Coca Cola Analysis
The Coca Cola Company The company that I have chosen for my course project is the Coca Cola Company. The reason for my selection is simple, I am impressed with growth associated with Coca Cola and plan on further researching and analyzing how such growth of this magnitude is possible. The company was founded in 1886 by John Pemberton as a simple soft drink, created solely out of curiosity. John Pemberton, a pharmacist, mixed together the caramel flavored carbonated drink and initially starting selling it for 5 cents.
Now 126 years later, Coca Cola has more than 3500 beverages, sold in over 200 countries and employ more than 146,200 employees. What debuted as a simple soft drink in an Atlanta pharmacy, now has a global success rate of 1. 8 billion servings per day. Product List The following product list is from research gathered covering the Coca Cola drinks of the North American Region in the United States. Globally Coca Cola has over 3500 products. The products sold solely in the United States range from juices, energy drinks, soft drinks, coffees, teas, sports drinks and drink mixers.
Coca Cola diverse efforts to cover every aspect of liquid drinks, whether for sporting events or simply enjoyment, have made up a total of XXXXXX in the United States alone. The original Coca Cola product was first introduced in 1886 and distributed nationally by 1899. Today you can find your favorite Coca Cola product literally anywhere in the world. Due to higher concerns for health and nutrition, in 2007 Coca Cola furnished caffeine content per serving along with already available nutritional information. Product Lines and Mix
The Coca Cola Company has 7 product lines within their beverage selection. They all fall into the non alcoholic liquid beverage sold in restaurants, stores, vending machines and distribution companies in the United States. Of the 7 product lines (see table A below), you can see that the most variety falls under the soft drink line with over XXXXX of products. Table A. Product Coca Cola Products have some of the most distinct flavors. At times they were criticized for adding certain ingredients, such as cocoa leaves, to enhance flavor and increased desire to drink the soft drink.
Today the Coca Cola products sold in stores in the United States range from carbonated delightful drinks, to sports drinks used to fuel the body with electrolytes (See Table B. below). Coca Cola’s first product was actually made by mixing a “fragrant, caramel flavored liquid and combined with carbonated water. (Coca Cola Co. , 2012). It became an almost instant sensation and today Coca Cola owns some of the favorite soft drink products sold in the U. S. such as Dr. Pepper, Sprite, PowerAde, Minute Maid, and Dasani. Table B. |Type of Drink | Popular | |Soft Drinks |Carbonated -flavored |Coca Cola- Sprite | |Juices |Non carbonated fruit drinks made from real fruit juice and |Minute Maid Lemonade | | |flavoring | | |Energy Drinks |Energy carbonated drinks made from Ginseng and Tuarine |Monster Energy | |Sports Drinks |Combines carbohydrates with fluid for hydration |POWERADE | |Tea / Coffee |Iced Coffee and Tea |Nestea | |Water |H20 |Dasani | |Other |Drink mixers, lactic drinks, and coffee blend |Bacardi Mixers | Include competition and SWOT ANALYSIS here before final draft!!! Branding Founded in 1886, the now famous brand that can be found world wide, Coca-Cola is the face to many different popular brands that we find on store shelves. In the 1950’s Fanta joined Coca Cola only to be followed by Sprite, Tab, Minute Maid, Mr. Pibb, and Mello Yello.
In the 1980’s the famous brand Diet Coke and Cherry Coke were added, and the 1990’s brought about the PowerAde and Dasani era. The Coca Cola logo has remained unchanged and impressively a letter script font so simple has become globally recognized. Packaging In 2010, Coca Cola switched from “The Coca Cola Management Company (TCCMS)” to the “Coca Cola Operating Requirements (KORE)” to ensure quality, and product safety. Coca Cola holds a high standard in packaging and quality control of their operations. Coca Cola is consistently refining their efforts to maintain a high level of packaging and implementing new requirements as deemed necessary.
