Executive summary

Giant soft drink company Coca Cola has come under intense scrutiny by investors due to its
inability to effectively carry out its marketing program. Consequently it is seeking the help of
Polianitis Marketing Company Pty Ltd to develop a professional marketing plan which will help
the business achieve its objectives more effectively and efficiently, and inevitably regain there
iron fist reign on the soft drink industry.
When establishing a re-birthed marketing plan every aspect of the marketing plan must be
critically examined and thoroughly researched. This consists of examining market research,
auditing business and current situation (situation analysis) and carefully scrutinising the soft drink
industry and possibilities for Coca Cola in the market. Once Coca Cola have carefully analysed
the internal and external business environment and critically examined the industry in general the
most suitable marketing strategies will be selected and these strategies will be administered by
effectively and continually monitoring external threats and opportunities and revising internal
efficiency procedures.

Situation Analysis on Coca Cola

Market

Analysis:

The market analysis investigates both the internal and external business environment. It is vital
that Coca cola carefully monitor both the internal and external aspects regarding its business as
both the internal and external environment and their respective influences will be decisive traits in
relation to Cokes success and survival in the soft drink industry.
Internal Business Environment
The internal business environment and its influence is that which is to some extent within the
businesss control. The main attributes in the internal environment include efficiency in the
production process, through management skills and effective communication channels. To
effectively control and monitor the internal business environment, Coke must conduct continual
appraisals of the businesss operations and readily act upon any factors, which cause
inefficiencies in any phase of the production and consumer process.
External Business Environment

The External business environment and its influences are usually powerful forces that can affect
a whole industry and, in fact, a whole economy. Changes in the external environment will create
opportunities or threats in the market place Coca cola must be aware off. Fluctuations in the
economy, changing customer attitudes and values, and demographic patterns heavily influence
the success of Coka Colas products on the market and the reception they receive from the
consumers.
SWOT Analysis:
SWOT stands for Strengths Weakness Opportunities Threats. SWOT analysis is a technique
much used in many general management as well as marketing scenarios. SWOT consists of
examining the current activities of the organisation- its Strengths and Weakness- and then using
this and external research data to set out the Opportunities and Threats that exist.
Strengths:
Coca-Cola has been a complex part of world culture for a very long time. The products image is
loaded with over-romanticizing, and this is an image many people have taken deeply to heart.
The Coca-Cola image is displayed on T-shirts, hats, and collectible memorabilia. This extremely
recognizable branding is one of Coca-Colas greatest strengths. Enjoyed more than 685 million
times a day around the world Coca-Cola stands as a simple, yet powerful symbol of quality and
enjoyment

(Allen,

1995).

Additionally, Coca-Colas bottling system is one of their greatest strengths. It allows them to
conduct business on a global scale while at the same time maintain a local approach. The
bottling companies are locally owned and operated by independent business people who are
authorized to sell products of the Coca-Cola Company. Because Coke does not have outright
ownership of its bottling network, its main source of revenue is the sale of concentrate to its
bottlers.
Weaknesses:
Weaknesses for any business need to be both minimised and monitored in order to effectively
achieve productivity and efficiency in their businesss activities, Coke is no exception. Although
domestic business as well as many international markets are thriving (volumes in Latin America
were up 12%), Coca-Cola has recently reported some declines in unit case volumes in
Indonesia and Thailand due to reduced consumer purchasing power. According to an article in
Fortune magazine, In Japan, unit case sales fell 3% in the second quarter [of 1998]scary
because while Japan generates around 5% of worldwide volume, it contributes three times as
much to profits. Latin America, Southeast Asia, and Japan account for about 35% of Cokes
volume

and

none

of

these

markets

are

performing

to

expectation.

