HISTORY

Coca-Cola originated as a soda fountain beverage in 1886 selling for five

cents a glass. Early growth was impressive, but it was only when a strong
bottling system developed that Coca-Cola became the world-famous brand it
is today.

1894 A modest start for a bold idea

In a candy store in Vicksburg, Mississippi, brisk sales of the new
fountain beverage called Coca-Cola impressed the store's owner,
Joseph A. Biedenharn. He began bottling Coca-Cola to sell, using a
common glass bottle called a Hutchinson.
Biedenharn sent a case to Asa Griggs Candler, who owned the
Company. Candler thanked him but took no action. One of his nephews
already had urged that Coca-Cola be bottled, but Candler focused on
fountain sales.

1899 The first bottling agreement

Two young attorneys from Chattanooga, Tennessee believed they could
build a business around bottling Coca-Cola. In a meeting with Candler,
Benjamin F. Thomas and Joseph B. Whitehead obtained exclusive rights
to bottle Coca-Cola across most of the United States (specifically
excluding Vicksburg) -- for the sum of one dollar. A third Chattanooga
lawyer, John T. Lupton, soon joined their venture.

1900-1909 Rapid growth

The three pioneer bottlers divided the country into
territories and sold bottling rights to local
entrepreneurs. Their efforts were boosted by major
progress in bottling technology, which improved
efficiency and product quality. By 1909, nearly 400 Coca-Cola bottling
plants were operating, most of them family-owned businesses. Some
were open only during hot-weather months when demand was high.

1916 Birth of the contour bottle

Bottlers worried that the straight-sided bottle for CocaCola was easily confused with imitators. A group
representing the Company and bottlers asked glass
manufacturers to offer ideas for a distinctive bottle. A
design from the Root Glass Company of Terre Haute,
Indiana won enthusiastic approval in 1915 and was
introduced in 1916. The contour bottle became one of the
few packages ever granted trademark status by the U.S.
Patent Office. Today, it's one of the most recognized icons in the world even in the dark!

1920s Bottling overtakes fountain sales

As the 1920s dawned, more than 1,000 Coca-Cola
bottlers were operating in the U.S. Their ideas and zeal
fueled steady growth. Six-bottle cartons were a huge hit
after their 1923 introduction. A few years later, open-top
metal coolers became the forerunners of automated
vending machines. By the end of the 1920s, bottle sales
of Coca-Cola exceeded fountain sales.

1920s and 30s International expansion

Led by longtime Company leader Robert W.
Woodruff, chief executive officer and chairman of
the Board, the Company began a major push to
establish bottling operations outside the U.S. Plants
were opened in France, Guatemala, Honduras, Mexico, Belgium, Italy,
Peru, Spain, Australia and South Africa. By the time World War II began,
Coca-Cola was being bottled in 44 countries.

1940s Post-war growth

During the war, 64 bottling plants were set up
around the world to supply the troops. This followed
an urgent request for bottling equipment and
materials from General Eisenhower's base in North
Africa. Many of these war-time plants were later
converted to civilian use, permanently enlarging the
bottling system and accelerating the growth of the
Company's worldwide business.

1950s Packaging innovations

For the first time, consumers had choices of CocaCola package size and type -- the traditional 6.5ounce contour bottle, or larger servings including
10-, 12- and 26-ounce versions. Cans were also
introduced, becoming generally available in 1960.

1960s New brands introduced

Following Fanta in the 1950s, Sprite, Minute Maid, Fresca and

TaB joined brand Coca-Cola in the 1960s. Mr. Pibb and Mello Yello
were added in the 1970s. The 1980s brought diet Coke and Cherry
Coke, followed by POWERADE and DASANI in the 1990s. Today
hundreds of other brands are offered to meet consumer preferences in
local markets around the world.

1970s and 80s Consolidation to serve customers

As technology led to a global economy, the retailers who sold CocaCola merged and evolved into international mega-chains. Such
customers required a new approach. In response, many small and
medium-size bottlers consolidated to better serve giant international
customers. The Company encouraged and invested in a number of
bottler consolidations to assure that its largest bottling partners would
have capacity to lead the system in working with global retailers.

1990s New and growing markets

Political and economic changes opened vast markets that were closed
or underdeveloped for decades. After the fall of the Berlin Wall, the
Company invested heavily to build plants in Eastern Europe. And as the
century closed, more than $1.5 billion was committed to new bottling
facilities in Africa.

21st Century
The Coca-Cola bottling system grew up with roots deeply planted in
local communities. This heritage serves the Company well today as
people seek brands that honor local identity and the distinctiveness of
local markets. As was true a century ago, strong locally based
relationships between Coca-Cola bottlers, customers and communities
are the foundation on which the entire business grows.

Mission, Vision & Values

The world is changing all around us. To continue to
thrive as a business over the next ten years and beyond,
we must look ahead, understand the trends and forces
that will shape our business in the future and move
swiftly to prepare for what's to come. We must get ready
for tomorrow today. That's what our 2020 Vision is all
about. It creates a long-term destination for our
business and provides us with a "Roadmap" for winning
together with our bottling partners.
Our Mission
Our Roadmap starts with our mission, which is enduring. It declares our
purpose as a company and serves as the standard against which we weigh
our actions and decisions.

To refresh the world...

To inspire moments of optimism and happiness...

To create value and make a difference.

Our Vision
Our vision serves as the framework for our Roadmap and guides every
aspect of our business by describing what we need to accomplish in order to
continue achieving sustainable, quality growth.

People: Be a great place to work where people are inspired to be the

best they can be.

Portfolio: Bring to the world a portfolio of quality beverage brands that

anticipate and satisfy people's desires and needs.

Partners: Nurture a winning network of customers and suppliers,

together we create mutual, enduring value.

Planet: Be a responsible citizen that makes a difference by helping

build and support sustainable communities.

Profit: Maximize long-term return to shareowners while being mindful

of our overall responsibilities.

Productivity: Be a highly effective, lean and fast-moving organization.

Our Winning Culture

Our Winning Culture defines the attitudes and behaviors that will be required
of us to make our 2020 Vision a reality.
Live Our Values
Our values serve as a compass for our actions and describe how we behave
in the world.

Leadership: The courage to shape a better future

Collaboration: Leverage collective genius

Integrity: Be real

Accountability: If it is to be, it's up to me

Passion: Committed in heart and mind

Diversity: As inclusive as our brands

Quality: What we do, we do well

Focus on the Market

Focus on needs of our consumers, customers and franchise partners

Get out into the market and listen, observe and learn

Possess a world view

Focus on execution in the marketplace every day

Be insatiably curious

Work Smart

Act with urgency

Remain responsive to change

Have the courage to change course when needed

Remain constructively discontent

Work efficiently

Act Like Owners

Be accountable for our actions and inactions

Steward system assets and focus on building value

Reward our people for taking risks and finding better ways to solve
problems

Learn from our outcomes -- what worked and what didnt

Be the Brand

Inspire creativity, passion, optimism and fun

OPERATIONS OF COCA COLA

Introductions of Business Operations
Business operations are those ongoing recurring activities involved in the
running of a business for the purpose of producing value for the
stakeholders. They are contrasted with project management, and consist
of business processes.
The outcome of business operations is the harvesting of value from assets
owned by a business. Assets can be either physical or intangible. An example

of value derived from a physical asset like a building is rent. An example of

value derived from an intangible asset like an idea is a royalty. The effort
involved in "harvesting" this value is what constitutes business operations.
Business operations encompass three fundamental management imperatives
that collectively aim to maximize value harvested from business assets (this
has often been referred to as "sweating the assets"):
1. Generate recurring income.
2. Increase the value of the business assets.
3. Secure the income and value of the business.
Main source of income/Revenue of Coca Cola
General Operation:
In general, The Coca-Cola Company (TCCC) and/or subsidiaries only produces
(or produce) syrup concentrate which is then sold to various bottlers
throughout the world who hold a Coca-Cola franchise.
Coca-Cola bottlers, who hold territorially exclusive contracts with the
company, produce finished product in cans and bottles from the concentrate
in combination with filtered water and sweeteners. The bottlers then sell,
distribute and merchandise the resulting Coca-Cola product to retail stores,
vending machines, restaurants and food service distributors.
One notable exception to this general relationship between TCCC and
bottlers is fountain syrups in the United States, where TCCC bypasses
bottlers and is responsible for the manufacture and sale of fountain syrups
directly to authorized fountain wholesalers and some fountain retailers.
Coca Cola plans own sales, distribution operations
Coca-Cola Company on Monday announced plans to commence its own sales
and distribution operations in Bangladesh.
The company earlier submitted a proposal to the government for setting up a
manufacturing plant in the country to have direct presence on the local
market.

Coca Cola products have been prepared, packaged and sold in Bangladesh
for around 50 years. But it has been marketing its products through local
representatives.
With the imminent launch of sales and distribution operations, the company
will distribute its flagship products- Coca-Cola, Sprite and Fanta- to the local
market directly.
Company sources told BSS today that the Coca Cola was expecting a positive
response shortly to its proposal for setting up a plant jointly with the
government.
Tabani beverage, a state-owned company, used to bottle and market Coca
Cola products in Bangladesh until September last year. But Tabani stopped
its operation in September when Coca Cola made a partnership with a
private company for bottling and marketing of its products.
The plan for setting up a plant and commence own sales and distributions
showed the company's keen interest in boosting its business and investment
in Bangladesh.
The sales and distribution operations will shortly be launched in Dhaka and
Rajshahi, the company said in a press release.
"The launch of our sales and distribution operations in Dhaka and Rajshahi is
a reaffirmation of this commitment," the press release quoted Debasish Deb,
country manager, Coca-Cola Far East Limited as saying.
The commencement of sales and distribution operations in Dhaka and
Rajshahi is also expected to generate direct and indirect employment in the
country for over 2500 people
Coca-Cola to acquire operations of largest bottler
Coca-Cola plans to buy the North American operations of its largest bottler in
an effort to put more new drinks on shelves more quickly to keep up with
changing tastes.
The move comes just days before main rival PepsiCo is expected to complete
a similar deal. The Coca-Cola deal marks a change in strategy -- at least

publicly -- for Coca-Cola Co., which has defended its arrangement of being
separate from its bottlers ever since PepsiCo announced its $7.8 billion deal
to buy its two biggest North American bottlers in August.
Both companies want to control distribution in their domestic market, where
soft drink sales are slumping as people switch to juices and teas or skip
purchases to save money.
The shift means shoppers will see more new drinks -- like coconut water,
exotic teas and sports beverages -- on store shelves. Products that don't sell
will disappear more quickly. And shoppers may not find the same choices in
the same places because Coca-Cola will have more control over where
products appear, right down to the shelf, and how much they cost.
Coca-Cola's deal calls for the maker of Sprite, Coke and other beverages to
give up its 34 percent stake in bottler Coca-Cola Enterprises Inc., worth $3.4
billion, and assume $8.88 billion in debt.
In a separate deal, Coca-Cola will sell its own Norwegian and Swedish
bottling operations to Coca-Cola Enterprises for $822 million. Coca-Cola
Enterprises also gets an option to buy Coca- Cola's 83 percent stake in its
German bottling operations.
Coca-Cola Enterprises shareholders will get one share of a new Coca-Cola
Enterprises company focused only on European bottling and a one-time $10per-share payment. The company plans to issue debt to finance this payment
and the European acquisition. It had 490 million shares outstanding at the
end of fiscal 2009, so taking out Coca-Cola's stake, cash payouts should be
about $3.2 billion to shareholders.
The Coca Cola Company (KO: 54.106 -0.084 -0.16%) intends to buy the
North American operations of its biggest bottler, Coca Cola Enterprises (CCE:
27.98 -0.12 -0.43%). Although the exact value of the deal is not yet finalized,
the transaction is expected to be valued at approximately $15 million,
including debt.
This move by Coca Cola follows a similar deal signed by its biggest rival
PepsiCo (PEP: 65.04 -0.94 -1.42%), who aims to close the acquisition of its
two biggest bottlers, Pepsi Bottling Group Inc. (PBG: 0.00 N/A N/A) and Pepsi
Americas Inc. this week. This deal was announced in August 2009.
Once the deal is finalized, Coca Cola would buy the North American
operations of Coca Cola Enterprises and some of the assets in Scandinavia
and Germany. However, the operations of the rest of the bottling company
will remain the same. The North American operations represent the major

