ABSTRACT:

Customer retention is vital these days and organisations are looking for the best way
to please and satisfy the interest of their consumers. The Coca-Cola Company is soft drink
industry that has been able to build its brand loyalty with its consumers over its years of
operation, despite the highly competitive market. The Economic recession was a trying time
for Coca-Cola which led to the closure. Here we will be analyse on how effective the
management of their consumers was to in ensuring their survival in the recession. Coca Cola
have long been a leading company in selling feelings and experiences, rather than just
selling beverages. Their marketing strategy has been strongly tied to music and customer
engagement, which has carried the company through two world wars, a depression, a global
financial crisis and even an elevation in health awareness. As an international giant, they have
a lot to teach the rest of us.

INTRODUCTION:

The most successful business establishments make optimum use of marketing

strategy for increased profits. Beverage industry forms a major part of total sales, both
domestic and international, worldwide. An example for such successful implementation of
marketing strategy is Coca Cola. Coca Cola is one of the most leading company in soft drink
beverage industry. It contributes to the highest sales of soft drinks globally.

Coca Cola was established in 1886 by Dr. John S. Pemberton, an Atlanta pharmacist, when
he tried to create a distinctive syrup which can be sold at soda fountains. Initially, the syrup
was mixed with carbonated water and then consumed. Frank M. Robinson, Dr.Pemberton‟s
partner and book keeper, termed the name Coca Cola‟ thinking that the two „Cs‟ would
sound well when advertised. He also designed the distinctive script in which the trademark is
created, which is still used today.

In 1894, Joseph Biedenharn installed bottling machinery and became the first one to put
Coca Cola in bottles. Since then, the journey of Coca Cola has always been on success in
expansion and profit making. To create a unique place among the consumers and to prevent
piracy, it hosted a competition to redesign a new bottle and later it started manufacturing its
own distinct bottle. Presently, Mr. James Quincey heads the Coca Cola Company as a CEO,
headquartered at Atlanta and T Krishnakumar heads the Coca Cola India company. Also,
Christina Ruggiero was recently named CEO Of Hindustan Coca-Cola Beverages (HCCB), the
largest bottling partner of The Coca-Cola Company in India.

Coca-Cola is an iconic global brand that has exemplified brand loyalty throughout its 125TH
year history of success. The brand has retained its popularity amidst economic downturns,
changing consumption patterns, and increased concern over healthy eating and drinking
habits.
 Situation Analysis:

In 2003, the community near the Coca-Cola bottling plant in Kerala, India
protested against the water scarcity and polluted water that resulted from its bottling
operations. The allegations caused the closure of the bottling plant. Coca-Cola was banned
in the state for these unethical business practices. Soon after the incident, the Center for
Science and Environment (CSE), a Delhi-based environmental NGO, released a report
indicating the presence of pesticides, greatly exceeding European standards, in a dozen
popular beverages sold under the brand names of the Coca-Cola Company and PepsiCo.
This report raised serious protests all over India on the soft drink industries, especially
Coca-Cola and PepsiCo. Together, the companies have 90% of the India's soft drink market.

In response to the allegations, Coca-Cola denies them by saying their

products are safe and questions the lab reports presented by CSE. The University of
Michigan placed the Coca-Cola Company on probation in 2006, and asked for an
independent assessment of its operations in India. The soft drinks were examined by an
independent lab, The Energy and Resources Institute (TERI). According to the reports the soft
drinks were declared safe and pesticide free. However, the CSE claimed that only the water
was tested and not the other ingredients; ingredients such as artificial flavors and sugar.
After the reports from TERI were published the government declared soft drinks as safe.
However, the problems with some bottling plants still remain, due to the depleting
levels of ground water, day by day.

Critical Issues/Problems:

Solid waste and water issue: The communities near the bottling plant in India
complained about the passage of sludge as fertilizer, causing health and environmental
damage. The most important issue concerning these communities is the depletion of water
levels caused by the Coca-Cola bottling operations which have drastically reduced
availability of water for irrigation purposes. Pesticides in soft drinks: The other issue
concerning human health caused by Coca-Cola is that their bottled water and soft drinks
contain pesticides which were tested by the reputed NGO, CSE. Dual product standards:
Coca-Cola is accused of having dual standards in terms of their products and safety
measures concerning human health with respect to USA, Europe and India.

Community issue:

These allegations affected Coca-Cola largely with its sales and also caused
the closure of one of their bottling plants in Kerala, India. Additionally, Coca-Cola’s
products are banned in the state of Kerala, India.
Action Taken:

Coca-Cola Company, India thought seriously about its corporate responsibility

and witnessing huge sales losses. In order to gain trust among the local communities
near the bottling plant, they improved their business practices and reduced the water usage
by 34%. Through the practice of rainwater harvesting, Coca-Cola returned substantial water
to the aquifers. They have stopped distributing sludge as Biosolids(fertilizers) to farmers for
agriculture use, and have taken initiatives with the Indian government to encourage the
development of additional solid waste disposal sites. The water used for making soft drinks is
treated with activated carbon filtration and run through a purification process to ensure that
the water is free of pesticide residue. The ingredients are also closely monitored and
undergo various quality checks. According to the company’s factsheet, they strictly follow the
product standards which are the same all over the world.

Coca-Cola has also partnered with the NGO’s and the government to provide medical
access to poor people through regular health camps. In addition to their outreach
efforts, the company committed itself to environment responsibility through its business
operations. For example by following the practices of conserving energy and by adhering
to the ban on purchasing CFCs, Coca-Cola exhibited greater corporate responsibility. The
allegations in other ways helped Coca-Cola Company, India to show their corporate social
responsibility and to maintain good product quality standards. The initiatives all over India
helped them reach villages for a good cause and also indirectly marketed their products with
establishing a trust among the public.

