STRATEGY MANAGEMENT

ASSIGNMENT

TITLE: A STUDY ON STRATEGIES FOLLOWED BY COKE(COCA-COLA)

SUBMITTED BY: HARSHIT SINGH SHISHODIA- PGP04032

SUBMITTED TO: PROF. PRAGYA BHAWSAR

 1. Introduction

The Coca-Cola Company is an American multinational corporation, and manufacturer, retailer, and
marketer of nonalcoholic beverage concentrates and syrups. The company is best known for its flagship
product Coca-Cola, invented in 1886 by pharmacist John Stith Pemberton in Atlanta, Georgia. The
Coca-Cola formula and brand were fully bought with US$2,300 in 1889 by Asa Griggs Candler, who
incorporated The Coca-Cola Company in Atlanta in 1892.

The company headquartered in Atlanta, Georgia, but incorporated in Wilmington, Delaware has
operated a franchised distribution system since 1889: the Company largely produces syrup concentrate,
which is then sold to various bottlers throughout the world who hold exclusive territories. The company
owns its anchor bottler in North America, Coca-Cola Refreshments. The company's stock is listed on the
NYSE and is part of DJIA, the S&P 500 index, the Russell 1000 Index, and the Russell 1000 Growth
Stock Index.

Coca-Cola, or Coke, is a carbonated soft drink manufactured by The Coca-Cola Company. Originally
marketed as a temperance drink and intended as a patent medicine, it was invented in the late 19th
century by John Stith Pemberton and was bought out by businessman Asa Griggs Candler, whose
marketing tactics led Coca-Cola to its dominance of the world soft-drink market throughout the 20th
century.The drink's name refers to two of its original ingredients: coca leaves, and kola nuts (a source of
caffeine). The current formula of Coca-Cola remains a trade secret, although a variety of reported
recipes and experimental recreations have been published.

The Coca-Cola Company produces concentrate, which is then sold to licensed Coca-Cola bottlers
throughout the world. The bottlers, who hold exclusive territory contracts with the company, produce
the finished product in cans and bottles from the concentrate, in combination with filtered water and
sweeteners. A typical 12-US-fluid-ounce (350 ml) can contains 38 grams (1.3 oz) of sugar (usually in
the form of high fructose corn syrup). The bottlers then sell, distribute, and merchandise Coca-Cola to
retail stores, restaurants, and vending machines throughout the world. The Coca-Cola Company also
sells concentrate for soda fountains of major restaurants and foodservice distributors.
The Coca-Cola Company has on occasion introduced other cola drinks under the Coke name. The most
common of these is Diet Coke, along with others including Caffeine-Free Coca-Cola, Diet Coke
Caffeine-Free, Coca-Cola Zero Sugar, Coca-Cola Cherry, Coca-Cola Vanilla, and special versions with
lemon, lime, and coffee. Based on Interbrand's "best global brand" study of 2015, Coca-Cola was the
world's third most valuable brand, after Apple and Google. In 2013, Coke products were sold in over
200 countries worldwide, with consumers drinking more than 1.8 billion company beverage servings
each day. Coca-Cola ranked No. 87 in the 2018 Fortune 500 list of the largest United States corporations
by total revenue.

