect the
'conduit' through which these international cola brands get to local consumers

Through the early 1980's, Coke's domestic bottlers were typically independent family
businesses deriving from franchises issued early in the century. Pepsi had a collection of
similar franchises, plus a few large franchisees that owned many locations. Until 1980, Coke
and Pepsi were somewhat restricted in owning bottling facilities, which was viewed as a
restraint of free trade. Jimmy Carter, a Coke fan, changed that by signing legislation to allow
soft-drink companies to own bottling companies or territories, plus upholding the territorial
integrity of soft-drink franchises, shortly before he left office.

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Also, the three most important channels for soft drinks are supermarkets, fountain sales, and
vending. In 1987, supermarkets accounted for about 40% of total U.S. soft drink industry
sales, fountain sales represented about 25%, and vending accounted for approximately 13%.
Other retailers represent the remaining percentage.

While both Coca-Cola and Pepsi distribute their bottled soft drinks through a network of
bottling companies, Coca-Cola uses its own network of wholesalers for their fountain syrup
distribution, and Pepsi distributes its fountain syrup through its bottlers.


The principal raw material used by the soft-drink industry in the United States is high
fructose corn syrup, a form of sugar, which is available from numerous domestic sources.
The principal raw material used by the soft-drink industry outside the United States is
sucrose. It likewise is available from numerous sources.

Another raw material increasingly used by the soft-drink industry is aspartame, a sweetening
agent used in low-calorie soft-drink products. Until January 1993, aspartame was available
from just one source -the NutraSweet Company, a subsidiary of the Monsanto Company- in
the United States due to its patent, which expired at the end of 1992.

Coke managers have long held 'power' over sugar suppliers. They view the recently expired
aspartame patents as only enhancing their power relative to suppliers.


PESTLE stands for Political, Economic, Social, Technological, Legal and Environmental. It
is a tool that helps the organisations for making strategies and to know the EXTERNAL
environment in which the organisation is working and is going to work in the future.

Coca-Cola beverage, which is the leading manufacturer and distributor of non-alcoholic

drinks also need to undergo this PESTLE analysis to know about the external environment
(especially their competitors and the opportunities available) in order to keep pace with the

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fast growing economy.

Political Analysis:

Political factors are how far a government intervenes in the operations of the company. The
political factors may include tax policy, trade restrictions, environmental policy, laws
imposed on the recruiting labours, amount of permitted goods by the government and the
service provided by the government.

Globally, Coca-Cola beverages being a non-alcoholic industry falls under the FDA (Food and
Drug Administration), it is an agency in the United States Department of Health and Human
Services. Its headquarters is in USA and it has started opening offices in foreign countries as
well. The job of the FDA is to check and certify whether the ingredients used in the
manufacturing of Coca-Cola products in the particular country is meeting to the standards or
not. In Coca-Cola the company takes all the necessary steps to analyze thoroughly before
introducing any ingredients in its products and get prior approval from the FDA. The
company also has to take into consideration of the regulation imposed by FDA on plastic
bottled products.

Apart from FDA the other political factors includes tax policies and accounting standards.
The accounting standards used by the company changes from time to time which have a
significant role in the reported results.

The company also is subjected to income tax policies according to the jurisdiction of various
countries. In addition to this, the company is also subjected to import and excise duties for
distribution of the products in the countries where it does not have the outsourcing units.

Moreover, if there is any unrest or changes in the government and any kind of protest by the
political activists may decline the demand for the products. Also the situations like the unsure
conditions prevailing in Iraq and escalation of the terrorist activities in these areas could
affect the international market of our product. It creates an inability for the company to

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penetrate in the markets of such countries.

Economic Factors:

The economic factors analyze the potential areas where the firm can grow and expand. It
includes the economic growth of the country, interest rates, exchange rates, inflation rates,
wage rates and unemployment in the country.

The company first analyzes the economic condition of the country before venturing into that
country. When there is an economic growth in the country, the purchasing power among
people increases. It gives the company or the marketer a good chance to market the product.
Coca-Cola, in the past identified this correctly and rightly started its distribution across
various countries. The net operating profits for the company outside US stands at around
72%. Along with this the company uses 63 various types of currencies other than US Dollar.
Hence there is a definite impact in the revenues due to the fluctuating foreign currency
exchange rates. A strong and weak currency tends to affect the exporting of the products

Interest rates are the rate which is imposed on the company for the money they have
borrowed from government. When there is an increase in the interest rates, it may deter the
company in further investment as the cost for borrowing is higher. Coca-Cola uses derivative
financial instruments to cope up with the fluctuating interest rates. Inflation and wage rate go
hand in hand, when there is an increase in the inflation the employee demand for a higher
wage rate to cope up with the cost of living.

This comes as additional cost for the company which cannot be reflected in the price of the
final product as the competition and risk in this segment is higher. This is a threat in the
external environment faced by the company. From the above explanation it is clearly seen
that the economic factors involves a major impact in the behaviour of the company during
various economic situations.

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Social Factors:

Social factors are mainly the culture aspects and attitude, health consciousness among people,
population growth with age distribution, emphasis on safety. The company cannot change the
social factors but the company has to adjust itself to the changing society. The company
adapts various management strategies to adapt to these social trends.

Coca-Cola which is a B2C company, is directly related to the customer, so social changes are
the most important factors to consider. Each and every country has a unique culture and
attitude among the people. It is very important to know about the culture before marketing in
a particular country. Coca-Cola has about 3300+ products in their stable, when entering into a
country it does not introduce all the products. It introduces minimum number of products
according to the culture of the country and the attitude of the people.

Consumers and government are becoming increasingly aware of the public health
consequences, mainly obesity which is the second social factor in the soft drinks industry. It
inspired the company to venture into the areas of Diet coke and zero calorie soft drinks. The
problem of obesity is taken seriously among the youngsters who like to maintain a good
physique. Hence coke introduced dietary products for those youngsters who can enjoy coke
with zero calories. In one of the study it is said that “Consumer from the age groups 37 to 55
are also increasingly concerned with nutrition”. Since many are aware, they are concerned
with the longevity of their lives. This will affect the demand of the company in the existing
product and also is an opportunity to venture into new health and energy drinks industry.

Population growth rate and the age distribution is another social factor to be considered. It is
very important because non-alcoholic markets have most of its share from the children and
youngsters. Adults used to celebrate mostly with alcohol. The age distribution of the country
becomes important for the success of the product in a country.

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Technological Factors:

Technology plays a varied role in the soft drinks industry. The manufacturing and distribution
of the products is relatively a Low-Tech business, although the creation of a new product
with the perfect blend and taste is a science (an art in itself).

Technological contributions are most important in packaging. The company rely on their
bottling partners for a significant portion of their business. Nearly 83% of the worldwide unit
case volume is manufactured and distributed by their bottling partners in whom the company
does not have controlling power. Hence it is necessary for the company to maintain a cordial
relation with their bottling partners. If the company do not give ample support in pricing,
marketing and advertising then the bottling industry while increase their short term profits,
may become detrimental to the company.

The advancement in technology in the company has led to: Introduction of new ways for the
availability of Coca-Cola, it introduced general vending machines all over the world. In
products it led to the development of new products like Cherry Coke, Diet Coke etc. The
technical advancement in the bottling industries include, introduction of recyclable and non
refillable bottles, introduction of cans which are trendy, stylish and popular among the

Legal Factors
The legal factors include discrimination law, customer law, antitrust law, employment law
and health and safety law. In Coca-Cola the business is subjected to various laws and
regulation in the numerous countries in which they do the business, the laws include
competition, product safety, advertising and labelling, container deposits, environment
protection, labour practices.

