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The MARKETING MIX OF COCA-COLA is divided up into 4 parts; product, price, promotions and place. The product is convenient, that is - bought frequently, immediately, and with a minimum of comparison and buying effort. The price of Coke is a key part of the marketing mix.
The MARKETING MIX OF COCA-COLA is divided up into 4 parts; product, price, promotions and place. The product is convenient, that is - bought frequently, immediately, and with a minimum of comparison and buying effort. The price of Coke is a key part of the marketing mix.
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The MARKETING MIX OF COCA-COLA is divided up into 4 parts; product, price, promotions and place. The product is convenient, that is - bought frequently, immediately, and with a minimum of comparison and buying effort. The price of Coke is a key part of the marketing mix.
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Attribution Non-Commercial (BY-NC)
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Firstly, we will look at how Coca-Cola has used their
marketing mix. The marketing mix is divided up into 4 parts; product, price, promotions and place. 1. Product: The product (Coca-Cola soft drink) includes not just the liquid inside but also the packaging. On the productservice continuum we see that a soft drink provides little service, apart from the convenience. Soft drinks satisfy the need of thirst. However, people are always different, some want more and others want less. Therefore Coca-Cola has made allowances for that by providing many sizes. We also have particular tastes, and again they have provided several options. So, although thirst is what is needed to be satisfied and that is the core benefit, we are receiving other benefits in the taste and size. Coca-Cola has developed several different flavours and sizes as mentioned above, but also several brands such as Sprite, Lift, Fanta and Diet Coke which increase the product line length, thus making full use of the market to maximize sales. The product is convenient, that is - bought frequently, immediately, and with a minimum of comparison and buying effort.The appearance of the product is eye catching with the bright red colour. It has a uniquely 38 designed bottle shape that fits in your hand better, and creates a nicer & more futuristic look. The quality of the soft drink is needed to be regularly high. Sealed caps ensure that none of the "fizz" is lost. The bottles are light, with flexible packaging, so they won't crack or leak, and are not too heavy to casually walk around with. The cans are also light and safe. The product range of Coca-Cola includes: • Coca-Cola, • Coca-Cola classic, • caffeine free Coca-Cola, • diet Coke • caffeine free diet Coke, • diet Coke with lemon • Vanilla Coke, • diet Vanilla Coke, • Cherry Coke, • diet Cherry Coke, • Fanta brand soft drinks, • Sprite, • diet Sprite • Sprite Remix 39 40 Product Lifecycle of Coke: Product life cycle has four phases 1. Introduction 2. Growth 3. Maturity 4. Decline. The markets where Coke is a dominant player are United States of America, Europe and Asia, Africa. There is a vast difference in terms of above given phases for example, in U.S.A & Europe it has reached maturity stage where it can’t expand its market more but if we consider Asia, it is still in the growth phase. Coca-Cola is currently going through the maturity stage in Western countires. This maturity stage lasts longer than all other stages. Management has to pay special attention to products during this stage of the product life-cycle. During the maturity stage, products usually go through a slowdown in sales growth. According to Coca-Cola's 2001 annual report, sales have increased by 1.02% compared to last year. This percentage has no comparison to the high level of growth Coca-Cola enjoyed during its growth stage. To add a little variation Coca-Cola took the Coca-Cola Classic and added variations to it, including Cherry Coke, Vanilla Coke and Diet Coke. Also Coca-Cola went from 6-oz. glass bottles to 8-oz. cans to plastic liter bottles, all helping increase consumption. 41 COCA-COLA 2. Price: Like any company who has successfully endured a century of existence, Coca- Cola has had to remain tremendously fluent with their pricing strategy. They have had the privilege of a worthy competitor constantly driving them to be smarter, faster, and better. A quote from Pepsi Co's CEO "The more successful they are, the sharper we have to be. If the Coca-Cola Company didn't exist, we'd pray for someone to invent them." states it simply. The relationship between Coca- Cola & Pepsi is a healthy one that each corporation has learned to appreciate. Throughout the years Coca-Cola has made many 42 pricing decisions but one might say that their ultimate goal has always been to maximize shareholder value. As cola consumption has decreased in the US colas have come to realize the untapped international market. In 2003 both Coke and Pepsi had a solid presence in India and had each introduced a 300mL bottle. In order to grab market share Pepsi began to drop prices (even with summer approaching, which was contrary to policy in America). Shortly thereafter, Coca-Cola decided to drop their prices slightly, but focused on the reduced price point of their 200mL container. Coca- Cola planned to use the lower price point to penetrate new cities that were especially price sensitive. The carbonated soft drink market in India is nearly 37% of the total beverage market there. This low price strategy was not unfamiliar to Coca- Cola. Both Coke & Pepsi utilized a low price strategy in the early 1990s. After annihilating the low price store brands, Coke chose to reposition itself as a "Premium" brand and then raise prices. Coca-Cola products would appear, on the shelf, to have the most expensive range of soft drinks common to supermarkets, at almost double the cost of no name brands. This can be for several reasons apart from just to cover the extra costs of promotions, for which no name brands do without. It creates consumer perceptions and values. When people buy Coca- Cola they are not just buying the beverage but also the image that goes with it, therefore to have the price higher reiterates the fact that the product is of a better quality 43 than the rest and that the consumer is not cheap. This is known as value-based pricing and is used by many other industries in attracting consumers. In India, the average income of a rural worker is Rs.500 a month. Coca Cola launched a 200 ml bottle for just Rs.5, an affordable amount on the pockets of the rural audience. 3. Place: Coca-Cola entered foreign markets in various ways. The most common modes of entry are direct exporting, licensing and franchising. Besides beverages and their special syrups, Coca- Cola also directly exports its merchandise to overseas distributors and companies. Other than exporting, the company markets internationally by licensing bottlers around the world and supplying them with the syrup needed to produce the product. There are different types of franchising. The type that is used by Coca-Cola Company is manufacturersponsored wholesaler franchise system. It is very 44 comparable to licensing but the only difference is that the finished products are sold to the retailers in local market. Coca Cola has managed their company’s marketing and sales strategy within channels. Have you ever considered the significance of the Coke vending machine to the success and profitability of the Coca Cola company? This channel is direct to consumer and vending machines often have little to no competition and no trade or price promotions. The Coke Company operates three primary delivery systems for its business channels: • Bulk delivery for the channels of large Supermarkets, Mass Merchandisers and Club stores; • For smaller channels Coke does advanced sale delivery for convenience stores, drug stores, small supermarkets and on-premise fountain accounts. • Full service delivery for its full service vending customers. Key Channel Listing • Supermarkets • Convenience Stores • Fast Food • Petroleum Retailers • Chain Drug Stores 45 • Hotels/Motels/Resorts • Mass Merchandisers • U.S. DOD Military Resale retail commands: AAFES, NAVRESSO and DECA • Vending In 2006, the Company began changing its delivery method for its route delivery system. Historically, the Company loaded its trucks at a warehouse with products the route delivery employee would deliver. The delivery employee was responsible for pulling the required products off a side load truck at each customer location to fill the customer's order. Coke began using a new CooLift® delivery system in 2006 in a portion of the Company's territory which involves pre-building orders in the warehouse on a small pallet the delivery employee can roll off a truck directly into the customer's location. The CooLift® delivery system involves the use of a rear loading truck rather than a conventional side loading truck. Coke will continue to rollout this program over the next several years since they expect such significant savings and more efficient deliverys. This is a huge investment for Coke. The company works through independent bottlers of Coke. They work in coordination with the Coke company which produces the 'secret formula concentrate' and ships to the distributors and bottlers for final processing and packaging prior to shipment to the stores. 46 Coca-Cola floods all possible retailing stores in satisfying the third part, place. In supermarkets and convenient stores, Coca-Cola products are always easy to identify, and usually make up the greater proportion of options to buy. This increases their market exposure through effective use of the retailers. For a FMCG it is important that they can be found and purchased easily. With many automatic Can machines located in many sports stadiums and shopping malls, you don't even need to go to a store to buy a drink. This greatly enhances the speed of purchase. The company produces concentrate, which is then sold to various licensed Coca-Cola bottlers throughout the world. The bottlers, who hold territorially exclusive contracts with the company, produce finished product in cans and bottles from the concentrate in combination with filtered water and sweeteners. The bottlers then sell, distribute and merchandise Coca-Cola in cans and bottles to retail stores and vending machines. Such bottlers include Coca-Cola Enterprises, which is the largest single Coca-Cola bottler in North America and Western Europe and food service distributors. 47 The Coca-Cola Company only produces a syrup concentrate, which it sells to various bottlers throughout the world who hold Coca-Cola franchises for one or more geographical areas. The bottlers produce the final drink by mixing the syrup with filtered water and sugar (or artificial sweeteners) and then carbonate it before filling it into cans and bottles, which the bottlers then sell and distribute to retail stores, vending machines, restaurants and food service distributors. The Coca-Cola Company owns minority shares in some of its largest franchises, like Coca-Cola Enterprises, Coca-Cola Amatil, Coca-Cola Hellenic Bottling Company (CCHBC) and Coca-Cola FEMSA, but fully independent bottlers produce almost half of the volume sold in the world. Since independent bottlers add sugar and sweeteners, the sweetness of the drink differs in various parts of the world, to cater for local tastes. 48