OUTLINE OF REPORT Coca-Cola Background Japan and its culture Japans Beverage and Tea Market Coca-Cola Japan

and its success Coca-Cola Product Line Competition SWOT Analysis Research and Development Marketing Plan and Recommendations

COCA-COLA COMPANY BACKGROUND Founded in 1886 by John C. Pemberton Worlds leading manufacturer, marketer, and distributor of nonalcoholic beverage concentrates and syrups More than 300 brands Corporate Headquarters in Atlanta with local operations in over 200 countries around the world

TWO BUSINESS SECTORS North American

Coca-Cola USA Coca-Cola Ltd. = Canadian Operations Coca-Cola Foods = juice drinks

International
Greater Europe Latin America Middle and Far East Africa
http://www.cocacola.com/worldwide/flashindex1.html

JAPAN IN THE 1980S Economy improving Yen appreciating in value Boom in consumer spending Health trend

Map Source: http://gojapan.about.com

AVERAGE EXCHANGE RATES, JAPANESE YEN/US DOLLAR, 197087

400 300

Rate

200 100 0 1965 1970 1975 Year 1980 1985 1990

JAPANESE BEVERAGE MARKET

Waters 16%

Sports Drinks 9%

Other Colas Carbonated 10% Drinks 9%

Coffees 21%

Teas 9%

Juices 26%

JAPANESE TEA MARKET Ready-to-drink segment Annual growth for tea categories
Oolong: 42% Black: 60% Western-style: 60%

Three Basic Categories of Tea

Green 12% Black 31% Oolong 57%

PLACES TO SELL

Grocery stores 5.1% annual average growth rate Convenience stores 15.8% annual average growth rate Restaurants Vending machines

Image Source: www.cocacola.com

THE COCA-COLA (JAPAN) COMPANY

1957, established in Tokyo Due to trade regulations, focus attention on:

Local connections Competitive environment Japanese culture

1961, trade deregulation policies Form strategic alliances with powerful Japanese corporations which allowed local acceptance of the product 1965, Coca-Cola best-selling soft drink in Japan

CCJC SUCCESS Two main factors contributing to leadership position

Direct marketing approach Distribution system

From the TV set to the store shelf

DIRECT SALES CONCEPT

Stiff Resistance

Wholesaler concept
Turnaround

Bottlers enthusiasm Strong Coca Cola sales

KEY ELEMENT In Principle

Bottlers acted as independent corporation
Sourced raw materials locally Complete all production on site

CCJC unified bottlers through

Aggressive Monitoring Marketing Strategies New Product Development

JAPANS FAVORITES
HI-C Opened a way for new fruit juice market Averted crisis for Japanese citrus farmers
Overproduction of Mikan Coca-Cola bought crop to produce HI-C

Led to lasting relationship between CCJC and growers

Georgia
Lack of canned coffee product source of controversy between CCJC and Japanese bottlers
Leading brand in market segment
34% of market in 1987 Young businessmen primary target

Aquarious
Isotonic drinks
Touted as health drink
Female consumer targeted

Ideal for replenishing fluid and electrolytes lost through perspiration

MARKET SHARE
Commanded 90% of cola market 60% noncola carbonated market 10% remaining drink market 21.5% of Coca-Colas worldwide profits came from Japan Profit per gallon four times higher than U.S.

COMPETITION
Included private-label suppliers, international and domestic producers Other beverages besides cola competed for their percentage of the market. Advertising, sales promo programs, intro of new packaging and new products, were competitive factors.

TEA MARKET COMPETITORS Ito En Ltd Suntory Ltd Kirin Hitachi Zosen Corp Ashai Breweries Ltd.

ITO EN LTD.
Leading Japanese canned tea marketer First to come out with canned tea product Introduction of green tea with superior quality in 1985 Central focus is just tea products

SUNTORY LTD.
Largest distillory in Japan due to production of alcholic beverages Decided to enter tea market by intro of canned oolong tea and resulted into 50 % of market Big competitor of Coca-Cola due to production of beverages including cola, green tea, and health tonics.

KIRIN
First canned black tea Afternoon Tea Advantage- facilities= 5th largest brewery Brand recognition due to having 50% market share of beers Leading domestic soft drink producer along with similar beverages to Coca-Cola

HITACHI ZOSEN CORP.

Prestigious company due to biotech background

Developed healthy tea from bark of tochu tree

ASHAI BREWERIES LTD.

1st producer of Western- style canned tea Significant competitor in canned coffee market

STRENGTHS
Multinational enterprise Global acceptance of beverage products Trademark is widely recognizable. Successful incoporation of local tastes and preferences Production and distribution in domestic and host countries Market leader, not a follower. Willingness to find new target markets.

WEAKNESSES
Not enough research on new trends in the market. Not broadening /entering new markets that could be a success for Cola-Cola.

OPPORTUNITIES
Expanding product categories to include some products offered in U.S.A. Diversify product lines Co-Branding with local companies Capitalize on local trends and favorites

THREATS
Local and global competition Production difficulties Culture and lifestyle differences Research and Development errors Investment loss

FACTORS TO CONSIDER Cola-Cola US focuses on expansion rather than researching and developing.

Has foreign direct investments in Japan with local companies.

MARKETING PLAN
Research for niches in the market Develop a product that fits those needs
Infuse Western culture with Japanese culture (allows brand recognition)

Focus on distribution and production with local franchises which aid in promotion and enthusiasm about the new product Incentives to try new products so tea products can be the new cash cow (since other Coca-Cola products may be in the maturity stage of the Product Life Cycle)
Promotion through samples & coupons

VALUE-ADDED
Unique packaging Focus on health awareness Be the first-mover advantage in different types of teas

RESEARCH AND DEVELOPMENT 2 new products that may cause a successful venture for Coca-Cola Japan that the research and development team are proposing:

Marocha Tea Sokenbicha

MAROCHA TEA

Well worth the wait The distinct flavor of Coca-Cola Japan's Marocha Tea comes from Kabusecha tea leaves, which take the longest time to ripen to perfection and, of all tea varieties, require the greatest effort to produce.
Marocha Green Tea and Marocha Gyokuro are superb quality green teas that contain a touch of sweetness and offer the deep mellow taste of a freshly brewed tea that consumers might make at home themselves. Consumers of all ages are recognizing the abundance of vitamins and anti-oxidants in green tea leaves and their positive effects.

SOKENBICHA Sokenbicha tea is popular among young Japanese women for its healthgiving properties. With 11 natural ingredients, including roasted rice, green tea, evening primrose, loquat leaves, chicory, and vitamin C, Sokenbicha reminds consumers that beauty and vibrant health naturally engender feelings of happiness and hope. Health trends make this product unique from others. The packaging incorporates an image of sunlight shining through leaves in a forest, suggesting refreshment amidst nature.