In the US the products of the company is subjected to various acts like Federal Food, Drug
and Cosmetic Act, the Federal Trade Commission Act, Occupation Safety and Health Act,

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various environment related acts and regulations, the production, distribution, sale and
advertising of all the products are subjected to various laws and regulations. Changes in these
laws could result in increased costs and capital expenditures, which affects the company
profitability and also the production and distribution of the products.

Various jurisdictions may adopt significant regulations in the additional product labelling and
warning of certain chemical content or perceived health consequences. These requirements if
become applicable in the future the company must be ready to accept and have necessary
changes in hand for the same.

Environment Factors
These factors include the environment such as the weather conditions and the seasons in
which people prefer to buy cool beverages. Also the company must follow the environmental
issues related to the product manufacturing, packaging and distributing in various countries.
It must adhere to the norms and market the product accordingly. Usage of renewable plastic
in the PET bottles is followed by the company strictly.





Coca-Cola has strong brand recognition across the globe. The company has a leading brand
value and a strong brand portfolio. Business-Week and Inter-brand, a branding consultancy,
recognize. Coca-Cola as one of the leading brands in their top 100 global brands ranking in
2006.The Business Week-Inter-brand valued Coca-Cola at $67,000 million in 2006. Coca-

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Cola ranks well ahead of its close competitor Pepsi which has a ranking of 22 having a brand
value of $12,690 million Furthermore; Coca-Cola owns a large portfolio of product brands.
The company owns four of the top five soft drink brands in the world: Coca-Cola, Diet Coke,
Sprite and Fanta.

Strong brands allow the company to introduce brand extensions such as Vanilla Coke, Cherry
Coke and Coke with Lemon. Over the years, the company has made large investments in
brand promotions. Consequently, Coca-cola is one of the best recognized global brands. The
company’s strong brand value facilitates customer recall and allows Coca-Cola to penetrate
new markets and consolidate existing ones.


With revenues in excess of $24 billion Coca-Cola has a large scale of operation. Coca-Cola is
the largest manufacturer, distributor and marketer of non-alcoholic beverage concentrates and
syrups in the world. Coco-Cola is selling trademarked beverage products since the year 1886
in the US. The company currently sells its products in more than 200 countries. Of the
approximately 52 billion beverage servings of all types consumed worldwide every day,
beverages bearing trademarks owned by or licensed to Coca-Cola account for more than 1.4

The company’s operations are supported by a strong infrastructure across the world. Coca-
Cola owns and operates 32 principal beverage concentrates and/or syrup manufacturing
plants located throughout the world.

In addition, it owns or has interest in 37 operations with 95 principal beverage bottling and
canning plants located outside the US. The company also owns bottled water production and
still beverage facilities as well as a facility that manufactures juice concentrates. The
company’s large scale of operation allows it to feed upcoming markets with relative ease and
enhances its revenue generation capacity.


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Coca-Cola’s revenues recorded a double digit growth, in three operating segments. These
three segments are Latin America, ‘East, South Asia, and Pacific Rim’ and Bottling
investments. Revenues from Latin America grew by 20.4% during fiscal 2006, over 2005.
During the same period, revenues from ‘East, South Asia, and Pacific Rim’ grew by 10.6%
while revenues from the bottling investments segment by 19.9%.

Together, the three segments of “Latin America”, “East, South Asia” and “Pacific Rim”
bottling investments, accounted for 34.8% of total revenues during fiscal 2006. Robust
revenues growth rates in these segments contributed to top-line growth for Coca-Cola during


The Coca-Cola Company has been involved in a number of controversies and lawsuits related
to its relationship with human rights violations and other perceived unethical practices. There
have been continuing criticisms regarding the Coca-Cola Company's relation to the Middle
East and U.S. foreign policy. The company received negative publicity in India during
September 2006.The company was accused by the Centre for Science and Environment
(CSE) of selling products containing pesticide residues. Coca-Cola products sold in and
around the Indian national capital region contained a hazardous pesticide residue.

On 10 December 2008, the US Food and Drug Administration (FDA) wrote to Mr. Muhtar
Kent, President and Chief Executive Officer, to warn him that the FDA had concluded that
Coca-Cola's product Diet Coke Plus 20 FL OZ was is in violation of the Federal Food, Drug,
and Cosmetic Act.

In January 2009, the US consumer group the Centre for Science in the Public Interest filed a
class-action lawsuit against Coca-Cola. The lawsuit was in regards to claims made, along

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with the company's flavours, of Vitamin Water. Claims say that the 33 grams of sugar are
more harmful than the vitamins and other additives are helpful.


Coca-Cola’s performance in North America was far from robust. North America is Coca-
Cola’s core market generating about 30% of total revenues during fiscal 2006. Therefore, a
strong performance in North America is important for the company.

n North America the sale of unit cases did not record any growth. Unit case retail volume in
North America decreased 1% primarily due to weak sparkling beverage trends in the second
half of 2006 and decline in the warehouse-delivered water and juice businesses. Moreover,
the company also expects performance in North America to be weak during 2007. Sluggish
performance in North America could impact the company’s future growth prospects and
prevent Coca-Cola from recording a more robust top-line growth.


The company’s cash flow from operating activities declined during fiscal 2006. Cash flows
from operating activities decreased 7% in 2006 compared to 2005. Net cash provided by
operating activities reached $5,957 million in 2006, from $6,423 million in 2005. Coca-
Cola’s cash flows from operating activities in 2006 also decreased compared with 2005 as a
result of a contribution of approximately $216 million to a tax-qualified trust to fund retiree
medical benefits.

The decrease was also the result of certain marketing accruals recorded in 2005.Decline in
cash from operating activities reduces availability of funds for the company’s investing and
financing activities, which, in turn, increases the company’s exposure to debt markets and
fluctuating interest rates.


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During 2006, its acquisitions included Kerry Beverages, (KBL), which was subsequently,
reappointed Coca-Cola China Industries (CCCIL). Coca-Cola acquired a controlling
shareholding in KBL, its bottling joint venture with the Kerry Group, in Hong Kong.
The acquisition extended Coca-Cola’s control over manufacturing and distribution joint
ventures in nine Chinese provinces.

In Germany the company acquired Apollinaris which sells sparkling and still mineral water.
Coca-Cola has also acquired a 100% interest in TJC Holdings, a bottling company in South

Africa. Coca-Cola also made acquisitions in Australia and New Zealand during 2006. These
acquisitions strengthened Coca-Cola’s international operations.

These also give Coca- Cola an opportunity for growth, through new product launch or greater
penetration of existing markets. Stronger international operations increase the company’s
capacity to penetrate international markets and also gives it an opportunity to diversity its
revenue stream. On 25 February 2010, Coco cola confirms to acquire the Coca cola
enterprises (CCE) one the biggest bottler in North America. This strategy of coca cola
strengthens its operations internationally.


Bottled water is one of the fastest-growing segments in the world’s food and beverage market
owing to increasing health concerns. The market for bottled water in the US generated
revenues of about $15.6 billion in 2006.

Market consumption volumes were estimated to be 30 billion litres in 2006. The market's
consumption volume is expected to rise to 38.6 billion units by the end of 2010. This
represents a CAGR of 6.9% during 2005-2010.

