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Introduction of Coco-Cola
Introduction of Coco-Cola
About nine servings of the soft drink were sold each day. Sales for
that first year added up to a total of about $50. The funny thing was
that it cost John Pemberton over $70 in expanses, so the first year of
sales were a loss.
Asa Candler
Situation Analysis
Market Analysis:
SWOT Analysis:
Strengths:
Coca-Cola has been a complex part of world culture for a very long
time. The product's 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-Cola's 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-Cola's 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 business’s 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
Coke's 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 Coke's competitive
position. Coca-Cola's 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-Cola's 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.
Marketing Objectives
2.Profitability Objectives:
To achieve a 20% return on capital employed by August 2007
3. Promotional Objectives
To increase awareness of the product on the market.
4. Objectives for Survival
To survive the current market war between competitors.
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 business’s 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
Branding
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 it’s volume of sales and revenue.
Price:
Promotion:
Financial Forecasts
Implementing
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.
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.
Market Research