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FINAL REPORT
MARKETING MANAGEMENT
Rehan Ahmed
Sadaf Farooq
Acknowledgement
After in-depth study of Marketing Management, we are finally succeeded to complete the progress report of Marketing Management on Coca Cola Pakistan Mr. Sir Syed Faiz-ul-Ullah Jawad being the instructor of this particular course remained very cooperative and helpful throughout the term to give guidelines and make rational decisions. We are grateful to him for his kind supervision. Each of our group members felt his responsibility to accomplish task of his part adequately. This collaboration resulted in the successful Marketing Management progress report on Coca Cola Pakistan.
TABLE OF CONTENT
1. Executive Summary 06 2. Company Introduction 07 3. Vision Statement.. 08 Mission Statement 08 Shared Values......... 09 Objective of Coca Cola Pakistan. 10 Goals of Coca Cola... 10 Marketing Objectives... 10 4. Current Marketing Situation... 13 a) Marketing Description.. 13 b) Benefits and Product features.. 14 c) Product Review... 15 d) Competitive Review 15 5. SWOT Analysis.. 18 6. Marketing Strategy.. 21 a) Positioning. 21 b) Product Strategy.. 22 c) Pricing Strategy 24 d) Distribution Strategy... 27 e) Marketing Communication Strategy 28 f) Marketing Research 30
Coke
1. EXECUTIVE SUMMARY
Role of Marketing Department in the improvement process continues to be at the vanguard of strategy contest not only in this part of the world (Pakistan) but also in other countries. Most of the specifics about promoting brands have been renowned in the entire world. The competitive allege for marketing department are infinite, containing promotions and strategies that make possible for them to survive in persistently varying environment (Such as technology) of world. By applying international marketing concepts the company can acquire multinational status with a reputed brands and the company is globally recognized for the quality and standard.
Coca-Colas headquarter is in USA and there are more than 200 countries in which it is acting as a host company. In Pakistan there are 9 plants and over 1800 employees, 8 plants are functional and three plants in Lahore, Gujranwala and Rahimyar Khan have achieved the Quality system award. Coca-cola with its 450 brands is claiming to be the worlds best non-alcoholic beverage maker and is yet proving his claim by having 63% share in the world market and they are fulfilling their promise to maintain a standard and proving to become a quality symbol. And their aim is to serve the nation by making only non-alcoholic drinks and to give the world a cool and fresh treat.
3. Company Introduction
The Coca-Cola Company began operating in Pakistan in 1953. Coke, Fanta and Sprite are the brands with whom Coca-Cola is operating in Pakistan. The CocaCola System in Pakistan operates through eight bottlers, four of which are majority-owned by Coca-Cola Beverages Pakistan Limited (CCBPL). The CCBPL plants are in Karachi, Hyderabad, Sialkot, Gujranwala, Faisalabad, Rahim Yar Khan, Multan and Lahore. The Coca-Cola System in Pakistan serves 70,000 customers/retail outlets. The Coca-Cola System in Pakistan has nearly 3,000 people working constantly for the company. During the last two years, The Coca-Cola Company in Pakistan has invested over $130 million (U.S) and coke has successfully provided 56 years of dedicated service to its customers in Pakistan. Since the beginning of Coke Company the firm has been continuously changing its slogans and thats a very creative idea to get the attention of the customers.
Today CCBPL is operated directly under the supervision of the Coca-Cola International based in Atlanta Georgia State___ USA .It owns 8 plants all around in Pakistan. Coca Cola Company offers the brand range as Coca Cola, Diet Coke, Fanta, and Sprite in Pakistan. Coca-Cola introduced in Pakistan 1953 Diet Coke 2001
3. VISION STATEMENT
Our vision guides every aspect of our business by describing what we need to accomplish in order to continue achieving sustainable growth. 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 responsibilities. Productivity: Be a highly effective, lean and fast-moving organization.
