●A stable enhancement in expansion in the Indian economy has lead to a rise in per-capita incomes.
SOCIAL/ CULTURAL:
● Coca-Cola is required to create contemporary products in order to provide variety of customers based on geographic, age and lifestyle placements of the population.
● Increase in productions due to increasing birth rate in India, over the years, being a major factor.
● Many Indian citizens are working on healthier lifestyles further leading to embryonic forces of Coca-Cola to alter product image which in turn can generate extra charges for the company.
TECHNOLOGICAL:
● With an advancement in technology there has been a prefacing of new machineries throughout. Due to this prefacing the production of the Coca-Cola company has augmented immensely than it was few years ago.
● The new technology of internet and television being used to create special effects for advertising, marketing and promoting through media, make some products look attractive.
● Bringing about of cans and plastic bottles have increased sales for Coca-Cola as these are conveniently carried and can be binned once they are used.
● All aspects of the soft drink industry have improved which have allowed the industry to make available products that endure changing customer tastes, preferences and requirements, all with the help of the advancement in technology.
Source: , Accessed on 18th April, 08
GEOGRAPHICAL:
Region Office:
- Haryana
- Kolkata
- Mumbai
- Hyderabad
Marketing Office:
Manufacturing Location In India:
Jammu Uttar Pradesh Amritsar Bareilly
Ludhiana Jaipur Punjab Gurgaon
Himachal Pradesh Ghaziabadh Hathras Barabanki
Faizabadh Raigarh KhedaKheda Varanasi
Patna Jabalpur Bilaspur Jamshedhpur
Howarah District Hooghly Kolkata Nagpur
Nasik Pune Thane Goa
Medaka Andhra Pradesh Visakhapatanam Banglore
Dist. VijayaWada Nellore Dist. Thiruvellore Dist. Palakkad
Source:
, Accessed on 18th April, 08
FIVE FORCES MODEL
Michael Porter's Five Forces model, helps understand the nature of competition in the soft drink industry.
Thus, from the above model, it seems that the soft drinks industry competitively unattractive.
Source:
, Accessed on 18th April, 08
THE COMPETITION
MAIN COMPETITORS
- Pepsi holds a 52% of the market share and gives a strict competition to Coca-Cola in the soft drink industry.
- Other competitors of Coca cola which holds a share of 1% in this market.
SOURCE:
, Accessed on 19th April, 08
THE COMPANIES MARKETING STRATEGY
SEGMENTATION
Each segment within the overall range of Coca-Cola meets specific consumer wants. Coca-Cola carries out extensive research to identify consumer wants in every segment of category in which it operates. Examples:
- A study of occasions when people drink sports drinks showed the importance of making it available in leisure centers.
- Market research into where specific products are consumed influences the design of pack types e.g. a 2 liter bottle for family consumption at home and a smaller 500ml bottle for consumption 'on the move'.
TARGETING
Coca Cola considers every customer a potential consumer. Thus, in order to target specific markets, Coca Cola divides the target market into the following market segments
Under the age of 18: To capture brand awareness.
Consumers between the age of 18 to 24: To capture brand awareness and loyalty
Consumers between the ages of 25 to 34: Loyalty has already been established.
Consumers between the ages of 35 to 49: These customers are loyal customers and are routine Coca Cola drinkers.
Consumers age 50 and up: These customers are loyal customers, and only drink Coca- Cola products.
Source:
, Accessed on 18thApril 08
, Accessed on 18th April, 08
BOTTLING
Soft drinks in glass bottles of 300ml or 200ml are also available mainly targeted in rural areas for the lower class segment, as it is much cheaper then pet bottles or aluminum tins.
Soft drinks in pet bottles and aluminum cans are mainly targeted towards the urban sector, targeting the middle class and the upper class customers, since aluminum cans are more expensive than glass bottles.