Coca-Cola on the other side has effects on the teeth which is an issue for health care. It also has
got sugar by which continuous drinking of Coca-Cola may cause health problems. Being addicted
to Coca-Cola also is a health problem, because drinking of Coca-Cola daily has an effect on your
body after few years.
Opportunities:
Brand recognition is the significant factor affecting Cokes competitive position. Coca-Colas
brand name is known well throughout 94% of the world today. The primary concern over the past
few years has been to get this name brand to be even better known. Packaging changes have
also affected sales and industry positioning, but in general, the public has tended not to be
affected by new products. Coca-Colas bottling system also allows the company to take
advantage of infinite growth opportunities around the world. This strategy gives Coke the
opportunity to service a large geographic, diverse area.
Threats:
Currently, the threat of new viable competitors in the carbonated soft drink industry is not very
substantial. The threat of substitutes, however, is a very real threat. The soft drink industry is very
strong, but consumers are not necessarily married to it. Possible substitutes that continuously put
pressure on both Pepsi and Coke include tea, coffee, juices, milk, and hot chocolate. Even
though Coca-Cola and Pepsi control nearly 40% of the entire beverage market, the changing
health-consciousness of the market could have a serious affect. Of course, both Coke and Pepsi
have already diversified into these markets, allowing them to have further significant market
shares and offset any losses incurred due to fluctuations in the market. Consumer buying power
also represents a key threat in the industry. The rivalry between Pepsi and Coke has produce a
very slow moving industry in which management must continuously respond to the changing
attitudes and demands of their consumers or face losing market share to the competition.
Furthermore, consumers can easily switch to other beverages with little cost or consequence.
Product Life cycle:
When referring to each and every product or service ever placed before the consumer i.e. in the
long term all the existing products and services are dead. For e.g.:- Replacement of Ford Cortina
( a highly successful car) by Ford Sierra, the replacement of sierra by the Ford Mondeo and the
replacement of the old Mondeo by the new Mondeo in 2001. So every product is born, grows,
matures and dies. So in the commercial market place products and services are created,
launched

and

withdrawn

in

process

known

as

Product

Life

Cycle.

To be able to market its product properly, a business must be aware of the product life cycle of its
product. The standard product life cycle tends to have five phases: Development, Introduction,

Growth, Maturity and Decline. Coca-Cola is currently in the maturity stage, which is evidenced
primarily

by

the

fact

that

they

have

large,

loyal

group

of

stable

customers.

Furthermore, cost management, product differentiation and marketing have become more
important as growth slows and market share becomes the key determinant of profitability. In
foreign markets the product life cycle is in more of a growth trend Cokes advantage in this area is
mainly due to its establishment strong branding and it is now able to use this area of stable
profitability

to

subsidize

the

domestic

Cola

Wars.

Insert the picture of the product lifecycle

Marketing

Objectives

The objective is the starting point of the marketing plan. Objectives should seek to answer the
question Where do we want to go?. The purposes of objectives include:
->
->

to
to

enable
help

to

a
motivate

company

to

individuals

and

control
teams

its

to

reach

marketing

plan.

goal.

common

-> to provide an agreed, consistent focus for all functions of an organization.

All objectives should be SMART i.e. Specific, Measurable, Achievable, Realistic, and Timed.
Specific

Be

Measurable
Achievable

precise

about

what

you

are

Quantify
Are

you

going

to

you
attempting

achieve
objectives

too

much?

Realistic Do you have the resource to make the objective happen (men, money, machines,
materials,

minutes)?

Timed State when you will achieve the objective (within a month? By February 2010?)
1.Market

Share

Objectives:

To gain 60% of the market for soft drink industry by September 2007.
2.Profitability

Objectives:

To achieve a 20% return on capital employed by August 2007

3.
To

Promotional
increase

4.

awareness

of

the

Objectives

Objectives
product

on

the

market.

for

Survival

for

Growth

To survive the current market war between competitors.

5.

Objectives

To increase the size of the worldwide Coca Cola enterprise by 10% .

Selecting

Target

Market

Once the situation analysis is complete, and the marketing objectives determined, attention turns
to the target market. The soft drink market is very large, and the business cannot be all things to

all people, so it must choose which market segments have the greatest potential. The target
market is the group of customers on whom the business focuses attention. The target market is
where Coca Cola focuses its marketing efforts as it feels this is where it will be most productive
and successful. The target market for Coca cola is very wide as it satisfys the needs for many
different consumers, ranging from the healthy diet consciousness through Diet Coke to the
average human through its best selling drink regular Coke. Most Coke products satisfy all age
groups as it is proven that most people of different age groups consume the Coca Cola product.
This market is relatively large and is open to both genders, thereby allowing greater product
diversification.
There

are

four

broad

ways

which

Coca

Cola

can

segment

its

market:

->

Mass

marketing

->

Concentrated

marketing

->

Differentiated

marketing

->

Niche

marketing

The most apparent method used by Coca Cola is with no doubt the differentiated marketing
method as Coke satisfys a range of different markets. Diet coke satisfys the weight
consciousness, regular coke, sprite, fanta the average human, coffee, iced tea etc. Each group of
beverages satisfy a particular group of people but majority the average human.
Developing

