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joeydaprof

Jun 12, 2006

Marketing plan Coco Cola

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Executive summary

Giant soft drink company Coca Cola has come under intense scrutiny by
investors due to its inability to effectively carry out its marketing
program. Consequently it is seeking the help of Polianitis Marketing
Company Pty Ltd to develop a professional marketing plan which will help
the business achieve it’s objectives more effectively and efficiently, and
inevitably regain there iron fist reign on the soft drink industry.

When establishing a
re-birthed marketing plan every aspect of the marketing plan must be
critically examined and thoroughly researched. This consists of examining
market research, auditing business and current situation (situation
analysis) and carefully scrutinising the soft drink industry and
possibilities for Coca Cola in the market. Once Coca Cola have carefully
analysedthe internal and external business environment and critically
examined the industry in general the most suitable marketing strategies
will be selected and these strategies will be administered by effectively
and continually monitoring external threats and opportunities and revising
internal efficiency procedures.

Situation Analysis

Market Analysis:
 The market analysis
investigates both the internal and external business environment. It is
vital that Coca cola carefully monitor both the internal and external
aspects regarding it’s business as both the internal and external
environment and their respective influences will be decisive traits in
relation to Coke’s success and survival in the soft drink industry.

Internal Business Environment

The internal business

environment and its influence is that which is to some extent within the
business’s control. The main attributes in the internal environment
include efficiency in the production process, through management skills
and effective communication channels. To effectively control and monitor
the internal business environment, Coke must conduct continual appraisals
of the business’s operations and readily act upon any factors, which
cause inefficiencies in any phase of the production and consumer process.

External Business Environment

The External business environment and its influences are usually powerful
forces that can affect a whole industry and, in fact, a whole economy.
Changes in the external environment will create opportunities or threats
in the market place Coca cola must be aware off. Fluctuations in the
economy, changing customer attitudes and values, and demographic patterns
heavily influence the success of Coka Cola’s products on the market and
the reception they receive from the consumers.

SWOT Analysis:

SWOT stands for Strengths Weakness Opportunities Threats. SWOT analysis is

a technique much used in many general management as well as marketing
scenarios. SWOT consists of examining the current activities of the
organisation- its Strengths and Weakness- and then using this and external
research data to set out the Opportunities and Threats that exist.
Strengths:

Coca-Cola has been a complex part of world culture for a very long time.
The product's image is loaded with over-romanticizing, and this is an
image many people have taken deeply to heart. The Coca-Cola image is
displayed on T-shirts, hats, and collectible memorabilia. This extremely
recognizable branding is one of Coca-Cola's greatest strengths. "Enjoyed
more than 685 million times a day around the world Coca-Cola stands as a
simple, yet powerful symbol of quality and enjoyment" (Allen, 1995).

Additionally, Coca-Cola's bottling system is one of their greatest

strengths. It allows them to conduct business on a global scale while at
the same time maintain a local approach. The bottling companies are
locally owned and operated by independent business people who are
authorized to sell products of the Coca-Cola Company. Because Coke does
not have outright ownership of its bottling network, its main source of
revenue is the sale of concentrate to its bottlers.

Weaknesses:

Weaknesses for any business need to be both minimisedand monitored in

order to effectively achieve productivity and efficiency in their
business’s activities, Coke is no exception. Although domestic business
as well as many international markets are thriving (volumes in Latin
America were up 12%), Coca-Cola has recently reported some "declines in
unit case volumes in Indonesia and Thailand due to reduced consumer
purchasing power." According to an article in Fortune magazine, "In Japan,
unit case sales fell 3% in the second quarter [of 1998]...scary because
while Japan generates around 5% of worldwide volume, it contributes three
times as much to profits. Latin America, Southeast Asia, and Japan account
for about 35% of Coke's volume and none of these markets are performing to
expectation.

Coca-Cola on the other side has effects on the teeth which is an issue for
health care. It also has got sugar by which continuous drinking of Coca-
Cola may cause health problems. Being addicted to Coca-Cola also is a
health problem, because drinking of Coca-Cola daily has an effect on your
body after few years.