MISSION STATEMENT
Mission statement is a statement of organizations purposes that what it wants to accomplish. In order to achieve mission of increasing market share and maintaining good relations with our customers all over the world, we wish to create value for all the constraints we serve, including our consumers, our bottlers, and our communities. The Coca Cola Company creates value by executing business strategy guided by four key beliefs:
Customer is king; Customer demand drives everything we do. Brand Coca Cola is the core of our business. We will serve consumers a broad selection of the nonalcoholic ready-todrink beverages they want to drink throughout the day. We will be the best marketers in the world.
Everything we do is inspired by our enduring Mission: To Refresh the World...in body, mind, and spirit. To Inspire Moments of Optimism...through our brands and our actions. To Create Value and Make a Difference...everywhere we engage.
SHARED VALUES
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
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.
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B) PROFITABILITY OBJECTIVES
To achieve a 20% return on capital employed by August 2007
C) PROMOTIONAL OBJECTIVES
To increase awareness of the product on the market.
PROMISE OF COKE
The basic proposition of our business is simple, solid and timeless. When we bring refreshment, value, joy and fun to our stakeholders, then we successfully nurture and protect our brands, particularly Coca-Cola. That is the key to fulfilling our ultimate obligation to provide consistently attractive returns to the owners of our business.
TARGET MARKET
Cokes commercials basically based on young generations, so, the young generation is the target market of Coke because they want to represent Coke with the youth and energy but they also consider about the old people they take then as a co-target market.
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MAJOR SEGMENTS
Major segments are basically those people who take this drink daily and those areas where the demands are higher than the other areas. There are so many people who take this drink daily and those people who take weekly and those who take less often are always there as well. So, their basic segments are those people who take this drink regularly.
And to get through with this difficulty there is need to increase the level of per capita income of Pakistan because it is much lesser than the rest of the countries.
COMPETITORS
Cokes major competitor is PEPSI and there is no hesitation to say these because everyone knows that and all the other cold drinks and water, coffee, tea are the competitors.
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WEATHER
Weather is the third major factor in effecting the Cokes selling. This is underdeveloped market so the cokes consumption in summers is 60% and in winters is 40%.
a) 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.
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FEATURES
Coke is having difference in taste than Pepsi due to having difference in ingredients. Coke has maintained global leadership in soft drink industry. Coke is trying to focus on worldwide expansion of the cola market. Coke must try to focus on its relationships with bottling subsidiaries. Coke is facing a major challenge in developing countries that their regional bottlers may not have the financial resources to continue expansion. The brands are trying to create world-wide economic development and population growth to sustain sales and profits
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c) PRODUCT REVIEW
Coca-Cola has, and still, continued to reign in the consumers market stunning other companies with their artistic and viewer-friendly commercials Coke is having difference in taste Coke has maintained global leadership in soft drink industry Coke is trying to focus on worldwide expansion of the cola market
d) Competitive Review
BUYERS/CUSTOMERS
Coca-Cola has three major and large customers in the market, food street 60,000 cerates /year, MacDonalds 40,000 cerates/year and Pakistan Railways who buy 50,000 cerates /year. However, these three customers being large and powerful are in an influential and bargaining position they can demand discount or others facilities like (boards sign/freezers/coolers etc.) and impose a threat to switch to their closest rival and competitor Pepsi.
SUBSTITUTES
Nestle products like juices, coffee, mineral water etc. and Shezan juices are substitutes of Coke for health conscious people and other fresh juices.
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INDIRECT COMPETITORS
These include Nestle and Shezan juices that do not pose a threat to Coke as yet but has the potential to do so as it is exploiting the natural aspect and health issues more and more to make people conscious about physical fitness Coke has launched Diet Coke to counter the physical fitness demands.
SUPPLIERS
Coca-Cola has authorized suppliers and which do not pose a threat to it. Anyhow Coke does have a quality check procedures in its plants to ensure that they get the right kind of ingredients from suppliers.
NEW ENTRANTS
Coca-Cola is not afraid of competing .it doesnt fear losing its share to MeccaCola or other new entrants. The company management believes that new entrants provoke healthy competition, which will provide Coke with a challenge to hold on to its loyal customers. Besides it will take a lot of effort on the part of new entrants like Mecca- Cola, Pak-cola to fully launch its product in Pakistan and capture or even motivate people to switch on to their new product from Coke.