In terms of value, the bottled water market is forecast to reach $19.3 billion by the end of
2010. In the bottled water market, the revenue of flavoured water (water-based, slightly
sweetened refreshment drink) segment is growing by about $10 billion annually. The

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company’s Dasani brand water is the third best-selling bottled water in the US. Coca-Cola
could leverage its strong position in the bottled water segment to take advantage of growing
demand for flavoured water.


Hispanics are growing rapidly both in number and economic power. As a result, they have
become more important to marketers than ever before. In 2006, about 11.6 million US
households were estimated to be Hispanic. This translates into a Hispanic population of about
42 million.

The US Census estimates that by 2020, the Hispanic population will reach 60 million or
almost 18% of the total US population. The economic influence of Hispanics is growing even
faster than their population. Nielsen Media Research estimates that the buying power of
Hispanics will exceed $1 trillion by 2008- a 55% increase over 2003 levels.

Coca-Cola has extensive operations and an extensive product portfolio in the US. The
company can benefit from an expanding Hispanic population in the US, which would
translate into higher consumption of Coca-Cola products and higher revenues for the


Coca-Cola competes in the non-alcoholic beverages segment of the commercial beverages
industry. The company faces intense competition in various markets from regional as well as
global players. Also, the company faces competition from various non-alcoholic sparkling
beverages including juices and nectars and fruit drinks. In many of the countries in which
Coca-Cola operates, including the US, PepsiCo is one of the company’s primary competitors.
Other significant competitors include Nestle, Cadbury Schweppes, Groupe DANONE and
Kraft Foods.

Competitive factors impacting the company’s business include pricing, advertising, sales

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promotion programs, product innovation, and brand and trademark development and
protection. Intense competition could impact Coca-Cola’s market share and revenue growth


Coca-Cola generates most of its revenues by selling concentrates and syrups to bottlers in
whom it doesn’t have any ownership interest or in which it has no controlling ownership
interest. In 2006, approximately 83% of its worldwide unit case volumes were produced and
distributed by bottling partners in which the company did not have any controlling interests.
As independent companies, its bottling partners, some of whom are publicly traded
companies, make their own business decisions that may not always be in line with the
company’s interests. In addition, many of its bottling partners have the right to manufacture
or distribute their own products or certain products of other beverage companies.

If Coca-Cola is unable to provide an appropriate mix of incentives to its bottling partners,

then the partners may take actions that, while maximizing their own short-term profits, may
be detrimental to Coca-Cola. These bottlers may devote more resources to business
opportunities or products other than those beneficial for Coca-Cola. Such actions could, in
the long run, have an adverse effect on Coca-Cola’s profitability.
In addition, loss of one or more of its major customers by any one of its major bottling
partners could indirectly affect Coca-Cola’s business results. Such dependence on third
parties is a weak link in Coca-Cola’s operations and increases the company’s business risks.


US consumers have started to look for greater variety in their drinks and are becoming
increasingly health conscious. This has led to a decrease in the consumption of carbonated
and other sweetened beverages in the US. The US carbonated soft drinks market generated
total revenues of $63.9 billion in 2005, this representing a compound annual growth rate
(CAGR) of only 0.2% for the five-year period spanning 2001-2005. The performance of the

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market is forecast to decelerate, with an anticipated compound annual rate of change (CAGR)
of -0.3% for the five-year period 2005-2010 expected to drive the market to a value of $62.9
billion by the end of 2010.

Moreover in the recent years, beverage companies such as Coca-Cola have been criticized for
selling carbonated beverages with high amounts of sugar and unacceptable levels of
dangerous chemical content, and have been implicated for facilitating poor diet and
increasing childhood obesity. Moreover, the US is the company’s core market. Coca-Cola
already expects its performance in the region to be sluggish during 2007. Coca-Cola’s
revenues could be adversely affected by a slowdown in the US carbonated beverage market.

Coca-Cola India was the leading soft drink brand in India till 1977 when it was forced to

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close down its operation by a socialist government in the drive for self sufficiency. After 16
years of absence, coca cola returned to India and witnessed a different culture and economic
platform. During their absence, Parle brothers introduced a new type of cola called THUMS
UP. Along with, they also formulated a lemon flavoured drink, LIMCA, and mango
flavoured, MAAZA. In 1993, coca cola bought the whole Parle Brother operation, in a hope
to beat the main competitor (Pepsi). They presumed that with the tried and tested products of
Parle they will be able to regain their throne in the Indian soft drink market. Pepsi having a 6
year head start helped revive the demand for global cola but it was not easy for the soft drink
giant (coca cola) to return to India. Pepsi put more focus on the youth of the country in their
advertisements but coca cola tried influencing Indians with the ‘American’ way of life, which
turned out to be a mistake.

Coca-Cola invested heavily in India for the first five years, which got them credit of being
one of the biggest investor in the country; however, their sales figures were not so
impressive. Hence, they had to re-think their market strategies. Coca-Cola learned from
Hindustan Lever that reducing their will result in more turnover, hence leading to profit. They
launched an extensive market research in India. They ascertained that in India 3 As must be
applied; Affordability, Availability and Acceptability. Coca-Cola learnt that they were
competing with local drinks such as “Nimbu Pani”, “Narial Pani”, “Lassi” etc. and reached to
a conclusion that competitive pricing was unavoidable. Since then they introduced a 200 ml
glass bottle for Rs.5.

Further, they had different advertising campaigns for different regions of the country. In the
southern part, their strategy was to make Bollywood or Tamil stars to endorse their products.
In various regions they tried portraying coca cola products with different regional food
products. One of the most famous ad campaigns in India was ‘Thanda Matlab Coca-Cola’;
they featured the same quote with different regional entities.

Presently, Coca-Cola is the biggest brand in soft drinks and is way ahead in market share i.e.

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60% in Carbonated Soft drinks Segment, 36% in Fruit drinks Segment, 33% in Packaged
water Segment, compared to its arch rival, Pepsi. Diversifying their product range and having
a competitive pricing policy, they have regained their throne. With virtually all the goods and
services required to produce and market Coca-Cola being made in India, the business system
of the Company directly employs approximately 6,000 people, and indirectly creates
employment for more than 125,000 people in related industries through its vast procurement,
supply, and distribution System.

The Indian operations comprises of 50 bottling operations, 25 owned by the Company, with
another 25 being owned by franchisees. That apart, a network of 21 contract packers
manufactures a range of products for the Company.

On the distribution front, 10-tonne trucks – open bay three-wheelers that can navigate the
narrow alleyways of Indian cities – constantly keep our brands available in every nook and
corner of the Country’s remotest areas.


In India Coca-Cola was leading soft drink till 1977 when Government policies necessitated
its departure. Coca-Cola made its return to the country in 1993 and made significant
investments to ensure that the beverage is available to more and more people, even in remote
and inaccessible parts of the nation.

Over the past fourteen years has enthralled consumers in India by connecting with passions of
India – Cricket, movies, music & food. Coca-Cola’s advertising campaigns “Jo Chaho Ho
Jaye” & “Life Ho Toh Aise” were very popular & had entered youths vocabulary. In
2002.Coca-Cola launched its iconic campaign “Thanda Matlab Coca-Cola” which sky
rocketed the brand to make it India’s favourite soft drink brand.

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200ml, 300ml, 500ml, 1.5L, 2L, 330 ml VARIOUS SIZES

500ml, 1000ml 2.25L, 500ml, 100ml

Table - 1.0

Limca was introduced in 1971 in India. Limca has remained unchallenged as the No.1
sparkling drink in the cloudy lemon segment. The success formula is the sharp fizz and
lemoni bite combined with the single minded proposition of the brand as the provider of

Limca can cast a tangy refreshing spell on anyone, anywhere. Derived from “Nimbu” +
“Jaise” hence Lime Sa, Limca has lived up to its promises of refreshment and has been the
original thirst choice of millions of customers for over 3 decades.


