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Marketing Strategies Of
Coca Cola
TABLE OF CONTENTS CONTENTS 1. 2. 3. 4. Acknowledgement. Mission statement Introduction. Coca Cola. a. Coca Cola International. b. History. 5. Management. 6. Market share. 7. Financial report. 8. Dividends and Cash Plan. 9. Products. 10. Strategic planning. 11. Bottlers owned by Coca cola 12. Coca Cola India. 13. Major Competitors a. Pepsi b. History. c. Financial assets. Market share. Financial report. Products. Methodology 14. Some basic information regarding marketing of coke a. Target market: b. Major segments: c. Factors effecting sales: d. Major competitors: e. Strategies of quality: f. Threats from competitors: g. Targets that would like to attain: h. Expanding target market i. Threats and opportunities for price: j. Strategies of getting goals i.e. high profits: k. Marketing strategy: l. Expectations for the coming year: m. How coke determine the yearly budget: 15. Marketing strategies
DEDICATION
This report is dedicated to my beloved parents, Who educated me and enabled me to reach at this level.
ACKNOWLEDGEMENT
We think if any of us honestly reflects on who we are, how we got here, what we think we might do well, and so forth, we discover a debt to others that spans written history. The work of some unknown person makes our lives easier everyday. We believe it's appropriate to acknowledge all of these unknown persons; but it is also necessary to acknowledge those people we know have directly shaped our lives and our work. First of all we would like to thank our teacher Mr. Nandan Sir for their guidance through out the semester.
MANAGEMENT:
The hierarchy of Coca Cola Company is as follows.
Vice Presidents
6%
5%
5%
5%
4%
4%
18%
9%
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This shows that the market of the company is geographically vast and it is controlling it with great success. In 2002, the company grew their carbonated soft-drink business by nearly 250 million unit cases and generated record volumes. Because carbonated soft drinks are the largest growth segment within the nonalcoholic ready-to-drink beverage category measured by volume, that is why they are focusing more on this and they are continually increasing the pace because they know that accelerating this pace is crucial to their future success. Thus they are increasing their market day by day. The operation income earned by Coca Cola Company can be illustrated by the following pie chart. (Figure)
This strategy has worked a lot and it has helped them to become the Worlds leading Soft Drink Company. The global unit sale of the Coca Cola Company is increasing from the last ten years. The data of the global unit sale of the Coca Cola Company can be represented by following chart. (Figure)
12 10 8 6 4 2 0 1971 1981 1991 2002 unit sale in billions
So there is positive growth in the market of the Coca Cola Company. There is a worldwide volume increase by 4% with strong international growth of 5%. This is only due to the innovative marketing programmers, which has deepened the relationship of the customers and Coca Cola. The financial health and success of their bottling partners is a critical component of The Coca-Cola Company's ability to build and deliver leading brands. 9
In 2002, the company had worked with their bottlers to turn good intentions into reality by improving the system economics. The results in 2002 reflect this steadily improving and mutually constructive relationship between the Company and their bottling partners. The main reason behind this relationship is to continue realizing shared opportunities for growth, with closer coordination of operations including customer relationships, logistics and production.
NORTH AMERICA LATIN AMERICA EUROPE & MIDDLE EAST ASIA AFRICA
So the volume is least in the Africa and most in the North America. The data about the market share of this company area wise is given in the following table. The above table shows the geographical earning of the Coca Cola Company and from this data; we can find out that the customers of Coca Cola are increasing which is shown by the companys per capita income. Unit case equals 24 eight-ounce servings. The column, which shows the non-alcoholic beverages consist of commercially, sold beverages, as estimated by the Company based on available industry sources. The country column is derived from 10
The Company's unit case volume while the industry column includes nonalcoholic ready-todrink beverages only, as estimated by the Company based on available industry sources. (Table) Country Unit case growth Nonalcoholi c Drinks 2002
Compan y share
2002
Compan y share Company per capita Income
North America United States Latin America Argentin a Brazil Chile Mexico Europe & Middle East Eurasia France German y Great Britain Italy Middle East Spain Asia Africa
4 4 6 7 5 9 7 6
5 5 7 4 5 6 10 3
3 3 6 6 3 5 8 5
3 3 6 2 6 3 9 3
2 2 3 7 3 (2) 2 2
2 2 4 2 5 3 5 4
22 23 24 20 23 56 22 12
15 16 15 10 13 23 18 6
17 8 1 8 1 12 6 7 7
8 3 2 2 3 12 4 6 6
6 9 (1) 11 4 7 8 6 8
5 3 1 2 3 5 5 7 3
(14) 7 (6) 8 2 4 4 10 10
1 3 1 3 2 8 4 7 6
14 9 14 17 9 8 17 14 34
5 5 7 6 6 3 12 5 11
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In Asian population, which is the satisfied customer of Coca Cola, is approximately 3.2 billion and the average consumer enjoys close to two servings of our products each month. Through an intense focus on Coca-Cola, innovation and new beverages, the company has achieved volume growth of 10 percent in 2002. With developing economies and populations, this region has strong long-term potential, and the company is building an exciting family of beverage brands in addition to expanding the popularity of our core brands, led by Coca-Cola. In China, for example, sales of Coca-Cola increased 6 percent. The total unit case sale of Coca Cola in Asia can be shown by the following pie chart. (Figure)
So the company is emphasizing more in this area and is trying to develop a strategy, which can increase the growth of the consumption of Coca Cola by the people of Asia. Among the countries of Asia, Japan has the highest percentage, which is about 29%. Among others, India, India and Bangladesh are those countries where the average consumption is increasing day by day.