Know The Bottling History Of Coca-Cola
Coca-Cola began as a fountain product, but candy merchant Joseph A. Biedenharn of Mississippi was looking for a way to serve this refreshing beverage at picnics. He began offering bottled Coca-Cola, using syrup shipped from Atlanta, during an especially busy summer in 1894. In 1899, large-scale bottling became possible when Asa Candler granted exclusive bottling rights to Joseph B. Whitehead and Benjamin F. Thomas of Chattanooga, Tennessee. The contract marked the beginning of The Coca-Cola Company s unique independent bottling system that remains the foundation of Company soft drink operations.
Coca-Cola Bottles As Memorable As The Design
Back then, soda bottles were all very similar. And Coca-Cola had many imitators, which consumers would be unable to identify until they took a sip. The answer was to create a distinct bottle for Coca-Cola. As a result, the contour bottle for Coca-Cola with the shape now known around the world was developed in 1915 by the Root Glass Company.
Source:
, Accessed on 19th April, 08
POSITIONING
The positioning map of Coca Cola and its competitors can be shown in the following figure below:
Quality
HIGH
Coca Cola
Pepsi
Price
LOW HIGH
LOW
The above figure shows that Coca Cola is positioned in the category of high quality and
low price, and its closest competitor Pepsi positioned in the same category.
Source:
, Accessed on 21st April, 08
GROWTH STRATEGY
- It is offering new product line with different flavors example vanilla coke.
- It has started to reach rural areas so as to capture whole of India as a market.
- By bulk buying of raw material the company is investing the money in various advertising strategies. Example hiring famous personalities for their advertising campaigns.
-
Coca cola has reduced its cost and reached economies of scale by using advanced technology machinery hence increasing the output and reducing the cost.
Source:
, Accessed on 19th April, 08
, Accessed on 19th April, 08
Coca cola is also bringing in its new growth strategy, which is called the ‘5 pillar’ growth strategy. The strategy focuses on People, Planet, Portfolio, Partners and Performance.
"It gives me great Joy to announce the 5 Pillar strategic framework which focuses on Portfolio, People, Planet, Partners and Performance. Each initiative that we are announcing today are drops of a larger vision aimed at mutual growth and development. Over the last few years, we have continuously engaged with a large number of stakeholders and have incorporated their learnings in refining our strategy for India. The integrated communication platform of “Little Drops of Joy” is a tribute to their valuable inputs and truly depicts what the Company has always stood for.” Atul Singh, President and CEO, Coca-Cola India
COCA-COLA’S 5 P STRATEGIC FRAMEWORK FOR INDIA:
PEOPLE
-
The Coca-Cola System to turn to India to provide global services in areas such as Engineering, Finance, Marketing & Technical R & D
-
Setting up Coca-Cola University in India- a global corporate university, representing a one-stop shop for all learning and capability building activities across The Coca-Cola Company to be set up in the country. The vision of the Coca-Cola University is to become the “Number One” global benchmark in "learning to enhance business performance" by providing experiences that equip people with practical skills and knowledge to win in the market. In India, the Coca-Cola University will stretch across the traditional boundaries of building employee capability and also work on building capability for the company bottlers and key customers. The entire initiative has been designed to contribute to the economic opportunity in the country.
-
Coca-Cola to set up an equipment testing facility at Hyderabad. This facility being set up, will test and certify coolers to ensure that they conform to the company’s stringent quality standards. The facility will test coolers from India and also from Asia pacific region.
PLANET
-
Coca-Cola in India to reach zero water balance with respect to ground water usage by 2009 - The Company continues to find efficiencies in all areas through an approach to water management that involves reducing, reusing, recycling, and recharging (4R program). Some examples include:
- In 2006, the Coca-Cola system in India saved more than 100,000 kilolitres (0.1 MCM) of water through its water conservation efforts i.e. – the first 3R’s (Reduce, Reuse, Recycle). Over the last seven years, Coca-Cola has improved its water use efficiency by more than 30% in its operations in India. It is the direct result of large investments in the efficiency of company operations.
- On the Recharge front i.e. (the 4th R) at both the plant level and the community level, the company has installed over 300 rainwater harvesting structures spread across 17 states, including locations at schools and farms. Plan is to have 320 rainwater harvesting systems operational in India this year. During the year 2006, the Company added RWH potential of 0.5 MCM, taking the overall design RWH potential to more than 2 MCM in 2006.
