Global Marketing Report

International Business of Coca-Cola

Appendix A

Olive McLean
Richmond, The American International University, London
MKT 6405: Global Marketing
Dunlop
4th of April, 2016

MKT 6405 REPORT !1

 Executive Summary
This report was written to provide a global evaluation and analysis of The Coca-Cola

Company. The methods of analysis include both primary and secondary research. The primary

research includes a survey conducted by 30 individuals regarding their choice of beverage when

in a foreign country. Secondary research includes internet based searches. It has been found that

when abroad, 52% of consumers will chose Coca-Cola over other soft drinks. Additionally, it has

been seen in this report that consumers are becoming considerably more health conscious which

may have an affect on soda consumption. Furthermore, younger generations entering the global

market as consumers are more environmentally conscious, and will be more likely to buy

environmentally friendly products. From this research it has been seen that while Coca-Cola is a

successful company that has thrived since 1886, they will need to make changes in order to stay

successful and relevant. Recommendations include finding new and healthier alternatives to

produce for health conscious consumers; donate funds to proper rubbish disposal education, and

to use biodegradable plastics for their bottles, as well as cut out aluminum cans all together.

While all this research has been collected, there are limitations. In the primary research done,

only soda and sports drinks options were provided; the data may change if other options were

offered. Furthermore, not all consumers are health conscious and their buying choices may

affect soda sales positively, rather than negatively.

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 Table of Contents
I. Introduction..4
1.1 History.5
1.2 Company Profile7
1.3 Brands.8

II. Findings.9
2.1 Triggers for Exportation Initiation9
2.2 PESTLE.11
2.3 Porters 5 Forces..13
2.4 Value Chain..14
2.5 SWOT Analysis15
2.6 Customer Profile.16
2.1 The 4 Ps..17

III. Recommendations19

IV. Conclusion..20

V. Appendices.21

VI. References..22

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 Introduction
Coca-Cola, invented in 1886, has continued to prove itself as a global phenomena,

reaching all but two countries globally. In this report, The Coca-Cola Company will be

evaluated on a global scale. The company, while immensely successful and the fourth most

valuable brand in the world according to Forbes Magazine (Forbes, n.d.), must prepare itself for

continued changes regarding health and environmental concerns.

In order to better understand The Coca-Cola Company, this report will begin by

introducing the history of the company, followed by a detailed profile of the company, including

brand values, and individual brands sold by Coca-Cola. Next, findings will be presented in the

form of primary and secondary research. This section will touch on triggers for exportation

initiation, evaluation of the macro and micro environments, as well as the value chain of Coca-

Cola and a consumers profile. Finally, a SWOT analysis will be provided, including a detailed

outline of the four Ps of marketing. This all will lead to the conclusion that the future success

and relevancy of Coca-Cola will be dependent on their ability to adapt to the ever changing

global market.

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 History
John Pemberton was living in Atlanta, Georgia as a pharmacist in the 1880s where he was selling

a tonic he called French Wine of Cola, a headache tonic laced with cocaine. However in 1886, the sale

and consumption of alcohol was banned in Atlanta. In response, Pemberton revised his tonic, adding

sugar syrup, citric acid, and a variety of fruit oils; he named his new tonic Coca-Cola. In the summer of

1886, a customer walked into a neighboring pharmacy and asked for the

Fact: Candler only paid Coca-Cola tonic to help his headache, and asked if the pharmacist would
$2,300 for a company add soda water so he could drink it immediately. The customer remarked
that would become a
global phenomenon that the drink tasted phenomenal. This was the birth of the new soft

drink. From then on, Coca-Cola was sold for 5 a glass at Jacobs

Pharmacy in Atlanta (Reference for Business, n.d.).

In 1888, Pemberton was forced to sell a portion

of the Coca-Cola Company to Asa Griggs Candler due

to financial problems and poor health, and by 1891,

Candler controlled the entire company. Within four

years of the purchase of the company, use of cocaine

had become controversial due to its addictive

properties, and it was replaced with coca leaf extract. Appendix B

In 1894, Coca-Cola was first bottled, a decision made by Mississippi businessman Joseph

Biedenharn. However, Candler did not approve of this change until 1899 when the rights to sell Coca-

Cola were sold to Benjamin Franklin Thomas, and Joseph B. Whitehead in Tennessee.