Since Coca Cola is packaged globally, the “KORE” has implemented a set of requirements that are must be in accordance with packaging guidelines in order to protect the integrity of the product wherever it may find it’s destination. The Coca Cola company first started bottling their product in 1894 in a now commonly known bottle called a “Hutchinson”. You can now find the product in a 6. 5oz, 10oz, 12oz. , 26oz. , bottle, plastic and aluminum containers. The product can also be found in a concentrate form. Sold in a carton box with the concentrate inside a plastic sealed bag, restaurant owners can then connect to their carbonated mixers and serve fountain drinks. Product Features
Coca Cola has some very unique features and on top of having a patented flavor that has literally been untouched since its’ debut in the late 1800’s, the Coca Cola Company has now expanded it’s diverse taste palette to accommodate anyone’s preference of taste. From soft drinks, to energy drinks, you can literally find a match from a Coca Cola product. One of Coca Cola’s biggest product features is that you can find your favorite product shelved at a local store, anywhere in the world. A great product feature is that you can purchase it in bulk or by a single unit. Labeling The Coca Cola Company provides several labels for their customers to attain facts of the beverage that they are consuming.
Nutritional Facts and UPC codes can clearly be found on Coca Cola Products. Since 2007, Coca Cola began furnishing a detailed “caffeine content in addition to nutritional information already provided. ” ( Coca Cola, 2012). As of 2008, Coca Cola began providing “servings-per-container” and “calories-per-serving” for all customer’s. Finally in 2009, Coca Cola’s packaging was formatted differently to provide an immediate visual presentation of the calorie content on front of packaging. Competition It is no secret that Pepsi Cola Company is Coca Cola’s direct competition. For many years we have seen the on going marketing battle of the two companies literally feuding via commercial air waves.
The long battle is due in large part to Pepsi’s direct marketing strategy to out due or match every single move that Coca Cola makes. The shadow-like improvements of each mega marketing campaign have proven to be cornerstones in marketing and advertising trends that we see today. The mega moves and strategies that each company has the ability to afford are a great tools for any company to take notes on and follow suit. Interestingly enough, Pepsi competes with Coca Cola in a different approach; Coca Cola has over 3500 soft drink products and Pepsi worked its’ way into marketing their brands of chips, oatmeal, snacks, cereal, teas, soft drink Pricing
Due to the variety of sub- brands under Coca Cola, price segmentation is in place due to the different markets and global distribution pricing as well. In the United States, Coca Cola Company and Pepsi Cola have become mega players in the oligopoly market. With less competitors, and the same brand names seeking larger market share, the pricing strategy on a product that sometimes can be found for $1. 00 U. S. , is uniform delivered pricing. (Lamb, Hair, McDaniel, 2012). Since distribution is world wide, the companies prefer to factor in their own freight and production costs, to deliver the price demand that competitors are available to offer. There is a mutual agreement when in a market such as oligopoly.
The pricing strategy is still competitive pricing strategy, due to the fact that if Coca Cola decided to lower prices, Pepsi Cola would soon follow suit to stay within the target markets price demand. It is also very realistic that when competitors raise or lower prices, the opposing players can decide not to match opposing prices as a strategic stronghold to maintain position in economic market spot. In a recent article from the “News by Industry”, Pepsi announced a “festive promotional price cut” and sources close to Coca Cola said that they would not match the cut. (“Pepsi to Cut”, 2012) Since the beverage commission has very little companies with a lot of buyers, the pricing strategy is competitive and based on competitors pricing.
Pricing in this market is very elastic and companies have the ability to change pricing as they wish depending on their geographic locations. The pricing in vending machines can also vary since labor costs do not exist and can basically sell the product all day, every day. The pricing strategy on Coca Colas different product sizes is extremely strategic. Depending on where you purchase the product from, prices will vary. According to a recent poll question asked on Yahoo, “how much does your Coca Cola cost where your at? ”, average cost on a 20oz. bottle of Coke is about $1. 25, average cost for a 2l bottle of Coke is about $1. 10, nationwide. Promotional pricing can be found regularly on 2l bottles and packages with larger per volume products.
