Beruflich Dokumente
Kultur Dokumente
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 its 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
analysed the 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 its
business as both the internal and external environment and their respective influences will
be decisive traits in relation to Cokes 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 businesss 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 businesss operations and readily act upon any factors, which
cause inefficiencies in any phase of the production and consumer process.
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 minimised and monitored in order to
effectively achieve productivity and efficiency in their businesss 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
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% .
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 companys 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 Colas 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, Manufacturers brand strategy, Private brand strategy and
Hybrid brand strategy. Coca Cola utilizes the Individual brand strategy as Coca Colas 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.
Packaging
Packaging, which is not as highly perceived by businesses, is still an important factor to
examine in the marketing mix. Packaging protects the product during transportation, while
it sits in the shelf and during use by consumers, it promotes the product and distinguishes it
from the competition. Packaging can allow the business to design promotional schemes,
which can generate extra revenue and advertisements. Coca-Cola has benefited from
packaging the product with incentives and endorsements on the labelling as a promotional
strategy to increase its volume of sales and revenue.
Price:
Price is a very important part of the marketing mix as it can effect both the supply and
demand for Coca Cola. The price of Coca Colas products is one of the most important
factors in a customers decision to buy. Price will often be the difference that will push a
customer to buy our product over another, as long as most things are fairly similar. For this
reason pricing policies need to be designed with consumers and external influences in mind,
in order to effectively achieve a stable balance between sales and covering the production
costs.
Price strategies are important to Coca Cola because the price determines the amount of
sales and profit per unit sold. Businesses have to set a price that is attractive to their
customers and provides the business with a good level of profit. Long before a sale was ever
made Coca Cola had developed a forecast of consumer demand at different prices which
inevitably determined whether or not the product came on the market, as well as the
allocation of adequate money and resources to produce, promote and distribute the
product.
Pricing Strategies And Tactics
The pricing Strategy a business will use will have to focus on achieving the marketing plans
objectives and support the positioning of the product, and take external factors such as
economic conditions and competitors in to account. There are 5 strategies available to
business: Market skimming pricing, Penetration pricing, Loss leaders, Price Points and
Discounts. Over the years Coca Cola has used Penetration Pricing as a way of grabbing a
foothold in the market and won a market share. Its product penetrated the marketplace.
Once customer loyalty is established as seen with Coca Cola it is then able to slowly raise
the price of its product. There has been a fierce pricing rivalry between Coca Cola and Pepsi
products as each company competes for customer recognition and satisfaction. Till now it
appears as if Coke has come up on top, although in order to gain long term profits Coke had
to sacrifise short term profits where in some cases it either went under of just broke even,
but as seen it has been all for the best.
Pricing Methods
Good pricing decisions are based on an analysis of what target customers expect to pay,
and what they perceive as good quality. If the price is too high, consumers will spend their
money on other goods and services. If the price is too low, the firm can lose money and go
out of business.
Pricing methods include: Cost based Pricing, Market based pricing and Competition based
Pricing. Over the years Coca has lost ground here in its pricing but has regained its
strength as it employed the Competition-based pricing method which allowed it to compete
more effectively in the soft drink market. Leader follower pricing occurs when there is one
quite powerful business in the market which is thought to be the market leader. The
business will tend to have a larger market share, loyal customers and some technological
edge, thus the case currently with Coke, it was first the follower but through effective
management has now become the leader of the market and is working towards achieving
the marketing objectives of the Coca Cola. Survival in the market place, own 60 % of
market share by 2007, increase further awareness of product and a return on 20% on
capital employed for August 2007.
Promotion:
In todays competitive environment , having the right product at the right place in the right
place at the right time may still not be enough to be successful. Effective communication
with the target market is essential for the success of the product and business. Promotion is
the p of the marketing mix designed to inform the marketplace about who you are, how
good your product is and where they can buy it. Promotion is also used to persuade the
percentage of businesses assets. Choosing the correct and desired inventory measure that
Jacksons sees as most effective is vital. Jacksons must remember though that there are
factors involved with inventory control that can hinder the products sales and customer
perceptions (hazards, distribution from storage facilities, etc).
Materials handling- this deals with physically handling the product and using machinery such
as forklifts and conveyor belts. When holding products, then Coca Cola has benefited from
purchasing or renting respective machinery.