By 1920, the original two bottling plants had increased to almost one thousand. In 1923, Robert

Woodruff became the company president and turned Coca-Cola into the most consumed soft drink in the

world.

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 Coca-cola reaches England (coca-colacompany.com, n.d.).
1900 Coca-Cola was brought to Cuba and Puerto Rico (coca-colacompany.com, n.d.).

Bottling plants were opened in Cuba, Puerto Rico, Canada, Panama, The
Early
1900s Philippines, and Guam (coca-colacompany.com, n.d.).

Bottling plant opened in France, which became the first bottler on the European
1920 continent (coca-colacompany.com, n.d.).

Coca-Cola had successfully established plants in 40 countries, including China,

1940 Mexico, Luxembourg, Trinidad, and Bermuda (Reference for Business, n.d.).

Robert Woodruff promises that Coca-Cola will be available to every serviceman

1941 serving in World War II, anywhere in the world, for 5 per bottle (Reference for

Business, n.d.).

Today, Coca-Cola is the largest beverage company in the world, reaching over two
Today hundred countries, and six regions (coca-colacompany.com, n.d.). Coca-Cola can

be found in all countries except North Korea, and Cuba.

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 Company Profile
Company Mission Statement:
Our mission is:
To refresh the world in mind, body and spirit.
To inspire moment of optimism and happiness though our brands and actions.
To create value and make a difference.
- (coca-colacompany.com, n.d.)

Company Vision:
To achieve our mission, we have developed a set of goals, which we will work with our bottlers
to deliver:
People: Inspiring each other to be the best we can be by providing a great place to work.
Portfolio: Offering the world a portfolio of drinks brands that anticipate and satisfy peoplee
desires and needs.
Partners: Nurturing a winning network of partners and building mutual loyalty.
Planet: Maximizing long-term return to shareholders, while being mindful of our overall
responsibilities.
Profit: Maximizing long-term return to shareholders, while being mindful of our overall
responsibilities.
Productivity: Being a highly effective, lean and fast-moving organization.
- (coca-colacompany.com, n.d.)

Company Values:
Our shared values guide 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, its up to me
Passion: Committed in heart and mind
Diversity: As inclusive as our brands
Quality: What we do, we do well
- (coca-colacompany.com, n.d.)

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 Coca-Cola Brands

The Coca-Cola company owns thousands of subsidiary brands (Business Insider, 2011). Some of
those brands include:

Appendices C-U

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 Findings
Triggers for Exportation Initiation
Coca-Cola first left the United States in 1900, when Asa Candler took a jug of the soft

drink to England during his vacation. During his trip, the first international order was placed for

five gallons (coca-colacompany.com, n.d.). Not long after Coca-Cola found its way to Cuba and

Puerto Rico, as the American military set up bases in these countries. At the start of World War

I, as American troops were based in foreign countries like Cuba, Puerto Rico, Guam, The

Philippines and Panama, bottling plants were built as a means to provide Coca-Cola to

servicemen abroad. The next move in globalization was when the company opened its first

European bottling plant in France in 1920 (coca-colacompany.com, n.d.).

During World War II, Robert Woodruff promised that troops abroad would be able to

find Coca-Cola anywhere they were stationed, and be able to purchase it for 5 per bottle. This

decision introduced many Europeans to Coca-Cola for the first time, and it continued to grow in

popularity in Western Europe following the end of the war in 1945 (Reference for Business, n.d.).

Between the mid-1940s and the 1960s, the number of Coca-Cola plants doubled. It was

considered a time of optimism and prosperity in post-war America, and Coca-Cola was a

symbol of that. It was a part of the fun, carefree American lifestyle [it] reflected the spirit of

the time (coca-cola.co.uk, n.d.).