part of Coca Cola Enterprises business, contributing about 70% of the net
operating revenue in 2009, according to the Wall Street Journal.
This move by both the companies is believed to be a response to falling softdrink sales. Over the past one year or so, the beverage industry, especially in
North America, is witnessing declining carbonated beverage sales. This has
prompted the companies to increase control over the costs and the
distribution system.
On February 18, 2010, Coca Cola raised its quarterly dividend by 7.3% to 44
cents. Recently, Coca Cola reported fourth-quarter results with a 5.4%
increase in revenues and 5% growth in worldwide unit case volume
Coca-Cola Company agreed to acquire bottling operations of Coca-Cola
Enterprises Inc that values the deal at $12.3 billion and all debts.The
statement released by Coca-Cola said that the company will also assume
$8.9 billion in debt and all assets and liabilities of its North American
Operations. In cashless transaction the company will acquire 75% of U.S.
bottler delivered volume and entire delivered volume in Canada. After the
acquisition Coca-Cola will control 90% of total North American volume.
Coca-Cola Enterprises shareholders will receive $10 in cash and one share in
new entity that will control operations in Europe. Coca-Cola will not have any
stake in the newly formed entity which will retain its current name Coca-Cola
Enterprises.
The Coca-Colas acquisition of all assets and liabilities of CCE''s North
American business includes consideration of the current 34% equity
ownership in CCE, valued at $3.4billion. In addition, consideration includes
the assumption of $8.9 billion of CCE debt and all of the North American
assets and liabilities, including CCE''s accumulated benefit obligation for
North
America
of
$580
million
as
of
December
2009.
Coca-Cola Enterprises surged 27% to $24.18 in the early trading and CocaCola edged up a fraction. Coca-Cola and Pepsi have been bringing back their
bottling operations in their control as U.S. consumers reduce their soda
consumption and prefer water and fruit juice and other beverages. Both
beverage
companies
have
been
diversifying
their
portfolio
of
beveragesandarefacingrisingcostsofpackinganddistributing.Coca-Cola
Enterprises also agreed to acquire for $882 million bottling operations in
Sweden and Norway from Coca-Cola and will have the right to acquire 83%
of its German bottling operations in the next 18to36months.Coca-Cola
Enterprises will convert to a new company that will hold its European
operations. Public shareholders will exchange each CCE share for a new

share inthenewentityandcontrol100%ofthecompany.After the transaction CCE

will initiate stock repurchase program of $1 billion and pay annual dividend
of 50 cents a share subject to boards discretion.

OPERATIONAL EFFICIENCY
Operational Efficiency is - what occurs when the right combination
of people, process, and technology come together to enhance the
productivity and value of any business operation, while driving
down the cost of routine operations to a desired level. The end
result is that resources previously needed to manage operational
tasks can be redirected to new, high value initiatives that bring
additional capabilities to the organization.
Higher operational efficiency helps boost profitability
Greater efficiency is a prime goal for all businesses, nowhere more so than in
the intensely competitive and rapidly changing environment.

Our primary challenges:

Three principal environmental challenges demand our attention because
they are where our business has the greatest impact: 1) water, 2) packaging
and 3) energy and climate protection. We set performance targets for our
core operationsthe 25 Company-owned concentrate Facilitiesin the areas
of water, energy and climate, as well as solid waste and recycling.
Plant capacity utilization:
Key Data:
Filtration System Capacity
9,600m/day
Operational Bottling Plant Supply Demand
400m/h
Water Quality
Turbidity
< 0.2 NTU
Total Chlorine Content
< 0.05mg/litre

Storage Tanks
2 850m
Activated Carbon Tanks
4
Full specifications
Coca-Colas Wakefield facility is the largest of six major bottling plants the
company operates in the UK. The plant recently completed an upgrade of its
water treatment facility with Severn Trent and Norit working to provide a
comprehensive purification and recovery system which increased influent
quality and upped supply capacity by over 30%. In addition, the solution
selected membrane ultra-filtration (UF) represents a significant departure
from the companys traditionally established multi-barrier approach to water
purification.
The project increased water treatment peak capacity from an hourly 300
m/hr to 400m/hr, improved efficiency to approaching 99% and achieved a
tenfold reduction in wastewater generation down to an average 60m/day.
The total project cost was 1.6m to design, manufacture and install the new
filtration and wash-water recovery system.

BACKGROUND
"The total project cost was 1.6m to design, manufacture and install the new
filtration and wash-water recovery system."
Housing nine production lines, with the capacity to produce 4,000 330ml
cans and 3,200 PET bottles per minute ranging from 500ml to 3l and
home to one of the fastest two-litre filling lines in the world, the Wakefield
plant is also a regional distribution depot for the UK. 25,000 pallets are
stored at the facility and as many as 250 lorries leave daily.
The pre-existing water treatment system was built in 1989, in accordance
with the then standard Coca-Cola multi-barrier policy, using polyamide
coagulation and sand filtration, with de-chlorination achieved through carbon
filtration.
When the decision was made to upgrade the facility, in addition to providing
the improved capacity, the new system was required to meet the standards
laid down in the Coca-Cola red book which applies to the raw water input at
all of the companys factories worldwide. This sets exacting quality

requirements including a total chlorine content of less than 0.05 mg/litre

and turbidity below 0.2 NTUs.

THE PLANT

The Wakefield plant is mains-fed from a Yorkshire Water surface WTP. The
influent is stored in two 850m storage tanks before being pumped to four
activated carbon tanks and then passing through an ion exchange unit which
forms the facilitys organics scavenging system organic content being a key
parameter in product make-up water.
From here, the water flows to the ultra filtration system, consisting of four
skids with the capacity to process 9,600m/day with a combined normal
throughput capacity of 400m/hour.
Each skid comprises six tubular modules, holding 24 of the 1.5m 250mm
membrane cartridges, the 0.8mm diameter hollow fibres contained within
having a filtration pore size of 0.03 microns. With over 10,000 fibres per
cartridge, the effective filtration surface area of each is 40m. Every three
hours each of the skids in turn is automatically taken out of service and
back-washed, with the flow rate through the other skids increased to
133m/hour to maintain the required supply to the plant.
"The project increased water treatment peak capacity from an hourly 300
m/hr to 400m/hr."

The backwash is based on double forward flow over a 30-second cycle,

regularly putting around 250m/hour through the skid; the backwash water is
then itself cleaned for reuse via a recovery UF system.
Once every six days each of the skids also receives a chemically-enhanced
back-wash, with a ten-minute period of soaking.
The UF permeate subsequently passes to semi-treated water tanks and then
undergoes a final treatment process of de-aeration, cartridge filtration and
UV sterilization prior to supplying the bottling lines.

Control is SCADA-based, a single-screen system displaying all the relevant

operational information, including flow, temperature, pressure, pH, turbidity
and chlorine levels across all stages of the process. Operational efficiency
and maintenance considerations have also been taken into account during
the plant design with all the pipe-work and valves being located at low level.
In addition, each membrane is automatically tested each day and can be
isolated for repair as necessary without compromising the rest of the plants
operation.
Whereas the previous plant achieved around 90% wastewater recovery
generating some 700m/day of waste, the new system achieves significantly
higher efficiency and has reduced the effluent to routinely less than 60
m/day. This represents both major operational advantages and considerable
cost savings over the year.
Environmental Performance Tracking Across the Coca-Cola System
Our operations:
The environmental impact of our business occurs within plant operations,
distribution networks and from sales and marketing equipment. We have

more than 300 bottling partners globally. Because much of the

environmental impact of our business occurs beyond Company-owned
facilities, we work closely with our bottling partners to improve our systems
overall performance.
We take a system wide view of our environmental impact, and collectively
develop strategies and share best practices. The Coca-Cola Environmental
Council includes senior environmental managers from the Company, our
Company-owned bottling plants and six of our largest bottling partners, who
together own and operate more than 200 production facilities (representing
approximately 47 percent of global unit case volume). The six bottling
partners are Coca-Cola Enterprises, Coca-Cola FEMSA, Coca-Cola Hellenic
Bottling Company, SABMiller, Coca-Cola Amatil and Coca-Cola West Japan.
The operations of these bottling partners cover significant portions of North
America, Europe and Eurasia, Latin America, Africa, Australia and Japan.
Our tracking systems
The Coca-Cola Quality System (TCCQS) is our quality management system,
integrating our approach to managing quality, the environment, and health
and safety. Through continuous improvement, our system strives to meet the
most stringent, up-to-date global requirements governing food safety, as well
as quality management standards. The environmental component of TCCQS,
known as the eKOsystem, reflects the international environmental
management system standard ISO 14001, while including additional
requirements tailored to our business.

GLOBAL CONCERNS
THE COCA-COLA COMPANY AND COCA-COLA ENTERPRISES
STRATEGICALLY ADVANCE AND STRENGTHEN THEIR PARTNERSHIP
The Coca-Cola Company to Acquire CCE's North American Bottling
Business
CCE Has Agreed in Principle to Buy The Coca-Cola Company's
Bottling Operations in Norway and Sweden, and to Obtain the Right
to Acquire the German Bottler

Advancement fully aligns with the Coca-Cola system's 2020 Vision and
drives long-term value for all shareowners
Evolves The Coca-Cola Company's North American business to more
profitably deliver the world's greatest brands in the largest NARTD profit
pool in the world
The Coca-Cola Company will generate immediate efficiencies with
expected operational synergies of $350 million over four years, and the
transactions, which are substantially cashless, are expected to be
accretive to EPS on a fully diluted basis by 2012 .

The Coca-Cola Company and the Beijing 2008 Olympic Games

With the Beijing 2008 Olympic Games in full swing,
see what Coca-Cola has rolled out for the athletes
and fans from around the world attending the
historic global event in China. Catch up on the
excitement at the Coca-Cola Shuang Zones at both
"The Place" and Chao Yang Park, as well as the
interactive attractions in the Coca-Cola Shuang
Experience Center on the Olympic Green. Find out
who is being honored with the daily Coca-Cola "Live Positively Award" and be
among the first to view the full-length student film documentary,
"Environmental Champions."
Learn about the other far-reaching programs we've launched for the Olympic
Games, including WE8, Design the World a Coke, Delicious Happiness, global
advertising, our presentation of the Beijing 2008 Olympic Torch Relay, our
environmental initiatives for the Olympic Games, and more.

Coca Cola vs. Indian Farmers: Luxury vs. Necessity

Coca Cola (Coke for short) companys activities in India highlighted problems
also seen around the world. Because Coke had been pumping water from
local wells and aquifers, this led to farmers digging deeper and deeper to
search for water, sometimes under dangerous conditions. Some farmers
were digging as deep as 450 feet without finding water. The documentary
noted that they wanted Coke to leave for they brought them nothing but
misery. Indeed, earlier in 2000, violent protests by farmers in the state of
Kerala led to the closure of Coke there.
Coke also claimed that government figures showed they did not cause the
drop in water levels, yet those figures showed otherwise. They also noted
that agriculture is responsible for more water usage than Coca Cola. While
this is partly correct, this applies more to industrial agribusinesses, not small
farmers.
Coke, typical of many global companies, have used the lands (and, in this
case, water) of the poor countries, to produce products to be mainly
consumed by people in wealthy countries.
The Facts: The Coca-Cola Company and Colombia

The Coca-Cola Company and our bottling partners have conducted

business in Colombia for more than 70 years. More than 2,000 Colombians
are employed by Coca-Cola bottlers in Colombia. Bottling plants distribute
beverages to approximately 500,000 retailers, creating additional jobs in
sales, marketing and shipping.

Over the past several decades, Colombia has experienced much

internal conflict, which affects trade union leaders and other people from
all walks of life. .

We share global concerns regarding the unfavorable labor environment

in Colombia. Coca-Cola has supported programs that aid children,
promote education, and bring relief to victims of the country's ongoing
conflict. Earlier this year, we provided $10 million to start the Colombian
Foundation for Education and Opportunity, an organization that addresses
the needs of victims of violence and is run by a group of well-respected
Colombians, including Mr. Carlos Rodriguez (president of the Colombian
United Confederation of Workers).

The Coca-Cola Company is the world's largest beverage company, refreshing

consumers with nearly 500 sparkling and still brands. Through the world's
largest beverage distribution system, consumers in more than 200 countries
enjoy the Company's beverages at a rate of nearly 1.6 billion servings a day.

With an enduring commitment to building sustainable communities, our

Company is focused on initiatives that protect the environment, conserve
resources and enhance the economic development of the communities
where we operate. For more information about our Company, please visit our
website at www.thecoca-colacompany.com.

COMPETITORS ANALYSIS
Product:
Coca-Cola. Its a simple idea, really. Drinking a Coke makes people happy. It
tastes good. And its an invitation to live on the positive side of life.Thats the
message behind The Coke Side of Life, brand Coca-Colas overarching
marketing platform. It has been created to invite people to create their own
positive reality, be spontaneous, listen to their hearts, and live in full color.
Coca-Cola has always been at its best when it reflects the simple, optimistic
moments in life.The Coke Side of Life recognizes that the most universal
experiences are those where Coca-Cola is refreshingly honest and uplifting.
Coca-Cola has been able to diversify its products to include carbonated
drinks such as Coke Classics and other soda products such as Sprite, Fanta,
Barqs Root Beer and Dr. Pepper as well as bottled water, RTD tea drinks and
juice drinks under the brand names Qoo, Sensation, Tianyudi and SMART. The
diversification to other soft drink sectors was influenced by the growing
demand for healthy beverages in its targeted market.
The diversity of the quantity of demand and the cost of packaging has
also affected the products of the company. The companies packaged their
products in glass bottles of different sizes and shapes. However, after the
development of plastic containers the packaging shifted to plastic containers
especially for larger volumes of soda making it lighter when carried. At
present, the demand for better convenience resulted to the packaging of
sodas in cans. Coca-Cola products are sold in glass bottles, plastic containers
and cans.
RECENT DEVELOPMENTS
As part of a continuous stream of innovation, Coca-Cola continues to expand
its Broad beverage portfolio to meet the ever-evolving Needs of consumers
who seek choice and Variety in the beverages they drink.
Diet Coke Plus:
Diet Coke Plus is a sparkling, calorie-free beverage with vitamins and
minerals. In addition to providing great, refreshing taste, Diet Coke Plus is a
good source of vitamins B3, B6, and B12, and the minerals zinc and
magnesium.
Enviga:
Enviga, a new sparkling beverage innovation proven to burn calories is
available in three flavors green tea, berry, and peach. Enviga, which

contains the optimum blend of green tea extracts, caffeine, and naturally
active plant micronutrients, is designed to work with the body to increase
calorie burning by gently boosting the drinkers metabolism.
Vault Red Blitz:
Vault, the hybrid energy soda that was introduced in 2006, has added a new
flavor to the lineup with Vault Red Blitz. With its vivid red color, bold Vault
graphics, and a new berry-injected flavor, Vault Red Blitz broadens the Vault
trademark to attract noncitrus drinkers to the hybrid energy soda segment
created by Vault.
Full Throttle Blue Demon:
For the latest flavor of Full Throttle, the brand is unleashing the power of
Mexican luchador (wrestler) and movie legend, the Blue Demon. The new
energy drink features the exotic taste of Blue Agave flavoring and is the first
product from Coca-Cola America to feature fully bilingual packaging,
including labeling and nutritional information. Marketing for FullThrottle Blue
Demon emphasizes the lucha libre aspect of the brand and targets Mexican
American males 2030 years old who understand the character and revere
him. For non-Hispanic consumers, the Blue Agave flavor and Blue Demon
name has more intrinsic value as a descriptor for the Full Throttle line
extension.
TaB Energy:
While TaB Energy shares the brand name of the iconic diet sparkling
beverage, TaB, it is not a cola.TaB Energy is a completely new and innovative
energy drink created especially for women. The deliciously crisp and lightly
carbonated pink beverage is sugar-free, with only five calories in each eyecatching, fashion-ably pink 10.5-ounce can.
Minute Maid Enhanced Juices:
Two new 100 percent orange juice products with health benefits from added
nutrients and functional ingredients were added to the Minute Maid
Enhanced Juices lineup. New Minute Maid Multi-Vitamin contains 16 essential
vitamins and minerals to help consumers get nutrition along with the great
Minute Maid Premium orange juice taste, and with 750 mg of Glucosamine
HCl per 8-fluid-ounce serving, Minute Maid Active helps sup-port healthy
joints.
.

THE MARKET
The Coca-Cola Company is the worlds largest beverage company. Along with
Coca-Cola, recognized as the worlds most valuable brand, the company
markets four of the worlds top-five nonalcoholic sparkling beverage brands,
including Diet Coke, Fanta,and Sprite, and a wide range of other beverages,
including diet and light beverages, waters, juices and juice drinks, teas,
coffees, and energy and sports drinks. Through the worlds largest beverage
distribution sys-tem, consumers in more than 200 countries enjoy the
companys beverages at a rate exceeding 1.4 billion servings each day.
Packaging:
Packaging is always going to have a huge impact on brand awareness and
expansion. Neville Isdell, The Coca-Cola Company, outlines his manifesto for
growth and shows that, even for the biggest players in manufacturing and
retail, the quest for value is relentless.
Classic packaging. The Coca-Cola bottle.
The equally famous Coca-Cola bottle, called the "contour bottle" within the
company, but known to some as the "hobble skirt" bottle, was created in
1915 by bottle designer Earl R. Dean. In 1915, the Coca-Cola Company
launched a competition among its bottle suppliers to create a new bottle for
the beverage that would distinguish it from other beverage bottles, "a bottle
which a person could recognize even if they felt it in the dark, and so shaped
that, even if broken, a person could tell at a glance what it was."
Earl R. Dean's original 1915 concept drawing of the contour CocaCola bottle Chapman J. Root, president of the Root Glass Company,
turned the project over to members of his supervisory staff,
including company auditor T. Clyde Edwards, plant superintendent
Alexander Samuelsson, and Earl R. Dean, bottle designer and
supervisor of the bottle molding room. Root and his subordinates
decided to base the bottle's design on one of the soda's two
ingredients, the coca leaf or the kola nut, but were unaware of
what either ingredient looked like. Dean and Edwards went to the
Emeline Fairbanks Memorial Library and were unable to find any
information about coca or kola. Instead, Dean was inspired by a
picture of the gourd-shaped cocoa pod in the Encyclopedia
Britannica. Dean made a rough sketch of the pod and returned
back to the plant to show Mr. Root. He explained to Root how he
could transform the shape of the pod into a bottle. Chapman
Root gave Dean his approval.[47]

The prototype never made it to production since its middle diameter was
larger than its base, making it unstable on conveyor belts.
Faced with the upcoming scheduled maintenance of the mold-making
machinery, over the next 24 hours Dean sketched out a concept drawing
which was approved by Root the next morning. Dean then proceeded to
create a bottle mold and produced a small number of bottles before the
glass-molding machinery was turned off.
Chapman Root approved the prototype bottle and a design patent was issued
on the bottle in November, 1915. The prototype never made it to production
since its middle diameter was larger than its base, making it unstable on
conveyor belts. Dean resolved this issue by decreasing the bottle's middle
diameter. During the 1916 bottler's convention, Dean's contour bottle was
chosen over other entries and was on the market the same year. By 1920,
the contour bottle became the standard for the Coca-Cola Company. Today,
the contour Coca-Cola bottle is one of the most recognized packages on the
planet..."even in the dark!"
As a reward for his efforts, Dean was offered a choice between a $500 bonus
or a lifetime job at the Root Glass Company. He chose the lifetime job and
kept it until the Owens-Illinois Glass Company bought out the Root Glass
Company in the mid-1930s. Dean went on to work in other Midwestern glass
factories.
Although endorsed by some this version of events is not considered
authoritative by many who consider it implausible. One alternative depiction
has Raymond Loewy as the inventor of the unique design, but, while Loewy
did serve as a designer of Coke cans and bottles in later years, he was in the
French Army the year the bottle was invented and did not emigrate to the
United States until 1919. Others have attributed inspiration for the design
not to the cocoa pod, but to a Victorian hooped dress.
In 1944, Associate Justice Roger J. Traynor of the Supreme Court of California
took advantage of a case involving a waitress injured by an exploding CocaCola bottle to articulate the doctrine of strict liability for defective products.
Traynor's concurring opinion in Escola v. Coca-Cola Bottling Co. is widely
recognized as a landmark case in U.S. law today
Until the mid-1950s, the contour bottle and bell-shaped fountain glass
defined packaging for Coca-Cola. But as people demanded a wider variety
of choices, the company responded with innovative packaging, new
technology, and new products.
In 1955, king-size and family-size glass bottles were introduced with
immediate success, followed by cans in the U.S. market in 1960.

 The company then marked several firsts in the soft-drink industry: lifttop cans and bottles with lift-top crowns in 1964, and a 24-pack
Cluster-Pak of cans and tin-free steel cans in 1969.
After more than $250,000 in development costs and rigorous testing by
NASA, the Coke Space Can was accepted for its first mission in outer
space in 1985.
In 1994, the company introduced a new generation to the famous
contour bottle in a plastic version, first in a 20-ounce size and later in
1-liter and 12-ounce packages.
In 1997, Coca-Cola also introduced a "contour can," similar in shape to
its famous bottle, on a few test markets, including Terre Haute, Indiana.
[52]
The new can has never been widely released.
A new slim and tall can began to appear in Australia as of December
20, 2006, it cost AU$1.95. The cans have a distinct resemblance to
energy drinks that are popular with teenagers. The cans were
commissioned by Domino's Pizza and are available exclusively at their
restaurants.
In January 2007, Coca-Cola Canada changed "Coca-Cola Classic"
labeling, removing the "Classic" designation, leaving only "Coca-Cola."
Coca-Cola stated this is merely a name change and the product
remains the same. The cans still bear the "Classic" logo in the United
States.

The original Coca-Cola logo, trademarked at the USPTO, and used by CocaCola Enterprises
In 2007, Coca-Cola introduced an aluminum can designed to look like
the original glass Coca-Cola bottles.
In 2007, the company's logo on cans and bottles changed. The cans
and bottles retained the red color and familiar typeface, but the design
was simplified, leaving only the logo and a plain white swirl (the
"dynamic ribbon").
In 2008, in some parts of the world, the plastic bottles for all Coke
varieties (including the larger 1.25- and 2-liter bottles) was changed to
include a new plastic screw cap and a contoured bottle shape designed
to evoke the old glass bottles.

New brands:

 In past decades, The Coca-Cola Company has created new brands to

meet the desires of consumers,
Starting with Fanta in. Sprite was launched in 1961,
Followed by TaB the com-panysfirst low-calorie drinks in 1963.
The debut of Diet Coke in 1982 marked the first extension of the
Coca-Cola trademark to another product. And the development of new
products, such as Coca-Cola Zero, Vault, and Full Throttle continues
today, adding to the companys portfolio of nearly 400 brands.
The latest accomplishment for The Coca-Cola Company is the May
2007 opening of the new World of Coca-Cola. Located in the heart of
Down town Atlanta, the 92,000-square-foot facility is the only place
where people can explore the complete story
Past, present, and future behind the worlds best-known brand. From a
thrilling, multisensory 4-D theater, to an art gallery dedicated to Coca-Cola
and pop culture featuring the works of AndyWarhol, to a tantalizing tour of
almost 70 different beverage products, to more than 1,200 artifacts from
across the globe, around every corner there is something new and inviting to
experience. For the past 117 years through its ads that brought the world
together, packaging innovations, and the introduction of new products to fit
the tastes of consumers wherever they may be, whatever they may be doing
Coca-Cola has become a part of the lives of people around the world
PROMOTION
Coca-Cola applies consistency and dependability even in its promotional
activities. The company actually makes use of pattern advertising ( 2003).
The company develops advertisements containing its determined marketing
communications message. The manner of advertising adheres to various
specific audiences. However, despite the consistency of its advertising
framework for its different markets around the world, Coca-Cola also
implements local adjustments. The adjustments cover the
translation of words and lyrics in the local dialect of particular markets
and delivered in a manner appropriate and acceptable to the local
culture,
basic adjustments to the advertising format such as the use of locally
significant words, phrases, messages and the arrangement of these
elements to deliver a cohesive promotional campaign aligned with the
basic marketing communications message of the company;

Audio-visual adjustments made to the advertising format such as

colour scheme, character selection, video stream and other audiovisual aspects of the campaign.

Apart from pattern advertising, Coca-Cola also adheres to product

differentiation by withdrawing from the explicit cola war with Pepsi.
The cola war persisted until the late 1900s with taste-tests and
celebrity endorsements of competing personalities. In succeeding
years Coca-Cola reverted to its marketing strategy of appealing to the
stability and consistency found in the value accorded to family and
friendship differentiating the company, product and brand from its
competitors.
Advertising
A 1890s advertisement showing model Hilda Clark in formal
19th century attire. The ad is titled Drink Coca-Cola
Coca-Cola ghost sign in Fort Dodge, Iowa. Note older Coca-Cola
ghosts behind Borax and telephone ads.

Coca-Cola hoarding in Lahore, Pakistan

Cola's advertising has significantly affected American culture, and it is
frequently credited with inventing the modern image of Santa Claus as
an old man in a red-and-white suit. Although the company did start
using the red-and-white Santa image in the 1930s, with its winter
advertising campaigns illustrated by Haddon Sundblom, the motif was
already common.[60] Coca-Cola was not even the first soft drink
company to use the modern image of Santa Claus in its advertising:
White Rock Beverages used Santa in advertisements for its ginger ale
in 1923, after first using him to sell mineral water in 1915.
Before Santa Claus, Coca-Cola relied on images of smartly-dressed
young women to sell its beverages.
Coca-Cola's first such advertisement appeared in 1895, featuring the
young Bostonian actress Hilda Clark as its spokeswoman.
1941 saw the first use of the nickname "Coke" as an official trademark
for the product, with a series of advertisements informing consumers
that "Coke means Coca-Cola".

 In 1971, a song from a Coca-Cola commercial called "I'd Like to

Teach the World to Sing," produced by Billy Davis, became a hit single.
Coke's advertising is pervasive, as one of Woodruff's stated goals was
to ensure that everyone on Earth drank Coca-Cola as their preferred
beverage. This is especially true in southern areas of the United States,
such as Atlanta, where Coke was born.

Coca-Cola sales booth on the Cape Verde island of

Fogo in 2004.
Some of the memorable Coca-Cola
television commercials between 1960
through 1986 were written and produced by
former Atlanta radio veteran Don Naylor
(WGST 19361950, WAGA 19511959) during
his career as a producer for the McCann Erickson advertising agency.
Many of these early television commercials for Coca-Cola featured
movie stars, sports heroes and popular singers.
During the 1980s, Pepsi-Cola ran a series of television advertisements
showing people participating in taste tests demonstrating that,
according to the commercials, "fifty percent of the participants who
said they preferred Coke actually chose the Pepsi." Statisticians were
quick to point out the problematic nature of a 50/50 result: most likely,
all the taste tests really showed was that in blind tests, most people
simply cannot tell the difference between Pepsi and Coke.
Coca-Cola ran ads to combat Pepsi's ads in an incident sometimes
referred to as the cola wars; one of Coke's ads compared the so-called
Pepsi challenge to two chimpanzees deciding which tennis ball was
furrier. Thereafter, Coca-Cola regained its leadership in the market.
Selena was a spokesperson for Coca-Cola from 1989 till the time of her
death. She filmed three commercials for the company. In 1994, to
commemorate her five years with the company, Coca-Cola issued
special Selena coke bottles.
The Coca-Cola Company purchased Columbia Pictures in 1982, and
began inserting Coke-product images in 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" (see Coca-Cola slogans).

Holiday campaigns
The "Holidays are coming!" advertisement features a train of red delivery
trucks, emblazoned with the Coca-Cola name and decorated with electric

lights, driving through a snowy landscape and causing everything that they
pass to light up and people to watch as they pass through.
The advertisement fell into disuse in 2001, as the Coca-Cola Company
restructured its advertising campaigns so that advertising around the
world was produced locally in each country, rather than centrally in the
company's headquarters in Atlanta, Georgia. [67]
However, in 2007, the company brought back the campaign after,
according to the company, many consumers telephoned its information
center saying that they considered it to mark the beginning of
Christmas. The advertisement was created by U.S. advertising agency
Doner, and has been part of the company's global advertising
campaign for many years.
Keith Law, a producer and writer of commercials for Belfast CityBeat,
was not convinced by Coca-Cola's reintroduction of the advertisement
in 2007, saying that "I don't think there's anything Christmassy about
HGVs and the commercial is too generic."
In 2001, singer Melanie Thornton recorded the campaign's advertising
jingle as a single, Wonderful Dream (Holidays are Coming), which
entered the pop-music charts in Germany at no. 9. In 2005, Coca-Cola
expanded the advertising campaign to radio, employing several
variations of the jingle.

Sports sponsorship
Coca-Cola was the first commercial sponsor of the Olympic games, at
the 1928 games in Amsterdam, and has been an Olympics sponsor
ever since.[73]
This corporate sponsorship included the 1996 Summer Olympics
hosted in Atlanta, which allowed Coca-Cola to spotlight its hometown.
Most recently, Coca-Cola has released localized commercials for
the 2010 Olympics in Vancouver;
one Canadian commercial referred to Canada's hockey heritage and
was modified after Canada won the gold medal game on February 28,
2010 by changing the ending line of the commercial to say "Now they
know whose game they're playing".[74]
Since 1978, Coca-Cola has sponsored each FIFA World Cup, and other
competitions organised by FIFA.

In fact, one FIFA tournament trophy, the FIFA World Youth

Championship from Tunisia in 1977 to Malaysia in 1997, was called
"FIFA Coca Cola Cup".

In addition, Coca-Cola sponsors the annual Coca-Cola 600 and Coke

Zero 400 for the NASCAR Sprint Cup Series at Charlotte Motor
Speedway in Concord, North Carolina and Daytona International
Speedway in Daytona, Florida. Coca-Cola has a long history of sports
marketing relationships, which over the years have included Major
League Baseball, the National Football League, National Basketball
Association and the National Hockey League, as well as with many
teams within those leagues. Coca-Cola is the official soft drink of many
collegiate football teams throughout the nation.

Coca-Cola was one of the official sponsors of the 1996 Cricket World
Cupheld on the Indian subcontinent.
Coca Cola is also one of the associate sponsors of Delhi Daredevils in
Indian Premier League.
In England, Coca-Cola is the main sponsor of The Football League, a
name given to the three professional divisions below the Premier
League in football (soccer).

 It is also responsible for the renaming of these divisions until the

advent of Coca-Cola sponsorship, they were referred to as Divisions
One, Two and Three.

Since 2004, the divisions have been known as The Championship

(equiv. of Division 1), League One (equiv. of Div. 2) and League 2
(equiv. of Division 3). This renaming has caused unrest amongst some
fans, which see it as farcical that the third tier of English Football is
now called "League One."

In 2005, Coca-Cola launched a competition for the 72 clubs of the

football league it was called "Win a Player".

In mass media
Coca-Cola has been prominently featured in countless films and television
programs. It was a major plot element in films such as One, Two, Three, The
Coca-Cola Kid, and The Gods Must Be Crazy. It provides a setting for comical
corporate shenanigans in the novel Syrup by Maxx Barry. And in music, in
the Beatles' song, "Come Together", the lyrics said, "Coca-Cola.
In 2006, Coca-Cola introduced My Coke Rewards, a customer loyalty
campaign where consumers earn points by entering codes from speciallymarked packages of Coca-Cola products into a website. These points can be
redeemed for various prizes or sweepstakes entries. My Coke Rewards is an
online mega-rewards program across all brands of the Coca-Cola Trademark
and is the leading, year-round promotional platform for Coca-Cola . In April
2007, the program was expanded beyond Coca-Cola brands to incorporate
multiple other brands, including Sprite, Fanta, Dasani, POWERade, and
Minute Maid, to name a few. The pro-gram pool of experiences, rewards, and
prizes that only Coca-Cola can offer and features rewards from some of the
worlds best brands. Through May 2007, more than 5.1 million people have
joined the My Coke Rewards pro-gram and have redeemed more than 2.4
million rewards. Participating in My Coke Rewards is easy. Consumers find
unique codes under caps or inside packages for participating brands. At
www.mycokerewards.com, consumers can create an account where they can
enter and collect codes. When they have collected enough points to redeem
their desired reward, consumers simply select the rewards and the points are
deducted from their accounts.
My Coke Rewards has partnered with some of the worlds favorite brands
to offer consumers unique and exciting rewards including Toshiba flat-screen
televisions; Nintendo DS and Wii products from Nintendo; AMC Theaters
movie tickets; appliances from Cuisinart and Kitchen-Aid; Sky Miles from
Delta Air Lines; Priority Club Rewards points from InterContinental Hotels
Group; Blockbuster movie rentals; gift certificates from Adidas, Sephora, and
Taylor-Made magazines from Hearst Magazines; and tickets to Six Universal
Orlando, and Universal Studios Hollywood to name a few. Through My Coke
Rewards, consumer are also offered offer exclusive merchandise and
experiences tied to programs such as NASCAR.

BRAND VALUES
Today, Coca-Cola North America provides consumers with the broadest
selection of brands for every taste, lifestyle, and occasion to hydrate,
energize, nourish, relax, or simply enjoy every drop of life. Coca-Cola
Company believes it has a responsibility to support programs that provide
nutrition and physical education. In the United States, more than 4 million
kids participate in and receive information on programs that are designed to
encourage physical fitness and overall well-being.
Beginning in 2006, the company began to provide consumers with more
useful information about its beverages and their ingredients beyond the label
on the package. Its information is
to help people decide which of its products fit best with the individual and
the family.
The company also is committed to following responsible marketing and
advertising practices.
Parents prefer to be the gatekeeper when it comes to what to serve their
children. For over 50 years, The Coca-Cola Company has adhered to a policy
that prohibits marketing full-sugar sparkling beverages on television
programs primarily viewed by children.
The Coca-Cola Company's 'Manifesto for Growth' is the operating framework
we have established to return The Coca-Cola Company to sustainable growth
in the future, with specific and measurable goals for people, our portfolio of
brands, our partners, the planet and, of course, profit. In short, we have a
clear path forward. And our call to action is made with humble confidence
which recognises that we have sometimes acted with arrogance in the past,
vis--vis the market and our customers.
Retailers and food and beverage companies need each other more than ever
before. As retailers look for ways to distinguish themselves in the eyes of
consumers, they need good, strong brands to help bring shoppers through
the doors and improve the shopping experience. And as tastes continue to
fragment and consumers become more demanding, food and beverage
companies need insights about shoppers that only retailers possess.
Ultimately, what is needed is a partnership between food and beverage
companies and retailers to jointly improve our understanding of, and
connection with, consumers.

DIVERSE PRODUCT OFFERINGS

For more than half its history, The Coca-Cola Company sold exactly one
product, in exactly one package. Today, in Europe alone, we offer more than
130 beverage brands double the number we had just eight years ago.
Counting all the different flavours, sweeteners and packages, the Coca Cola
system in Europe produces around 3,500 Stock-Keeping Units (SKUs). And
the number keeps growing: in the late 1990s, Coca-Cola in Europe launched
around 200 new products and line extensions annually. Last year, we
launched more than 600.
"We are seeing enormous demand for low- and no-calorie drinks."
We are not alone, of course. In the EU, there are nearly 2,000 different nonalcoholic beverage brands. Counting the different flavours, there are about
10,000 products. Counting the different combinations of packaging materials
and sizes, there are 100,000 distinct beverage options for European
consumers.
The Coca-Cola Company does not offer 400 brands because retailers have
millions of kilometres of shelf space that otherwise would remain empty. And
retailers do not offer all that shelf space to accommodate our thousands of
SKUs. We all of us in manufacturing exist to create value. We also need to
continue to respond to consumers' needs and to innovate.
It was coined by Coca-Cola board member Warren Buffett, the man who runs
Berkshire Hathaway and who also has a pretty nice way with words: 'Price is
what you pay,' he said. 'Value is what you get.'
In the UK, the light version of Coca-Cola's flagship brand outsells the 'regular'
version in supermarkets. With the increasing interest in health and wellness
in Europe and around the world, consumers are increasingly demanding
hydration, refreshment, taste and functionality without the calories.
The demand is unprecedented, and we see it every day in our sales
numbers. But it is not especially surprising, as consumers become aware of
the role of calories consumed and calories burned in the obesity equation.
CONSUMER REQUIREMENTS
Obviously, food and beverage manufacturers have much deeper and more
extensive obligations to consumers than simply informing them of ingredient
and calorie contents. The beverage industry, for example, through UNESDA
and CIAA, is participating in the EU Platform for Action on Diet, Physical
Activity and Health launched by Commissioner Kyprianou. In Germany it is

participating in a joint government-industry initiative called the Platform for

Nutrition and Exercise. Both are fundamentally important.
The Coca-Cola Company aspires to offer a beverage for every occasion and
every need state. Health and wellness is enormously important, but it's still
only one specific requirement. This means that you can expect still more
categories, brands, flavours, sweeteners, packages and SKUs from The Coca
Cola Company.

'RELATIONSHIP-VIEW'
However, making this work throughout the industry will take an entirely new
worldview let's call it a new 'relationship-view' for manufacturers and
retailers.
First, we manufacturers are going to have to move our focus from selling into
retailers' back doors to helping retailers sell out their front door. Business
with retailers must be seen not simply as moving inventory from plants to
stores but, instead, as truly creating value for shoppers and consumers.
Second, to accomplish this, we have to remove the barriers that keep food
manufacturers from collaborating effectively with retail merchants on a realtime basis. This is especially true as we move to address major trends such
as health and wellness. In North America, that information-sharing led to an
entirely new product Diet Coke Sweetened with Splenda after an
important customer demonstrated that a range of Splenda-sweetened
products had all reached strong, double-digit growth rates.
Third, food and beverage manufacturers and retailers will have to transform
IT capabilities, along with culture and processes to better manage all data, in
order to collaborate to identify the insights and to take action in the
marketplace together.
This may seem obvious or it may make manufacturers and retailers a little
bit nervous. Even so, I believe it is essential that we make this transition,
because data and information empowered by new and energetic
collaboration will be a very important source of new ideas, new value and
growth for retailers and food and beverage companies alike for many years
to come.
EFFECTIVE COLLABORATION

Partnerships can be more effective throughout our industry. We all need to

increase the frequency and quality of company-to-company dialogue about
potential growth opportunities before we have something to sell. This should
be a multi-year dialogue that focuses on opportunities and emerging ideas
about how to capture them.
Retailers and food and beverage companies need more freely to share data
and information about every aspect of our businesses. I understand that
there is a very important distinction between raw data and value-added
insights and analysis. Clearly there is a role for value-added services in the
data-analysis arena. But best-practice companies are already sharing
transaction data freely and openly. However, while they have removed the
obstacles to free information exchange, they are expecting and getting
something even more powerful from their efforts: collaborative, real-time
analysis and insights translated into actions to drive the common scorecard
that the data represents.
Finally, we all need to adopt the data standards and processes advocated by
ECR, GCI, GS1 and other leading industry groups. The initiatives and
standards they are advocating will help to drive much more effective and
efficient supply chains, reduce non-value-added costs and enable
reinvestment to create value for shoppers and consumers. Ultimately, this
creates business results for all of us.
None of these recommendations is completely new, but they do represent a
three-step execution plan that we should continue to discuss and act upon.
The real reason to act is that the best among us the companies with the
healthiest and most competitive businesses are already doing so. If we
don't join them together we will not be as successful as we want to be in
the future.
Local competitors
Pepsi is usually second to Coke in sales, but outsells Coca-Cola in some
markets. Around the world, some local brands compete with Coke.
In South and Central America Kola Real, known as Big Cola in
Mexico, is a fast-growing competitor to Coca-Cola
On the French island of Corsica, Corsica Cola, made by brewers of
the local
Pietra beer, is a growing competitor to Coca-Cola.
In the French region of Bretagne, Breizh Cola is available.
In Peru, Inca Kola outsells Coca-Cola, which led The Coca-Cola
Company to purchase the brand in 1999.

 In Sweden, Julmust outsells Coca-Cola during the Christmas season.

[56]

In Scotland, the locally-produced Irn-Bru was more popular than

Coca-Cola until 2005, when Coca-Cola and Diet Coke began to outpace
its sales.[57]

In India, Coca-Cola ranked third behind the leader, Pepsi-Cola, and

local drink Thums Up. The Coca-Cola Company purchased Thums Up
in 1993.[58] As of 2004, Coca-Cola held a 60.9% market-share in India.
[59]

Tropicola, a domestic drink, is served in Cuba instead of Coca-Cola,

due to a United States embargo.
French brand Mecca Cola and British brand Qibla Cola, popular
in the Middle East, is competitors to Coca-Cola.

In Turkey, Cola Turka is a major competitor to Coca-Cola.

In Iran and many countries of Middle East, Zam Zam Cola and
Parsi Cola are major competitors to Coca-Cola.
In some parts of China Future cola is a competitor. In Slovenia, the
locally-produced Cockta is a major competitor to Coca-Cola, as is the
inexpensive Mercator Cola, which is sold only in the country's biggest
supermarket chain, Mercator.
In Israel, RC Cola is an inexpensive competitor.
Classiko Cola, made by Tiko Group, the largest manufacturing
company in Madagascar , is a serious competitor to Coca-Cola in many
regions.
Laranjada is the top-selling soft drink on the Portuguese island of
Madeira.
Coca-Cola has stated that Pepsi was not its main rival in the UK, but
rather Robinsons drinks

Pricing
The pricing strategy of Coca-Cola is based on the pricing dynamics relative to
its competitors as well as the value of its products. In the international
market, the fiercest competitor of Coca-Cola is Pepsi so that pricing is in a
way influenced by the interplay of these competitors in a given market.

However, Coca-Cola holds the advantage in pricing because it had a head

start of several years giving the company a stable market share relative to
Pepsi, which suffered several bankruptcies. The product price of Coca-Cola
became the industry benchmark. The strategy of Pepsi then was to sell its
products at half the price of Coca-Cola. The company was able to gain a
share in the market. ( 2003). This pricing dynamics between Coca-Cola and
Pepsi continue today. In supermarkets, the price of coke is still higher by 15
to 20 cents when compared to Pepsi.
The higher price given by Coca-Cola to its products is supported by the
value of the brand equity of its different soft drink products. Coca-cola
was able to sell at a higher price than its competitors because of its stable
share market share due to its marketing communications message linked
to brand equity of product stability. This makes Coca-Cola a true leader in
the industry due to its ability to determine the industry pricing
benchmark. Despite its slightly higher pricing, it is still able to maintain a
market share by establishing a high value for its products through
associations with consistency and dependability.
Price is not just a number tag. Price comes in many forms and performs
many functions. It is one of the factors that affect the sales in a drastic ways.

PEPSI PRICING STRATEGY

Pepsi gained popularity following the introduction in 1936 of a 12-ounce
bottle. Initially priced at 10 cents, sales were slow, but when the price was
slashed to five cent, sales increased substantially. Pepsi encouraged pricewatching consumers to switch referring the coca cola standard of six ounces
a bottle for the price of five cents (a nickel), instead of the 12-ounces Pepsi
sold at the same price. In 1936 alone 500 million bottles of Pepsi were
consumed. For 1936 to 1939, Pepsi profit doubled and there is also a
dramatic increase in sales of Pepsi. This case of Pepsi presents the live
example how the pricing makes difference in marketing process of a firm.

PRICING MIX (COCA COLA AND PEPSI)

There is the time (2002-2003) when Coca cola and Pepsi tried to
appeal to the masses through a 200ml bottle priced at Rs.5.
It brought down the average price of its product to Rs.5 thereby
bridging the gap between soft drink and other local option like tea,

milk, and sugarcane juice or lemon water and it also make the price
point of the soft drink within the reach of high potential rural market.
Coca cola and Pepsi in the market place now start with the basic
introductory pack, which is a 200 ml returnable glass bottle priced at
Rs.8 and is available across low income and rural areas.
The next pack size is 300 ml at Rs.10 and is focused on those willing to
pay more within the immediate consumption arena.
Coca cola and Pepsi recently introduced an on-the-go pack as research
showed it that the next pack of 600ml (mobile) was too much to
consume on the go. The new on-the-go consumption pack is called the
express pack and doing well in channels such as travel, malls, so on,
where people want a single serve and it is priced at Rs.20. Can
packing (250 ml) of Coca cola and Pepsi is priced at Rs.15. The
company also introduced the party pack of 2 liter of the consumption
in the party and is priced at Rs.55.
The average price of this packing is cheap than other packing as to
increase the consumption of soft drink in the market. PepsiCo India
priced SoBe Adrenaline Rush (premium product) at Rs.75 for the can of
245ml.

Place/physical distribution
All the soda brands are marketed in the common channels of
distribution except in the exclusive retail venues that companies bid to
have.
In supermarkets, these brands are sold side by side in the display shelf
not giving a single brand any edge relative to the buyer. The rivalry
over the channels of distribution was elevated to obtaining exclusive

selling contracts in restaurants, places

recreation areas, and popular events.

for

vending

machines,

The focus of Coca-Cola is in direct-to-retail distribution through the

establishment of a minimum of one sales centre in cities with a total
population of 1 million. The sales centres that also serve as
warehouses are completely owned and agreement.

For logistics support, delivery trucks numbering around twenty in large

cities are on standby in the sales centres to cater to retail orders.
Apart from its own distribution centres, Coca-Cola also partners with
large wholesalers with valuable experience in the area of retailing
and independent wholesalers able to reach out to local communities.
Apart from this, Coca-Cola also builds strong partnerships with
government units by sponsoring welfare programs.

Pepsi-Cola Brands

Pepsi has been bringing fun and refreshment to consumers

for over 100 years.

Pepsi-Cola Brands

International Brands
Mirinda
7UP (International)
Pepsi Limn
Kas
Teem
Pepsi Max
Pepsi Light
Manzanita Sol
Paso de los Toros
Fruko
Evervess
Yedigun

 Shani
Fiesta
D&G (License)
Mandarin (License)
Radical Fruit

Promotion:
Pepsi promotes its products by personal selling, advertising, and
sales promotion.
For advertising, and sales promotion it used printed and
electronic media. Every newspaper and magazine carry Pepsi
advertisements. Advertisement of Pepsi are eye catching and
attractive. Through advertising it informs the consumer about new
brands and flavours.
Pepsi designs its sales promotion strategies and advertisement
campaign focusing strictly on the target markets.

Pepsi has been catching the trends of society. National songs by bands
like Vital Signs, Awaaz, Junoon and Strings were the keys in
their advertisement campaign. Sponsoring the pop industry and the
cricketing team helped Pepsi hit right on target of their primary market
which consists of teenagers.

Pricing:
The management of PEPSI uses both the skimming and penetration
pricing strategy.
The brands, which has price greater than Pepsi beverage is skimming
pricing strategy, and
brands having prices less than one can of Pepsi adopted penetrationpricing strategy. By adopting skimming they are earning more profit
and by penetration they attract the customers and consolidating
position in the market.

 They have to adopt both strategies because they are facing

established competition in the market,
e.g. In beginning the main competitors for Pepsi are Coca cola & RC, now
their Lucrative Markets and the Strategies adopted by the Cola giants:
Chinese Market:
The Chinese soft drink market is one of the fastest growing and both the cola
makers have tailored their strategies to make the most of this boom.
Coca-Colas long time strategy has been to make its product inexpensive,
widely available and tasty. As far as taste is concerned, the company had to
develop various drinks tailored to Chinese palates. During the China
International Beverage Festival held in September, Coca-Cola invited Chinese
folk artists to make paper-cuts and mold clay dolls, so as to better combine
traditional Chinese art with a foreign brand.
Pepsi also developed its market strategy according to the unique tastes of
Chinese customers. They spent huge amounts of money to invite famous
singers, stars and soccer players to promote its products. The company
called this its soccer & music promotional strategy.
The Chinese market presents unique problems. For example, 2,800 local softdrink bottlers, many of whom are state-owned, control nearly 75% of the
Chinese market. Those bottlers located in remote areas have virtual
monopolies. The battle for China will take place in the interior regions. These
areas are unpenetrated as most of the foreign soft-drink producers have set
up in the booming coastal cities. China's high transportation and distribution
costs mean that plants must be located close to their markets. Otherwise, in
a country of China's size, Coca-Cola and Pepsi risk pricing their products as
luxury items. In China, it is easier and politically safer to expand through
joint ventures with local bottlers. It is expected that, in China, the company
that wins the cola war will win based on the locations of their bottling plants
and the quality of the partners they choose.
Australian Market:
Pepsi has scored a marketing coup in the battle of the lemon in Australia by
getting its new Pepsi Twist product in consumers hands ahead of Coca-Colas
planned launch of its own lemon-flavoured cola product. When Coke
announced plans to have its Diet Coke with Lemon product on Australian
supermarket shelves it served as a blow to Pepsi, whose plans to launch into
the Australian market before Coke had been hampered by production
hurdles. But in an aggressive strategy deliberately aimed at pre-empting
Cokes entry, PepsiCo Australia launched a major coming soon public
relations campaign and sampling promotion to raise awareness of its product
ahead of its roll-out in stores, supermarkets and in the route trade.
Coke and Pepsi in Russia:

In 1972, Pepsi signed an agreement with the Soviet Union, which made it the
first Western product to be sold to consumers in Russia. This gave Pepsi the
first-mover advantage. Presently, Pepsi has 23 plants in the former Soviet
Union and is the leader in the soft-drink industry in Russia. Pepsi outsells
Coca-Cola by 6 to 1 and is seen as a local brand. Also, Pepsi must counter
trade its concentrate with Russia's Stolichnaya vodka since rubles are not
tradable on the world market. However, Pepsi has also had some problems.
There has not been an increase in brand loyalty for Pepsi since its advertising
blitz in Russia, even though it has produced commercials tailored to the
Russian market and has sponsored television concerts. On the positive side,
Pepsi may be leading Coca-Cola due to the big difference in price between
the two colas. Coca-Cola, on the other hand, only moved into Russia 2 years
ago and is manufactured locally in Moscow and St. Petersburg under a
license. Despite investing $85 million in these two bottling plants, they do
not perceive Coca-Cola as a premium brand in the Russian market. Moreover,
they see it as a "foreign" brand in Russia.
Coke and Pepsi in Romania:
Romania is the second largest central European market after Poland, and this
makes it a hot battleground for Coca-Cola and Pepsi. When Pepsi established
a bottling plant in Romania in 1965, it became the first U.S. product
produced and sold in the region. Pepsi began producing locally during the
communist period and has recently decided to reorganize and retrain its local
staff. Pepsi entered into a joint venture with a local firm, Flora and Quadrant,
for its Bucharest plant, and has 5 other factories in Romania. Quadrant
leases Pepsi the equipment and handles Pepsi's distribution. In addition,
Pepsi bought 500 Romanian trucks, which are also used for distribution in
other countries. Moreover, Pepsi produces its bottles locally through an
investment in the glass industry. While the price of Pepsi and Coca-Cola are
the same, some consumers drink Pepsi because Pepsi sent Michael Jackson
to Romania for a concert. Another reason for drinking Pepsi is that it is
slightly sweeter than Coca-Cola and is more suited for the sweet-toothed
Romanians. Lastly, some drink Pepsi because, in the past, only top officials
were allowed to drink it, but now everyone can. Coca-Cola only began
producing locally in November 1991, but it is outselling all of its competitors.
In 1992, Coca-Cola saw an increase in Romania of sales by 99.2% and
outsold Pepsi by 6 to 5. While Pepsi preferred to buy its equipment from
Romania, Coca-Cola preferred to bring equipment into Romania. Also, CocaCola brought 2 bottlers to Romania. One is the Leventis Group, which is
privately owned. Coca-Cola has invested almost $25 million into 2 factories.
These factories are double the size of the factory Pepsi has in Bucharest.
Moreover, Coca-Cola has a partnership with a local company, Ci-Co, in
Bucharest and Brasov. Ci-Co has planned an aggressive publicity campaign
and has sponsored local sporting and cultural events. Lastly, Romanians
drink Coke because it is a powerful western symbol, which was once
forbidden.

Coke and Pepsi in The Czech Republic:

The key to success in the Czech Republic is for both Coca-Cola and Pepsi to
increase the annual consumption of soft drinks. Per capita consumption of
beer, the national drink in the Czech Republic, exceeds that of soft drinks by
3 to 1(165 liters of beer per capita of beer versus 50 liters of soft-drinks).
Both companies are trying to increase their market share because
distribution for both products is no longer as limited as it was in 1989. CocaCola and Pepsi face stiff competition from domestic producers, whose
products are lower-priced. Because of this, domestic producers have a
market share of about 60%. Coca-Cola and Pepsi each have a market share
between 10%-25%. Another problem in the Czech Republic is that many
people think that the same company produces Coca-Cola and Pepsi.
Recently, Pepsi opened an office in Prague. Coca-Cola, on the other hand,
has been trying to convince local shop owners to stock and circulate its
product. The main apprehension may be that the price of Coke is twice the
price of locally produced colas and a little higher than Pepsi. Coca-Cola has
arrangements with 4 domestic bottling companies and acquired a new plant
in 1992 in which it has invested almost $20 million. This may be one reason
why Coca-Cola is closing in on Pepsi's lead in the Czech Republic.
Coke and Pepsi in Poland:
Poland, with a population of 38 million people, is the biggest consumer
market in central and eastern Europe. Coca-Cola is closing in on Pepsi's lead
in this country with 1992 sales of 19.5 million cases versus Pepsi's sales of
26.5 million cases. The main problems in this area are the centralized
economy, the lack of modern production facilities, a non-convertible local
currency, and poor distribution. However, since the zloty is now convertible,
Coca-Cola realizes the growth potential in Poland. After Fiat, Coca-Cola is now
the second biggest investor in Poland. Coca-Cola has developed an
investment plan, which includes direct investment and joint
ventures/investments with European bottling partners. Its investments may
exceed $250 million, and it has completed the infrastructure building. CocaCola has divided Poland into 8 regions with strategic sites in each of these
areas. Moreover, it has organized a distribution network to make sure its
products are widely available. This distribution network, which Coca-Cola has
spent a lot of money organizing, is extremely important to challenge Pepsi's
market share and to maintain a high level of customer service. Also, CocaCola, like Pepsi, signed counter trade agreements with Poland. Both trade
their concentrate for Polish beer. All of this has helped Coca-Cola to close in
on Pepsi's lead in Poland.
Coke and Pepsi in Saudi Arabia:

In Saudi Arabia, Pepsi is the market leader and has been for nearly a
generation. Part of this is due to the absence of its archrival, Coca-Cola. For
nearly 25 years, Coke has been exiled from the desert kingdom. Coca-Cola's
presence in Israel meant that it was subject to an Arab boycott. Because of
this, Pepsi has an 80% share of the $1 billion Saudi soft-drink market. Saudi
Arabia is Pepsi's third largest foreign market, after Mexico and Canada. In
1993, almost 7% of Pepsi-Cola International's sales came from Saudi Arabia
alone. The environment in Saudi Arabia makes the country very conducive to
soft-drink sales: alcohol is banned, the climate is hot and dry, the population
is growing at 3.5% a year, and the Saudis' oil-based wealth "make it the most
valuable market in the Middle East". Coca-Cola, long known as "red Pepsi",
has finally started to fight back. The battle for Saudi Arabia actually began 6
years ago, when the Arab boycott collapsed and Coca-Cola began to make
inroads into the Gulf, Egypt, Lebanon, and Jordan.
The start of the Gulf War, however, temporarily stunted Coca-Cola's growth
in the region. Pepsi's 5 Saudi factories worked 24 hours a day to keep the
troops refreshed. The most significant blow to Coca-Cola's return to the
desert, however, came at the end of the war, when General Norman
Schwarzkopf was shown signing the cease-fire with a can of diet Pepsi in his
hand. Coca-Cola aims to control 35% of the Saudi market by the year 2000.
Coca-Cola, which plans to pour over $100 million into the Saudi market, is
focusing on marketing to get there. Recently, it shipped some 20,000 red
coolers into Saudi Arabia over the last 9 months. Also, Coca-Cola put $1
million into sponsoring the Saudi World Cup soccer team. This alone has
doubled Coca-Cola's market share to almost 15%. America's Reynolds
Company is among the investors looking to cash in on Coca-Cola's return to
Saudi Arabia. The company is among the investors in a new factory, which,
by 1996, will be producing 1.2 billion Coca-Cola cans per year. This equates
to nearly 100 cans for every Saudi in the country. Pepsi, trying to fight off the
Coca-Cola onslaught, has responded with deep discounting.

Coke and Pepsi in India:

Coca-Cola controlled the Indian market until 1977, when the Janata Party
beat the Congress Party of then Prime Minister Indira Gandhi. To punish CocaCola's principal bottler, a Congress Party stalwart and longtime Gandhi
supporter, the Janata government demanded that Coca-Cola transfer its
syrup formula to an Indian subsidiary. Coca-Cola balked and withdrew from
the country. India, now left without both Coca-Cola and Pepsi, became a
protected market. In the meantime, India's two largest soft-drink producers
have gotten rich and lazy while controlling 80% of the Indian market. These
domestic producers have little incentive to expand their plants or develop
the country's potentially enormous market. Some analysts reason that the
Indian market may be more lucrative than the Chinese market. India has 850

million potential customers, 150 million of whom comprise the middle class,
with disposable income to spend on cars, VCRs, and computers. The Indian
middle class is growing at 10% per year. To obtain the license for India, Pepsi
had to export $5 of locally made products for every $1 of materials it
imported, and it had to agree to help the Indian government to initiate a
second agricultural revolution. Pepsi has also had to take on Indian partners.
In the end, all parties involved seem to come out ahead: Pepsi gains access
to a potentially enormous market; Indian bottlers will get to serve a market
that is expanding rapidly because of competition; and the Indian consumer
benefits from the competition from abroad and will pay lower prices. Even
before the first bottle of Pepsi hit the shelves, local soft drink manufacturers
increased the size of their bottles by 25% without raising costs.

Dr. Snapple pepper 2nd competitors:

DPS, like other soft drink makers in the United States is facing a marketplace where demand has
seen lukewarm growth since 2002 as consumers shift towards healthier sports drinks, energy
drinks, and/or cheaper drinks such as bottled or tap water.
Along these lines, in the third quarter of 2008 consumption of soft drinks declined by 3%
while sales of water filters increased by 16%
The most dramatic manifestation of consumer health concerns regarding soft drinks,
though, has been a proposal put forth in the state of New York that would impose an 18%
excise tax on all non-diet soda sales.
Other firms, such as Coca-Cola Company (KO), have been able to mitigate the effects of a
declining US market through expansion of their sales abroad in regions such as Asia, where
demand is still growing and consumers' are not as sensitive towards health.
Due to a lack of operations outside of North America and decreased consumption of soft drinks
in North America, DPS will face a distinct competitive disadvantage as competitors solidify
market share in markets abroad.
Larger firms are also able to invest more money in R&D and, in 2008, both Pepsico (PEP) and
Coca-Cola Company (KO) announced the FDA approval of a new zero calorie sweetner that is
aimed towards winning back consumers who may have stopped drinking Pepsi or Coke for
health reasons.
Company Overview
DPS is organized into four main segments that are delineated primarily along the lines of the
products that each segment manufactures and sells. In order to measure the performance of each
segment Dr. Pepper and other carbonated beverage firms uses two main metrics: Net sales and
Underlying Operating Pr=fit (UOP).

Performan=e Metrics
Definitio=

2008 2007

Net Sales

Similar to gross revenues, net sales measures, in dollar terms, the

4,369 4,347
amount of products that is sold by DPS over a certain time period.

Underlying
Operating
Profit

UOP is a measure of income from operations that excludes certain

additional accounting expenses that are unique to the beverage
industry b=t not reflective of future firm performance. One example 668
is the exclusion of the impairment expense related to a firm's
intangible assets.

731

Since the bottling group garners business not only from the bottling of DPS owned brands but
also third party clients it makes up the largest segment of revenue for the firm

The Beverage division remains the most profitable division within DPS due to the low marginal
cost associated with the production of soft drinks

Beverage Concentrates
The Beverage Concentrates division of DPS is responsible for the manufacturing =f the syrups
and concentrates used to make fountain drinks, and consists primarily of carbonated soft drink
brands such as
Dr. Pepper, Canada Dry,
7UP, and
A&W Root Beer.
In 2008, the fastest growing bran= was Canada Dry which saw sales growth of 8% following the
launch of Canada Dry Green Tea.
Sales of Dr. Pepper remained relatively flat while sales of 7UP declined by 3%. Overall,

the Beverages Concentrate is the most profitable division within DPS accounting for less
than one-fifth of sales but more than two-thirds of profits as a result of the low marginal
cost associated with the ongoing production of soft drinks.

Finished Goods
The Finished goods division of DPS is responsible for the actual production of the products that
originated in the Beverage Concentrates division and also includes many of the non carbonated,
or juice brands managed by Dr. Pepper such as Hawaiian , Mott's, and Snapple.

In 2008, the highest performing brand in this divisonwas Hawaiian Punch which saw

double digit increases in sales due to a newly crafted promotional campaign.

The worst performing brand turned out to be Snapple which saw sales decline 10% as
DPS decided to cut and completely revamp its advertising surrounding this brand during
the economic downturn. Overall, while this divsion is neither the largest or most
profitable division in DPS it is the fastest growing, experiencing a growth rate of 5% in
2008.

Bottling Group
This division is responsible not only for the manufacture, bottling, and/or distribution of finished
beverages managed by DPS but also third party owned brands seeking a distribution platform.
Overall sales in the division declined by 4% in 2008 but this was offset slightly due to greater
intersegment sales as DPS sought to increase the manufacturing of company owned brands by
the division.

In 2008, DPS also lost a distribution agreement with Hansen Natural Corporation which had
been responsible for almost 10% of revenues prior to its contract termination.The bottling
division the highest proportion of revenues and lowest proportion of sales due to the low profit
margins and high capital expenditures associated with the bottling and distribution of soft drinks.
Trends and Forces
As consumers become more health conscious and rein in spending amidst the economic crisis,
beverage companies, such as DPS, are faced with conditions that force them to market and
launch new products meant to entice customers even as credit and cash become scarce.
Moreover, sales of carbonated beverages have declined since 2002 as consumers are increasingly
monitoring their diets and consumption of sugar
Development of a zero calorie sweetner by Coca-Cola Company (KO)
In December of 2008, the FDA approved a new zero-calorie sweetner, derived from the stevia
plant, which has long been viewed as the holy grail in the manufacturing of carbonated soft
drinks. Unfortunately, DPS did not play any role in the development of this new sweetener,
which will be marketed by Coca-Cola Company (KO) and
In any case, the introduction of a zero calorie naturally derived sweetner gives DPS a distinct
technological disadvantage that will hurt sales moving forward as consumers look for healthier
products that do not sacrifice taste.
Concentration of sales in only North America will hurt revenue growth as competitors enter
foreign markets
DPS is unique amongst its competitors in that it sells all of its products in the United States,
Mexico, and the Carribbean. However, while it is possible to find Dr. Pepper and Snapple on
store shelves around the world, none of the money from these sales benefits DPS, since the rights
to DPS's brands abroad are effectively owned by Coca-Cola Enterprises (CCE) and Pepsi
Bottling Group (PBG).
Both companies originally purchased the Dr. Pepper trademark from Cadbury
Schweppes (CSG), allowing them to distribute the soda using their more extensive
manufacturing and distribution networks. Such licensing agreements involve one time
payments, valid for a set time period, and do not typically include provisions that would
allow the original seller to gain a proportion of any future income.
As a result, DPS is less effectively able to compensa=e for declines in demand since it
sells a majority of its products in only one market. In the long run, this approach places

DPS at a competitive disadvantage, as both Coca-Cola Company (KO) and

Competitive Analysis
The carbonated soft drink industry is driven largely along the lines of both brand loyalty and
price with consumers rarely shifting from one brand of soft drink to another. As a result, firms in
this industry typically unveil multi-million dollar global ad campaigns in an attempt to increase
consumption amongst established customers and gain market share amongst those individuals
who may have never tried their product.

Market Share Analysis

A significant majority of the beverage industry is controlled by Coca-Cola Company (KO) and
Dr Pepper Snapple Group (DPS) Cadbury Schweppes (CSG) largely capturing the rest of the
market.
Due to a lag in the release of data, the annual market share information for 2008 will not
be available until the end of the first quarter in 2009. As a result, it is impossible to
segregate the market share that solely belongs to DPS since it became its own
independent company in the second quarter of 2008. However, it is possible to rank the
brands owned by each company in terms of market share and in 2007 Dr. Pepper ranked
6th in the world.

2007 Global Market Share By Company

% of Mark=t

Number of=Cases
(millions)

Dr Pepper Snapple Group (DPS)=Cadbury Schweppes

15.0
(CSG)

1491.3

Coca-Cola Company (KO)

42.8

4241.1

Pepsico (PEP)

31.1

3082.8

Cott (COT)

4.8

476.6

2007 Glob=l Market Share By Brand

% of Mark=t Number of=Cases (millions)

Coke Classic

17.2

1707.3

Pepsi-Cola

10.7

1059.8

Mountain Dew (Owned by Pepsi) 6.6

659.6

Dr. Pepper

585.9

5.9

Internal external aspects:

External Audit
Opportunities
1. Bottled water consumption has increased 11 percent.
2. According to the S&P Industry Survey, consumers are drawn to new
smaller beverage brands that are not sold on a mass scale.
3. Word Economic Forums annual Davos, Switzerland gathering grants
international voice.
4. Less developed countries are in desperate need to improve
community water supplies.
5. Energy drink sales are expected to increase 7 to 8 percent in 2007.
6. Disposable income has increased 6.2 percent.
7. Consumers are striving to drink and eat their way to better health
than pervious generations.
8. EPS is expected to rise 7 to 8 percent in 2007.

Threats
1. Consumption of American beverages is denounced by foreign
officials in areas where conflicting interest exist.
2. Multiple lawsuits against the new Enviga beverage for calorie
burning claims in advertising
3. Smaller, lesser known brands are turning to major beer distributors
for bottling.
4. Overall carbonated drink sales have been flat due to links of sugar
to obesity and high fructose corn syrup to heart disease.
5. Pepsi is more diversified offering beverage and food products.
6. High cost of commodities such as sugar, and metals used in
production of cans.

7. Many smaller companies are fierce competitors around the world in

their local markets.

CPM Competitive Profile Matrix

Coca-

Pepsi

Cola
Critical
Success
Factors

Weig
ht

Ratin
g

Market Share

0.15

0.60

0.45

Price Comp

0.10

0.30

0.30

Financial
Position

0.12

0.48

0.48

0.15

3
4

0.45
0.60

0.45

0.60

0.60

0.60

0.33

0.33

0.21

0.21

Product
Quality
Product
Lines
Customer
Loyalty
Employees

0.15
0.15
0.11
0.07
1.00

Weigh Ratin
ted
g
Score

Weight
ed
Score

3.71

Marketing
Total

3.5
6

Cadbury
Schweppes
Ratin Weight
g
ed
Score
2
0.30
3
0.30
3
0.36
3
0.45
3
0.45
3
0.45
3
0.33
3
0.21
2.85

External Factor Evaluation (EFE) Matrix

Key External Factors

Weight

Rating

Weighted
Score

0.06

0.24

0.05

0.10

0.02

0.04

0.02

0.04

0.06

0.18

0.05

0.15

0.07

0.21

0.07

0.28

0.02

0.06

0.04

0.08

0.06

0.12

Opportunities
1. Bottled water consumption has
increased 11 percent.
2. According to the S&P Industry
Survey, consumers are drawn to
new smaller beverage brands
that are not sold on a mass
scale.
3. Word Economic Forums annual
Davos, Switzerland gathering
grants international voice.
4. Less developed countries are in
desperate need to improve
community water supplies.
5. Energy drink sales are expected
to increase 7 to 8 percent in
2007.
6. Disposable income has
increased 6.2 percent.
7. Consumers are striving to drink
and eat their way to better
health than pervious
generations.
8. EPS is expected to rise 7 to 8
percent in 2007.
Threats
1. Consumption of American
beverages is denounced by
foreign officials in areas where
conflicting interest exist.
2. Multiple lawsuits against the
new Enviga beverage for calorie
burning claims in advertising
3. Smaller, lesser known brands
are turning to major beer
distributors for bottling.
4. Overall carbonated drink sales
have been flat due to links of

sugar to obesity and high

fructose corn syrup to heart
disease.
5. Pepsi is more diversified offering
beverage and food products.
6. High cost of commodities such
as sugar, and metals used in
production of cans.
7. Many smaller companies are
fierce competitors around the
world in their local markets.

0.10

0.20

0.20

0.60

0.10

0.30

0.08

0.24

1.00

2.84

TOTAL
E.

Internal Audit
Strengths
1.
2.
3.
4.
5.
6.
7.
8.
9.

Product line has over 400 brands.

Strong global presence, located in over 200 countries.
Long history has built excellent brand recognition.
Partnership longevity with established sporting events including the
Olympics.
Industry leader in market capitalization with $112 billion.
Return on Equity yielded 30 percent in 2006.
Leader of dividend yields of 2.6 percent. The company has had 43
consecutive years of an annual dividend increase.
Joint venture between The Coca Cola Company and Nestle has
resulted in the establishment of Beverage Partners Worldwide
(BPW).
Coca-Cola has formed a strong partnership with McDonalds, with
McDonalds becoming their largest customer.

Weaknesses
1. Product line is limited to beverages.
2. A failed $16 billion acquisition of Quaker Oats hinders long-term
growth.
3. Negative publicity in India because of water issues, has led to poor
brand image and hindered growth there.
4. Lack of management willingness to place foreign products into
American markets.
5. Marketing deficiencies due to turnover in leadership and a 16
percent decrease in advertising spending.

6. Coca Colas inventory turnover is only 5.4 compared to Pepsi Co.s

8.0.

FINANCIAL ANALYSIS
Growth Rates %

Coca Cola

Industry

SP-500

19.20

22.20

11.60

Net Income (YTD vs YTD)

8.30

25.70

17.10

Net Income (Qtr vs year

ago qtr)

13.30

30.00

9.30

Sales (5-Year Annual Avg.)

6.54

8.45

13.09

Net Income (5-Year Annual

Avg.)

5.01

9.38

19.82

11.49

12.61

10.00

25.4

26.2

20.3

P/E Ratio 5-Year High

NA

49.9

26.8

P/E Ratio 5-Year Low

NA

20.7

6.8

Price/Sales Ratio

5.00

3.96

2.37

Price/Book Value

6.97

5.71

3.45

21.10

19.60

10.70

Gross Margin

64.2

52.7

34.5

Pre-Tax Margin

26.0

17.5

17.8

Net Profit Margin

19.8

14.2

12.6

Sales (Qtr vs year ago qtr)

Dividends (5-Year Annual

Avg.)
Price Ratios
Current P/E Ratio

Price/Cash Flow Ratio

Profit Margins

5Yr Gross Margin (5-Year

Avg.)

64.4

59.1

34.3

5Yr PreTax Margin (5-Year

Avg.)

27.9

20.1

16.4

5Yr Net Profit Margin (5Year Avg.)

21.1

14.9

11.4

0.49

0.69

1.06

Current Ratio

0.8

1.0

1.1

Quick Ratio

0.6

0.7

0.9

55.1

41.0

31.8

2.1

2.5

3.7

8.52

10.25

18.53

Return On Equity

28.9

22.0

24.9

Return On Assets

14.9

11.2

7.6

Return On Capital

22.6

16.9

10.2

Return On Equity (5-Year

Avg.)

32.0

25.4

18.5

Return On Assets (5-Year

Avg.)

16.7

12.6

6.4

Return On Capital (5-Year

Avg.)