The Marketing

Mix

The marketing mix is probably the most crucial stage of the marketing planning process. This is
where the marketing tactics for each product are determined. The marketing mix refers to the
combination of the four factors(price, promotion, product, place) that make up the core of a
businesss marketing strategy. In this step of the marketing planning process, marketing mix must
be designed to satisfy the wants of target markets and achieve the marketing objectives. The
most successful businesses have continually monitored and changed their marketing mix due to
respective internal and external factors and have monitored the external business environment in
order to maximise their marketing mix components.
Product:
Many Products are physical objects that you can own and take home. But the word product
means much more than just physical goods. In marketing, product also refers to services, such
as holidays or a movie, where you enjoy the benefits without owning the result of the service.
Businesses must think about products on three different levels, which are the core product, the
actual product and the augmented product. The core product is what the consumer is actually
buying and the benefits it gives. Coca Cola customers are buying a wide range of soft drinks. The

actual product is the parts and features, which deliver the core product. Consumers will buy the
coke product because of the high standards and high quality of the Coca Cola products. The
augmented product is the extra consumer benefits and services provided to customers. Since
soft drinks are a consumable good, the augmented level is very limited. But Coca Cola do offer a
help line and complaint phone service for customers who are not satisfied with the product or
wish to give feedback on the products.
Positioning
Once a business has decided which segments of the market it will compete in, developed a clear
picture of its target market and defined its product, the positioning strategy can be developed.
Positioning is the process of creating, the image the product holds in the mind of consumers,
relative to competing products. Coca Cola and Franklins both make soft drinks, although
Franklins may try to compete they will still be seen as down market from Coca Cola. Positioning
helps customers understand what is unique about the products when compared with the
competition. Coca Cola plan to further create positions that will give their products the greatest
advantage in their target markets. Coca Cola has been positioned based on the process of
positioning by direct comparison and have positioned their products to benefit their target market.
Most people create an image of a product by comparing it to another product, thus evident
through the famous battles between Coca-Cola and Pepsi products.
Branding
It is often hard to say exactly why we buy one companys product over another. Companies such
as Nike and Adidas spend large amounts of money trying to win consumers away from their
competitors who make products that are very similar. The popularity of the brand is often the
deciding factor. Over the time Coca Cola has spent millions of dollars developing and promoting
their brand name, resulting in world wide recognition. Coca-Cola is the most recognised
trademark, recognised by 94% of the worlds population and is the most widely recognised word
after OK. Coca Colas red and white colours and special writing are all examples of world-wide
trademarks.
There are a number of branding strategies: Generic brand strategy, Individual brand strategy,
Family brand strategy, Manufacturers brand strategy, Private brand strategy and Hybrid brand
strategy. Coca Cola utilizes the Individual brand strategy as Coca Colas major products are
given their own brand names e.g Fanta, Sprite, Coca Cola etc although they maybe presented as
different lines they operate under the name of Coca Cola.
Packaging
Packaging, which is not as highly perceived by businesses, is still an important factor to examine

in the marketing mix. Packaging protects the product during transportation, while it sits in the
shelf and during use by consumers, it promotes the product and distinguishes it from the
competition. Packaging can allow the business to design promotional schemes, which can
generate extra revenue and advertisements. Coca-Cola has benefited from packaging the
product with incentives and endorsements on the labelling as a promotional strategy to increase
its volume of sales and revenue.
Price:
Price is a very important part of the marketing mix as it can effect both the supply and demand for
Coca Cola. The price of Coca Colas products is one of the most important factors in a
customers decision to buy. Price will often be the difference that will push a customer to buy our
product over another, as long as most things are fairly similar. For this reason pricing policies
need to be designed with consumers and external influences in mind, in order to effectively
achieve

stable

balance

between

sales

and

covering

the

production

costs.