The pricing strategy is tactical and allows for consumers to feel the need to upgrade to save on price and increase volume. The most expensive form of consumer product purchase is the 5 gallon “bag in box” form. This concentrated syrup is usually purchased by restaurants/bars industry, and can yield 30 gallons of fresh fountain product. This price also varies on your geographic location and distributor, but on average here in Texas can be purchased from Sam’s Club for $69. 83. (Sams, 2012) When sold in restaurants, soft drinks now sell for about $2. 00 for a 10-16oz glass, making it extremely profitable and cost effective to purchase the concentrate.
On the other hand, Coca Cola benefits for simply selling the concentrate and less costly forms of packaging. Place Since Coca Cola is one of the most popular soft drinks in the world, distribution is in high demand and in a multitude of channels. The distribution method that is used by Coca Cola is in the Fast Moving Consumer Goods. Here the products do not rely on a long shelf life and due to the moderate and easy pricing, products are in high demand, sell at a high rate and distribution is high. Ranging from mobile vendor carts on the streets to some of the large amusement parks such as Disneyland and 6 Flags, distribution is effective in every form.
At the end of the day when added up globally, Coca Cola is at the top of the beverage consumption list. Some of the many distribution channels include the following. Mobile/ cart vendors- mobile vending can satisfy consumers conveniently at their location instead of having the consumer come to a retail store or stand. Provides easier access to consumers in special events or parks with the satisfaction of a cold beverage in any location. Vending Machines- with an occasional restocking visit, a vending machine provides an assortment of products at no labor cost. The vending machine provides product to areas that are remote or not within walking distance to the store, accessibility and great advertising.
Vending machines are favorites in schools and business lounge areas. Retail stores / grocery stores- with places such as Wal-mart, this allows for a wide array of variety to be shelved and advertised while selling the product. Coca Cola holds contracts and agreements to provide for strategic placement of their product so that the first visual product such as Coke is in plain site. Competitors products are pushed to the end of the aisles. Hotels, Restaurants, Cafe- This is by far the largest number of consumption since restaurants and bars use a large number of soft drinks and mixers. Contracts and sponsorships with these locations provide for major distribution.
Amusement Parks, Museums, Civic Centers- Areas like Disneyland and 6 Flags over Texas are the biggest types of distribution forms. Amusements Parks hold concerts and special events where the “official beverage” of the theme park are displayed profoundly. Within the park are restaurants and food courts that are also limited to selling the “official beverage” adding to the large number of distribution methods. In a recent article provided by Beverage World, “Six Flags Entertainment Corp. and The Coca-Cola Company have announced a 10-year extension to their partnership agreement, designating Coca-Cola as Six Flags’ official beverage sponsor for all domestic parks. (“Coke, six flags,” 2012) With a partnership agreement of this magnitude, competition is increased due to the large number of exposure and distribution that is provided. Coca Cola has had this same contract with 6 Flags for the last 50 years. Any media that is released or furnished by 6 Flags Over Texas, (i. e. Twitter, Facebook, Yahoo) will automatically provide the “Coca Cola-Official Drink” stamp. With a consistent strategic placement in a venue such as ginormous as an amusement park, it can be said that all of Coca Cola distribution channels undoubtedly cover important areas to contribute to the 1. 8 billion serving per day in over 200 countries. Promotion Communication Strategy
A communication strategy is the way in which a company relays information for the products or services to reach the consumers hands and attention. The Coca Cola Company has several strategies which it employs to reach their target market. In order to reach the correct target market a strategic and precise strategy must be applied. Although specific, detailed marketing information could not be obtained, in 2006 roughly $2. 6 billion dollars were used for advertising expenses in pursuit of reaching a solid communication strategy. In 2000, only $1. 7 billion was spent on advertising. (Coca-Cola FAQ. 2012) In my summary the amount of advertising investments paid in relation to dividends generated will be defined.
