PRINCIPLES OF MARKETING

MARKETING MIX OF COCA COLA

SUBMITTED TO: SIR USMAR GHOURI SUBMITTED BY: M. TAHIR AURANZAIB

DATE: 07-06-2013

1172 3311

HAJVERY UNIVERSITY LAHORE

TABLE OF CONTENT
1. INTRODUCTION 2. MISSION 3. VISION 4. HISTORY 5. MARKITING MIX a. PRODUCT b. PRICE c. PLACE d. PROMOTION 6. MARKET SEGMENTATION 7. COMPETITOR ANALYSIS

INTRODUCTION
In 1886, Coca-Cola brought refreshment to patrons of a small Atlanta pharmacy. Now well into its second century, the Company's goal is to provide magic every time someone drinks one of its more than 500 brands. Coca-Cola has fans from Boston to Budapest to Bahrain, drinking brands such as Ambasa, Vegitabeta and Frescolita. In the remotest comers of the globe, you can still find Coca-Cola. Coca-Cola is committed to local markets, paying attention to what people from different cultures and backgrounds like to drink, and where and how they want to drink it. With its bottling partners, the Company reaches out to the local communities it serves, believing that Coca-Cola exists to benefit and refresh everyone it touches. From the early beginnings when just nine drinks a day were served, Coca-Cola has grown to the worlds most ubiquitous brand, with more than 1.7 billion beverage servings sold each day. Wh en people choose to reach for one of The Coca-Cola Company brands, the Company wants that choice to be exciting and satisfying, every single time. The world is changing all around us. To continue to thrive as a business over the next ten years and beyond, we must look ahead, understand the trends and forces that will shape our business in the future and move swiftly to prepare for what's to come. We must get ready for tomorrow today. That's what our 2020 Vision is all about. It creates a long-term destination for our business and provides us with a "Roadmap" for winning together with our bottling partners.

Our Mission:
Our Roadmap starts with our mission, which is enduring. It declares our purpose as a company and serves as the standard against which we weigh our actions and decisions.

To refresh the world... To inspire moments of optimism and happiness... To create value and make a difference.

Our Vision:
Our vision serves as the framework for our Roadmap and guides every aspect of our business by describing what we need to accomplish in order to continue achieving sustainable, quality 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.

Our Winning Culture:

Our Winning Culture defines the attitudes and behaviors that will be required of us to make our 2020 Vision a reality.

Live Our 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

Focus on the Market:

Focus on needs of our consumers, customers and franchise partners Get out into the market and listen, observe and learn Possess a world view Focus on execution in the marketplace every day Be insatiably curious

Work Smart:

Act with urgency Remain responsive to change Have the courage to change course when needed Remain constructively discontent Work efficiently

Act Like Owners:

Be accountable for our actions and inactions Steward system assets and focus on building value Reward our people for taking risks and finding better ways to solve problems Learn from our outcomes -- what worked and what didnt

Be the Brand:

Inspire creativity, passion, optimism and fun

HISTORY OF COCA COLA

Dr. jhon Pemberton invented coca cola as colored syrup in a three-legged brass kettle in his backyard. He first distributed the product by carrying it in a jug down the street to Jacobs Pharmacy and customers bought the drink for five cents at the soda fountain. Carbonated water was teamed with the new syrup, whether by ac Coca-Cola was first introduced by John Syth Pemberton, a pharmacist, in the year 1886 in Atlanta, Georgia when he concocted caramel cident or otherwise, producing a drink that was proclaimed delicious and refreshing, a theme that continues to echo today wherever Coca-Cola is enjoyed. Dr. Pembertons partner and book-keeper, Frank M. Robinson, suggested the name and penned Coca-Cola in the unique flowing script that is famous worldwide even today. He suggested that the two Cs would look well in advertising. The first newspaper ad for Coca-Cola soon appeared in The Atlanta Journal, inviting thirsty citizens to try the new and popular soda fountain drink. Hand-painted oil cloth signs reading Coca-Cola appeared on store awnings, with the suggestions Drink added to inform passersby that the new beverage was for soda fountain refreshment. By the year 1886, sales of Coca-Cola averaged nine drinks per day. The first year, Dr. Pemberton sold 25 gallons of syrup, shipped in bright red wooden kegs. Red has been a distinctive color associated with the soft drink ever since. For his efforts, Dr. Pemberton grossed $50 and spent $73.96 on advertising. Dr. Pemberton never realized the potential of the beverage he created. He gradually sold portions of his business to various partners and, just prior to his

death in 1888, sold his remaining interest in Coca-Cola to Asa G. Candler, an entrepreneur from Atlanta. By the year 1891, Mr. Candler proceeded to buy additional rights and acquire complete ownership and control of the Coca-Cola business. Within four years, his merchandising flair had helped expand consumption of Coca-Cola to every state and territory after which he liquidated his pharmaceutical business and focused his full attention on the soft drink. With his brother, John S. Candler, John Pembertons former partner Frank Robinson and two other associates, Mr. Candler formed a Georgia corporation named the Coca-Cola Company. The trademark Coca-Cola, used in the marketplace since 1886, was registered in the United States Patent Office on January 31, 1893. The business continued to grow, and in 1894, the first syrup manufacturing plant outside Atlanta was opened in Dallas, Texas. Others were opened in Chicago, Illinois, and Los Angeles, California, the following year. In 1895, three years after The Coca-Cola Companys incorporation, Mr. Asa G. Candler announced in his annual report to share owners that Coca -Cola is now drunk in every state and territory in the United States. As demand for Coca-Cola increased, the Company quickly outgrew its facilities. A new building erected in 1898 was the first headquarters building devoted exclusively to the production of syrup and the management of the business. In the year 1919, the Coca-Cola Company was sold to a group of investors for $25 million. Robert W. Woodruff became the President of the Company in the year 1923 and his more than sixty years of leadership took the business to unsurpassed heights of commercial success, making Coca-Cola one of the most recognized and valued brands around the world.

Plants in Pakistan:
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. Karachi Lahore Gujranwala Rawalpindi

Peshawar Hyderabad Faisalabad Rahim Yar Khan

DEVELOPING MARKETING MIX

The marketing mix is probably the most famous phrase in marketing. The term "Marketing Mix" is used to describe how businesses promote their products and services or how customers learn about a business's products and services. Marketing Mix is a combination of marketing tools that are used to satisfy customers and company objectives. Consumers often call the marketing mix "the offering."

1. 2. 3. 4.

Product Price Promotion. Place (Distribution)

1. PRODUCTS:
Coca cola beverages and products:
For almost 70 years, the only beverage produced and sold by The Coca-Cola Company was the flagship Coca-Cola invented in Atlanta in 1886. It wasn't until 1955 that Coca-Cola beverage offerings started to expand when a bottler in Italy started selling Fanta Orange. From that point on, the Company began adding a wider variety of beverage selections and portion sizes for consumers. The Coca-Cola Company believes in offering an assortment of beverages for every lifestyle, life stage and life occasion. Today, over 500 beverage brands are sold in more than 200 countries. This amounts to 3,500 beverages in numerous categories, such as regular, low- and no-calorie sparkling beverages; fruit juices and fruit drinks; bottled water; sports and energy drinks and ready-to-drink teas and coffee.

Coca-Cola the worlds most popular beverages. Consumers buy t he coke product because of the high standards and high quality of the Coca Cola products. The popularity of Coke is to such an extent that

The most known and spoken word in world after OK is COKE.

Brand Name:
A brand is a name; term, symbol and / or special design that is intended to identify the goods or services of one seller or a group of sellers. A brand differentiates one sellers products from those of competitors.

Coke: Coca-Cola is the most well known trademark. Coca Colas red and white colours and special writing are all
examples of world-wide trademarks. Coca-Cola (often "Coke") is a carbonated cola and the world's most popular soft drink. For all ages (mostly fun loving people). In Pakistan the Coca-Cola is spending millions rupees in developing and promoting the Coca-Cola.