200ml, 300ml, 500ml, 1.5L, 2L, 330 ml VARIOUS SIZES

500ml, 1000ml 2.25L, 500ml, 100ml

Table - 1.1

Thums up is a leading sparkling soft drink and most trusted brand in India. Originally
introduced in 1977, Thums up was acquires by The Coca-Cola Company in 1993. Thums up

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is known for its strong, fizzy taste and it confident, mature and uniquely masculine attitude.
This brand clearly seeks to separate the men from the boys.


200ml, 300ml, 500ml, 1.5L, 2L, 330 ml VARIOUS SIZES

500ml, 1000ml 2.25L, 500ml, 100ml

Table - 1.2

Sprite a global leader in the lemon lime category is the second largest sparkling beverage
brand in India. Launched in 1999, Sprite with its cut-thru perspective has managed to be a
true teen icon.


200ml, 300ml 500ml, 600ml, 330 ml VARIOUS SIZES

1250ml, 1500ml,
2000ml, 2250ml

Table – 1.3

Fanta entered the Indian market in the year 1993. Over the years Fanta has occupied a strong

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market place and is identifies as “The Fun Catalyst”. Perceived as a fun youth brand, Fanta
stands for its vibrant colour, tempting taste and tingling bubbles that not just uplifts feelings
but also helps free spirit thus encouraging one to indulge in the moment. This positive
imagery is associated with happy, cheerful and special times with friends.


200ml, 300ml 500ml, 1.5L, 2L, 330 ml VARIOUS SIZES

2.25L, 500ml, 100ml

Table – 1.4


The history of the Minute Maid brand goes as far back as 1945 when the Florida Food
Corporation developed orange juice powder. The company developed a process that
eliminated 80% of the water in the orange juice, forming a frozen concentrate that when
reconstitute created orange juice. They branded it Minute Maid a name connoting the
convenience and the ease of preparation. Minute Maid thus moved from a powdered
concentrate to the first ever orange juice from concentrate.

The launch of Minute Maid in India (started with the south of the country) is aimed to further
extend the leadership of Coca-Cola in India in the juice drink category.

Available in 3 PET pack sizes i.e. 400ml, 1 litre, 1.25 litres.

Maaza was introduced in late 1970’s. Maaza has today come to symbolise the very spirit of

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mangoes. Universally loved for its taste, colour, thickness and wholesome properties, Maaza
is the mango lover’s first choice.


200ml, 250ml 250ml, 600ml, 1.2L 200ml

Table – 1.5

The importance of water can never be understated, Particularly in a nation such as India
where water governs the lives of the millions, be it as a part of everyday ritual or as the
monsoon which gives life to the sub continent. Kinley water comes with the assurance of
safety from the Coca-Cola Company.

Available in PET 500ml and 1000ml.


Georgia coffee was introduced in India in 2004. The Georgia gold range of Tea and coffee
beverages is the perfect solution for office and restaurant needs. Today Georgia coffee is
available at Quick-Service Restaurants, Airports, Cinemas and in Corporates across all major
metros in India.

HOT BEVERAGES Espresso, Americano, Cappuccino, Caffe Latte, Mochaccino,

Hot Chocolate, Cardamon Tea.

COLD BEVERAGES Ice Teas, Cold Coffee.

Table – 1.6


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Coca-Cola India has a wide range of products in its product line i.e. Coca-Cola, Fanta, Sprite,
Thums Up, Maaza, Minute Maid and Georgia Gold. Bottled water was another area where
Coca-Cola identified major opportunities. In 2002, Packaged drinking water in India was a
Rs 1,000 cr industry and growing by 40% every year. PDW was a low margin – high volume
business, but it was an attractive proposition for bottlers as it increased plant utilization rates.
In this market Coke’s Kinley was pitched against Ramesh Chauhan’s Bisleri and Pepsi’s
Aquafina. The product not only faced intense competition but also was difficult to
differentiate. Coke positioned Kinley as natural water with the tag line “Bhoond Bhoond
Mein Vishwas” (Trust in each drop of water).

In early 1999, the parent company acquired Cadbury Schweppes. As a result 12 more bottlers
were brought into CCI’s fold. This acquisition added Crush, Canada Dry and Sport Cola to
CCI’s product line. This meant CCI had three orange, clear lime and cola drinks each in its

Coke learnt with experience that price was a strategic weapon in an emerging market like
India. An increase in value added tax in 1996 had taken the price of the 300ml bottle beyond
the reach of many Indian customers. In 2000, CCI conducted a yearlong experiment in
coastal Andhra Pradesh by introducing a 200ml bottle at Rs 7. The volumes went up by 30%
demonstrating the importance of consumer affordability. So the 200ml pack priced at Rs 5
was rolled out countrywide in January 2003. The advertising Campaign highlighted the
affordability and Indian image.

To make it affordable, Coke introduced Kinley in 200ml pouches for Re. 1 in selected places
in Ahmadabad and 200ml water cups in Maharashtra, priced at Rs 3 per cup in testing
marketing exercise conducted in mid – 2002. In 2002 Kinley with 35% market share had
become the leader in the retail PDW segment and was contributing 20% of CCI’s revenues.

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Coke pushed down responsibilities from corporate headquarters to the local business units.
The aim was to effectively align CCI's corporate resources, support systems and culture to
leverage the local capabilities. CCI's operations had been divided into North, Central and
Southern regions. Each region had a president at the top, with divisions comprising
marketing, finance, human resources and bottling operations. The heads of the divisions
reported to the CEO. Bottling operations were divided into four companies directed by the
bottling head from headquarters. Under the new plan, CCI shifted to a six region profit center
set up where product customization and packaging, marketing and brand building were taken
up locally. A Regional General Manager (RGM) headed each region with the regional
functional heads reporting to him. All the RGMs reported to VP (Operations, who in turn
reported to CEO. The four bottling operations, with 37 bottling plants, were merged into
Hindustan Coca-Cola Beverages (HCCB). Each of the six regions had on an average six
bottling plants. Each plant was headed by an Area General Manager (AGM) and held profit
center responsibility for a business territory. He reported to the RGM as well as the head of
bottling at the head quarters.

In the initial years, CCI focused on establishing the Coca-Cola brand quickly. The marketing
campaign positioned Coca-Cola as an international brand and did not emphasize local
association. Coke, as a deliberate strategy, decided not to spend heavily on promoting Thums
Up. Indeed the marketing spend on Thums Up between 1993 and 1996 was almost negligible.
The overall marketing effort was also not focused as CCI changed the head of marketing
three times during the period. Thumps Up remained neglected. Inadequate marketing support
for other Parle brands also led to their declining market shares.

The bottlers taken over by Coke also had problems adjusting to a new work culture. They
argued that CCI's lack of interest in promoting Thumps Up was resulting in falling sales and

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asked CCI to take corrective action.