Opportunities:

Brand recognition is the significant factor affecting Coke's competitive

position. Coca-Cola's brand name is known well throughout 94% of the world
today. The primary concern over the past few years has been to get this
name brand to be even better known. Packaging changes have also affected
sales and industry positioning, but in general, the public has tended not
to be affected by new products. Coca-Cola's bottling system also allows
the company to take advantage of infinite growth opportunities around the
world. This strategy gives Coke the opportunity to service a large
geographic, diverse area.

Threats:

Currently, the threat of new viable competitors in the carbonated soft

drink industry is not very substantial. The threat of substitutes,
however, is a very real threat. The soft drink industry is very strong,
but consumers are not necessarily married to it. Possible substitutes that
continuously put pressure on both Pepsi and Coke include tea, coffee,
juices, milk, and hot chocolate. Even though Coca-Cola and Pepsi control
nearly 40% of the entire beverage market, the changing health-
consciousness of the market could have a serious affect. Of course, both
Coke and Pepsi have already diversified into these markets, allowing them
to have further significant market shares and offset any losses incurred
due to fluctuations in the market. Consumer buying power also represents a
key threat in the industry. The rivalry between Pepsi and Coke has produce
a very slow moving industry in which management must continuously respond
to the changing attitudes and demands of their consumers or face losing
market share to the competition. Furthermore, consumers can easily switch
to other beverages with little cost or consequence.

Product Life cycle:

When referring to each and every product or service ever placed before the
consumer i.e. in the long term all the existing products and services are
dead. For e.g.:- Replacement of Ford Cortina ( a highly successful car) by
Ford Sierra, the replacement of sierra by the Ford Mondeo and the
replacement of the old Mondeo by the new Mondeo in 2001. So every product
is born, grows, matures and dies. So in the commercial market place
products and services are created, launched and withdrawn in a process
known as Product Life Cycle.

To be able to market its product properly, a business must be aware of the

product life cycle of its product. The standard product life cycle tends
to have five phases: Development, Introduction, Growth, Maturity and
Decline. Coca-Cola is currently in the maturity stage, which is evidenced
primarily by the fact that they have a large, loyal group of stable
customers.

Furthermore, cost management, product differentiation and marketing have

become more important as growth slows and market share becomes the key
determinant of profitability. In foreign markets the product life cycle is
in more of a growth trend Coke's advantage in this area is mainly due to
its establishment strong branding and it is now able to use this area of
stable profitability to subsidize the domestic Cola Wars.

Insert the picture of the product lifecycle

Marketing Objectives

The objective is the starting point of the marketing plan. Objectives

should seek to answer the question 'Where do we want to go?'. The purposes
of objectives include:

-> to enable a company to control its marketing plan.

-> to help to motivate individuals and teams to reach a common goal.

-> to provide an agreed, consistent focus for all functions of an

organization.

All objectives should be SMART i.e. Specific, Measurable, Achievable,

Realistic, and Timed.

Specific - Be precise about what you are going to achieve

Measurable - Quantify you objectives

Achievable - Are you attempting too much?

Realistic - Do you have the resource to make the objective happen (men,
money, machines, materials, minutes)?

Timed - State when you will achieve the objective (within a month? By
February 2010?)

1.Market Share Objectives:

To gain 60% of the market for soft drink industry by September 2007.

2.Profitability Objectives:

To achieve a 20% return on capital employed by August 2007

3. Promotional Objectives

To increase awareness of the product on the market.

4. Objectives for Survival

To survive the current market war between competitors.

5. Objectives for Growth

To increase the size of the worldwide Coca Cola enterprise by 10% .