With the increasing success of Coca-Cola globally, the company decided to expand its

brands. Fanta, which began as a version of Coca-Cola made with the ingredients available in

Nazi Germany, was introduced as its own brand in the 1950s. Sprite was then released in 1961,

followed by TAB in 1963, and Fresca in 1966. Between 1960 and the early 80s, Coca-Cola

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continued to grow in popularity and therefore expanded to countries like Cambodia, Montserrat,

Paraguay, Macau and Turkey (coca-colacompany.co.uk, n.d.).

The success of the globalization of Coca-Cola can be attributed to its successful

marketing and advertising. The Coca-Cola Company came up with a variety of slogans

including:

Drink Coca-Cola.
Things go better with Coke.
Good til the last drop.
Its the real thing.
Always Coca-Cola.
Enjoy.
Life tastes good.
Open Happiness.
Share a Coke with
The constant slogans, jingles and
visual advertising kept Coca-Cola
Appendix V
present in peoples minds, and made them
remember the brand (Saylor Foundation, n.d.).
The recent Coca-Cola marketing campaign, Share a Coke with proved immensely
successful. The campaign included Coke cans and bottles being printed with the slogan, followed
by someones name, or a saying. This encouraged consumers to search for their name through
the bottles and cans in stores. It also included the ability to customize your own Coke can or
bottle with your own saying or name.

PESTLE ANALYSIS

Appendix W
MKT 6405 REPORT Appendix X !10
 The MACRO environment
As a global brand, Coca-Cola must be vigilant of world affairs and how they may affect
their company. PESTLE Analysis is a way to explore the affects of the macro environment by
analyzing political, environmental, socio-cultural, technological, legal and economic factors.

Political:
There are several examples of how political factors have affected Coca-Cola. During
World War II, Robert Woodruff wanted to ensure that Coke was available to all servicemen
abroad. This was not an easy task due to the boarders and conflict between countries. To
overcome these issues in Nazi invaded Germany, Coca-Cola used the ingredients that were
available to make a drink similar to Coca-Cola available. The result of this was the creation of
Fanta.
More recently, the United States have begun rekindling their ties with Cuba. While for
decades Cuba was the only country apart from North Korea that did not import Coca-Cola
products, this may now change (Yuhas, 2016).

Environmental:
A company that specializes in beverages sold in disposable containers must be vigilant of
environmental affects. As millennial are entering the work force and becoming major
contributors in the global market, it is important to take into consideration their values. It has
been proven that millennials care more about the environment, and therefore will be more
environmentally conscious in their purchases. According to Sustainable Brands, younger
generations are more likely to pay for responsibly made products; 80% want to work for
companies that care about their impact [on the environment], and many already choose buses
and bikes over cars (Rayapura, 2014). According to recyclingbins.co.uk, 51,000 tons of
aluminum is turned into packaging for food and drinks each year, and 36,000,000 of aluminum
is thrown into landfills every year. Furthermore, it takes up to 500 years for plastic to decompose,
and Americans alone throw away 25million plastic bottles per hour on average
(recyclingbins.co.uk). These factors should be important to a company like Coca-Cola who uses
cans and plastic bottles as a way to distribute their products.

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Socio-Cultural:
Consumers are becoming increasingly health conscious. Soda is considered one of the
worst foods for a persons health (readers digest, n.d.). This is bad for companies like Coca-Cola
who mainly produce sugary sodas. For the past 20 years, soda sales have dropped by 25% as
consumers are becoming more interested in living a healthy lifestyle (Sanger-Katz, 2015).
Furthermore, in a 2015 study done by British health expert, Niraj Naik, it was found that
drinking diet sodas, like Diet Coke have health related consequences. Diet sodas were found to
rot teeth, encourage the body to pile on fat and even mimic the effect of cocaine (Hamill,
2015). If soda companies, like Coca-Cola hope to stay relevant in the current day and age, they
must stay conscious of how socio-cultural ideals are changing.

Technological:
Even soda companies benefit from technological advancements. Coca-cola has continued
to find more ways to be green, including using greener bottles and packaging. Additionally,
social networking has allowed Coca-Cola to reach out to consumers and branch out their
marketing. Furthermore, Coca-Cola introduced their freestyle dispensers between 2010 and
2011, which allowed consumers to discover a greater variety of drinks. The dispensers allow
consumers to choose from 100+ drink combinations, while the machine records peoples drink
choices in order for the company to analyze the data (Ireland, n.d.).

Legal:
Coca-Cola has seen their fair share of legal issues. In 2014, Coca-Cola was sued by
Illinoian man, Ronald Sowizrol, for false advertising. Coca-Cola bottles were labeled as
containing no artificial flavors or preservatives. Sowizrol argued that this premise was untrue as
Coca-Cola contains Phosphoric acid which is an artificial flavoring agent, as well as a chemical
preservative. Coca-Cola had been accused of misleading health claims before, regarding their
Vitaminwater drink (Asbury, 2014). Coca-Cola must make a conscious effort to be more open
with consumers about their products in order to avoid legal action in the future.

Economic:
Coca-Cola products are relatively inexpensive, and during recessions Coca-Cola has
seemed to be unaffected. This is not only due to Coca-Colas low-priced products, but also
because it is a global product with incredibly effective brand awareness, as well as a unique selling
point. Therefore, during recession, Coca-Cola sales have not been shown to fall, but in some
cases rise (Bolotaeva, 2014).

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 Porters 5 Forces
While the threat of new entry to the
soda industry is a possibility, it is
unlikely that any new competitors will
make a real threat to Coca-Cola.
Threat of New
The company has been established Entry
for over a century and has incredibly
strong brand recognition globally.
The threat Coca-Cola should observe
is that of new entrants in healthy
alternatives, as consumers have
become more health conscious in
recent years (Butler, 2015).
Competitive
Supplier Power Rivalry:
Coca-Cola
Pepsi
Suppliers hold power over Coca-Cola
as the price of raw materials is
consistently changing with economic
and environmental factors. Coca-
Cola does not have much power to
change the price of its products, as
they are sold through distributors,
therefore when suppliers of
commodities used to produce their
products it affects the cost of goods Threat of
sold, and will decrease profits for Substitution
Coca-Cola.
Appendix Y
MKT 6405 REPORT
Buyers have a significant amount of
power when it comes to Coca-Cola.
Coca-Cola does not sell directly to its
consumers, but to distributers who
keep a fairly consistent selling price.
This means that when Coca-Colas
cost of goods sold increases, they must
absorb the additional cost, or the
distributors must absorb it. Since
Coke products are elastic goods, the
buyers have other choices in beverages
and gives them a fair amount of
power over companies like Coca-Cola
(Butler, 2015).
Buyer Power
Threat of substitution is rather high
for Coca-Cola, as there are several
competing brands. Although, Coca-
Cola has global recognition that no
other brand has which makes it an
exceedingly successful brand.
However, the biggest threat of
substitution that Coca-Cola faces is
the threat of new healthier
alternatives like designer waters,
coconut water, green teas, etc
!13
 Value Chain

Agriculture and The Coca-Cola Bottling Partners &

Ingredient Sourcing Company Distribution

Coca-Cola products start with
farmers who act as suppliers.
They provide the raw
materials that are used as
ingredients to make Coca-
Cola products (coca-
colacompany.com, n.d.).
At the Coca-Cola factory the
focus is on operations and
logistics. The process involves
concentrate development, and
all administrative functions of
headquarters (coca-
colacompany.com, n.d.).
The bottling and distribution part of
the value chain is focused on human
rights, packaging, product &
ingredient safety, and water
stewardship (coca-colacompany.com,
n.d.). The phase includes the bottling
investments group and franchise
bottling partners.