2. History

2.1. 19th century historical origins

Eagle Drug and Chemical House in Columbus, Georgia. John Pemberton, the original creator of Coca-
Cola Believed to be the first coupon ever, this ticket for a free glass of Coca-Cola was first distributed in
1888 to help promote the drink. By 1913, the company had redeemed 8.5 million tickets. This
refurbished Coca-Cola advertisement from 1943 is still displayed in Minden, Louisiana. Early Coca-
Cola vending machine at Biedenharn Museum and Gardens in Monroe, Louisiana Confederate Colonel
John Pemberton, who was wounded in the American Civil War and became addicted to morphine, began
a quest to find a substitute for the problematic drug. In 1885 at Pemberton's Eagle Drug and Chemical
House, a drugstore in Columbus, Georgia, he registered Pemberton's French Wine Coca nerve tonic.
Pemberton's tonic may have been inspired by the formidable success of Vin Mariani, a French-Corsican
coca wine, but his recipe additionally included the African kola nut, the beverage's source of caffeine. It
is also worth noting that a Spanish drink called "Kola Coca" was presented at a contest in Philadelphia
in 1885, a year before the official birth of Coca-Cola. The rights for this Spanish drink were bought by
Coca-Cola in 1953. In 1886, when Atlanta and Fulton County passed prohibition legislation, Pemberton
responded by developing Coca-Cola, a nonalcoholic version of Pemberton's French Wine Coca. It was
marketed as "Coca-Cola: The temperance drink", which appealed to a large number of people as the
temperance movement enjoyed wide support during this time. The first sales were at Jacob's Pharmacy
in Atlanta, Georgia, on May 8, 1886, where it initially sold for five cents a glass. Drugstore soda
fountains were popular in the United States at the time due to the belief that carbonated water was good
for the health, and Pemberton's new drink was marketed and sold as a patent medicine, Pemberton
claiming it a cure for many diseases, including morphine addiction, indigestion, nerve disorders,
headaches, and impotence. Pemberton ran the first advertisement for the beverage on May 29 of the
same year in the Atlanta Journal. By 1888, three versions of Coca-Cola – sold by three separate
businesses – were on the market. A co-partnership had been formed on January 14, 1888, between
Pemberton and four Atlanta businessmen: J.C. Mayfield, A.O. Murphey, C.O. Mullahy, and E.H.
Bloodworth. Not codified by any signed document, a verbal statement given by Asa Candler years later
asserted under testimony that he had acquired a stake in Pemberton's company as early as 1887. John
Pemberton declared that the name "Coca-Cola" belonged to his son, Charley, but the other two
manufacturers could continue to use the formula. Charley Pemberton's record of control over the "Coca-
Cola" name was the underlying factor that allowed for him to participate as a major shareholder in the
March 1888 Coca-Cola Company incorporation filing made in his father's place. Charley's exclusive
control over the "Coca-Cola" name became a continual thorn in Asa Candler's side. Candler's oldest son,
Charles Howard Candler, authored a book in 1950 published by Emory University. In this definitive
biography about his father, Candler specifically states: "..., on April 14, 1888, the young druggist Asa
Griggs Candler purchased a one-third interest in the formula of an almost completely unknown
proprietary elixir known as Coca-Cola."The deal was actually between John Pemberton's son Charley
and Walker, Candler & Co. – with John Pemberton acting as cosigner for his son. For $50 down and
$500 in 30 days, Walker, Candler & Co. obtained all of the one-third interest in the Coca-Cola Company
that Charley held, all while Charley still held on to the name. After the April 14 deal, on April 17, 1888,
one-half of the Walker/Dozier interest shares were acquired by Candler for an additional $750.

2.2. Company

In 1892, Candler set out to incorporate a second company; "The Coca-Cola Company" (the current
corporation). When Candler had the earliest records of the "Coca-Cola Company" destroyed in 1910, the
action was claimed to have been made during a move to new corporation offices around this time.

After Candler had gained a better foothold on Coca-Cola in April 1888, he nevertheless was forced to
sell the beverage he produced with the recipe he had under the names "Yum Yum" and "Koke". This
was while Charley Pemberton was selling the elixir, although a cruder mixture, under the name "Coca-
Cola", all with his father's blessing. After both names failed to catch on for Candler, by the middle of
1888, the Atlanta pharmacist was quite anxious to establish a firmer legal claim to Coca-Cola, and
hoped he could force his two competitors, Walker and Dozier, completely out of the business, as well.
John Pemberton died suddenly on August 16, 1888. Asa Candler then decided to move swiftly forward
to attain full control of the entire Coca-Cola operation. Charley Pemberton, an alcoholic and opium
addict unnerved Asa Candler more than anyone else. Candler is said to have quickly maneuvered to
purchase the exclusive rights to the name "Coca-Cola" from Pemberton's son Charley immediately after
he learned of Dr. Pemberton's death. One of several stories states that Candler approached Charley's
mother at John Pemberton's funeral and offered her $300 in cash for the title to the name. Charley
Pemberton was found on June 23, 1894, unconscious, with a stick of opium by his side. Ten days later,
Charley died at Atlanta's Grady Hospital at the age of 40. In Charles Howard Candler's 1950 book about
his father, he stated: "On August 30 [1888], he Asa Candler became sole proprietor of Coca-Cola, a fact
which was stated on letterheads, invoice blanks and advertising copy."[27] With this action on August
30, 1888, Candler's sole control became technically all true. Candler had negotiated with Margaret
Dozier and her brother Woolfolk Walker a full payment amounting to $1,000, which all agreed Candler
could pay off with a series of notes over a specified time span. By May 1, 1889, Candler was now
claiming full ownership of the Coca-Cola beverage, with a total investment outlay by Candler for the
drink enterprise over the years amounting to $2,300.

In 1914, Margaret Dozier, as co-owner of the original Coca-Cola Company in 1888, came forward to
claim that her signature on the 1888 Coca-Cola Company bill of sale had been forged. Subsequent
analysis of other similar transfer documents had also indicated John Pemberton's signature had most
likely been forged as well, which some accounts claim was precipitated by his son Charley. On
September 12, 1919, Coca-Cola Co. was purchased by a group of investors for $25 million and
reincorporated. The company publicly offered 500,000 shares of the company for $40 a share. In 1986,
The Coca-Cola Company merged with two of their bottling operators (owned by JTL Corporation and
BCI Holding Corporation) to form Coca-Cola Enterprises Inc. (CCE). In December 1991, Coca-Cola
Enterprises merged with the Johnston Coca-Cola Bottling Group, Inc.

2.3. Origins of bottling

The first bottling of Coca-Cola occurred in Vicksburg, Mississippi, at the Biedenharn Candy Company
on March 12, 1894. The proprietor of the bottling works was Joseph A. Biedenharn. The original bottles
were Hutchinson bottles, very different from the much later hobble-skirt design of 1915 now so familiar.
A few years later two entrepreneurs from Chattanooga, Tennessee, namely Benjamin F. Thomas and
Joseph B. Whitehead, proposed the idea of bottling and were so persuasive that Candler signed a
contract giving them control of the procedure for only one dollar. Candler never collected his dollar, but
in 1899, Chattanooga became the site of the first Coca-Cola bottling company. Candler remained very
content just selling his company's syrup. The loosely termed contract proved to be problematic for The
Coca-Cola Company for decades to come. Legal matters were not helped by the decision of the bottlers
to subcontract to other companies, effectively becoming parent bottlers. This contract specified that
bottles would be sold at 5¢ each and had no fixed duration, leading to the fixed price of Coca-Cola from
1886 to 1959.

2.4. 20th century

The first outdoor wall advertisement that promoted the Coca-Cola drink was painted in 1894 in
Cartersville, Georgia. Cola syrup was sold as an over-the-counter dietary supplement for upset stomach.
By the time of its 50th anniversary, the soft drink had reached the status of a national icon in the US. In
1935, it was certified kosher by Atlanta Rabbi Tobias Geffen, after the company made minor changes in
the sourcing of some ingredients.The longest running commercial Coca-Cola soda fountain anywhere
was Atlanta's Fleeman's Pharmacy, which first opened its doors in 1914. Jack Fleeman took over the
pharmacy from his father and ran it until 1995; closing it after 81 years. On July 12, 1944, the one-
billionth gallon of Coca-Cola syrup was manufactured by The Coca-Cola Company. Cans of Coke first
appeared in 1955.

2.5. New Coke

On April 23, 1985, Coca-Cola, amid much publicity, attempted to change the formula of the drink with
"New Coke". Follow-up taste tests revealed most consumers preferred the taste of New Coke to both
Coke and Pepsi but Coca-Cola management was unprepared for the public's nostalgia for the old drink,
leading to a backlash. The company gave in to protests and returned to the old formula under the name
Coca-Cola Classic, on July 10, 1985.

2.6. 21st century

On July 5, 2005, it was revealed that Coca-Cola would resume operations in Iraq for the first time since
the Arab League boycotted the company in 1968. In April 2007, in Canada, the name "Coca-Cola
Classic" was changed back to "Coca-Cola". The word "Classic" was removed because "New Coke" was
no longer in production, eliminating the need to differentiate between the two. The formula remained
unchanged. In January 2009, Coca-Cola stopped printing the word "Classic" on the labels of 16-US-
fluid-ounce (470 ml) bottles sold in parts of the southeastern United States.The change is part of a larger
strategy to rejuvenate the product's image. The word "Classic" was removed from all Coca-Cola
products by 2011.

In November 2009, due to a dispute over wholesale prices of Coca-Cola products, Costco stopped
restocking its shelves with Coke and Diet Coke for two months; a separate pouring rights deal in 2013
saw Coke products removed from Costco food courts in favor of Pepsi. Some Costco locations (such as
the ones in Tucson, Arizona) additionally sell imported Coca-Cola from Mexico with cane sugar instead
of corn syrup from separate distributors. Coca-Cola introduced the 7.5-ounce mini-can in 2009, and on
September 22, 2011, the company announced price reductions, asking retailers to sell eight-packs for
$2.99. That same day, Coca-Cola announced the 12.5-ounce bottle, to sell for 89 cents. A 16-ounce
bottle has sold well at 99 cents since being re-introduced, but the price was going up to $1.19.

In 2012, Coca-Cola resumed business in Myanmar after 60 years of absence due to U.S.-imposed
investment sanctions against the country. Coca-Cola's bottling plant will be located in Yangon and is
part of the company's five-year plan and $200 million investment in Myanmar. Coca-Cola with its
partners is to invest US$5 billion in its operations in India by 2020. In 2013, it was announced that
Coca-Cola Life would be introduced in Argentina and other parts of the world that would contain stevia
and sugar. However, the drink was discontinued in Britain on June 2017.

2.7. Acquisitions

The company has a long history of acquisitions. Coca-Cola acquired Minute Maid in 1960 and in 1982,
it acquired the movie studio Columbia Pictures for $692 million but Columbia was sold to Sony for $3
billion in 1989. It acquired the Indian cola brand Thums Up in 1993, and Barq's in 1995. In 2001, it
acquired the Odwalla brand of fruit juices, smoothies, and bars for $181 million. In 2007, it acquired
Fuze Beverage from founder Lance Collins and Castanea Partners for an estimated $250 million.

The company's 2009 bid to buy Chinese juice maker Huiyuan Juice Group ended when China rejected
its $2.4 billion bid, on the grounds the resulting company would be a virtual monopoly. Nationalism was
also thought to be a reason for aborting the deal.
In 2011, it acquired the remaining stake in Honest Tea, having bought a 40% stake in 2008 for $43m. In
2013, it finalized its purchase of ZICO, a coconut water company. In August 2014, it acquired a 16.7%
(currently 18.5% due to stock buy backs) stake in Monster Beverage for $2.15 billion with an option to
increase it to 25%, as part of a long-term strategic partnership that includes marketing and distribution
alliance, and product line swap. In 2015, the company took a minority stake ownership in the cold
pressed juice manufacturer, Suja Life LLC. In December 2016, it bought many of the former
SABMiller's Coca-Cola operations. The Coca-Cola Company owns a 68.3% stake in Coca-Cola Bottlers
Africa. Coca-Cola Bottlers Africa's headquarters located in Port Elizabeth South Africa.

In 2017, The Coca-Cola Company acquired Mexican sparking water brand Topo Chico. On August 31,
2018, it agreed to acquire Costa Coffee from Whitbread for £3.9bn. The acquisition closed on 3 January
2019. The Coca-Cola Company acquired a 40% stake in Chi Ltd on January 30, 2016. The Coca-Cola
Company acquired the remaining 60% stake in Chi Ltd on January 30, 2019. During August 2018 The
Coca-Cola Company acquired Moxie for an undisclosed amount. On September 19, 2018 The Coca-
Cola Company acquired Organic & Raw Trading Co. Pty Ltd the manufacturer of MOJO Kombucha in
Willunga, Australia. On August 14, 2018 The Coca-Cola Company announced a minority interest in
Body Armor. On October 5, 2018 The Coca-Cola Company acquired a 22.5% stake in MADE Group
from Luke Marget, Matt Dennis and Brad Wilson the company's 3 founders. The Coca-Cola Company
owns a 30.8% stake in Coca-Cola Amatil ltd, therefore The Coca-Cola Company owns a further 6.93%
stake in MADE Group through its ownership stake in Coca-Cola Amatil ltd.

3. Strategy

Strategy is a long-term, forward-looking approach to planning with the fundamental goal of

achieving a sustainable competitive advantage. Every business irrespective of its size needs to
have definite goals in order to expand the business. These planned out goals will help the business
sustain itself in the ever-growing competitive market and also to increase its sales. Marketing
strategy is nothing but the pavement to define your goals so that you can direct your efforts in
the right direction. A well-defined strategy should not only help you to achieve your goals but also,
help you to reach the customer’s goals and expectations from you. A marketing strategy usually consists
of some default points for its establishment. The most important of those being the organisational short-
term and long-term goals. This is followed by analysis of the market the organisation plans to establish
its business into. For a service-based industry, targeting the relevant customers and expanding
the client domain is of utmost importance. Also, making a SWOT (strengths, weaknesses,
opportunities and threats) analysis of provided services or sold products will help the
organisation to analyse itself.A successful marketing strategy will create a win-win situation for
both, customer and the organisation. Needless to say, customer satisfaction will in turn increase the
organisation‟s brand value and create an edge over the competitor.It helps in creating a realistic
plan of approach which states the methods to achieve the stated goals. Once the strategy and
plans are ready, the company can search for ways to implement the plans making the process
highly efficient.Most ofthe successful business establishments make optimum use of marketing strategy
for increased profits. Beverage industry forms a major part of total sales, both domestic and
international, worldwide. With the continuous and dynamic demand of different beverages,having
accurate marketing strategy is quite important for beverage industries. An example for such successful
implementation of marketing strategy is Coca Cola. Coca Cola is one of the most leading company in
soft drink beverage industry. It contributes to the highest sales of soft drinks globally.Coca Cola was
established in 1886 by Dr. John S. Pemberton, an Atlanta pharmacist, when he tried to create a
distinctive syrup which can be sold at soda fountains. Initially, the syrup was mixed with
carbonated water and then consumed. Frank M. Robinson, Dr. Pemberton‟s partner and book keeper,
termed the name “Coca Cola‟ thinking that the two „Cs‟ would sound well when advertised. He also
designed the distinctive script in which the trademark is created, which is still used today. Prior to Dr.
Pemberton‟s death in 1888, Coca Cola was sold to various partieswith the majority of interest sold to
Atlanta businessman, Asa G. Chandler. Mr. Chandler is credited with founding the layout of the Coca
Cola‟s empire.

Under his leadership, Coca Cola was sold in soda fountains outside Atlanta. In 1894, Joseph Biedenharn
installed bottling machinery and became the first one to put Coca Cola in bottles.Since then, the journey
of Coca Cola has always been on success in expansion and profit making. To create a unique place
among the consumers and to prevent piracy, it hosted a competition to redesign a new bottle
and later it started manufacturing its own distinct bottle. The shape of the bottle is still approximately
retained in the present bottles. Later, since 1886 it changed its logo almost over 10 times to suit the time
and people‟s liking. Also, over the years it changed 50 slogans and also made slight change in shape of
bottle.From a humble beginning of sales from 9 bottles per day back in 1886, today Coca Cola has
succeeded to increase its sales to 1.9 billion servings per day. Today, approximately 94% of the world
population is aware of the red & white logo of Coca Cola.

The sales of bottles varied largely across the globe, highly depending upon various market factors as per
the country. The major affecting market factors included: per capita income of the people and cultural &
linguistic differences. In some countries, govt. policies led to either increase or decrease in sales. The
varying geographical factors led to challenges in supplying the bottles at remote places. However,
overcoming all the difficulties, Coca Cola managed to supply its bottles in every nook and corner.
Presently, Mr. James Quincey heads the Coca Cola Company as a CEO, headquartered at Atlanta and T
Krishnakumar heads the Coca Cola India company. Also, Christina Ruggiero was recently named CEO
of Hindustan Coca-Cola Beverages (HCCB), the largest bottling partner of The Coca-Cola Company in
India[3]. Coca Cola is presently spread worldwide over above 200 countries and 5 operating regions,
(Asia pacific, Europe, Middle East & Africa, Latin America, and NorthAmerica). With over 1 lakh
associates worldwide and together with their bottling partners, Coca Cola ranks among the world‟s top
10 private employers with more than 7 lakh system employees. Coca Cola leads the beverage industry
with a portfolio featuring 21 billion-dollar brands. Globally it is the No.1 provider of sparkling
beverages, juices and juice drinks and ready-to-drink coffees. In 2017, the net revenue of Coca Cola was
$ 9.702 billion.

3.1. Strategic Actions

On a wider scale, Coca Cola introduced five strategic actions to achieve its goals which are as follows:

3.1.1. Market segmentation

Market segmentation is a strategic method to divide the market based on volume and capacity of
buyers and using appropriate methods to maximise sales and thereby, earning profits from each segment.
Coca Cola used this technique to segment the market according to emerging markets, developing
markets and developed markets since every country in the 200 plus countries play a crucial rolein the
growth. In emerging markets, the primary focus was on increasing the sales volume rather than profits
so that it increased its customer domains and make a strong foundation for future business. This was
made possible by selling beverages at economical rates so that higher no. of masses can enjoy it. In
developing markets, a balance was made between volume sold and pricing, whereas, in developed
countries the focus was more on profit making by offering more small packages and premium packages
like glass and aluminium bottles. In 2015, globally, price/mix rose 2 percent as did volume, helping
increase organic revenue 4 percent. Coca Cola also gained worldwide value share in their industry.

3.1.2. Brand establishment and Customer relationship

Brand establishment becomes vital while expanding an organisation‟s portfolio. Consumers tend to trust
a branded product and often spend an extra penny upon it rather than choosing an unheard product.
Brand name is also viewed as a status quo in developed markets. Coca Cola made a right decision to
invest in developing the brand value by improving and modernising the advertisements by investing
over $250 million. These ads focused on creating an impact upon people and changed the perspective of
Coca Cola from an occasional drink to an integral part of people‟s life. At the same time, investment
was made to improve the position in energy drink category, juices and also healthy drinks by making
strategic partnerships with Monster Beverage Corporation, Suja (a line of premium organic juices),
Fairlife ultra filtered milk etc. A major breakthrough took place in 2015 when Coca Cola developed its
first global marketing campaign. The primary objective was to establish the „one-brand‟ strategy to
bring all its sub products under one brand name „Coca-Cola‟. The slogan „Taste the Feeling‟ launched
in early 2016 emphasizes the refreshment, taste, uplift and personal connections that are all part of
enjoying an ice-cold Coca-Cola. For the fitness-oriented consumers, it sent a broader message that they
can enjoy Coca Cola by choosing an appropriate variety of drink with varying number of calories in
caffeine.

3.1.3. Increasing financial efficiency

For any business, the ultimate goal is to have maximum returns for the investments with maximum
productivity. In order to achieve this, financial efficiency plays an important role. Coca Cola made
efforts to achieve financial flexibility by implementing a solution known as „zero-based work‟- wherein
annual budget is revised from zero and must be justified annually at the end rather than simply carrying
over at levels established onsumers thereby generating profits from all segments irrespective of market
conditions.

Its primary core competency has been the ability to manage a huge system of independent bottling
partners and also acquiring a number of bottlers under its own. The primary aim has been to improve
performance of bottling partners by increasing productivity, performance, optimizing manufacturing and
distribution systems and finally refranchising the independence of bottling territories. All this effort
finally creates value for retail and restaurant customers. In 2015, the organisation took major steps in
North America to make company-owned bottling territories independent. The plan was to refranchise
the North America bottling system by end of 2017. A new unified bottling partner was planned to set up
in Western Europe and accordingly, a transaction was announced. Further, improvement and
refranchising has been planned for bottling system in Southern Africa, East Africa, Indonesia and China.
Coca Cola plans to reduce company-owned bottlers to 3 percent from 18 percent of the global volume.

3.2. Analysis Of Worlwide Markets:

Coca Cola‟s success was not achieved over-night and it had to overcome a number of obstacles in the
process. It took a great deal of strategy, marketing skills, quality maintenance and patience to reach at
this stage. The paper focuses primarily on a country from all three types of markets viz. developed
(USA), developing (India) and under-developed (Africa).

3.2.1. Developed Markets (USA)

Origin:- An Atlanta pharmacist named Dr. John S. Pemberton was the inventor of Coca Cola when he
invented his drink in 1886 with the original motive to cure most common ailments basing it on cocaine
from the coca leaf and caffeine-rich extracts of the kola nut. With new legislature passed in 1888 stating
the prohibition of use of alcohol, Dr. Pemberton had to change the previous drink recipe.Dr.
Pemberton‟s bookkeeper, Frank M. Robinson, is credited with designing the trademarked logo and with
naming the beverage “Coca-Cola”. Prior to Pemberton‟s death in 1888, he sold portions of his company
to a few different parties with a majority of the business being sold to a local Atlanta businessman
named Asa G. Candler. By 1889, Candler acquired the rights to the formula as well as the “Coca-Cola”
name and brand. He incorporated The Coca-Cola Company in 1892 and expanded distribution of the
Coca-Cola syrup concentrate to soda fountains beyond Atlanta.

Difficulties:-
Low calorie cola performance in category of coca cola‟s zero calorie drinks and diet drinks in the sense
of sweetness. While Coca Cola dominates the emerging markets, it has seen increased competition from
domestic players, with global competitors such as Pepsi Co. also looking to grow in these regions as
well. With more and more people nowadays trying to be aware of fitness and health problems, Coca
Cola had to launch itself in products to substitute unhealthy ingredients in drinks without affecting the
taste of drinks.

Marketing strategy:-
Coca-Cola began distributing bottles as „Six-packs‟, encouraging customers to purchase the beverage
for their home. In 1928, Coca-Cola was introduced as a sponsor for the Olympics Games, giving the
company even more international exposure and starting a tradition that continues to this day. In 1941,
the U.S. entered World War II, and the demand for Coca-Cola from U.S. soldiers serving overseas
increased tremendously. It always took consideration of the events currently happening in country like
making advertisement involving Santaclause with his gift bag during Christmas, giving sponsorship to
famous sports such as NBA and NESCAR. At the beginning the first bottles of Coca Cola was sold at a
price 5 cent in US. Low possible cost for the product formed the key for the Coca Cola in US of his sell
and promotion.

3.2.2. Developing Markets (India)

Origin:– Coca Cola launched itself in the Indian market in 1956 and made huge revenue operating under
100% foreign equity. Indian FOREX act was implemented in the year 1974 during the Prime Minister
Indira Gandhi reigned, which stated that foreign companies selling consumer goods must invest 40% of
its equity stake in INDIA in its Indian associates.Coca Cola agreed with investing 40% foreign equity
but stated that they would still hold full power in technical and administrative units with no local
participation allowed. This demand was against the foreign exchange act. The government instructed
coca cola to either ready with a new plan but in 1977 Coca Cola left the INDIA.In 1993 Coca Cola re-
entered after government approval, due to the new liberalization policies that were coming to INDIA.
The foreign exchange act which had once prevented companies from keeping too much equity had now
been completely modified.

Difficulty:-
Coca-Cola is facing a slew of challenges in India. A debate over water usage, accusations over pesticide
content and sweeteners, as well as more general concerns in India over the un-healthiness of fizzy drinks
are plaguing the brand. Coca-Cola faces tough competition from PepsiCo as well as local brands,
although such local companies are largely limited to their home states rather than having a large
nationwide presence.

Marketing strategy:–
In order to establish a strong base, Coca Cola India took over Parle foods and acquired local
popularbrands like Thums up, Limca, Mazaa etc. This combination of local and global brands enabled
Coca Cola to exploit the benefit of global branding. Diversification in product is the key for coca cola in
INDIA. Coca-Cola has succeeded in spite of an extremely price-sensitive consumer with entrenched
beverage consumption habits – tea, nimbu-paani (lemonade) and a fragmented and geographically
dispersed retail market, and a high tax environment. Coca cola follows intensive brand building
programme.

The company focuses on understanding the Indian consumer, and in using these local insights to build
powerful connect for its brands. Coca-Cola experienced unprecedented growth rates (above 40 per cent)
in 2002 by virtue of its Affordability Strategy.It continues to grow in strong double digits since then. It
has also significantly grown its consumer base from 162 million in 2001 to 233 million in 2004. Coca-
Cola India minimised its capital needs by meeting new manufacturing capacity needs through external
co-packers, outsourcing its distribution and meeting its inmarket- refrigeration and cooling needs by
giving incentives to retailers to self-fund the same through its “Own Your Fridge Scheme”. The
company had also decided to expand its retail network by 18 per cent during every financial year.
 3.2.3. Under Developed Markets (Africa)

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

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

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

3.3. Global Competiton

Every business has to face competition in this innovative world and few competitions can be so
challenging that it could result in the devastation of an empire. Although there are many beverage
manufacturers, Coca Cola faces such serious competition with PepsiCo which was born 12 yrs after
Coca Cola. Only Coca Cola and PepsiCo combined shares around 65-75% market of beverages
worldwide and they will continue to be rivals in the years ahead.

Both, Coca Cola and PepsiCo use different marketing strategies. Coca Cola focuses on covering
maximum no. customers by reaching every nook and corner of the world thereby creating a monopoly,
whereas, PepsiCo focuses on niche` marketing which covers a certain group of customers and earning
maximum sales and profits from it. Coca Cola was more famous among the older generations, but
PepsiCo created its image among the generation X (younger generation) as they comprise majority of
the population.
Similar strategy was used in their sub-brands wherein, gender segmentation was focused. Thums up is
advertised as a masculine drink and Fanta, having a light taste, is more feminine. In case of PepsiCo,
Mirinda orange flavour is more popular among ladies and children and Mountain Dew is famous among
masculine gender.

The following table shows comparison between advertising expenditure and gross profit of Coca Cola
and Pepsi in the years 2013-2015. It can be observed that Coca Cola, once a beverage market ruler, is
now behind PepsiCo in terms of net profit. However, the net profits of both the lead aggressors has come
down in 2015

Fig Shows comparison between advertisement and gross profit of Coca Cola and Pepsi.
(Source: Forbes Magazine)

3.4.Sub-Branding And Advertising

Sub branding is essentially a product or service that is affiliated with a parent brand but has its own
brand name. Sub branding is useful when an organisation wants to explore a whole new system of
products or services under a new motto but wants to use the original established name of parent
company for trust building among consumers without a considerable influence of the type of original
product. The primary marketing strategy behind this is to provide consumers with many options which
allow consumers to have clearer choices on the type of product they want. When coming to a product
diversity, coca cola company tried to serve their consumer with a large number of different products in
areas like carbonated soft drinks, energy drink, fruit juices, mineral water, electrolytes without calories,
nutrition product, caffeine free soft drink, tea, sugar and calorie free soft drink and vitamin water. There
are in all 21 Products by CocaCola tofulfil all the needs by their consumers.

Among these, some highlighted products have notable facts like:

3.4.1. SPRITE – Sprite was developed in West Germany in 1959 and introduced in 1961 to United
States. It is believed that sprite was manufactured as Coca Cola‟s response to the popularity
of 7UP owned by PepsiCo and Dr. Pepper Snapple group. It is a lemon-lime flavored soft
drink which presently ranks no.3 worldwide and is available in 190 countries. The success
behind this quick growth is credited to its aggressive marketing strategy. In the 1990‟s,
Sprite launched the „Jooky‟ad campaign, which poked fun at other soft drinks and their lack
of authenticity. In 2000, graffiti artist temper was hired by sprite to create a limited edition
design in celebration of the millennium that appeared on 100 million cans distributed across
Europe.
3.4.2. FANTA - Fanta was launched in the year 1960 in U.S and in year 1993 in INDIA, it is the
2nd oldest sub brand by Coca Cola, consumed 130 million times every day around the world.
Currently, it has put the special onus on social media with the help of tools like Youtube,
Tweeter and Facebook.
3.4.3. MINUTE MAID - Minute Maid has been making juice for more than 60 years and has a
heritage of nutrition, innovation, and quality. In 1945, the U.S. Army ordered 500,000
pounds of powdered orange juice from the Florida Foods Corporationwhich finallyrenamed
itself the Minute Maid Corporation. It was acquired by the Coca-Cola Company in 1960,
marking its first venture outside of soft drinks.
3.4.4. DIET COKE - Diet Coke, also known as Coca-Cola light in some markets, is a sugar- and
calorie-free soft drink. It was first introduced in the United States in 1982, as the first new
brand since 1886 to use the Coca- Cola Trademark. Today, Diet Coke/Coca-Cola light is one
of the largest and most successful brands of The Coca-Cola Company, available in more than
150 markets around the world. They included Caffeine- Free Diet Coke, Diet Cherry Coke,
Diet Vanilla Coke, Diet Coke with Lime and Diet Coke with Citrus Zest. Within 2 years of
being brought to the market, DietCoke becamethe top diet soft drink in the world.
In order to create trust among consumers in remote areas, marketing strategies can be coupled with CSR
(Corporate Social Responsibility) activities which will not only result in development of remote areas
but also lead to brand developing for organisations, although profit making is not an objective behind it.

Organisations are asked to use 2% of their annual profit for such activities and the no. of companies
participating are increasing at a fast rate. The Coca Cola India Pvt. Ltd. (CCIPL) company has taken
initiatives like water sustainability, solar energy projects, PET recycling (in the light of the “Swaach
Bharat Abhiyan” and “Clean India campaign” of the Govt. of India),„Support My School‟ (“SMS”)
campaign aimed at revitalizing rural schools etc. In Africa,The Replenish Africa Initiative (RAIN) aims
to improve access to clean water for 2 million people in Africa and is also focused on Water, Sanitation
and Hygiene (WASH), Watershed Protection and Productive Use of Water. It can be worthy to note how
the medium of advertisements has changed over the years. Initially the primary source was printed
posters, banners and newspapers to advertise which has shifted to electronic media and social media
with the advent of television and internet. Presently, advertisements are heavily based on digital
marketing andArtificial Intelligence is incorporated to make ads more interactive. Few examples are as
Follows:

 Coca cola happiness machine – The happiness machine is a coke vending machine that can
provide their customers with a versatile product range of drinks, pizza, sandwich etc.
 Share a coke – The campaign gives people the chance to order personalized coke bottles
through a Facebook app. While in some countries the labelling has been changed on demand, so
all coke products have different names on them.
 Tweet your Christmas wish – for Christmas 2011 Coca Cola gave people a chance to have their
tweets displayed on its giant neon sign.

4. Conclusion And Future Strategy

4.1. Performance in sales (brand value)

Fig: Brand Value of Coca Cola from yr. 2006 -2017(source: Statisca)

As seen from the fig, there was a steady rise in brand value till 2015 but has started decreasing in the
recent years. The primary reason behind this is majority urban people are now health conscious
considering the long term effects of obesity and other side effects growing in the newer generations. The
effect is seen not only on Coca Cola, but also on PepsiCo and brand value of both these beverage giants
has reduced.

Another reason behind this is the increase of local competitors who provide substitute to Coca Cola.
Also, Coca Cola had to face social criticism in few regions due to exploited use of water leading to
water scarcity in the areas.

4.2.Picture of rival markets

In the whole world, Coca Cola is not sold in only 2 countries viz. Cuba and North Korea who are
considered as trade embargoes for USA since 1962 and 1950 respectively.

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

4.3.1. Replacement to alcohol drinks-

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

4.3.2. Development in purified water system.

Kenley is a sub brand of Coca Cola, but the sales are not good in mineral water category. Bislerihad
already created the brand name in the mineral watersection so much so that its name was used as
equivalent to purified water bottles by the people. Also these days, local distributors provide packaged
drinking water at lower cost. Coca Cola can tie-up with such distributors and make deals so that
promotion of Kenley increases among the public.

4.3.3. Use of purified sea water for Coca Cola drinks

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

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