Coke is primarily targeted at young individuals over the age of twenty-five. This can be seen
by Coca-Colas advertising campaigns, which are aimed towards the young, by featuring well
known personalities popular to this age group. During 90'ies Coke's promotion efforts did not
seem to be effective. They were focused on mega events like the 1996 Cricket World Cup
held in India. CCI's World Cup Cricket campaign was overshadowed by Pepsi's "Nothing
official about it" campaign. Major analysts were surprised that Thumps Up was totally out of
the picture during such a mega event. In 1998 localization of marketing efforts, CCI signed
up celebrities like Aamir Khan, Aishwarya Rai, and Sunil Gavaskar to promote Coke. Coke
also began efforts to rejuvenate the Parle brands, Limca and Thumps Up. In 1998, India was
declared the fastest growing market within the Coca-Cola system. But things were far from
normal. Attempts at building growth through discounts and PET take home segment were not
very successful because of lack of coordination between the launches and marketing back-up.

To maintain good relationships with bottlers and avoid defections to the other camp, dealers
had been pampered by offering expensive overseas trips. In 2000, Coke wrote off
investments in India, amounting to $400 Mn. The revised value of CCI's assets after the
charge was $300 mn.

CCI spent $3.5 mn to beef up advertising and distribution for Thumps Up. By 2002, it had
become India's No.2 cola drink after Pepsi. Maaza, the mango drink, was repositioned as a
juice brand and saw a growth of almost 30% in 2001. Since India was a large country of
different tastes and cultures, CCI customized its marketing strategy for different regions. It
promoted the Coke brand in Delhi, Thumps Up in Mumbai and Andhra Pradesh, and Fanta in
Tamil Nadu. Coke had plans to launch Rimzim, a spicy soda drink in North Maharashtra.


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PESTLE stands for Political, Economic, Social, Technological, Legal and Environmental. It
is a tool that helps the organisations for making strategies and to know the EXTERNAL
environment in which the organisation is working and is going to work in the future.

Political Factors:

 Historical

Coca Cola India was the leading soft drink brand in India till 1977 when it left rather than
revealing its formula to the government. They re-entered the country in 1993. However, the
primary barrier for Coca-Cola’s entry into the Indian market was its political environment.
Despite the liberalization of the Indian economy in 1991 and introduction of the New
Industrial Policy to eliminate barriers such as bureaucracy and regulation, there was still a lot
of protectionism. India’s past promotion of “Indigenous availability” or “Swadeshi
movement” depicted its affinity for local products. Due to India’s suspicion of foreign
business entering Indian markets, Coca Cola received alien status its re-entry. This and some
of the policies imposed on foreign enterprises proved as a hindrance to the growth of the
company in the country. To make things worse, the policies were neither clear nor

For example, foreign businesses were not allowed to market their products under the same
name if selling within the Indian market. Thus, Coca Cola had to be changed to Coca Cola
India (and Pepsi had to be renamed to Lehar Pepsi). However, the most controversial, and by
far, the most damaging was when Coca-Cola was forced to sign an agreement to sell 49% of
its equity in order to buy out Indian bottlers. Due to the lack of consistency in the legal
aspects, more importance was being given to lobbying the politicians.

 Recent Scenario

During recent times, Coca Cola India has faced its fair share of problems. On August 5 th

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2003, The Centre for Science and Environment (CSE), an activist group in India focused on
environmental sustainability issues (specifically the effects of industrialization and economic
growth) issued a press release stating: "12 major cold drink brands sold in and around Delhi
contain a deadly cocktail of pesticide residues". According to tests conducted by the Pollution
Monitoring Laboratory (PML) of the CSE from April to August, three samples of twelve
PepsiCo and Coca-Cola brands from across the city were found to contain pesticide residues
surpassing global standards by 30-36 times.

This had an adverse impact on the sales of Coca Cola, with a drop of almost 30-40%1 in only
two weeks on the heels of a 75% five-year growth trajectory. Many leading clubs, retailers,
restaurants, and college campuses across the country had stopped selling Coca-Cola. This
threatened the newly achieved leadership attained over Pepsi due to a successful marketing

But this was not the end of Coca Cola’s troubles. There was widespread discontent around
many of their plants. For example, in Plachimada, Kerala, the communities in and around the
Coca Cola plant blamed the factory for their water problems. Due to this, the local Panchayat
decided not to renew the license issued to Coca Cola to “protect public interest". The
company has also been accused of illegally occupying a portion of the village property
resources in Mehdiganj, near Varanasi. However, there are certain positives as well, with a 22
percent increase in its unit case volume last quarter.
Economic Analysis:

The Indian economy sustained the global economic slowdown in the previous year and has
shown a tremendous economic growth. It showed 8.6% of growth in the last quarter of 2009-
10 as compared to 5.8% same time in the previous year. It has emerged as an attractive
economy to invest in as many opportunities has been recognized.

 Economic growth

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India is ranked second in economic growth, just behind China. Analysts have said that India
will be the third biggest economy of the world in the coming year behind China and USA.
With economic growth many opportunities have been seen, which have attracted many
foreign investor to the company.

Coca cola India returned to the country in 1993, despite few problems in the start they have
emerged as the king of soft drink industry in India. The strong economic growth of India has
resulted in coca cola to invest heavily in sales and distributive channels. It has introduced two
new products, Nimbu Fresh and an energy drink ‘Burn’.

Coca cola registered 22% growth in their unit case volume in the second quarter (April-June).
It is the 16th consecutive quarter of such growth out of which 13 are double digit. Coca cola
India’s growth is in contrast to its overall performance, the beverage king reported a growth
of just 5% (worldwide) in the same quarter.

 Inflationary effects
Inflation is one of the main problems that Indian economy has been facing for a year now.
Rising prices in the food and other products doesn’t only effect the consumers it also has an
adverse effect on a company. The inflation rate for the year 2009 was recorded to be 11.49%.
As prices have gone up in India for various products, especially oil, there has been
uncertainty in decision making of almost every company. Coca cola India has also been
affected by the same; it has been forced to think about their input costs, as they have been
rising due to inflation. Their expenditure has been rising, with more costs in salaries,
distribution channels and other operating costs. Beverage industry being price competitive
market, they have not revised their product prices.

Exchange rate

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The exchange rate of rupee to US Dollar has been stable but in the previous months the rate
has had a tumultuous period. Exchange rate determines at what price will the company export
its products and import whatever is required by it. The previous year, the rate of rupee to
USD touched 44, on an average it has been around 47, so the exports earned less and the
imports cost more. Therefore, coca cola India had to bear some low profitable times.
However, in the present scenario rates have reached a stable level and exports are on an
increasing trend.

Social Analysis:
Coca- Cola returned to India in 1993 after a 16 year hiatus, amidst competition from Leher
Pepsi which had the advantage of entering the country 7 years earlier. Initially, it struggled to
find acceptance as there were already other brands such as Parle’s Thums Up which existed
in the market. Coca-Cola had earlier focussed more on the American way of life in their
advertising campaigns, which the Indian consumers could not identify with. Also, they did
not focus on competition from other alternatives such as lemonade, Lassi etc.

These products had been around for centuries, and were also cheaper alternatives to Coca-
Cola. However, things were brought under control when Thums Up was bought over by Coca
Cola, and more attention was paid by the company on their marketing mix.
With the lowering of their prices by almost 15-20%, introduction of newer products which
appealed to the Indian tastes, more investment in market research and focussing on the target
group of 18-24 year olds, they were able to increase their market share and build brand

Coca Cola today, has made significant investments to build its business in India. It has also
generated employment for almost 1,25,000 people in related industry through its
procurement, supply and distribution cycles.