Selecting Target Market

Once the situation analysis is complete, and the marketing objectives

determined, attention turns to the target market. The soft drink market is
very large, and the business cannot be “all things to all people”, so it
must choose which market segments have the greatest potential. The target
market is the group of customers on whom the business focuses attention.
The target market is where Coca Cola focuses its marketing efforts as it
feels this is where it will be most productive and successful. The target
market for Coca cola is very wide as it satisfy’s the needs for many
different consumers, ranging from the healthy diet consciousness through
Diet Coke to the average human through its best selling drink regular
Coke. Most Coke products satisfy all age groups as it is proven that most
people of different age groups consume the Coca Cola product. This market
is relatively large and is open to both genders, thereby allowing greater
product diversification.

There are four broad ways which Coca Cola can segment its market:

-> Mass marketing

-> Concentrated marketing

-> Differentiated marketing

-> Niche marketing

The most apparent method used by Coca Cola is with no doubt the
differentiated marketing method as Coke satisfy’s a range of different
markets. Diet coke satisfy’s the weight consciousness, regular coke,
sprite, fanta the average human, coffee, iced tea etc. Each group of
beverages satisfy a particular group of people but majority the average
human.

Developing The Marketing Mix

The marketing mix is probably the most crucial stage of the marketing
planning process. This is where the marketing tactics for each product are
determined. The marketing mix refers to the combination of the four
factors(price, promotion, product, place) that make up the core of a
business’s marketing strategy. In this step of the marketing planning
process, marketing mix must be designed to satisfy the wants of target
markets and achieve the marketing objectives. The most successful
businesses have continually monitored and changed their marketing mix due
to respective internal and external factors and have monitored the
external business environment in order to maximise their marketing mix
components.
Product:

Many Products are

physical objects that you can own and take home. But the word product
means much more than just physical goods. In marketing, product also
refers to services, such as holidays or a movie, where you enjoy the
benefits without owning the result of the service.

Businesses must think

about products on three different levels, which are the core product, the
actual product and the augmented product. The core product is what the
consumer is actually buying and the benefits it gives. Coca Cola customers
are buying a wide range of soft drinks. The actual product is the parts
and features, which deliver the core product. Consumers will buy the coke
product because of the high standards and high quality of the Coca Cola
products. The augmented product is the extra consumer benefits and
services provided to customers. Since soft drinks are a consumable good,
the augmented level is very limited. But Coca Cola do offer a help line
and complaint phone service for customers who are not satisfied with the
product or wish to give feedback on the products.

Positioning

Once a business has decided which segments of the market it will compete
in, developed a clear picture of its target market and defined its
product, the positioning strategy can be developed. Positioning is the
process of creating, the image the product holds in the mind of consumers,
relative to competing products. Coca Cola and Franklins both make soft
drinks, although Franklins may try to compete they will still be seen as
down market from Coca Cola. Positioning helps customers understand what is
unique about the products when compared with the competition. Coca Cola
plan to further create positions that will give their products the
greatest advantage in their target markets. Coca Cola has been positioned
based on the process of positioning by direct comparison and have
positioned their products to benefit their target market. Most people
create an image of a product by comparing it to another product, thus
evident through the famous battles between Coca-Cola and Pepsi products.

Branding
 It is often hard to
say exactly why we buy one company’s product over another. Companies such
as Nike and Adidas spend large amounts of money trying to win consumers
away from their competitors who make products that are very similar. The
popularity of the brand is often the deciding factor. Over the time Coca
Cola has spent millions of dollars developing and promoting their brand
name, resulting in world wide recognition. 'Coca-Cola' is the most
recognised trademark, recognised by 94% of the world's population and is
the most widely recognised word after "OK". Coca Cola’s red and white
colours and special writing are all examples of world-wide trademarks.

There are a number of

branding strategies: Generic brand strategy, Individual brand strategy,
Family brand strategy, Manufacturer’s brand strategy, Private brand
strategy and Hybrid brand strategy. Coca Cola utilizes the Individual
brand strategy as Coca Cola’s major products are given their own brand
names e.g Fanta, Sprite, Coca Cola etc although they maybe presented as
different lines they operate under the name of Coca Cola.

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