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FINANCIAL REPORT:
This company is financially very strong. It is due to the strong finances, the company is still surviving the ups and down of the business world. The financial report of Coca Cola Company of the year 2001 and 2000 along with the percentage change is as follows. (Table) Year Ended December 31, (In millions except per share data, ratios and growth rates) 2002 Net operating revenues Operating income Net income Net income per share (basic) Net income per share (diluted) Net cash provided by operating activities Business reinvestment Dividends paid Share repurchase activity Free cash flow Return on capital Return on common equity Unit case sales (in billions) International operations North America operations Worldwide 20,092 5,352 3,969 1.601 1.601 4,110 (963) (1,791) (277) 3,147 26.6% 38.5% 12.5 5.3 17.8 2001 19,889 3,691 2,177 0.882 0.882 3,585 (779) (1,685) (133) 2,806 16.2% 23.1% 11.9 5.2 17.1 Percentage change 1% 45% 82% 82% 82% 15% 24% 6% 108% 12% 5% 2% 4%
2002 basic and diluted net income per share includes a non-cash gain of $.02 per share after taxes, which was recognized on the issuance of stock by Coca-Cola Enterprises Inc., one of the equity investors of this company. 2002 basic and diluted net income per share includes the following charges: $.24 per share after income taxes related to an organizational Realignment. $.19 per share after income taxes related to the Company's portion of charges recorded by the investors of the company. $.16 per share after income taxes related to the impairment of certain bottling, manufacturing and intangible assets. $.05 per share after income taxes related to the settlement terms of a discrimination lawsuit. $.01 per share after income taxes related to incremental marketing expenses in Central Europe. 13
These charges are partially offset by a gain of $.05 per share after income taxes related to the merger of Coca-Cola Beverages plc and Hellenic Bottling Company S.A. and $.04 per share after income taxes related to benefits from a tax rate reduction in Germany and from favorable tax planning strategies.
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COMPANY STATISTICS:
The statistics of this company is impressive. Since it is operating through out the world that is why the number of employees and the bottling equipments is highest among the other bottling companies. There is a constant increase in every aspect when we compare the statistics of 2001 and the statistics of 2002. This is because; Coca Cola Company is increasing its volume day by day. The expansion of this company, which shows the success of Coca Cola brands, results in the percentage change in the statistics of the two years. The statistics is as follows. (Table) 2002 Equivalent cases Bottle and cans Fountain Employees Vehicles Cold drink equipments Facilities Production only Distribution Combination Total Percent of North America population coverage Number of States of Operation Bottle and can equivalent case package distribution Cans Non-refillable bottles Refillable bottles Capital structure Net debt to total capital ratio EBITDA interest coverage Weighted average cost of debt Key Statistics Constant territory bottle and can volume growth Bottle and can net revenues per case change Bottle and can cost of sales per physical case change Reported EBITDA (in billions) Reported EBITDA change Capital expenditures( in billions) %-age of net operating revenues Coverage of North American Can/bottle volume 4.2 billion 87% 13% 72,000 54,000 2.4 million 25 385 53 463 80% 46 44% 52% 4% 63% 3 6.3% 3% Flat 1 $1.95 (18)% $0.97 6% 83% 2001 3.8 billion 87% 13% 67,000 52,000 2.3 million 25 361 50 436 72% 46 45% 51% 4% 59% 3 6.8% % 2% % $2.39 9% $1.18 8% 74%
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EBITDA is the Earnings before interest, taxes, depreciation, and amortization, and other non-operating items. Net Debt is the Long-term debt plus current portion of long-term debt less cash and marketable securities. Equivalent Case or Unit Case is the physical case and fountain gallons converted to a standard unit of measure defined as 24 eight-ounce servings or 192 ounces per equivalent case sold by Coca-Cola Enterprises.
PRODUCTS:
There are different brands of the Coca Cola Company, which are currently in use through out the world. This company not only deals in the carbonated drinks but also other drinks. While launching its product, the marketing team considers the culture of the country.