The soft drink industry today is growing steadily due to the booming economy, strengthened

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middle class and low per capita consumption. With the increase in health consciousness
among the urban consumers, the company has introduced newer products such as Diet Coke,
which contain lesser calories than ordinary Coca Cola. This is also responsible for the
company shifting focus from carbonated drinks to Fruit Drinks / Juices and bottled water.
The rural market had also been identified by Coca-Cola India as an attractive target, with
almost 70% of the country’s population. The company has recorded significant growth in
recent years

Coca Cola India has also taken many initiatives as a responsible corporate citizen, by tying up
with many NGOs such as BAIF (or Bharatiya Agro Industries Foundation), SOS Children’s
Villages and Save the Children. It has also taken initiatives to promote education in rural
Technological Analysis:
Coca-Cola has started operations of its R&D facility in India, with the view of localizing its
product portfolio. The major focus would be on non carbonated drinks and flavours. The
company’s R&D team has already rolled out drinks such as Maaza aam panna and also a
Maaza mango milk drink, and is exploring options to enter new categories in India such as
juices in localised flavours, energy drinks, sports drinks and flavoured water. These
initiatives are being taken by the company to further expand their product portfolio.
With the increasing importance of 360 degree media tools and overall ad spend on social
media sets likely to grow by almost 44%, Coca-Cola has increased ad spend on the internet.
Case in point is the recent 2009 Sprite campaign, which was first launched on the internet.

Environmental Analysis:

Coca Cola has earned a title of environment friendly company and Coca Cola India too has
followed in the footsteps. Coca Cola India’s Corporate Social Responsibility (CSR), is an
initiative that prioritizes many social and environmental issues; one of them being ‘water
conservation’. They support many community based rainwater harvesting projects and help

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lending conservation education.

The company has made sure that the following ideas are considered during their operations:

1. Environmental due diligence before acquiring land

2. Environmental impact assessment before commencing project

3. Ground water and environment survey before selecting the site

4. Ban on purchasing CFC emitting refrigerating equipment

5. Waste water treatment facilities

6. Compliance with all regulatory environmental requirements

7. Energy conservation programs

By following these guidelines Coca-Cola India has helped the environment with consistent
profits and success. They seek to provide leadership in three different areas, these are as

1. Water efficiency and water quality

2. Energy efficiency

3. Eliminating or minimizing solid waste.

h being an environmental friendly company, Coca Cola India had to face its share of
controversies. On 4th February, 2003, Centre of Science and Environment in India, released a
report based on experiment done by Pollution Monitoring Laboratory. In the experiment, they
tested 17 packaged drinking water brands and found that, Coca Cola’s Kinley has 15 times
more pesticide residual levels than the stipulated norms, Bisleri had 59 times and Aquaplus
had 109 times.

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The main law governing the food safety is the 1954 Prevention of food alteration act, which
stated that pesticides should not be present in any food item but did not have law against
pesticides being present in soft drinks. However, the Food Processing Order 1955 stated that
the main ingredient used in soft drinks must be ‘potable water’ but the Bureau of Indian
Standards had no prescribed standards for pesticides in water.

But later it was found that BIS had stated that pesticides should not be present or it should not
exceed 0.001 part per million. Further, the health ministry of India admitted that ‘there were
lapses in PFA regarding carbonated drinks’.


Legal Analysis:

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As the Indian consumer is getting more educated, the government is also paying special
attention to consumer laws. In the past, there were not so many laws protecting the benefits to
the consumer but now every business has to go by the law and fix their operations, strategies
so as to satisfy their consumers, and employees. Keeping in mind the consumer laws,
employment laws, antitrust law, discrimination laws etc. a business should plan out

 Consumer Laws
In the present scenario, consumer is the king, if a product is defective, not meeting the stated
standards a consumer can complain against the manufacturer. Complaining and getting the
verdict the court has made very fast and efficient as government of India has installed new
consumers courts. Their main job is to see that the consumer benefits are being met or not.
When producing their beverages, Coca Cola India has to make sure that they have written
price, manufacturing date, expiry date, batch no, nutritional facts are written on the packed

 Employment Laws

Ministry of Labour makes the laws for proper employment in the country. They have
stipulated norms on employing people from the country and getting expatriates in the
company as well. India has strict laws against employing child labour. Being a male
dominated society, the ministry has made sure that female employees are treated with respect
and given equal importance at the work place. Every field of work has got its own wage,
these are to meet the norms and laws set by the labour ministry. When employing anyone,
coca cola India cannot discriminate on social, regional or any racists’ basis. If it is found that
the company has been violating the law, it has to face strict action and fines.

 Health and safety laws

As coca cola produces a product that is consumed by the consumer as a food item, there are
laws that the company must abide by when producing it. Ministry of Food Processing

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Industries makes and oversees the laws and norms for the food processing industries.

The Indian Parliament has recently passed the Food Safety and Standards Act, 2006 that
overrides all other food related laws.

It will specifically repeal eight laws:

• The Prevention of Food Adulteration Act, 1954.

• The Fruit Products Order, 1955.
• The Meat Food Products Order, 1973.
• The Vegetable Oil Products (Control) Order, 1947.
• The Edible Oils Packaging (Regulation) Order, 1998.
• The Solvent Extracted Oil, De oiled Meal, and Edible Flour (Control) Order, 1967.
• The Milk and Milk Products Order, 1992.
• Essential Commodities Act, 1955 relating to food.
From now on, the act establishes a regulatory body, the Food Safety and Standards Authority
of India. Anything that coca cola makes, have to make accordingly to the laws. They have to
check the weight, volume and ingredients of the product. The export or the import of the
products by the company has to meet the quality standards stipulated by the law.

 Anti-trust law
The Competition Commission of India was made under the Indian Competition Act 2002,
Monopolies Restrictive and Trade Practices Act 1969 was replaced by it. This committee
looks after all the issues regarding unethical means of doing business, competition issues and
any dispute between two different business entities. CLG competition and anti trust practices
are as follows:

• Representing clients before the MRTP Commission in ‘monopolistic and restrictive

trade practices’ and ‘unfair trade practices’ matters.

• Legal Advice and sophisticated insight into the international best practices on

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competition law.

• Consultancy services on specific issues - supply and distribution, pricing and

marketing, ‘promotional materials’, mergers, acquisitions, amalgamation, licensing,
joint operation and research, joint buying, ‘dominant-firm’ status etc.
• Competition Audit and Due Diligence for developing appropriate guidelines for
employees, distributors, agents, franchisees etc.
• Legal Due Diligence on anti-competition, unfair and restrictive market practices.
• Drafting claims, counter-claims, replies, rejoinders, representations etc. on
Competition Law and related legal issues.
• Strategic policing on anti-competition market practices and trends.
• Policy due diligence for mergers, acquisitions, joint ventures with appropriate anti-
trust safeguard measures and policy.

All these laws help Coca Cola India to maintain its own brand and values. Any other business
trying to copy the brand of coca cola will face the strict action against itself. These laws help
every business to compete in a fair environment. As it is known that the coca cola and Pepsi
are the fiercest rivals in the beverage industry, the CCI makes sure that either of them does
not indulge in unfair means to make profits and hurt each other’s business.





The Company has a strong and reliable distribution network. The network is formed on the

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basis of the time of consumption and the amount of sale yielded by a particular customer in
one transaction. It has a distribution network consisting of a number of efficient salesmen,
700,000 retail outlets and 8000 distributors. The distribution fleet includes different modes of
distribution, from 10 tonne to open bay three wheelers that can navigate the narrow alleyways
of Indian cities – constantly keep Coca-Cola brands available in every nook and corner of the
Country’s remotest areas.


Coke has its history of about more than a century and this prolonged sustenance has
definitely added to the brand image in the minds of the consumers and to its wallet. The
products produced and marketed by Coca-Cola India have a strong brand image.