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DIET COKE
Coca-Cola has successfully addressed to the needs of its health conscious overweight customers with the launch of diet Coke. Its competitor has yet to come up with and counter diet Coke properly
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THREATS
There are much more threats in increasing prices. Because same problem of substitute. If Coke increases the price lets say 1 rupee. Then people definitely wont go for coke. They have the best substitute of Coke that is Pepsi. So these are the threats in increasing prices. Coke will lose the margin of its profit and can face loss.
5. SWOT ANALYSIS
SWOT Analysis is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities and Threats inside a company, project, or a business venture. It involves identifying the internal and external factors that are favorable/ unfavorable for business to Succeed.
WEAKNESSES
Liquid concentrates and power concentrates are both seasonal categories in the market and their sales peak in the summer in Pakistan. Both Rooh Afza and Jam-e-Shirin are traditional sandalwood drinks in Pakistan which are highly regarded by consumers. These drinks can be found in every home in Pakistan, especially in rural areas throughout the summer and are the mainstay of liquid concentrates.
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OPPORTUNITIES
The Government of Pakistan has reduced excise taxes to encourage soft drinks manufacturers and importers. The Government also reduced other applicable taxes to promise more profit not only for soft drink manufacturers already in the market but also to attract potential soft drinks manufacturers to invest in Pakistan. Tax reductions proved extremely beneficial to the soft drinks market in Pakistan and certainly encouraged and attracted multinational companies to invest in the countrys soft drinks industry. The government also decided to tax the beverage industry on capacity of production rather than on actual production and that brave move encouraged soft drinks manufacturers to maximize production and reduce prices.
THREATS
Increasing health and hygiene awareness among Pakistanis has greatly increased sales of fruit/vegetable juice products. Both the government and the media have started health awareness campaigns to make Pakistanis realize that consumption of fruit/vegetable juice is as essential as eating food. Fruit/vegetable juices are doing very well in both urban and rural areas. On the other hand, health and hygiene awareness has also led to increased sales of bottled water in Pakistan. Previously bottled water was targeted on at major cities where consumers are more health-conscious and aware of the difference between bottled water and tap water. Nowadays, health conscious rural inhabitants also drink bottled water due to health concerns.
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SWOT ANALYSIS OF COCA COLA INTERNAL STRENGTHS Popularity Well Known Branding obvious and easily recognized A lot of finance Customer loyalty International Trade WEAKNESSES Word of mouth Lack of popularity of many Coca Colas brands Most unknown and rarely seen Result of low profile or nonexistent advertising. Health issues
EXTERNAL Changing healthLegal issues Health ministers Competition (Pepsi) Many Successful brands to consciousness attitude pursue Advertise its less popular products Buy out competition More brand recognition
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6. MARKETING STRATEGY
Our local marketing strategy enables Coke to listen to all the voices around the world asking for beverages that span the entire spectrum of tastes and occasions. What people want in a beverage is a reflection of which they are, where they live, how they work and play, and how they relax and recharge. Whether you're a student in the United States enjoying a refreshing Coca-Cola, a woman in Italy taking a tea break, a child in Peru asking for a juice drink, or a couple in Korea buying bottled water after a run together, we're there for you. We are determined not only to make great drinks, but also to contribute to communities around the world through our commitments to education, health, wellness, and diversity.
Coke strives to be a good neighbor, consistently shaping our business decisions to improve the quality of life in the communities in which we do business. It's a special thing to have billions of friends around the world, and we never forget it.
a) MARKET 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.
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ACTUAL PRODUCT
Design: Pet bottles, returnable glass bottles, economy packs. Quality: Quality differs with respect to country for example. Coca-Cola Can quality that is available in Middle East is certainly different as compared to Coke Can available in Pakistan.
PRODUCT CLASSIFICATIONS
Coke is categorized as a convenience product, because the purchasing rate is very high and this is the product that is bought very frequently.