Price strategies are important to Coca Cola because the price determines the amount of sales
and profit per unit sold. Businesses have to set a price that is attractive to their customers and
provides the business with a good level of profit. Long before a sale was ever made Coca Cola
had developed a forecast of consumer demand at different prices which inevitably determined
whether or not the product came on the market, as well as the allocation of adequate money and
resources to produce, promote and distribute the product.
Pricing

Strategies

And

Tactics

The pricing Strategy a business will use will have to focus on achieving the marketing plans
objectives and support the positioning of the product, and take external factors such as economic
conditions and competitors in to account. There are 5 strategies available to business: Market
skimming pricing, Penetration pricing, Loss leaders, Price Points and Discounts. Over the years
Coca Cola has used Penetration Pricing as a way of grabbing a foothold in the market and won a
market share. Its product penetrated the marketplace. Once customer loyalty is established as
seen with Coca Cola it is then able to slowly raise the price of its product. There has been a fierce
pricing rivalry between Coca Cola and Pepsi products as each company competes for customer
recognition and satisfaction. Till now it appears as if Coke has come up on top, although in order
to gain long term profits Coke had to sacrifise short term profits where in some cases it either
went

under

of

just

broke

even,

but

as

seen

it

has

been

all

for

the

best.

Pricing Methods
Good pricing decisions are based on an analysis of what target customers expect to pay, and
what they perceive as good quality. If the price is too high, consumers will spend their money on

other goods and services. If the price is too low, the firm can lose money and go out of business.
Pricing methods include: Cost based Pricing, Market based pricing and Competition based
Pricing. Over the years Coca has lost ground here in its pricing but has regained its strength as
it employed the Competition-based pricing method which allowed it to compete more effectively in
the soft drink market. Leader follower pricing occurs when there is one quite powerful business in
the market which is thought to be the market leader. The business will tend to have a larger
market share, loyal customers and some technological edge, thus the case currently with Coke, it
was first the follower but through effective management has now become the leader of the
market and is working towards achieving the marketing objectives of the Coca Cola. Survival in
the market place, own 60 % of market share by 2007, increase further awareness of product and
a return on 20% on capital employed for August 2007.
Promotion:
In todays competitive environment , having the right product at the right place in the right place at
the right time may still not be enough to be successful. Effective communication with the target
market is essential for the success of the product and business. Promotion is the p of the
marketing mix designed to inform the marketplace about who you are, how good your product is
and where they can buy it. Promotion is also used to persuade the customers to try a new
product,

or

buy

more

of

an

old

product.

The promotional mix is the combination of personal selling, advertising, sales promotion and
public relations that it uses in its marketing plan. Above the line promotions refers to mainstream
media:Advertising through common media such as television, radio, transport, and billboards and
in newspapers and magazines. Because most of the target is most likely to be exposed to media
such as television, radio and magazines, Coca Cola has used this as the main form of promotion
for extensive range of products. Although advertising is usually very expensive, it is the most
effective way of reminding and exposing potential customers to Coca Cola Products. Coca Cola
also utilizes below the line promotions such as contests, coupons, and free samples. These
activities are an effective way of getting people to give your product a go.
Place

and

Distribution:

The place P of the marketing mix refers to distribution of the product- the ways of getting the
product to the market.The distribution of products starts with the producer and ends with the
consumer.
One key element of the Place/Distribution aspect is the respective distribution channels that
Coca Cola has elected to transport and sell its product.

Selecting the most appropriate distribution channel is important, as the choice will determine
sales levels and costs. The choice for a distribution channel for any business depends on
numerous

factors,

How
The

these

far

away

type

the

of

The
The

costs

customers

product

lead

include:
being

times

are;
transported;

required;

associated

with

and;
transport;

There are four types of distribution strategies that Coca Cola could have chosen from, these are:
intensive, selective, exclusive and direct distribution. It is apparent from the popularity of the
Coca Colas product on the market that the business in the past used the method of intensive
distribution as the product is available at every possible outlet. From supermarkets to service
stations to your local corner shop, anywhere you go you will find the Coca Cola products.
Physical

Distribution

Issues

Coca Cola needs to consider a number of issues relating to the physical distribution of its soft
drink products. The five components of physical distribution are, order processing, warehousing,
materials handling, inventory control, transportation. Coca Cola must further try to balance their
operations with more efficient distribution channels.
Order Processing- Coca Cola cannot delay their processes for consumer deliveries (i.e. delivery
to selling centers), as this is inefficient business functioning and is portrays a flawed image of the
product

and

overall

business.

Warehousing and inventory control- warehousing of Coca Cola products is necessary. Inventory
control is another important aspect of distribution as inventory makes up a large percentage of
businesses assets. Choosing the correct and desired inventory measure that Jacksons sees as
most effective is vital. Jacksons must remember though that there are factors involved with
inventory control that can hinder the products sales and customer perceptions (hazards,
distribution

from

storage

facilities,

etc).

Materials handling- this deals with physically handling the product and using machinery such as
forklifts and conveyor belts. When holding products, then Coca Cola has benefited from
purchasing

or

renting

respective

machinery.

Transportation- transporting Coca Cola products is the one most important components of
physical distribution. Electing either to transport the sports drink by air, rail, road or water
depends on the market (i.e. global, or domestic?) and depends on the associated costs. The
most beneficial transportation method for Coca Cola would be ROAD if the product were moved
around from storage to the cost centers.

Implementing, Monitoring And Controlling

Financial Forecasts
Financial forecasts are predictions of future events relating strictly to expected costs and revenue
costs for future years. There are five major marketing expenditures, which include research costs,
product development costs, product costs, promotion costs and distribution costs.
Sales force composite is the most logical method in forecasting revenue. This involves estimates
from individual salespeople to sell to work out a total for the whole business. Once these costs
and revenues are forecasted, management can then decide which combination of marketing mix
strategies will deliver the most sales revenue at the lowest cost.
Implementing
Implementation is the process of turning plans into actions, and involves all the activities that put
the marketing plan to work. Successful implementation depends on how well the business blends
its people, organisational structure and company culture into a cohesive program that supports
the marketing plan.
For its further success, Coca Cola must impose several key changes. Production needs to be on
time and meet the quota demanded from wholesalers. It must also be efficient so as not to build
inventory stocks and inventory prices. The marketing needs to be motivated and knowledgeable
about the product. The forms of promotion such as advertising must be attracting and enticing to
the target market to get the greatest amount of exposure possible for the product. This will ensure
the success of the product in the stores. Distribution of the product must be efficient. This
problem has already been taken care of with convenient transport routes to commercial areas
and transport already being arranged.
Monitoring And Controlling
Monitoring and controlling allows the business to check for variance in the budget and actual. This is
important because it allows Coca Cola to take the necessary actions to meet the marketing
objectives. There are three tools Coca Cola should use to monitor the marketing plan. They are the
following:
i.

Sales Analysis The sales analysis breaks down total business sales by market segments
to identify strengths and weaknesses in the different areas of sales. Sellers of Coca Cola
products vary from major retail supermarkets to small corner stores. This gives the its
products maximum exposure to customers at their convenience.

ii.

Market Share Analysis Market share analysis compares Coca Colas business sales
performance with that of its competitors. Coca Cola looks to increase its market share by
over 60%. With the changes Coca Cola is currently undergoing, they aim to regain an iron
fist control of the market. Target market various age groups and lifestyles from high
school students too universities, and male or female.

Marketing

Profitability

Analysis

This analysis looks at the cost side of marketing and the profitability of products, sales territories,
market segments and sales people. There are three ratios to monitor marketing profitability; they
are market research to sales, advertising to sales and sales representatives to sales. The results
of these three tools can help Coca Cola determine any emerging trends, such as the need for a
different product. Comparing these results with actual results gives the business an idea on when
to change.
MarketResearch
When attempting to implement a new Marketing plan a business must address its target market
and conduct the relevant information to insure the new marketing plan both differs from the old
and is better for the business. When conducting market research a business must first define the
problem and then gather the appropriate information to solve the problem. There are 3 types of
information

business

can

gather

to

solve

its

problems.

->Exploratory Research which clarifies the problem an d searches for ways to address it.
->Descriptive Research is used to measure and describe things like the market potential for a
product

and

characteristics

of

the

target

market.

->Casual Research is used to test a hypothesis about a cause and effect relationship.
Coca Cola through its market research has addressed all three types of research to define the
problem raised by shareholders and gathered information to serve their needs.
Factors Influencing Consumer Choice
When making decisions on products a business must look at factors that influence consumer
choice such as psychological factors, Socio cultural factors, Economic factors and Government
Factors.
Psychological Factors: such as motivation, perception, lifestyle, personality and self concept,
learning, and attitudes influence the consumers behavior towards a product and Coca Cola has
addressed

this

issue

by

introducing

Diet

Coke

to

satisfy

different

lifestyles.

Socio cultural factors: such as culture, subculture, socio-economic status, family and reference
groups

influence

the

consumers

behavior

towards

product.

Economic factors: such as Disposable income and discretionary income. Coca Cola has
addressed this side of the influence by maintaining a low price on the price of its products.
Government Factors: such as new regulations, inflation, interest rates all influence consumer
spending and choice.