Strong brand names like Coca-Cola, Fanta, Thums up, Limca and Maaza add up to the brand
name of Coca-Cola Company as a whole. Coca Cola India for the first time has come out
with corporate campaign in India targeting its stakeholders. The multimedia
campaign “Little Drops of Joy " is aimed at raising the corporate brand image of the
company which took a heavy beating with a number of controversies it faced in different

The new campaign is a part of a complete restructuring exercise in the Indian arm of this
global change. Coca Cola recently announced its new corporate strategy called the “5 Pillar"
strategy. The company has identified the 5 pillars as
• People.
• Planet.
• Portfolio.
• Partners.
• Performance.

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In light of the company’s Affordability Strategy, Coca-Cola went about bringing a cost-focus
culture in the company. This included procurement Efficiencies – through focus on key input
materials, trade discipline and control and proactive tax management through tax incentives,
excise duty reduction and creating marketing companies. These measures have reduced the
costs of operations and increased profit margins.



In India, there exists a major controversy concerning pesticides and other harmful chemicals
in bottled products including Coca-Cola. In 2003, the Centre for Science and Environment
(CSE), a non- governmental organization in New Delhi, said aerated waters produced by soft
drinks manufacturers in India, including multinational giants PepsiCo and Coca-Cola,
contained toxins including lindane, DDT, malathion and chlorpyrifos - pesticides that can
contribute to cancer and a breakdown of the immune system.


The Company’s operations are carried out on a small scale and due to Government
restrictions and ‘red-tapism’, the Company finds it very difficult to invest in technological
advancements and achieve economies of scale.



The domestic market for the products of the Company is very high as compared to any other
soft drink manufacturer. Coca-Cola India claims a 58 per cent share of the soft drinks market;

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this includes a 42 per cent share of the cola market.

Other products account for 16 per cent market share, chiefly led by Limca. The company
appointed 50,000 new outlets in the first two months of this year, as part of its plans to cover
one lakh outlets for the coming summer season and this also covered 3,500 new villages. In
Bangalore, Coca-Cola amounts for 74% of the beverage market.


The Company can come up with new products which are not manufactured abroad, like
Maaza etc and export them to foreign nations. It can come up with strategies to eliminate
apprehension from the minds of the people towards the Coke products produced in India so
that there will be a considerable amount of exports and it is yet another opportunity to
broaden future prospects and cater to the global markets rather than just domestic market.


Development of India as a whole has lead to an increase in the per capita income thereby
causing an increase in disposable income. Unlike olden times, people now have the power of
buying goods of their choice without having to worry much about the flow of their income.
Coca-Cola Company can take advantage of such a situation and enhance their sales.


As India is developing at a fast pace, the per capita income has increased over the years and a
majority of the people are educated, the export levels have gone high. People understand
trade to a large extent and the demand for foreign goods has increased over the years.

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If consumers shift onto imported beverages rather than have beverages manufactured within
the country, it could pose a threat to the Indian beverage industry as a whole in turn affecting
the sales of the Company.


The tax system in India is accompanied by a variety of regulations at each stage on the
consequence from production to consumption. When a license is issued, the production
capacity is mentioned on the license and every time the production capacity needs to be
increased, the license poses a problem. Renewing or updating a license every now and then is
difficult. Therefore, this can limit the growth of the Company and pose problems.


The rural market may be alluring but it is not without its problems: Low per capita disposable
incomes that is half the urban disposable income; large number of daily wage earners, acute
dependence on the vagaries of the monsoon; seasonal consumption linked to harvests and
festivals and special occasions; poor roads; power problems; and inaccessibility to
conventional advertising media. All these problems might lead to a slowdown in the demand
for the company’s products.

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 The main objective of the project is to analyze and study in efficient way the current
position of Coca- Cola Company.

 To perform PESTLE and SWOT analysis of Coca-cola globally as well as locally.

This would help us identify areas of potential growth.

 The study was aimed to perform Market Analysis of Coca-Cola Company & find out
different factors effecting the growth of Coca-Cola.

 Another objective of the study was to perform Competitive analysis between Coca-
Cola and its competitors.

 To understand the reasons behind the purchase of Coca-Cola products.


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This study basically tries to discover the current position of Coca-cola in the market. It
also tries to discover the preferences of the customers when posed with a choice between
Coca-Cola and Pepsi. It is primarily directed to the general public but was done only in
New Delhi, Noida and Greater Noida

A research design is the specification of methods and procedures for acquiring the needed
information. It is overall operational pattern or framework of the project that stipulates what
information is to be collected from which source by what procedure.

There are three types of objectives in a marketing research project:-

• Exploratory Research.
• Descriptive Research.
• Casual Research.
1. Exploratory Research:-

The objective of exploratory research is to gather preliminary information that will help
define problems and suggest hypothesis.

2. Descriptive Research:-

The objective of descriptive research is to describe things, such as the market potential
for a product or the demographics and attitudes of consumers who buy the product.

3. Casual Research:-

The objective of casual research is to test hypothesis about casual and effect

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Based on the above definitions it can be established that this study is a Descriptive Research
as the attitudes of the customers who buy the products have been stated. Through this study
we are trying to analyze the various factors that may be responsible for the preference of
Coca-Cola products.


The data has been collected from both primary as well as secondary sources.


It is defined as the data collected earlier for a purpose other than one currently being pursued.

As a researcher I have scanned lot of sources to get an access to secondary data which have
formed a reference base to compare the research findings. Secondary data in this study has
provided an insight and forms an outline for the core objectives established.

The various sources of secondary data used for this study are:-

 News papers.
 Magazines.
 Text books.
 Marketing reports of the company.
 Internet.


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The primary data has been collected simultaneously along with secondary data for
meeting the established objectives to provide the solution for the problem identified in
this study.

The methods that have been used to collect the primary data are:-

 Questionnaire.
 Personal Interview.


The primary tool for the data collection used in this study is the respondent’s response to the
questionnaire given to them. The various research measuring tools used are:-

 Questionnaire.
 Personal interview.
 Tables.
 Percentages.
 Pie-charts.
 Bar-charts.
 Column charts.


An integral component of a research design is the sampling plan. Especially it addresses

three questions: Whom to survey (sample Unit), how many to survey (Sample Size) and how
to select them (sampling Procedure). Making the census study of the entire universe will be

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impossible on the account of limitations of time and money. Hence sampling becomes
inevitable. A sample is only his portion of population. Properly done, sampling produces
representative data of the entire population.


i. Through questionnaire – 150 respondents.

ii. Through personal interview – 27 respondents.


Questionnaire was used as a main tool for the collection of data, mainly because it gives the
chance for timely feedback from respondents. Moreover respondents feel free to disclose all
necessary detail while filling up a questionnaire. Respondents seeking any clarification can
easily be sorted out through tool.

Sampling Tools Respondents Number

Questionnaire Customers 150
Personal Interview Customers 27
Total 177
Table – 1.7


The study was conducted in New Delhi, Noida and Greater Noida.

 The questionnaires were given to the respondents to fill in order to get their feedback.
 Questions were read out to the respondents and the answers were noted.

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The main purpose of this study is get idea about the preference of the customers towards
various Coca-Cola products. But there are certain factors which affects this study they are as

 Since the sampling procedure was judgmental, the sample selected may not be true
representative of the population.

 Economic and market conditions are very unpredictable (Present and future).

 The project duration is limited to 4 weeks so it limits the area of study.