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BRAND STRATEGY
The following is the brand strategy of Coke LINE EXTENSION Line extension occurs when a company introduces additional items in a given product category under the same brand name. For example if Coke introduces new flavors and package size, it will be considered as line extension. BRAND EXTENSION Brand extension means using a successful brand name lets say Coca-Cola and then launching new product for example cherry coke. This was an example of brand extension. MULTI-BRANDING It means introducing additional brands in the same category. For example Coca-Cola not only introduced coke as a brand but also sprite and Fanta. DIVERSIFICATION It means introducing new product with the new brand name. It means diversification but this is something Coca-Cola has not adopted for as yet.
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c) PRICING STRATEGY
The amount of money charged for a product or service, or sums of the values that consumers exchange for the benefits of having or using the product or services. As price gives us the profit so this P is very important for business price of product should be that which gives maximum benefit to the company and which gives maximum satisfaction to the customer. Following factors Coca Cola kept in mind while determining the pricing strategy. Price should be set according to the product demand of public. Price should be that which gives the company maximum revenue. Price should not be too low or too high than the price competitor is charging from their customers otherwise nobody will buy your product. Price must be keeping the view of your target market. The price of Coca Cola, despite being market leader is the same as that of its competitor Pepsi Cola. Sometimes, Pepsi places its customers into some psychological pricing strategies by reducing a high priced bottle and consumers think that they save a lot of money from this.
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DISCOUNTS
Coca Cola offers various discounts to those retailers who have the maximum sales of Coca Cola products on daily, monthly and on seasonal basis. Some of the main discounts given to the retailers are as follows:
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QUALITY DISCOUNT
Following are discounts offered by Coca Cola. 1/10 DISCOUNT I.e. one case of Coca Cola is free on buying 10 cases of Coca Cola at one time. 2/20 DISCOUNT I.e. two cases of Coca Cola are free on buying 20 cases of Coca Cola at one time.
SEASONAL DISCOUNT
Following are discounts offered by Coca Cola. Coca Cola also offers seasonal discounts schemes by reducing price in Ramadan and on Eid. Coca Cola also offers trade in allowance for retailers. 3 B F DISCOUNT I.e. sometimes, especially in the off-season duration, in order to increase the sale of Fanta and Sprite, 3-BF discount is given (i.e.) 3 bottles free on purchasing every case of Fanta and Sprite.
INCENTIVES
Mainly two types of incentives are given by the Coca Cola:
INCENTIVE TO RETAILERS
Coca Cola provide various incentives to retailers on the best sales and achieving the predetermined sales targets. These incentives are in the shape of: Deep Freezers Return Tickets Free Transportation Services.
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INCENTIVE TO DEALERS
The first, second and third best dealers of the year are awarded.
CREDIT
There is no credit system in the beverage industry. Every single bottle is sold on the cash basis.
SPECIAL OFFERS
Coca Cola gives special offers to consumers on special occasions like Ramadan and Eid days instead of decreasing the price of the products, some special packs like Pakkora Mix, Chat Massala, or Free Drinks with Liter Bottles are offered.
d) DISTRIBUTION CHANNELS
Coca Cola Company makes two types of selling Direct selling Indirect selling
DIRECT SELLING
In direct selling they supply their products in shops by using their own transports. They have almost 450 vehicles to supply their bottles. In this type of selling company have more profit margin.
INDIRECT SELLING
They have their whole sellers and agencies to cover all area. Because it is very difficult for them to cover all area of Pakistan by their own so they have so many whole sellers and agencies to assure their customers for availability of Coca Cola products.
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E)
The field of advertisement is one area where Coca-Cola has always emphasized. In year 2000 Coca-Cola unveiled the biggest advertising billboards in the history of Pakistan. Each unveiling was marked by entertainment and light shows watched by thousands of people. Similarly in July 2000 Coca-Cola launched its first under the crown promotion by the name of Dream Vacations in which the consumers could collect caps of promotional bottles of Coca-Cola like Sprite, Fanta and Coke.
ADVERTISEMENT OBJECTIVE
Type of advertising with respect to product life cycle that Coca-Cola adopts is reminder type. The reason behind this fact is that coke is such a product that is at the maturity level currently so for such a product companies mostly go for reminder type of advertisement so that they can penetrate more and more and same is the case with Coke.