-
Provide Drinking water solutions in 1000 schools by 2010- Coca-Cola India has partnered with Rotary International to launch the path-breaking Elixir of Life project, covering nearly 30,000 students in the first phase to provide potable water to underprivileged children.
- Commission Study on 10 watersheds by 2009 and implement interventions accordingly
- The Coca-Cola Foundation partnered with CII and ICRISAT on two watershed projects in five villages in Dungarpur, Rajasthan and two villages in Tirunelveli District, Tamil Nadu in order to improve rural livelihoods and contribute to poverty alleviation.
PORTFOLIO
-
Coca-Cola in India is exploring a wide variety of beverage opportunities like energy drinks, sports drinks, flavored water and juices.
-
The company is planning to further expand its portfolio in the country in due course of time, most of which would be developed in India. The launch of bolder tasting Fanta in South India is a prime example of the same strategy.
-
The second example being the phased launch of Minute Maid Pulpy Orange, a refreshing juice drink with natural orange pulp. The orange juice drink has already been launched in South India (Tamil Nadu, Andhra Pradesh, Karnataka) followed by its launch in select markets in North (Punjab, Haryana and Himachal Pradesh). The company is now planning to “nationally” launch the juice drink, best explained by its tagline- “Refreshingly Orange, Surprisingly Pulpy”.
PARTNERS
-
Coca-Cola to set up Retail University to train Indian retailers to compete in the fast changing retail environment- With the changing face of the retail trade in India, the objective of setting up the Coca-Cola Retail University would be to expose the Indian retailers including their staff, sales team and distributors of Coca-Cola to the global best practices. This would include training them with the right techniques, tools and knowledge to operate in the new retail environment.
PERFORMANCE
- Coca-Cola system in India has invested over US$ 1.2 billion.
- As part of its commitment, Coca-Cola in India has already announced an investment of US$ 250 million over the next 3 years. These investments would enable the Coca-Cola system to create bottling capacities for new product offerings, execute marketing strategies, devise innovation distribution models to meet consumer demand and also ensure value creation for all its business partners. This exercise will also result in the creation of new jobs for the entire value chain.
In India, unit case volume increased 12 % in the second quarter of 2007, cycling a decline of 12 % in the same quarter of the previous year. Continued investments in building organizational capabilities and focus on improved execution by the consolidated bottling operations resulted in four consecutive quarters of solid growth backed by share gains in sparkling and still beverages.
Source:
,Accessed on 20th April, 08
THE MARKETING MIX
PRODUCT
● Coca Cola has a variety of soft drink products such thumps up, limca, maaza, diet coke, sprite, fanta etc.
● Coca Cola is engaged in product development such as the launch of Vanilla Coke recently and introducing new pet bottles sizes such as first 1.5 liters and then 2 liters.
● People recognize the logo of Coca Cola as a product of the highest quality as Coca Cola has given different individual brand names such as Sprite, maaza, fanta etc. to its other products.
PLACE
● Coca Cola is focused on developing new markets such as capturing the market in the remote areas in Jammu & Kashmir and other rural markets in the backward regions of the county, thus expanding its distribution network and increasing its coverage across India. ● Coca Cola is also providing performance-based incentives to wholesalers & retailers by giving out watches, clocks and other articles to them hence motivating them.
● Distribution channel for coca cola:
SOURCE:
, Accessed on 20th April, 08
, Accessed on 20th April, 08
PRICE
● Coca Cola adopts the going-rate competitive pricing because of its stiff competition with Pepsi and there is hardly any product differentiation.
● In order to increase sales by mass production and they are constantly reducing prices to achieve greater market share.
● Coca Cola offers discounts in festival seasons and reduced the price of its pet bottle of 2 liters from Rs.40 to Rs.35.
● Coca Cola has been offering credits for even more than two weeks to its distributors/dealers and thus captures the outlets.