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The commitment of the company is to devote resources to water only in markets where it expects profitable growth. This strategy has paid dividends. The company has successfully applied its approach to brands in several key markets, including Ciel in Mexico, Mori No Mizudayori in Japan, Bonaqua in Russia and Kinley in India. Backed by a strong network of bottling partners through out the United States, Dasani became the nation's fastestgrowing water brand. In Eurasia, the entire Turkuaz brand team worked together to launch Turkey's first purified water brand. This year, Coca-Cola Company also successfully energized a major piece of its beverage strategywater. By the end of 2001, its bottled water volume exceeded 570 million unit cases, making it the second biggest contributor to the growth of the company after carbonated soft drinks.
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Among the soft drinks Fanta and Sprite become successful along with the major brand Coca Cola and Thums Up. In key markets, the company has created new packaging sizes to satisfy consumer demands. Increasingly, Mexican families have lunch together at home. The average Mexican household drinks two-and-a-half liters or more of soft drinks during that break, while a twoliter bottle was the largest available package. So the company introduced a convenient 2- liter bottle to select regions, contributing to the sale of nearly 1.5 billion unit cases of CocaCola in Mexico this year. This larger bottle will complete its nationwide rollout in 2002. In China, Coca-Cola is an integral part of holiday celebrations and the family get-togethers that accompany such events. Through an intense focus on Coca-Cola, innovation and new beverages, it has achieved volume growth of 10 percent in 2001. In China, sales of CocaCola increased by 6 percent. In the United States, recognizing that consumers often enjoy 18
their diet Coke with a slice of lemon, the company "bottled" the concept. The resultdiet Coke with lemoncontributed to volume growth of 4 percent for the number-one diet. Soft drink in North America: diet Coke. The company increased its two largest bottle sizes during the 2001 holidays, and festival packaging helped drive a 6 percent volume increase for Coca-Cola. The packaging innovations do not just involve resizing. The company has also responded to consumers' changing fashion styles with new bottles. With brands such as Minute Maid, Maza and juice drinks in the India. Coca-Cola India is running against time to launch its sports drink Powerade in the country before the Commonwealth Games in October. In India company has wide range of product & distribution Channel from Urban to village
STRATEGIC PLANNING
In the year 2002, the company had a great success, as the strategy worked which resulted in making Coca Cola Company the worlds leading company. In 2001, company accomplished the crust of its strategy as Worldwide volume increased by 4 percent with strong international growth of 5 percent and clear signs that our North American business is growing solidly and predictable. Earnings per share grew by 82 percent, as we delivered on our commitment to create volume growth while aggressively Return on common equity grew from 23 percent in 2000 to 38 percent this year. Return on capital increased from 16 percent in 2000 to 27 percent in 2001. The company has generated free cash flow of $3.1 billion, up from $2.8 billion in 2000, a clear indication of its underlying financial strength. The strategy for the future of the company is very straightforward. The marketing strategy for the year 2002 is as follows, 19
Accelerate carbonated soft-drink growth, led by Coca-Cola. Selectively broaden the family of beverage brands to drive profitable growth. Grow system profitability and capability together with our bottling partners. Serve customers with creativity and consistency to generate growth across all channels. Direct investments to highest potential areas across markets. Drive efficiency and cost-effectiveness everywhere.
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Pepsis Products
Pepsi Mirinda Mountain Dew 7up
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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.
MAJOR SEGMENTS
Major segments are basically those people who take this drink daily and those areas where the demands is higher then 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 India because it is much lesser than the rest of the countries.
Competitors
Cokes major competitor is PEPSI and there is no hesitation to say this because every one knows that and all the other cold drinks and water.
Weather
Weather is the third major factor in effecting the Cokes selling. This is underdeveloped market so the cokes consumption in summers is 70% and in winters is 30%.
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MAJOR COMPETITORS
Consumers firstly decide that they are going to have a soft drink. Then they compete brands with each other. Like they compete Coke with Pepsi and Sprite with 7up and team .So the major competitor of Coke is Pepsi. When they motivate to any other brand or on Coke its in instinct basically that based on messages derive certain feelings.
STRATEGIES OF QUALITY
After Micro and macro analysis Brand coke is primarily role 1. Enhance competition moments 2. When people watch cricket 3. Through commercialization 4. Fun time Though these strategies there could be better understanding and better connection with the public. These are the key consumption.
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Windfall Profit
Can be windfall profit. They are the extras profit. When the consumption the consumption is on boom. So, there is different kind of profits.
Brand Differentiation
Now different companies have got different brand names. So, people can distinguish between brands. Two major brands coke and Pepsi also have brand names. 27
Pepsis Brand
Pepsis brand is basically is basically ME branded. They use the temperament of ME. In contrast to Coke they believe on individual struggle.
Threats
There are much more threats in increasing prices. Because same problem of substitute. If Coke increase 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.
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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 who 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 29
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.
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MARKET POSITIONING
Product Range
The total range of Coca Cola company in India includes: Coke. Sprite. Fanta. Thumps Up Etc.
And company offers their products in different bottle sizes these includes:
(return glass bottle) (litter returnable bottle) (no return bottle 600ml ) or disposable bottle (1.5 litter plastic bottle) (tin pack 300 ml)
Packing
Coca cola products are available in different packing 24 regular bottle shell 6 bottle pack for 1.5 pets 12 bottles in a pack for disposable bottle 24 cans in one pack.
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PRICE STRATEGY
Trade Promotion
Coca cola company gives incentives to middle men or retailers in way a that they offer them free samples and free empty bottles, by this these retailers and middle man push their product in the market. And thats why coca cola seen more in the market. And they have a good sale in the market because according to the expert which product seen more in the market that sells more. Seen as sold They do agreements with a shop keepers and stores to exclusive sale in that stores. These stores are called as KEY accounts in their local language. And coke also invest heavy budget on these stores and offers them free samples and free bottles and some time cash incentives.
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PROMOTION STRATEGIES
Getting shelves
They gets or purchase shelves in big departmental stores and display their products in that shelves in that style which show their product more clear and more attractive for the consumers.
Sale Promotion
Company also do sponsorships with different college and schools cafes and sponsors their sports events and other extra curriculum activities for getting market share.
UTC Scheme
UTC mean under the crown scheme, coca cola often do this type of scheme and they offer very handy prizes in it. Like once they offer bicycles, caps, tv sets, cash prizes etc. This scheme is very much popular among children.
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.
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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 India by their own so they have so many whole sellers and agencies to assure their customers for availability of coca cola products.
ADVERTISEMENT
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.
POS Material
Pos material mean point of sale material this includes: posters and stickers display in the stores and in different areas.
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TV Commercials
As everybody know that TV is a most common entertaining medium so TV commercials is one of the most attractive way of doing advertisement. So Coca Cola Company does regular TV commercials on different channels.
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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.
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Coca-Cola Concerts
Abrar-ul-haqs distinct style, lyrics & songs have made him an instant hit among the masses in India. His enormous popularity in the country & abroad is supported by CocaColas commitment towards providing healthy & fun-filled entertainment for the youth of India. Coca-Cola brought Abrar to his fans through holding concerts & featuring Abrar in a much-appreciated TVC & MMT featured throughout the country. The TVC campaign focused on the hectic lifestyle of a pop star who found respite & relief through Coca-Cola in short moments that he had to himself during a concert. Coca-Colas brand positioning of providing deep down refreshment for the body, soul & mind were captured accurately in the TVC & depicted aptly how the drink completes the moment for Abrar.
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In November 2000moving on to the Sprite & Fanta brands, the consumers in India witnessed a soft launch in essence. The Coca-Cola Company declared the new NonReturnable bottles of Sprite & Fanta as the New, On the Go Packs flaunting the innovative packaging convenience. Fanta & Sprite are sure to enjoy considerable success in India.
Diet Coke
After the acquisition of the individual local franchise bottling facilities in 1996, the company has successfully launched its first new product, diet coke, for the first time in almost 3 years. The was linked with three fashion shows as Diet Coke is related to fashion & fitness, but the major hit was thematic fashion shows in restaurants, which are the key accounts of the company as this has been never done before in India.
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CONCLUSION
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.
RECOMMENDATIONS
After completing our project we have concluded some recommendation for the coca cola company, which are following. Coca Cola Company should try to emphasis more on providing their infrastructure in the market to facilitate their customers.
According to the survey, conducted by the international firm Indiai people like little bit sweeter cola drink. So for this coca cola company should produce their product according to the local demand.
Marketing team should try to increase the availability of Coke in rural areas. They should also focus the old people. Now young generation has a trend to drink a coke 2 regular bottles at same time, so providing more satisfaction to them company should introduce liter disposable bottle.
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Coca-Cola slogans
"Thanda matlab Coca-Cola!" ("Cold means Coca-Cola!") (2000s) [2] "Pio sar utha ke" ("Drink with pride") "Jo chaho ho jaye, Coca-Cola enjoy!" ("Whatever you wish will come true, enjoy Coca-Cola!") "Burrrrrrrrr" ("Refreshment" )(2011)
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CONCLUSION:
Coca-Cola no doubt come the heart beat of Indiais. Coca-Cola is one of the leaders in sponsoring the most important, thrilling events. E.g. Cricket matches, concerts and many other social occasions. Event at the present they are organizing a Diwali festival for which they busily organizing stuff.
So
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