The final step in the value chain is delivering to the Customers

consumer, and then going to recycle and recovery. After
Coca-Colas customers are the
consumers have purchased the product from the customers/
distributors such as gas stations,
distributors, the intended next step is for them to recycle the
college campuses, vending machine
bottles and cans. Once they have been recycled they are
companies, grocery stores and food
intended to be collected and returned to the supplier for
chains for fountain services (Butler,
recovery, thereby closing the loop (coca-colacompany.com,
2015). The consumers purchase from
n.d.).
the customers.
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Appendices Z-BE
 SWOT Analysis

Strengths Weaknesses Threats Opportunities

Brand Recognition Consistency of all Legal action Future in
Forbes fourth most brand popularity regarding false biodgradable
valuable brand Health issues advertising plastics
Global diversity Environmental Pepsi Buying out
Formula hazard Growing health competition
consistency Reliance on soda conscious Health conscious
Customer loyalty Negative publicity consumers products
Global network Dropping sales Obesity Expansion into new
Strong marketing Increasing markets
and advertising commodity
pricing

Appendix BF

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 Customer Profile
There is no single target market for Coca-Cola. The company values diversity not only

internally, but also regarding its consumers. The company instead has developed numerous

brands that target different markets. Despite the company as a whole not having a specific target

market, the majority of consumers of Coke are between the ages of twelve and thirty, and is

inclusive of both genders. However, the general target market for Coca-Cola is consumers

between the ages of eighteen and twenty-five. Coca-Cola tends to target people with a busy

lifestyle and the younger, mobile generation. Most of the advertising done by Coca-Cola

includes younger people who seem to be students, or family oriented peoples. The people in

their advertisements seem to be fun and easy going, with a sense of happiness about them. Coca-

Cola wants their consumers to enjoy the products, and to feel like their lives have been improved

by consuming the product, therefore thats the lifestyle they portray in their marketing (Vendredi,

2012).

Appendix BG

Appendix BH

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 The 4 Ps
Product
The Coca-Cola Company is home to thousands of brands, and has purchased numerous
companies that are now subsidiaries operated by Coca-Cola. The company claims that their
recipe is the same all over the world, but that differs to what consumers say (UK Yankee, 2004).
In response to the frequently asked question, the Coca-Cola Company responded:
The ingredients and manufacturing processes used to make
CocaCola are the same, whether it's a 330ml can or 500ml bottle.
A person's perception of taste can be influenced by many different
things such as the temperature of the drink, whether it's consumed
straight from the pack or drunk from a glass - but its always the
same Coca-Cola no matter what the container!
- (coca-colacompany.com, n.d.).
It is possible that consumers believe there is a difference in taste because the drink is sent
as a paste and water is added at the local bottling plant (ubuntuforums.org, 2009). Water
contains different minerals depending on where you are in the world which could change the
taste. Furthermore, available ingredients change depending on location of the bottling plants. In
the United States, corn syrup is more regularly used as a sweetener, while in the United Kingdom
they use cane sugar. The available ingredients would clearly change the taste of the drink.
Ultimately, Coca-Cola makes its best effort to ensure consistency in its products no matter where
in the world a consumer is.

Place
Coca-Cola products are available in all countries except North Korea, and currently
Cuba. However, with recent political dealings between Cuba and the United States, it is
probable that the Coca-Cola bottling plant in Cuba will open again. Coca-Cola is bottled in
more than nine-hundred bottling and manufacturing facilities globally (coca-colacompany.com,
2012).

Price
The price for Coca-Cola is does not vary by much. A 500ml bottle of Coca-Cola ranges
from .10 (USD) in Estonia, to $5.39 (USD) in Switzerland (humuch.com, n.d.). Comparatively,
a 330ml can of Coca-Cola ranges from .36 (USD) in Belarus, to $2.12 (USD) in Norway
(globalbrandprices.com, n.d.).

MKT 6405 REPORT !17

Promotion
Coca-Cola has been incredibly effective at promotional strategy. The company is even
sometimes given credit for inventing the modern day Santa Claus, for their holiday advertising
specials. Although Father Christmas significantly predates Coca-Cola, before the ads sprang up
in the 1920s, Santa Claus was portrayed in a number of ways including tall and giant; shot and
elfin; distinguished and intellectual; even downright frightening(coca-colacompany.co.uk, n.d.).
Haddon Sundblom was a Swedish-American artist, commissioned to paint a Christmas advert
for Coca-Cola. He is responsible for establishing Father Christmas as a jolly old man portrayed
as an old man with rosy cheeks, a white beard, twinkling eyes, a big belly and laugh lines (coca-
colacompany.co.uk, n.d.).