After all these allegations, the CSE is still not convinced of the quality of the product.
Therefore, Coca-Cola must prove that they have upgraded their lab with sophisticated
instrument which is capable of measuring pesticide residue in soft drinks. As per the recent
reports by CSE, they claim that the pesticide residue has gone up 27 times higher than
expected level by the Bureau of Indian Standards (BIS) (in 2006).

. Under Developed Markets (Africa)

Origin:–

Africa started importing Coca Cola in 1928 and bottling started in 1940. Africa
accounts for 7% of the daily of The Coca Cola Company products consumed
worldwide, daily, which accounts to some 120 mn Coca Cola products served across the
African continent daily. The number increases daily with Africa‟s exponential growth.

Difficulty:-

The biggest difficulty faced by Coca Cola in any under developed market like Africa is
the low demand for a beverage product or typically any other product which is
deciphered as ‟unnecessary‟ by the public, since, it is not one of the primary products
useful for livelihood. Also, transportation of products at long distances becomes a
challenge since the facilities are limited.
Marketing strategy:–

To overcome the first major challenge of the demand, the pricing has to be as low as
possible so that more public is attracted towards the products. Big corporations
usually first try to know their customers and their choices & preferences. Since the
literacy is low and subsistence agriculture is still a dominant industry in under
developed markets, sophisticated marketing and brand strategizing have little
meaning. Also, Coca Cola has tried to establish its name in the better regions by the
initiative of Coke Studio wherein new artists are given an opportunity to present
themselves. Coke Studio with the motto „one studio, one brand, one great continent‟
has made a widespread reach among the masses. Today The Coca-Cola Company,
along with its 46 bottling partners, operates in all countries and territories in Africa
and in each the business is a local enterprise.

USING MUSIC FOR CUSTOMER RETENTION:

In 1971, Coca Cola released their ad that features the song “I’d like to teach the world to
singz”, originally by the New Seekers. 44 years later, the ad appeared on the TV series Mad
Men and shortly after that, the ‘Hilltop’ commercial was remastered and re-distributed as an
iconic piece of American culture for the next generation. At the time of its original release in
1971, radio stations were inundated with listeners calling in to request the song.

USING ENGAGEMENT STRATEGIES FOR CUSTOMER RETENTION:

Another striking campaign presented by Coke, which is more recent, wa s their inclusion of
people’s names on labels. The “Share a Coke” campaign consisted of placing names on Coke
labels in an effort to improve customer engagement and built on customer retention
through personalisation. To make the campaign even more memorable, they tied this with
music. Needless to say that the campaign went viral. As a result of the campaign (according
to Coca Cola), the company sold over 250 million named bottles and cans in Australia.
Considering Australia is made up of less than 23 million people, that is an astounding effort.

“Share a Coke” was enhanced by music and social media to create a shocking ripple effect, at
least in Australia, with 12 million media impressions and a 7% increase in young adult
consumption
FUTURE STRATEGY:.

In order to retain the top rank position and also increase the down-falling brand value, some
drastic changes need to be done. Although, the organisation has covered most of aspects in
technology and marketing, there are few more strategies which can be implemented as
follows:

i. Replacement to alcohol drinks

With the growing stress level in workspace and personal life, more and more people are
getting addicted to injurious addictions like alcohol, smoking, chewing tobacco etc.
Usually it is quite late when they understand their mistakes and try to overcome the
addiction, but, the effects are in vain since their body is already habituated to the
addiction. Coca Cola can plan to launch a new sub brand focusing on this topic which has
the potential to have high demands and also create a good image among the public.
Although there are few

pharmaceutical products which provide similar medical help, Coca Cola can use its brand
name and its unique

way to market its product.

ii. Development in purified water system.

Kenley is a sub brand of Coca Cola, but the sales are not good in mineral water category.
Bisleri had already created the brand name in the mineral watersection so much so that its
name was used as equivalent to purified water bottles by the people. Also these days, local
distributors provide packaged drinking water at

lower cost. Coca Cola can tie-up with such distributors and make deals so that promotion of
Kenley increases

among the public.

iii. Use of purified sea water for Coca Cola drinks

Coca Cola and other beverage companies have been often severely criticised for using
tremendous amount of groundwater in their factories which resulted in scarcity of drinking
water to the people. Coca Cola can either try to replenish the used qty after use or use a sea
water purification technique with a one-time investment. It is a known fact that such sea
water purification has not being carried out yet at an economical or industrial level, but the
daily advancement in technology, one can surely expect to see such a technique in near
future. An outstanding research has been carried out in University of Alexandria over sea
water purification process and Is published in journal: Water Science and technology in 2015.
This process claims to be quite economical and external energy independent. Coca Cola can
sponsor such patented R&D projects to speed up the process and use the patented product
on a large scale so that it is cost effective. Such projects can surely develop its name among
the remote areas too.

CONCLUSION:

Understanding consumers’ behaviour is key to having a successful company; marketers need

to deepen their research on their consumers because the consumers are becoming aware of
the important role they play in their consumption pattern. Competitors are always also
looking for tactics to grow and influence new consumers, and any organisation that does not
meet up with consumer’s expectations would be losing a consumer. Companies should look
for ways to retain their current customers and also focus on getting new ones “attracting
new customers should be a priority in a recession” (Pearce and Michael 2006). Organisations
should actively engage their customers more than before.