Transportation- transporting Coca Cola products is the one most important components of
physical distribution. Electing either to transport the sports drink by air, rail, road or water
depends on the market (i.e. global, or domestic?) and depends on the associated costs. The
most beneficial transportation method for Coca Cola would be ROAD if the product were
moved around from storage to the cost centers.
Implementing, Monitoring And Controlling
Financial Forecasts
Financial forecasts are predictions of future events relating strictly to expected costs and
revenue costs for future years. There are five major marketing expenditures, which include
research costs, product development costs, product costs, promotion costs and distribution
costs.
Sales force composite is the most logical method in forecasting revenue. This involves
estimates from individual salespeople to sell to work out a total for the whole business.
Once these costs and revenues are forecasted, management can then decide which
combination of marketing mix strategies will deliver the most sales revenue at the lowest
cost.
Implementing
Implementation is the process of turning plans into actions, and involves all the activities
that put the marketing plan to work. Successful implementation depends on how well the
business blends its people, organisational structure and company culture into a cohesive
program that supports the marketing plan.
For its further success, Coca Cola must impose several key changes. Production needs to be
on time and meet the quota demanded from wholesalers. It must also be efficient so as not
to build inventory stocks and inventory prices. The marketing needs to be motivated and
knowledgeable about the product. The forms of promotion such as advertising must be
attracting and enticing to the target market to get the greatest amount of exposure possible
for the product. This will ensure the success of the product in the stores. Distribution of the
product must be efficient. This problem has already been taken care of with convenient
transport routes to commercial areas and transport already being arranged.
Monitoring And Controlling
Monitoring and controlling allows the business to check for variance in the budget and
actual. This is important because it allows Coca Cola to take the necessary actions to meet
the marketing objectives. There are three tools Coca Cola should use to monitor the
marketing plan. They are the following:
i. Sales Analysis
The sales analysis breaks down total business sales by market segments to identify
strengths and weaknesses in the different areas of sales. Sellers of Coca Cola products vary
from major retail supermarkets to small corner stores. This gives the its products maximum
exposure to customers at their convenience.
ii. Market Share Analysis
Market share analysis compares Coca Colas business sales performance with that of its
competitors. Coca Cola looks to increase its market share by over 60%. With the changes
Coca Cola is currently undergoing, they aim to regain an iron fist control of the market.
Target market various age groups and lifestyles from high school students too universities,
and male or female.
Marketing Profitability Analysis
This analysis looks at the cost side of marketing and the profitability of products, sales
territories, market segments and sales people. There are three ratios to monitor marketing
profitability; they are market research to sales, advertising to sales and sales
representatives to sales. The results of these three tools can help Coca Cola determine any
emerging trends, such as the need for a different product. Comparing these results with
actual results gives the business an idea on when to change.
Market Research
When attempting to implement a new Marketing plan a business must address its target
market and conduct the relevant information to insure the new marketing plan both differs
from the old and is better for the business. When conducting market research a business
must first define the problem and then gather the appropriate information to solve the
problem. There are 3 types of information a business can gather to solve its problems.
->Exploratory Research which clarifies the problem an d searches for ways to address it.
->Descriptive Research is used to measure and describe things like the market potential for
a product and characteristics of the target market.
->Casual Research is used to test a hypothesis about a cause and effect relationship.
Coca Cola through its market research has addressed all three types of research to define
the problem raised by shareholders and gathered information to serve their needs.
Factors Influencing Consumer Choice
When making decisions on products a business must look at factors that influence consumer
choice such as psychological factors, Sociocultural factors, Economic factors and
Government Factors.
Psychological Factors: such as motivation, perception, lifestyle, personality and self concept,
learning , and attitudes influence the consumers behaviour towards a product and Coca Cola
has addressed this issue by introducing Diet Coke to satisfy different lifestyles.
Sociocultural factors: such as culture, subculture, socio-economic status, family and
reference groups influence the consumers behaviour towards a product.
Economic factors: such as Disposable income and discretionary income. Coca Cola has
addressed this side of the influence by maintaining a low price on the price of its products.
Government Factors: such as new regulations, inflation, interest rates all influence
consumer spending and choice.