Appendix BI

Coca-Cola has continued their successful promotional campaigns, including unifying all
Coke brands under one name in the UK and parts of Western Europe (Moye, 2016). This is
similar to Burberrys plan to unify its three brands under one name (Hyland, 2015), as well as
Mugler stating their plans to unify its company under one name and logo (Hendriksz, 2016).
This is a possible sign of a new movement within the United Kingdom of consumers preferring
less options from a single company. This new movement within Coca-Cola was accompanied by
another promotional plan designed by Chief Marketing Officer, Marcos de Quinto. The new
campaign will be on a global scale with the tagline, Taste the Feeling. The unification process
will be implemented in May of 2016 (Hepburn, 2016), and if it proves successful it is likely that it
will spread globally as well (Moye, 2016).

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 Recommendations
As consumers continue to become more health conscious and environmentally friendly,

Coca-Cola will have to do the same. Coca-Cola is a company thats main focus is on sodas, it

would be in their best interest to investigate healthier choices. Studies continue to be published

regarding the negative side effects of drinking carbonated beverages, and as it is becoming a

more accepted fact, people will tend to buy less soda. Furthermore, after the study done in 2015

by Niraj Naik regarding the affects of Diet Coke on the body, Coca-Cola will have to find a way

to cope with the expected losses if consumers take the research seriously.

Coca-Cola makes a valiant effort to be a green company, by encouraging consumers to

recycle their bottles and cans, as well as working towards lowering the amount of petroleum used

in their factories. However, while their effort is respectable, billions of

plastic bottles are thrown away each day, ending up in land fills which

continues to pollute the earth. Where the problem really starts is

education. Older generations were not educated on proper recycling, and Appendix BJ

still today in many parts of the world education regarding proper ways to dispose of

rubbish is not being offered. If people recycled their plastic bottles, it would significantly cut

carbon dioxide omissions (Staley, 2005).

At this point, the best option for Coca-Cola is to find healthier alternatives to offer

consumers as they become more health conscious, as well as providing funding for education

regarding smart rubbish disposal, and the importance of recycling. Another beneficial option

would to use biodegradable plastics for their bottles, and cut cans all together.

MKT 6405 REPORT !19

 Conclusion
Through explanation of the history and through detailed research, it has been shown that

the Coca-Cola Company is a successful brand, focused on global diversity and consistency. The

Coca-Cola Company has been established since 1886, and continues to thrive and grow. That

being said, in a continuously changing world, they must find a way to evolve as a company in

order to remain relevant. Through primary research, it was seen that in a focus group that only

54% of consumers would choose Coca-Cola if they were to find themselves in a foreign country,

and given a choice of selected global beverages. While the majority still would choose Coca-

Cola, several consumers responded that they would be more interested in trying something new,

foreign, or healthier, despite knowing very little regarding the other brands. As times change,

Coca-Cola will find themselves needing to make decisions on the direction of their company in

order to stay relevant and successful.

MKT 6405 REPORT !20

 Appendices
Appendix A: Black and White photograph of a crate of Coca-Cola bottles.
Appendix B: Black and White photograph of the historic line up of Coca-Cola bottle shapes.
Appendix C-U: Variety of Coca-Cola products.
Appendix V: Things Go Better With Coke advert.
Appendix W: Share a Coke with advert.
Appendix X: Share a Coke with advert.
Appendix Y: Porters 5 forces chart.
Appendix Z: Plant growing out of dirt illustration.
Appendix BA: Coca-Cola bottle illustration.
Appendix BB: Photograph of Coca-Cola delivery truck.
Appendix BC: Photograph of Coca-Cola in a convenience store.
Appendix BD: Photograph of man drinking Coca-Cola.
Appendix BE: Photograph of empty Coca-Cola bottles.
Appendix BF: SWOT Analysis chart.
Appendix BG: Coca-Cola Advert.
Appendix BH: Coca-Cola Advert.
Appendix BI: Coca-Cola Christmas Advert.
Appendix BJ: Recycling logo illustration.

MKT 6405 REPORT !21

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