Packaging:
Packaging protects the product during transportation. Packaging can allow the business to design promotional schemes, which can generate extra revenue and advertisements. The Coca-Cola Beverages Pakistan packages its beverages into: 250-ml bottle. 300ml disposable bottles. Tins. 300ml 500-ml Bottle. 1-litre bottle.

1.5 liter bottle. 2.25 liter Jumbo

2. PRICING OF COCA COLA

The amount of money charged for a product or service, or sum 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.

PRICES OF DIFFERENT BOTTLES

Size of Coca Cola Regular bottle 250ml Disposable bottle 300ml Disposable bottle 500ml 1.5 liter bottle 2.25 liter bottle Coca Cola can Price of Coca Cola (RS.) 20 25 40 70 90 55

PRICING STRATEGIES
Competition Based Pricing Approach:
Coca Cola has intense competition with Pepsi so its pricing cant exceed too much nor decrease too much as compared to the price of Pepsi Cola. If price of the Coca Cola exceed too much from the Pepsi then people will

shift to the Pepsi Cola and on the other hand if the price of Coca Cola decreases people might get the impression that its quality is also low.

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:

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.

INCENTIVE TO DEALERS:
The first, second and third best dealers of the year are awarded.

3. PLACE OR DISTRIBUTION
As a part of its drive to enhance the quality, availability, and image of Coca-Cola products, the CocaCola Company established a new Company in Pakistan in 1996, by the name of Coca-Cola Beverages Pakistan Limited (CCBPL). CCBL started the process of acquiring and investing in locally franchised bottling operations. This process was completed in 2006 and, thereafter, all manufacturing and selling rights of Coca-Cola products are now with Coca-Cola Beverages Pakistan Limited. 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.

FACILITATING THE PRODUCT BY INFRASTRUCTURE:

For providing their product in good manner company has provided infrastructure these includes: Vizi cooler Freezers Display racks Free empty bottles and shells for bottles

4. POROMOTION
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. Through TV commercials coke becomes a part of life their customers. Coke become the part of their entertainments, funs and parties. The coke commercials always create a unique impact on their customers. Every time

they come with a new idea or creativity. Like open happiness campaign was a great success in coke history. Their special ramdan commercials in Islamic world and now with idea of Good kay lye ho jao crazy they create a uniqu e image in the mind of their customers.

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.

SETTING OF ADVERTISING BUDGET:

Coca-Cola sets its advertisement budget on the basis of competitor based budgeting. Major competitor of Coca Cola is Pepsi and as Coke realizes that Pepsi has increased its advertising budget, straight away Coca-Cola management plans to do the same so that they can compete in advertising department as well.

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 Pakis 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 Sponsorships Advertising campaigns

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 that are displayed in the stores and in different areas.

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.

BILLBOARDS AND HOLDINGS:

Coca Cola is very much conscious about their billboards and holdings. They have so many sites in different locations for their billboards.

SPONSERSHIPS:
Coca cola sponsoring all over the world different events and programs includes sports, cooking programs, festival events and music programs. In Pakistan the Coke Studio is the most popular music project of the coca cola company.

PROMOTION STRATEGIES OF COCA COLA

GETTING SHELVES:
They get or purchase shelves in big departmental stores and display their products in those shelves in that style which show their product clearer and more attractive for the consumers.

EYE CATCHING POSITION:

Salesman of the Coca Cola Company positions their freezers and their products in eye-catching positions. Normally they keep their freezers near the entrance of the stores.

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.

MARKET SEGMENTATION OF COCA COLA

Coca cola serves its products using mass marketing technique, which obviously falls in undifferentiated marketing, and undifferentiated marketing means no segmentation, but there are minor factors on which we can say that the coke segments its products and then targets the customers somehow. These factors are as follows.