 The study was confined to New Delhi, Noida and Greater Noida due to which the
result cannot be applied universally.

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Fig 2.4

Fig 2.5


From Fig 2.4, we can comprehend that 90% of total respondents belong to the age group of
20-30. This is because most of the consumers that prefer or consume Coca-Cola products
belong to this age group. About 6% belong to age group below 20 and 3% belong to age
group of 30-40.Form Fig 2.5, we come to know that the gender ratio of the total respondents
is almost 2:1 (male: female).

Fig 2.6

Fig 2.7


From Fig 2.6, we interpret that about 48% of the total respondents consume soft drinks rarely
or once a week. About 35% respondents consume soft drinks twice or thrice a week and only
18% consumes soft drinks every day.

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From Fig 2.7, we interpret that about 81% of the respondents spend only Rs. 50-100 a week
on Coca-Cola products, which is very low as compared to the global scenario. This creates a
potential growth market for Coca-Cola India. About 12% spends from 100-150 a week & 7%
spend above 150.

Fig 2.8


From the above data, we have ascertained that preferred portal for purchase of Coca-Cola
products is the retail shops i.e. 58%. This is probably because not all communities in India
have supermarkets and other purchasing channels present nearby, whereas, we can find retail
shops in every corner.19% prefer to purchase from Supermarkets and Vendor machines. 23%
prefer to purchase from Pubs, Restaurants and Multiplexes.

Fig 2.9


From this graph, we infer that there is no specific occasion why people purchase Coca-Cola
products. Although some of the advertising campaigns target special occasion or festivals.
From Fig 2.9 it is concluded that 59% respondents purchase Coca-Cola without any specific
reason. About 23% purchase for the purpose of parties, 15% purchase while watching
movies in the cinemas and only about 4% purchase during festivals and for picnic purposes.

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Fig 2.10


From the above graph we interpret that about 70% of the respondents, prefer consuming
Coca-Cola product over Pepsi and other drinks. This clearly states why Coca-Cola is market
leader with almost 60% of market share. 23% prefer Pepsi Products and only 75 prefer other

Fig 2.11

Fig 2.12


From Fig 2.11, we infer that though the respondents are more than satisfied by the Coca-Cola
product range they would still like the company to introduce new drinks. From Fig 2.12, we
conclude that about 40% would like to see a new fruit drink being added to the product
basket, 26% want energy drinks, 20% alcoholic drinks and only 14% want another fizzy
drink. Majority of the people wanting to see a fruit drink is mainly because people are more
health conscious now and want to manage their calorie intake.

Fig 2.13


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From Fig 2.13, we infer that about 47% of respondents prefer to purchase PET bottle of
Coca-Cola Products. About 27% prefer to purchase glass bottles, 19% prefer Can of 300ml
and only 8% prefer 1 & 2 litre bottles of Coca-Cola.

Fig 2.14

Fig 2.15


From Fig 2.14, it is concluded that respondents find Coca-Cola products better than that of
Pepsi products. About 62% respondents said that they find Coca-cola products better than
Pepsi and only 38% supported Pepsi products.

From Fig 2.15, we infer that about 62% of the respondent considers the pricing of Coca-Cola
much more reliable than that of Pepsi. About 38% respondents think that Pepsi have better
pricing than that of Coca-Cola.

Fig 2.16

Fig 2.17

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From Fig 2.16 & 2.17, it’s clear that Coca-Cola products have better taste and quality than
that of Pepsi. About 73% respondents consider that Coca-Cola products have very good
quality and taste. 27% respondents consider Pepsi products have better taste and quality.

Fig 2.18

Fig 2.19


From Fig 2.18, it’s clear that there is slight difference between the availability of products of
Coca-Cola and Pepsi. About 51% respondents think that Coca-Cola products are much easily
available in the market.49% consider that availability of Pepsi products is more in the

About 70% of respondents are satisfied with the Coca-Cola products while as 30%
respondents are satisfied with the Pepsi products as shown in Fig 2.19.

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The suggestions made in this section are based on the market study conducted as part of
“Coca-Cola India”. The suggestions are arranged in order of priority, highest first.

 Perform a detail demand survey at regular interval to know about the unique needs
and requirements of the customer.

 The company should make hindrance free arrangement for its customers/retailers to
make any feedback or suggestions as and when they feel.

 The company should focus to bring some more flavors like health drinks and other
low-calorie offerings. Coca-Cola India can also introduce some fruit based drinks,
as it has already entered the energy drink arena with “Burn”.

 Coca-Cola’s distribution channel is mostly through retail. Whereas the competitors

also concentrates more on the multiplexes, pubs and restaurants. Coca-Cola should
try to increase their distribution in these areas.

 The company must keep a watch on its primary competitors in market in order to be
able to compete with them.

 The company should use new attractive system of word of mouth advertisement to
keep alive the general awareness in the whole market as a whole.

 The company should be always in a position to receive continuous feedback and

suggestions from its customers/ consumers as well as from the market and try to
solve it without any delay to establish its own good credibility.

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 A strong watch should be kept on distributors so that the goodwill of the BRAND
doesn’t get affected.


Though there were certain limitations in the study that was conducted. The sample allowed
for some conclusions to be drawn on the basis of analysis that was done on the data

The data has clearly indicated that Coca-Cola products are more popular than the products
of Pepsi mainly because of its TASTE, BRAND NAME, INNOVATIVENESS and
AVAILABILITY, thus it should focus on good taste so that it can capture the major part of
the market. The study also indicated that the consumers are satisfied with the Coca-Cola
products and purchase them without any specific occasions.

In today’s scenario, customer is the king because he has got various choices around him. If
you are not capable of providing him the desired result he will definitely switch over to the
other provider. Therefore to survive in this cutthroat competition, you need to be the best.
Customer is no more loyal in today’s scenario, so you need to be always on your toes.

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 Marketing Management – Kotler Philip.

 Research Methodology – Kothari.



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 Annual report of Coca-Cola 2008.

 Annual report of Coca-Cola 2009.



a) Male b) Female

 Do you drink Soft drinks?

a) Yes
b) No

 How often do you have soft drinks per week?

a) Once a week
b) Twice a week
c) Thrice a week
d) Everyday
e) Rarely

 What drink comes to your mind when you think of soft drinks?

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a) Coca-Cola
b) Pepsi
c) Other products of Coca-Cola
d) Other products of Pepsi
e) Other drinks

 What quantity do you usually prefer to buy?

a) 200-250 ml Glass bottle
b) 300 ml Can
c) 500 ml Pet bottle
d) 1 litre
e) 2 litre

 What do you feel about Coca-Cola product range?

a) Excellent
b) Good
c) Satisfactory
d) Below Satisfactory
e) Bad

 What occasions do you prefer to buy Coca-Cola products?

a) Festivals
b) Picnics
c) Parties
d) Cinemas
e) Just like that

 What is your most preferred channel for purchasing Coca-Cola products?

a) Super markets
b) Retails
c) Vendor Machines
d) Pubs & Restaurants
e) Multiplexes

 How much do you spend on Coca-Cola products per week?

a) 50-100
b) 100-150

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c) 150-200
d) Above 200

 Put (X) mark in which ever you feel is appropriate?

Parameters / Product Coca-Cola Products Pepsi Products

1) Branding
2) Quality
3) Price
4) Taste
5) Availability
6) Satisfaction

 What kind of products do you want Coca-Cola to introduce in the future?

a) Fizzy Drinks
b) Fruit Drinks
c) Energy Drinks
d) Alcoholic Drinks


Thank you!

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