According to a recent article by Forbes Magazine, The Coca Cola Company is at the top of all beverage companies, and ranked #3 among the most powerful brands in the world. Forbes Magazine also estimates Coca Cola’s advertising expenses at around 3. 2 billion (Badenhausen, 2012) In order to form a powerful communication strategy, the target audience must be defined. The following target market is what Coca Cola has found to be beneficial for the companies growth. . Young athletes- young athletes are a good source to start with. By increasing product awareness at a young age, you inspire taste bud recollection and a higher return. Young athletes are easier to inspire with promotional ads, billboards and endorsements from professional athletes. More of the sports drinks and water fits into this category.
High School Athletes- High school athletes are constantly looking up to professional collegiate athletes. Adding the endorsement incentive to these young athletes is a primary step in increasing product consumption. Sponsorships Collegiate Athletes- here athletes are influenced by professional figures and the hopes of the Olympics. Endorsement deals are larger here since the competition is fierce with hungry rising, mature individuals. Sponsorships Pro Athletes- Endorsements are the main source of advertising. Professional athletes are the main element of advertising and sports drinks are seen everywhere. Young Adults- Non Athletes- Clubs, bars, and nightclubs are the focal point in order to attract this demographic.
Professionals- very open form of market. Basically all elements of the previous demographics factor into the professionals. This is an ongoing form of demographic that derive from the adolescent to present day professional. Large Audience- there is no specific market here as it applies to the whole general consumer base as a whole. It is the maximum exposure that creates a large audience base. Olympians- The entire universe participates in these events and are a great source of advertising. Here endorsements here are extremely valuable as athletes are in a world wide arena and competition is extremely fierce. Other- made up of all elements comprised
Sales Strategies Coca Cola has several different sales strategies that have actually worked for them numbers wise. According to an article posted by “The Packaging Digest” in 2011, a recent sales strategy boosted sales by 8% to 2. 2. billion world wide, and actually increased the product price by 3%. (Crocker, 2011) This is a proven method that has given results. The placement of products is strategic. When shopping for health foods, one of the most popular fruits being the bright yellow bananas, you will find “Dasani” , eco friendly recycled water bottles right under them. Pairing items like this is a tactic that has proven effective since 2011.
Another strategy is one that Coke Zero uses to place their products in the beer section, to encourage the designated driver to consume their products. Finally, the 2 liter coke that is found in the grocery stores near the pre-cooked chicken is also a strategy to make it easier for you to “grab and go”. Making it easier for people to shop faster is key. Vending machines and coolers with the product before check out are some of the sales strategies that Coca Cola uses to increase sales in a market of $1 products. “The competition is actually pretty fierce for the overall beverage dollar,… It requires a lot of marketing and promotional support. “(Crocker, 2011) Sales Approach
In order for a product to remain within the realm of competition it is necessary for your product to remain as fresh as it was as when you opened it. Coca Cola claims that their approach is quite simple in this aspect according to a recent article in the Forbes Magazine. Jeff Tripodi, CMO of Coca Cola, claims that their strategy is innovation. (Dan, 2012) Having a state of the art dispensing machine will increase sales, further connecting with your consumers will also increase your chances at success. One of the recent forms of innovation are the “Freestyle” dispensing machines that can pour 125 different beverages with a perfect pour each time. Building a strong cultural connection with your geographic area you plan on promoting to is a huge plus in improving overall sales.
In order to promote sales a great promotional mix is required to ensure that all advertising expenses are maximized and yield awesome results. The following is promotional mix that includes all of the avenues thru which sales are promoted. Promotional Mix Advertising- commercials, billboards, visual advertisments, vending machines Sales Promotion- Battle of Bands, My Coke Rewards Personal Selling- Coca Cola Representatives Social Media- Facebook, Twitter Communication Channels / Media A recent article on Coca Cola’s webpage, March 27, 2012, announced the acceptance speech of the companies induction to the “Advertising Hall of Fame”. With over 120 years in the beverage business, there is no doubt that Coca Cola has held some very important marketing campaigns.
Their first campaign came in the 1920’s, with “The Pause That Refreshes”, then with “Things Go Better With a Coke” in the 1960’s, and present day “Open Happiness”. Today over 845 million people are connected to Coca Cola via Facebook, 6 billion cell phone subscriptions, and 2. 5 million connected regularly via the webpage. (“Remarks in acceptance,” 2012) In order for these communication channels and effective marketing efforts to be maximized, a diverse array of marketing efforts are taken into account in the following channels. Promotional Tasks: Internet Sporting Events Billboards TV Advertising Press Concerts Sales Promos Promotional SWOT Analysis SWOT |Positive |Negative | | |Strengths |Weakness | |Internal |Globally recognized |Product shipment could be damaged | | |Established distribution |Recalled products costly | | |Established Market shares |Endorsements could cost face of the company with a | | |Brand identity |simple mistake | | |Opportunity |Threats | | |unlimited partnerships |Pepsi is the biggest competitor | |External |unlimited new product offerings |the product is inexpensive and easily lose consumers to | | |globally recognized brand |competitors | | |offer beverages for all carbonated or “un”. |the caffeine and diet craze could prove costly. | Conclusion to Promotional Analysis The Coca Cola Company deals with promotional aspect of their business on a mass communication level. The company usually doesn’t know the type of people with whom they are trying to communicate with but rather who their target market is.
Careful management of this delicate area can ensure that messages are being met and no clutter of message or mixed signals occurs. The promotional campaigns that the Coca Cola Company is operating grew 20% to 10. 2 billion dollar in the year 2011 so that you can say that it is extremely effective and does work. The Coca Cola Company is represented by everyone who drinks it and when they do, they are literally providing advertising with a profit rather than at an expense. Coca Cola originated in the U. S. A. and has built a brand that has represented many countries during the Olympics. For that reason Coca Cola has had a successful and prosperous lifespan.
They have allowed the people that drink the product the opportunity to share in many of its’ triumphs during the Olympics and built a brand that is represented by the people who enjoy Coca Cola. References (2012). Coke, six flags extend partnership. Beverage world-Intelligence for the global drinks business, Retrieved from http://www. beverageworld. com/articles/full/15193/coke-six-flags-extend-partnership concentrate-5-gal/185511. ip#desc (2012). how to get your customers to like price segmentation. Upstream commerce, Retrieved from http://upstreamcommerce. com/blog/2012/08/15/customers-price-segmentation 2012). Pepsi to cut 600ml pet bottle price. News by industry, Retrieved from http://articles. economictimes. indiatimes. om/2012-10-05/news/34279675_1_returnable-glass-bottles-coca-cola-cola-category (2012). Remarks in acceptance of the coca cola company’s induction into the advertising hall of fame. (2012). [Print Photo]. Retrieved from http://www. coca-colacompany. com/our-company/acceptance-induction-into-the-advertising-hall-of-fame Badenhausen, K. (2012, 10 02). The worlds most powerful brands. Forbes Magazine, Retrieved from http://www. forbes. com/powerful-brands/ Crocker, R. (2011). Sales pop as coke refreshes strategy. The houston chronicle:Packaging digest, Retrieved from http://www. packagingdigest. com/article/519787- Dan, A. (2012, 03 15). Coca cola’s joe tripodi on staying relevant.
Forbes Magazine, Retrieved from http://www. forbes. com/sites/avidan/2012/03/15/inside-the-coca-cola-marketing-machine/ Lamb, C. W. , Hair, J. F. , & McDaniel, C. (2012). MKTG 4 (6th ed. ). New York: Cengage. ISBN: 9781133190110 . Sams Club. (2012). Retrieved from http://www. samsclub. com/sams/dr-pepper-syrup- The Coca Cola Company FAQ’s. (2012) Retrieved from http:/www. coca-colacompany. com/contact-us/faqs. The coca cola company. (2012). Retrieved from http://www. thecoca-colacompany. com/ourcompany/index. html The Pepsi cola company. (2012). Retrieved from http://www. pepsico. com/ Yahoo (2012). Retrieved from http://yahoo. com ———————– [pic]