GEOGRAPHIC SEGMENTATION
INTERNATIONALLY:
Coke segments its products country wise and region wise, here the most important thing is the taste and the quality, it varies according to the taste and the income level of the people in that country, and i.e. Third world counties are given low quality taste. Coca Cola Company tries to satisfy the needs of a whole line of different people. They have drinks that target different, age groups, ethnic groups, sexes, lifestyles, etc. There are some of the different brands: Oasis This is a juice made for the younger working adults, 20-30. It is available in berry, lemon and orange tangerine. This drink is most popular in Britain and Ireland. Minute Maid Minute Maid targets kids and adults, ages 1-10 and 40+. This drink is conveniently packaged to take with you on the go anywhere. The health check is part of the reason for the wide target market, parents want their kids to be healthy and so knowing that this product is accepted by such a well known respected company pleases the parents and gives them a sense of relief. Coca Cola The Coca Cola drink is by far there most successful drink. It is very popular among many different nations. It is a soft drink. Because of the huge demand for the coca cola drink, and the trend towards healthier lifestyles coca and begun to produce spin-offs of the coca cola product. They have made drinks such as coca cola zero, coca cola diet, coca cola C2, coca cola with lime etc. By having all these different drinks with the same basic taste they are able to target a much bigger market. Due to the large success of the drinks coca cola is in demand worldwide. As such the Coca Cola brand is sold in most countries in the world.

Coca Coal Zero This drink is specifically targeted at teens that dont want the calories that come with coke but want to same great taste. This Product is sweetened with aspartame. Coca Cola Diet

The diet drinks are targeted at adults of ages 30-50, who are health conscious but still love the great taste of coke. This drink is sugar less. Coca Cola with lime The drink is sold in both regular and diet. It is for a wide range a coke lovers who are looking for an extra little punch. Sprite This is a soft drink that has many different target markets. This product has a different taste then coke all together and is not as popular but it is still a very popular drink. Like coke it also has a whole other line of drinks associated with it, such as diet sprite, sprite zero, sprite with a hint of lime. This drink is also sold in many places worldwide. Powerade Powerade is a sports drink. It is designed with a great taste and is also thirst quenching. It is made for athletes of all ages, sexes and sports, but they would target this drink at teens and y oung adults, ages 13- 27. This drink is sold in many places but mostly over North America. Aquarius Aquarius is a sports drink, enjoyed by people who have healthy lifestyles. It is made for athletes of all ages, sexes and sports, but they would target this drink at teens and young adults, ages 13- 27. This produce is very well known in Europe. Particularly in France, Norway, Spain. But it is still known all over. It became even more successful when it became the official drink of the Olympic games in Barcelona in 1992. Full Throttle This is an energy drink. It is designed for athletes both male and female but particularly males, of ages 14-25. As we can see by looking at a select few of coca colas drinks they have a wide variety of drinks to satisfy everyones needs.

CLIMATIC:
Weather is the third major factor in effecting the Cokes selling. In coke marketing, main idea is to serve it cold, so we can say that, they focus more on hot areas of the world, i.e. middle east etc and there sale increase in summer. This is underdeveloped market so the cokes consumption in summers is 60% and in winters is 40%. . It is a source of refreshment when a person is thirsty due to the hot weather.

LOCALLY:
In Pakistan the coke segments more in urban and suburban areas as compare to rural. 35 % population resides in urban areas and 65% population lives in rural areas in Pakistan. Coca Cola is focusing on urban areas as people there are more inclined towards such beverage while people in rural areas are more inclined drinking lassi and desi drinks.

DEMOGRAPHIC SEGMENTATION
AGE:
Internationally coke has segments the small children introducing tastes like vanilla, lime and cherry, they focus children from 4-12. Coke specifically target more young people than older. Pakistan is considered to be a young country i.e. average age of Pakistani population is less than 38 years. Thus targeting young generation can be a beneficial marketing strategy for soft drink companies. In fact this is the case, all the major brands like Coca Cola, Pepsi mainly target younger generation in Pakistan.

GENDER:
Coca Cola targets both genders with its wide variety of drinks. This market is relatively large and is open to both genders, thereby allowing greater product diversification.

FAMILY TYPE:
Coca Cola introduces its economy pack, and thats how they focus family and groups.

INCOME:
Coca Cola segments different income levels by packaging. Like for small income people it has small returnable glass bottle, for middle people it has non returnable bottle and for higher income people it has coke tin.

PSYCHOGRAPHICS SEGMENTATION
All psychographics variables the social class, lifestyle, occupation, level of education and personality, Coca Cola segments everyone, but again it is their packaging which is different for different consumers.

SOCIAL CLASS:
Coca Cola is a well known brand. People who are brand conscious will not drink beverages of less known brands and quality such as Amrat cola. They will try to show their status by drinking Coca Cola which is known to all as a quality drink.

 LEVEL OF EDUCATION:
A company has to make promotional strategies keeping in view the customer level. If the percentage of education is high in a country then through advertisements people can be made well aware of their product and can convey their message easily. Promotion and education has a direct relationship.

BEHAVIORAL SEGMENTATION:
It is how people perceive a specific product, in short psychological analysis of a product. Coca Cola all over the world is recognized as a quality drink and therefore people drink it without any hesitation whenever they are thirsty or otherwise. So marketers of Coca Cola have made it a drink for all people and for diabetic people they introduced diet Coke.

OCCASIONS:
A very special occasion for the people of Pakistan Ramzan, people emphasis on enjoying Coca-Cola at Iftar and then on Eid with friends & family with super price off promotion

BENEFITS SOUGHT:
Sometimes, for the promotion strategy of coke, Coca Cola Company introduce prizes in the top cover. So they segment people by benefit sought, i.e. by giving them prizes.

COMPETITOR ANALYSIS
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.

RIVALS/COMPETITORS
DIRECT COMPETITORS:
The direct competitor of Coca-Cola is Pepsi and that of CCBPL is PCI (Pepsi cola international) there is always ongoing tuff competition between these two arch rivals with Pepsi leading with 54% market share and Coke gradually growing and catching up 36% market share in Pakistan. However on global level the situation is reverse. Both companies often engage in price cut wars, prize scheme wars and sponsorship wars to win over each other customers.

INDIRECT COMPETITORS:
These include Nestle and Shezan juices who 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.

BUFFERING AND SMOOTHING:

For beverages like Coke the buffering and smoothing policies doesnt matter and they dont apply anymore because Coke remains in demand all the year round in festivals, parties, events, meetings sports etc.

SUPPLIERS:
Coca-Cola has authorized suppliers and which do not pose a threat to it. Any how Coke does have a quality check procedures in its plants to ensure that they get the right kind of ingredients from suppliers.

FOR EXAMPLE:
If market has low quality carets of bottles by chance, they call their sales mangers to lift up all the stock from the market then inquired from the quality inspector. They take strict notice of that .and don not take materials from that company again if that default is due to the ingredient contains by it.

NEW ENTRANTS
Coca-Cola is not afraid of competing .it doesnt fear losing its share to Mecca -Cola 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 MeccaCola, Pak-cola to fully launch its product in Pakistan and capture or even motivate people to switch on to their new product from Coke.

COMPETITIVE ADVANTAGES
BRAND NAME, SYMBOL, BOTTLE SHAPE:
Brand name, symbol and bottle shape are distinctive features of Coca-Cola which give it an edge over its competitors. (Even without name people can easily identify Cokes, fantas, and sprites bottle from crowd.) They cannot be copied or imitated by others.

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.

SNATCHING AWAY CUSTOMERS:

In the market Coke has been able to snatch large customers like Food Street, Pakistan Railways, McDonalds, as well as Sponsorship events (basant, Eid, concerts etc.) from Pepsi mainly due to its superiority in the following areas. Cost: It is very economical, justifies performance, Quality: No quality compromise, get the best all over Pakistan at any cost. Innovation: new ideas for billboards design, sponsorship, changing their slogans time to time, according to the needs of the market. Speed: On time delivery in all over the Pakistan.