PRICES OF DIFFERENT PRODUCTD OF COCA COLA
- 200 ml is for Rs. 6
- 300 ml is for Rs. 8
- 500 ml is for Rs. 18
- 330 ml can for Rs. 25
- 2 ltr. Bottle is for Rs. 45
SOURCE:
, Accessed on 20th April, 08
PROMOTION
● Coca Cola has signed on various celebrities such as actors, actresses, sports men, etc. to advertise their products and with the help of which they have made a massive appeal and their sales have increased.
● Coca Cola has engaged in a lot of publicity by sponsoring various events such as cricket world cup, music concerts, road shows, as well as Indian festivals.
● Coca Cola has given sales promotion to wholesalers by giving bulk discounts to encourage volume buying and to consumers by giving bonus packs such as 600 ml pet bottle of coca cola for the same price of a 500ml pet bottle of coca cola.
Source:
, Accessed on 22nd April, 08
Coca-Cola Advertisements Its The Real Thing
Advertising has played an important role in the success of our products since our first newspaper ad in 1886, which read, "Coca-Cola. Delicious! Refreshing! Exhilarating! Invigourating!" The Company uses advertising to trigger desire as often and in as many ways as possible. Throughout the years, slogans for Coca-Cola have always been memorable. Here are some highlights:
2000 - Coca-Cola Enjoy
1993 - Always Coca-Cola
1990 - Can t Beat the Real Thing
1989 - Can t Beat the Feeling
1986 - Red, White and You
1982 - Coke Is It
1976 - Coke Adds Life
1971 - I d Like to Buy the World a Coke
1969 - It s the Real Thing
1963 - Things Go Better with Coke
1959- Be Really Refreshed
1944- Global High Sign
1942- It s the Real Thing
1936- It s the Refreshing Thing To Do
1929 - The Pause That Refreshes
Indian Advertising Award
In India too, the Companys thrust has always been on reaching the core of the consumers heart through advertising excellence. In fact, we have produced some of the most memorable campaigns of the times. Consequently, in early 2003, Coca-Cola India collected Advertiser of the Year and Campaign of the Year awards for the Thanda Matlab Coca-Cola all-media campaign.
Source:
, Accessed on 21st April, 08
EVALUATION OF THE COMPANY`S STRATEGIES AND TACTICS
Evaluation of the company’s current position
Coca cola has successfully achieved its targets and have become one of the India’s largest manufacturers of soft drink.
It holds a share of 49% in the market with only one close competitor i.e., Pepsi which holds a share of 50% in the market.
Its sale has grown massively in between the years 1993 till now. And the bottle grew from 5670 million to 10000 million bottles and would grow by 10% every year till 2012.
Evidences of company’s success
The company’s financial statements and its sales treads show a net increase of almost 70% since 1993. Coca cola has achieved its targets and steady and constant growth by introducing new products, expanding its operations and focusing on consumer needs, which shows that the Company’s marketing and competitive strategies have worked extremely well for the Company.
Prospects for future growth/success
The future of Coca Cola seems successive as in this market there is a stiff competition and new competitor might not arise. Hence they will be able to increase their market share in the coming years as the company hopes to continue with its double-digit growth rates in its sales volumes and also expand its operations.
SOURCE:
Appendix A
CONCLUSION
Coca-Cola in the soft drinks industry, by using its aggressive marketing & competitive strategies to achieve their sales and profit targets and become the leading manufacturer in the soft drinks industry with a market share of 52% .The Company should work towards improving the technology and their share in the market. A large number of opportunities are available for Coca cola and by making best out of them they can maintain their position as the market leaders.
APPENDIX A
Financial Statement of the company
Financial Highlights
(in millions except per share data, percent change and unit case volume)
The company’s sales increased due to an increase in the GDP, level of activity, operations, marketing spends; introduction of new products, technological tie ups.
The financial statement above shows a gradual increase in the companies profit over the years.
LIST OF REFERENCES
Text Books:
-
David Jobber, 3rd edition (2001) Principles & Practice of Marketing, McGraw – Hill
-
Philip Kotler, millennium edition (2000) Marketing Management, Prentice – Hall
Websites:
