- Acceptability - Through effective marketing, Coca-Cola is an integral part of consumer’s daily lives, making it one of the most preferred beverages everywhere.
- Affordability - Coca-Cola maintains a very competitive and affordable price that justifies value for money.
- Availability – Coca-Cola makes sure that its brand is available anywhere where people want refreshment, and a pervasive penetration of the marketplace.
Coca-Cola has created an extensive and well-organized global distribution network guaranteeing the ubiquity of its products. (Ubiquity is the ability to appear to be presents everywhere at once). The idea behind this approach is based on the background that it must try to quench the thirst of everyone in the world. The Company operates a worldwide franchise system supplying syrups and concentrates to all bottling operations, which thus involves local companies and suppliers in the 200 countries in which Coca-Cola is sold. The bottling companies distribute the world's favorite brand using the most sophisticated technology and distribution networks available. The Company supports its international bottler network with sophisticated marketing programmes seeking to guarantee the Company's brands are available where anyone is seeking refreshment. Coca-Cola's bottling system is the largest and most widespread production and distribution network in the world.
Global Branding
The ability to engage in global branding is a key advantage to Coca Cola. Coca-Cola is fortunate in that it possesses a number of instantly recognizable icons, which go beyond the familiar taste of its product. In particular, the Company benefits from its registered trademark, the characteristic classic shapes of its bottles and the highly familiar red and white Coca-Cola can. No story of Coca-Cola would be complete without the Coca-Cola glass bottle. The design for the bottle was created in the early 1900s when the bottlers of Coca-Cola faced constant threat of imitation of both product and packaging. Today the glass bottle is seen as an icon. An icon is a symbol or image, which directly refers to a specific entity or moment. Acclaimed as one of the most famous packages, the Coca-Cola glass bottle was re-launched in 1997 in a unique new format for Britain at "The Coca-Cola Bottle" exhibition at London's Design Museum. Coca-Cola also produces the world's most popular flavored soft drinks: Fanta and Sprite, as well as diet Coke and Cherry Coke. These products can be mass marketed across the globe using standard promotions and advertising campaigns. This dramatically cuts promotional and advertising costs as these are distributed over a large market area. As Coca-Cola is the flagship of the Company, more money is spent advertising and promoting Coke than any of the other drinks. In the United Kingdom, Coca-Cola advertises all year round.
Consumers will have different experiences, given their personal preferences and location. Coca-Cola is adjusting its approach so that it can tap into these differences and provide the appropriate marketing activities and beverages to connect with consumers. Coke is learning a new lesson: A single global strategy and a single global campaign won’t work. It has realized that locally relevant executions are important to support global brand strategies. It’s “think local, act local” approach to marketing allows to adapt communications to fit local circumstances. Coca-Cola Company wants to provide consumers with beverages to fit their different life styles and life stages. As consumers are having different experiences, it has been recognised that the commercial beverage industry is in different stages of development around the world. If we look at theoretical beverage consumption of eight 8-ounce glasses of liquid a day, it becomes apparent that the commercial beverage industry only provides 25% of the liquid that is consumed by the world’s population. The non-commercial beverage consumption is basically tap water and/or homemade fruit juices. Over time, Coca-Cola Company is expecting that this non-commercial portion of consumption will continue to decline and that the commercial beverage industry will grow (http://www.cocacola.com).
COMPETITIVE STRENGTH
The soft drink industry seems duopoly in nature due to the important role of two players, Pepsi and Coca Cola.
Firstly, the soft drink industry is affected by macro environmental factors of the industry that will lead to make a difference of future business prospect of any player. First, the entry/exit of major firms is a trend in the industry that may change the structure leading to merger and consolidation. As a result further drawing of business location and combination of players may take place. Several leading companies have been striving hard to drive revenue growth and improve market share through the economies of scale of operation like PepsiCo acquired Quaker Oats, who bought Gatorade which will help expand PepsiCo’s energy drink sector (Datamonitor, 2005). This trend has increased competition as firms’ diversification of products is increasing.
Secondly, the impact of globalization is always a strong bearing on the growth of soft drinks industry. With the technological improvements and faster communication system, a global market is being created where firms are trying to collaborate within the country market and expand into world markets. It has driven competition greatly as companies strive to be first-movers. Specifically, the global soft drink market’s compound annual growth rate (CAGR) is expected to expand to 3.6% from 2004 to 2009 (Datamonitor, 2005).
Thirdly, with the societal changes in the lifestyle of people, people are becoming more concerned with a healthy lifestyle. “Consumer awareness of health problems arising from obesity and inactive lifestyles, represent a serious risk to the carbonated drinks sector” (Datamonitor, 2005, p. 15). Hence, the Soft-drink companies are exploring all possibilities to launch new product line to fulfill consumer’s requirements. Taking the example of Coca-Cola product line which includes regular Coca-Cola, Diet Coke, Diet cherry Coke, cherry Coke, Vanilla Coke, Coca-Cola with Lime, Coca-Cola with lemon and many more (Murray, 2006a).
Considering the factors, the most important outcome comes as Coca-Cola is continuing product innovation and expansion of their product line. The soft-drinks industry is fully saturated with competitors. Also, the industry is no longer expanding, and market share is actually decreasing as more consumers are looking to healthier options. By continually introducing new products, Coca-Cola will be able to increase their profits and allow the company to continue to grow. Also, having a diverse product line will make the corporation very stable, which is appealing to investors and creditors.
A second consideration is retention of global market share. Coca-Cola is very well established globally, and is the global soft-drinks leader. This is very important to sustain because it is the source of the majority of their profits. A final recommendation for Coca-Cola is to maintain and try to increase their brand loyalty. The consumer has accepted diet Coke as the most preferred brand due to loyalty. The brand loyalty is important because it will allow Coca-Cola to sustain profits and maintain maximum market share.
If someone holds the responsibility of ensuring success to this industry, one has to emphasize upon the key factors that can lead to real growth in this industry.
- Constant product innovation is imperative. In this industry, one has to recognize consumer wants and needs, while maintaining the ability to adjust with the changing market. By doing so one can reach at the expectation of consumer with the changing trends.
- Since the product’s use is depending on large consumer base, one has to give importance to large distribution system. Large distributors have the ability to negotiate with public congregation location where mass appeal can be derived.
- As brand loyalty is guiding factor in soft-drink industry, brand-building measures should be given top most priorities. Many consumers of soft-drink industry are extremely attached to a particular product, and rarely purchase other brand or varieties. So maintaining brand image is very important.
REFERENCES
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Datamonitor. (2005, May). Global Soft Drinks: Industry Profile. New York. Reference Code: 0199-0802.
- Asian Market Research News (2002), Soft drinks market expanding in Asia derived from http://www.asiamarketresearch.com
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The Coca-Cola Company. (2008). 2008 Annual Report. Retrieved February 17, 2009 from
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Murray, Barbara. (2006a). The Coca-Cola Company. Hoovers. Retrieved February 13, 2006, from
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Murray, Barbara. (2006c). Carbonated Beverages. Hoovers. Retrieved February 13, 2006, from