24.6

18.2

8.6

76,690

56,327

92,892

Revenue/Employee

386,732

360,922

806,706

Receivable Turnover

9.8

10.1

14.3

Inventory Turnover

5.4

6.8

7.8

Financial Condition
Debt/Equity Ratio

Interest Coverage
Leverage Ratio
Book Value/Share
Investment Returns %

Management Efficiency
Income/Employee

Asset Turnover

0.8

0.8

0.8

Adapted from www.moneycentral.msn.com

Date

Avg. P/E

Price/Sale
s

Price/Bo
ok

Net Profit
Margin (%)

12/06

20.30

4.71

6.61

21.1

12/05

21.00

4.18

5.84

21.1

12/04

23.30

4.65

6.29

22.3

12/03

25.00

5.99

8.79

20.8

12/02

31.10

5.56

9.18

20.3

Date

Book Value/
Share

Debt/Equi
ty

ROE
(%)

ROA
(%)

Interest
Coverage

12/06

$7.30

0.27

30.0

17.0

28.7

12/05

$6.90

0.35

29.8

16.6

25.4

12/04

$6.61

0.45

30.4

15.4

29.1

12/03

$5.77

0.38

30.9

15.9

29.3

12/02

$4.78

0.45

33.7

16.3

27.4

Adapted from www.moneycentral.msn.com

Net Worth Analysis (December 2006 in millions)

1. Stockholders Equity + Goodwill = 17,000 + 1,400

18,400
2. Net income x 5 = $5,000 x 5=

$
25,000

3. Share price = $58.00/EPS 2.34 =$24.78 x Net Income

$5,000=

$
123,93
1

4. Number of Shares Outstanding x Share Price = 1,600 x

$58.00 =

$
92,800

Method Average

$65,03
2

Internal Factor Evaluation (IFE) Matrix

Weight

Rating

Key Internal Factors

Weighte
d
Score

Strengths
1. Product line has over 400 brands.

0.09

0.36

2. Strong global presence, located in

over 200 countries.
3. Long history has built excellent brand
recognition.
4. Partnership longevity with
established sporting events including
the Olympics.
5. Industry leader in market
capitalization with $112 billion.
6. Return on Equity yielded 30 percent
in 2006.
7. Leader of dividend yields of 2.6
percent. The company has had 43
consecutive years of an annual
dividend increase.
8. Joint venture between The Coca Cola
Company and Nestle has resulted in
the establishment of Beverage
Partners Worldwide (BPW).

0.10

0.40

0.06

0.24

0.05

0.20

0.12

0.48

0.04

0.12

0.04

0.16

0.06

0.24

9. Coca-Cola has formed a strong

partnership with McDonalds, with
McDonalds becoming their largest
customer.
Weaknesses

0.10

0.40

1. Product line is limited to beverages.

0.09

0.09

2. A failed $16 billion acquisition of

Quaker Oats hinders long-term
growth.
3. Negative publicity in India because of
water issues, has led to poor brand
image and hindered growth there.
4. Lack of management willingness to
place foreign products into American
markets.
5. Marketing deficiencies due to
turnover in leadership and a 16
percent decrease in advertising
spending.
6. Coca Colas inventory turnover is
only 5.4 compared to Pepsi Co.s 8.0.
TOTAL

0.10

0.10

0.03

0.06

0.02

0.04

0.05

0.10

0.05

0.10

F.

1.00

3.09

SWOT Strategies
SO Strategies
1. Improve environmental awareness with community involvement
(S2, S4, O2, O3).
2. Market new diet drinks that have healthier sugar substitutes (S5,
O7).
WO Strategies
1. Market international beverages to American consumers (W4, O2,
O6, O7).

2. Increase marketing efforts for bottled water (W5, W6, O1).

ST Strategies
1. Acquire Krispy Kreme (KKD) to help diversify the product line (S5,
T5).
2. Acquire Golden Enterprises (GLDC) to help diversify the product line
(S5, T5).

WT Strategies
3. Acquire Krispy Kreme (KKD) to help diversify the product line (W1,
T5).
4. Acquire Golden Enterprises (GLDC) to help diversify the product line
(W1, T5).

G.

SPACE Matrix

x-axis: -1.4 + 5.0 = 3.6

y-axis: 5.4 + -3.2 = 2.2
Coordinate: (3.6, 2.2)
H.

Grand Strategy Matrix

I.

The Internal-External (IE) Matrix

The IFE Total Weighted Score

High

Strong

Average

Weak

3.0 to 4.0

2.0 to 2.99

1.0 to 1.99

II

III

3.0 to
3.99

Medium
The EFE
2.0 to
Total
2.99
Weighted
Score

IV

VI

VIII

IX

Coca Cola

Low

VII

1.0 to
1.99

Grow and Build

Divisions
North America
Bottling Investments
North Asia, Eurasia &
Middle East
European Union
Latin America
Africa
East, South Asia & Pacific
Rim
Corporate

Percent Revenue
2006
29.1
21.2
16.5
14.6
10.3
4.6
3.3
0.4

J.

QSPM

Strategic Alternatives
Acquire KKD
and GLDC

Key Internal Factors

Weight
Strengths

Produce
new diet
drinks that
have
healthier
sugar
substitutes

TAS

AS

TAS

0.18

0.36

1. Product line has over 400 brands.

0.09

AS
2

2. Strong global presence, located in

over 200 countries.
3. Long history has built excellent
brand recognition.
4. Partnership longevity with
established sporting events
including the Olympics.
5. Industry leader in market
capitalization with $112 billion.
6. Return on Equity yielded 30
percent in 2006.
7. Leader of dividend yields of 2.6
percent. The company has had
43 consecutive years of an
annual dividend increase.
8. Joint venture between The Coca
Cola Company and Nestle has
resulted in the establishment of
Beverage Partners Worldwide
(BPW).
9. Coca-Cola has formed a strong
partnership with McDonalds, with
McDonalds becoming their largest
customer.
Weaknesses

0.10

---

---

---

---

0.06

0.12

0.24

0.05

---

---

---

---

0.12

0.48

0.36

0.04

0.16

0.12

0.04

---

---

---

---

0.06

---

---

---

---

0.10

---

---

---

---

1. Product line is limited to

beverages.

0.09

0.36

0.09

2. A failed $16 billion acquisition of

Quaker Oats hinders long-term
growth.
3. Negative publicity in India
because of water issues, has led
to poor brand image and
hindered growth there.
4. Lack of management willingness
to place foreign products into
American markets.
5. Marketing deficiencies due to
turnover in leadership and a 16
percent decrease in advertising
spending.
6. Coca Colas inventory turnover is
only 5.4 compared to Pepsi Co.s
8.0.
SUBTOTAL

0.10

---

---

---

---

0.03

---

---

---

---

0.02

---

---

---

---

0.05

---

---

---

---

0.05

0.20

0.05

1.00

Acquire
KKD and
GLDC

Key External Factors

Weight

Opportunities
1. Bottled water consumption has
increased 11 percent.
2. According to the S&P Industry
Survey, consumers are drawn to
new smaller beverage brands that

1.50

1.2
2

Produce
new diet
drinks that
have
healthier
sugar
substitutes

AS

TAS

AS

TAS

0.06

---

---

---

---

0.05

0.05

0.15

are not sold on a mass scale.

3. Word Economic Forums annual
Davos, Switzerland gathering
grants international voice.
4. Less developed countries are in
desperate need to improve
community water supplies.
5. Energy drink sales are expected to
increase 7 to 8 percent in 2007.
6. Disposable income has increased
6.2 percent.
7. Consumers are striving to drink
and eat their way to better health
than pervious generations.
8. EPS is expected to rise 7 to 8
percent in 2007.
Threats
1. Consumption of American
beverages is denounced by foreign
officials in areas where conflicting
interest exist.
2. Multiple lawsuits against the new
Enviga beverage for calorie
burning claims in advertising
3. Smaller, lesser known brands are
turning to major beer distributors
for bottling.
4. Overall carbonated drink sales
have been flat due to links of sugar
to obesity and high fructose corn
syrup to heart disease.
5. Pepsi is more diversified offering
beverage and food products.
6. High cost of commodities such as
sugar, and metals used in
production of cans.
7. Many smaller companies are fierce
competitors around the world in
their local markets.
SUB TOTAL
SUM TOTAL ATTRACTIVENESS
SCORE

0.02

---

---

---

---

0.02

---

---

---

---

0.06

---

---

---

---

0.05

---

---

---

---

0.07

0.14

0.28

0.07

0.28

0.21

0.02

---

---

---

---

0.04

---

---

---

---

0.06

---

---

---

---

0.10

0.20

0.40

0.20

0.80

0.40

0.10

---

---

---

---

0.08

---

---

---

---

1.47

1.44

2.97

2.66

Recommendations
The QSPM strategies assessed whether acquiring KKD and GLDC (a
potato chip and snack food company) was a better option than
producing a new diet soda line made form more healthy sugar
alternatives. Both scores on the QSPM are relatively close and given
the financial condition of KKD and GLDC, it is recommended Coca Cola
undertake both strategic alternatives. The Net Worth of both
companies is provided below. It is estimated it would cost $200 million
to research, produce and market the new diet drinks.
Krispy Kreme (KKD) Net Worth January 2008 (in millions).

1. Stockholders Equity + Goodwill = 79 + 28

$ 107

2. Net income x 5 = $-42 x 5=

$ NA

3. Share price = $2.73/EPS -0.94 = NAx Net Income $-42=

$ NA

4. Number of Shares Outstanding x Share Price = 65 x $2.73

=

$ 177

Method Average

$142

Golden Enterprises (GLDC) Net Worth January 2008 (in millions).

1. Stockholders Equity + Goodwill = 19.4 + 0

2. Net income x 5 = $1.2 x 5=

$ 19.4
$ 6.0

3. Share price = $2.95/EPS 0.19 =$15.52 x Net Income

$1.2=

$ 18.6

4. Number of Shares Outstanding x Share Price = 11.2 x

$2.95 =

$ 33.0

Method Average

$19.3

L.

EPS/EBIT Analysis
$ Amount Needed: 360M
Stock Price: $58
Tax Rate: 35%
Interest Rate: 5%
# Shares Outstanding: 1,600M

Epilogue
U.S. sales of both Coca-Cola and Pepsi-Cola are declining sharply. In the
first nine months of 2007, sales of cases of Coca-Cola Classic declined
5.6%, while Pepsi-Cola's volume slid 8.3%, according to Beverage
Digest, an industry publication. Both companies are suffering from the
broader decline in soda sales as more people switch to water and
juices. Coke and Pepsi are beginning to advertise more and to aim ads

at each other. Historically, ad wars between Coke and Pepsi have

benefited both firms.

The Coca-Cola company has been examining Hansen Natural

(NASAQ:HANS) as a possible new acquisition. Analysts say such an
acquisition would save $500M in manufacturing immediately. Analysts
believe a potential sale is more likely in the $80-$100 range rather
than lower speculation of $60. KO views recent weakness in HANS as a
buying opportunity.

KO is expanding its tea business and will look at acquisitions to

improve its position. "Tea is a priority area," Chief Executive Neville
Isdell told Reuters on the sidelines of the World Economic Forum. "Tea
is one area where we've seen our performance has not been as good
as we would like it to be." He declined to confirm or deny recent
reports that Coca-Cola might buy or make an investment in Honest
Beverages, a privately-held maker of Honest Tea. "The honest answer
is we look at everything and when we decide that we are going to do
something we will let you know," Isdell said.
Both Coca-Cola and PepsiCo Inc. have suffered a domestic slowdown in
sales of its traditional soft drinks as health-conscious consumers opt for
bottled water or tea, which they view as healthier. Pepsi already has a
strong position in water, where it ranks third in the world, helped by
last year's acquisition of vitamin-water maker Glaceau. KOs Isdell,
who will hand over the CEO job to Chief Operating Officer Muhtar Kent
in July 2008, says Coca-Cola is not interested in large-scale M&A deals.
"We will be acquiring bolt-on but no major acquisitions," he said.
On January 30, 2008, PepsiAmericas (PAS), the No. 2 Pepsi bottler,
reported a 60 percent jump in fourth-quarter net income helped by
acquisitions, volume growth in Central Europe and a weaker U.S. dollar,
but forecast fiscal 2008 profit below expectations. PAS forecasts fiscal
2008 earnings per share of $1.77 a share to $1.83 a share, short of
analysts' expectations of $1.89 a share for the same period. Based in
Minneapolis, PepsiAmericas has pursued deals in Central and Eastern
Europe in an effort to capture a share of the rapidly growing markets in
these regions. The company earned $42 million, or 32 cents a share,

for the quarter, versus $26.1 million, or 20 cents a share, a year earlier.
The current quarter included a charge of 1 cent a share. Volume
growth in the United States continued to decline this quarter but a net
pricing growth of 3.8 percent helped sales growth. Central European
volume grew 56.1 percent. Net sales in the U.S., which were about 71
percent of the company's total for the quarter, rose 4 percent to
$812.2 million.