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ADVERTISING STRATEGY
Before creating advertising message the Coca-Cola Company gives lots of time to the factor that the message must gain customer attention. This is basically called Clutter Buster means that only that advertisement will leave impact on customer mind that has some specialty or uniqueness in it. For example in India Coke current slogan Thanda Matlab Coca-Cola has gained reasonable customer attention.
ADVERTISEMENT MEDIA
Coca-Cola Company advertises its products mainly coke through electronic media that includes Television, Radio and Internet as well. Moreover leading newspapers of Pakistan are also the targeted by coke for advertising. So we can say that coke not only uses electronic but print media for advertisement as well. Coca Cola Company use different mediums Print media Pos material TV commercial Billboards and holdings
PRINT MEDIA
They often use print media for advertisement. They have a separate department for print media.
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TV COMMERCIALS
As everybody know that TV is a most common entertaining medium so TV commercials are one of the most attractive way of doing advertisement. So Coca Cola Company does regular TV commercials on different channels.
F)
MARKETING RESEARCH
Coca Cola marketing team focuses not only on the results as well as the tasks assigned. They firmly believe if you want to establish a clear image in the minds of consumers, you first need a clear image in your own mind. Since the major competitor is Pepsi Co. so Coca Cola Intl has focused on neutralizing the competition. Kill the category: If Pepsi Co. launched Crystal Pepsi then Coca Cola Intl launched Diet Coke. The Coca Cola marketing team maintained their focus strongly on the product itself. When they changed bottle shape, many people started buying bottles instead of the drink itself The Coca Cola team learnt from everything. Even if a customer said no, they focused on why did he say no and then found out ways on how to solve that issue. Formula for positioning success: Define Over deliver Claim Succeed
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They specified the criteria for each product offered because if you dont specify the criteria for choosing, consumers will develop their own, which is dangerous. After thorough research, we come to the conclusion that the marketing strategy of Coca Cola is working for them and the product is gaining popularity among youth day-by-day.
7. ACTION PROGRAM
T o achieve the business objectives coca cola adopted the following strategies Coke Studio- Coke Studio is a musical program sponsored by coca cola and telecasted on popular channels in Pakistan Coke Blitz- In coke blitz coca cola companys employees worked as a team and visited their retailers and helped them in cleaning of refrigerators and placed them at easily reachable position. Sprite Mad about TV- In this promotional activity a media team visited the universities all over Pakistan in search of talent under the coca cola company name to promote its product. Ramadan offer- In month of Ramadan special discounts are given to increase the sales
8. BUDGET
HOW COKE DETERMINE THE YEARLY BUDGET
Coke determines its yearly budget by the Sales volume Profitability Target volume
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SALES VOLUME
Coke determines its yearly budget through the sales volume. They first concentrate on the thing is what is the condition of their sales? if the condition is good of their sales then they definitely increase their production and sales volume. Otherwise they concentrate on their old strategies.
PROFITABILITY
The second thing through which they determines budget is the profit .if they r getting profits with the high margin, then they definitely want to increase their profits in the next coming year. Every organization runs on the basis of getting high profits. No organization wants to face Loss in their business. To get profit is the first priority of the Coke.
TARGET VOLUME
To run the business every industry has some targets, which they want to achieve in a specific time period. If industry achieves those goals in that period then for the coming year it increases the volume of the target. So Coke Follow the same thing it has also some goals and targets to achieve in the given time period. When they succeed to achieve that target then they increase their target volume in the next year.
9. CONTROLS
Coca Cola Intl. has controlled sales via: Geographic Market Organization Opening plant in various countries (in Pakistan they have 10 plants) so as to reduce taxes. They have invested $5.6 million in their R&D facility to maintain Product Quality Control. Their primary concern right now is penetrating into the Pakistani market via strong attacking techniques whereby maintaining defense strategy against Pepsi Co. The overall strategic control is implemented in all plants and factories throughout the 200 countries which Coca Cola proudly serves.
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7. BIBLIOGRAPHY
www.scribd.com www.fliiby.com www.slideshare.net www.cocacola.com
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