Principles of Marketing

Digital Assignment 1 – FMCG Company Analysis

Name: Jai Kishun R Slot: F1+TF1

Reg. No: 16BEC0540

The Coco-Cola Company

The Coca Cola Company is the largest beverage company of the world, and it provides
consumers in excess of five hundred unique brands. Coca Cola is one of the most profitable
companies of the world and it includes as products: Fanta, Coca Cola Zero, Powerade, and
Minute Maid. At the moment the company focuses on having sustainable community
protecting environment and having good economic development.

The company’s success is bestowed on steady leadership and value for human resources. However,
maintaining steady market leadership has not been easy because of the large number of competitors in
the soft drink industry. The main competitors of The Coca-Cola Company are Pepsi, Nestle, Cadbury
Schweppes and other minor companies.

Coca Cola, the product:

The Coca-Cola Company produces concentrate, which is then sold to licensed Coca-Cola
bottlers throughout the world. The bottlers must own exclusive territory contracts with the
company to distribute its product. They produce the finished product in cans and bottles from
the concentrate, in combination with filtered water and sweeteners. The bottlers then sell,
distribute, and merchandise Coca-Cola to retail stores, restaurants, and vending machines
throughout the world.
Target Market:

 Age: Generally, Coke does not have a specific target and is addressed to everyone.
But the main consumers are 12-30 years old people; even if there is no specific
product or communication for less than 12 or more than 30, the brand succeed in
reaching them, through partnerships for example (restaurants, fast foods such as
McDonald’s…), or thanks to its value among consumers. So, the core target audience
of Coca Cola is youngster or youth.

 Gender: The Coca-Cola Company does not target based on gender. But, results show
that both genders like this product and use it.
 Lifestyle: No specific lifestyle targeted but more busy lifestyle and mobile generation
are considered to be the most important part of the companies consumers.

PESTEL Analysis of Coca Cola:

Coca Cola is a global company and does business in several markets and regions. There are
several challenges to global operations and keeping in mind that working globally a brand
can go over obstacles that can be political, monetary or even legal in nature.

 Political: Unstable political environments or political chaos can hurt businesses and
their supply chains. Coca Cola’s supply chain is located globally in several countries
and political disruptions can cause the disruption of its supply chain and distribution
network. Moreover, the condition of trade relationships of US with other countries
also affects its business and sales.
 Economic: The world has been through a bitter recession just some years ago and
during that period the world economy saw declining activity, falling employment and
retarded growth. All of this resulted in declining consumer spending and less sales for
international brands. As economic activity returned the level of employment rose
leading to higher dispensable income in the hands of the consumers.
 Sociocultural: Sociocultural factors are affecting the business and marketing
strategies of global brands. The demographic composition of the global population
has also changed and businesses have to alter their marketing strategies and customer
service practices in order to better cater to the needs and choices of the millennial
generation.
  Technological: From marketing to supply chain management as well as
manufacturing and distribution, everywhere being technologically advanced is
important for fast growth of businesses. Coca Cola has made significant investments
in technology in various areas from marketing to supply chain and distribution. One
another important area where investing in technology has proved profitable for
businesses is customer engagement.
 Environmental: Coca Cola has faced severe criticism over its water consumption.
Water is an important raw material for Coca Cola and it has to use it in very large
quantities. However, in the recent years it has focused a lot on water conservation and
water management. It also invests in environmental protection through its
sustainability and CSR efforts.
 Legal: Law and compliance have grown very important due to which organisations
have special compliance teams dedicated to legal issues. Local laws vary across the
various regions of the world and organisations have to focus on it especially in order
to avoid fines and resulting financial losses.

Marketing Strategy

The Coca-Cola company marketing strategy is based on its mission statement that aims at
maximizing shareowner value. As a requisite to realize the above mission, the company has
designed a strategy that adds value to all the constraints they serve. For instance, the
company accords high value to their consumers, suppliers, bottlers, and customers.

The pillar of the strategy is creating demand and fulfilling it profitably. The market demand
determines the company’s actions. The company is also building other products under the
brand Coca-Cola since it’s the leading market seller. Currently, the company has 16 million
customers and it is appealing other 6 million globally
Advertisement:

Although Coca-Cola is a multinational company, its rich brand name and good will does not
guarantee future prosperity. Thus the company is investing heavily in advertisement and
project differentiation to ensure the company is performing at the highest level. The
company’s advertisement history is as old as the company itself with the television
advertisement pioneered by Charlie McCarthy in 1950.

In 1982, The Coca-Cola Company purchased Columbia Pictures and began inserting Coke-
product images into many of its films. After a few early successes during Coca-Cola's
ownership, Columbia began to under-perform, and the studio was sold to Sony in 1989.

Coca-Cola has gone through a number of different advertising slogans in its long history,
including "The pause that refreshes", "I'd like to buy the world a Coke", and "Coke is it".

Coca-Cola introduced “My Coke Rewards” in 2006, a customer loyalty campaign where
consumers earn points by entering codes from specially marked packages of Coca-Cola
products into a website. These points can be redeemed for various prizes or sweepstakes
entries.

In Australia in 2011, Coca-Cola began the "share a Coke" campaign, where the Coca-Cola
logo was replaced on the bottles and replaced with first names. Coca-Cola used the 150 most
popular names in Australia to print on the bottles. The campaign was paired with a website
page, Facebook page, and an online "share a virtual Coke". The same campaign was
introduced to Coca-Cola, Diet Coke & Coke Zero bottles and cans in the UK in 2013.

Coca-Cola has also advertised its product to be consumed as a breakfast beverage, instead of
coffee or tea for the morning caffeine.
This formed the basis of what proved to be a rich and very sophisticated venture in product
promotion. The television ads have designed with wonderful words such as “signs of good
taste”; “be really refreshed” while it has also promoted both the national heritage and pride in
their ads tag such as “look up America”.

Strengths and Weaknesses:

 Strength: Coca-Cola is the leading non-alcoholic drink producer in the world. The
strong brand name is a fundamental pillar through which sustainable growth is vested
on. Amazing global market survey indicates that 54 billion beverages are traded daily
out of which 1.6 billion have Coca Cola trademark. Furthermore, the company enjoys
robust manufacturing and distribution mechanism through which it reaches out its
customers. Hence, the company’s strong brand name enhances customer recall, and
allows Coca-Cola to penetrate new markets and strengthen its presence in the
established ones.
 Weakness: The legendary nature of Coca-Cola brands is slowly withering away as
customers are shifting their attention to new brands. For example in 2010, the
company was forced to abandon the production of Smart Water with concern that the
product didn’t meet FDA’s quality standards. Similarly, in 2009, an Israel Coca-Cola
Company was forced to withdraw several brands such as 1.5 L of Coca-Cola and Diet
Coke after the discovery of benzenes and sulphur traces in the drinks. As similar cases
continue to emerge, the once faultless brand name is becoming stained and is no
longer faultless. A section of consumers are concerned over the nutritious aspect of
the popular drinks since are purely made out of artificial materials. As the popularity
of the products erodes, customer confidence is strained which in turn is reducing the
company revenues margins. This prompted Pepsi, Coca-Cola main rival to grab the
opportunity and increase its revenues.